A new kind of Middlemen

Even thinking about the middlemen annoys us. We have never liked them. They always seem to be operating against the principle that one who creates something should enjoy its fruits. However they have managed to be a part of our commerce ever since mankind started trading and they don’t seem to be going anywhere, even after the Internet Revolution. The internet was supposed to get rid of the middleman. Consumers were supposed buy directly from manufacturers and producers. Producers were meant to enjoy a greater slice of their profits and not lose it to a bunch of people who didn’t do much to deserve that profit.

Maybe I’m being too harsh on this group. But all of us can agree that we would prefer to buy our stuff from the source at a wholesale price. I mean, the fact that people used travel agents seems like a distant idea now. Although I’m not sure if the number of people still using travel agents is large because I’ve been told they still exist. Even if it’s large, it’s falling now. Now that my hate for travel agents is clear, I’d like to discuss the new kind of middleman. They’re taking over the Indian economy and the world in general. Just like the old school middlemen did back in the day.

If I ask you to open your phone right now and tell me whether you have the following applications on it or a different one that serves the same purpose, you wouldn’t be able to say no. Amazon, Flipkart, Zomato, Swiggy, Ola, Uber, Oyo, Book My Show so on and so forth. We all love these apps. They’ve made our lives enormously easier. Cabs, Movie tickets, Hotel rooms, Retail Shopping, Food and Food. You name it, you got it.

Yes, its not a typo, I mentioned food twice

These are the new age middlemen. Amazon is not a real store, Zomato does not own a single restaurant, Oyo does not own a single hotel room and Uber does not have a single cab of its own. One gets the idea that they don’t own the product itself, obviously because they are the men in the middle.

I hope this phrase ‘men in the middle’ does not have any dirty connotations though :p

Middlemen though hated are inevitable. Economic logic says that consumers are rational beings. And as funny as it sonunds rationality for us is that we treat our laziness with high regard. The more something allows us to be lazy, the more utility it provides. We could’ve gone to the original seller on the internet to buy our stuff but we don’t. We prefer an application that brings us those sellers at that place so that we could save us a couple of seconds. The Internet Revolution did not wipe out laziness from the planet and so it could not wipe out the middlemen too. Being a middleman is the most competitive industry the world has ever known as Michael Munger, an economist at the Duke University puts it. Middlemen are getting people together much more efficiently.

They are basically selling reductions in transaction cost and taking away a slice of the profits. It is such an amazing time to be alive because we can see people fighting over a couple of lines of code that connect the buyers and sellers rather than competing over the resources itself to produce something tangible. Nobody could’ve anticipated that and probably about what lies ahead.

In case you were wondering, we’ve got online travel agents now that help you compare prices. I’m pretty sure you knew that too. How lazy are you!

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