If you combine foreign companies who avoid tax in Australia and those that use online technologies to massively gouge customers and destroy local industries, what do you have? As Dick Smith has warned us, you have the e-commerce gougers epitomised by the online booking agencies who are having destructive effects that few are aware of. Do these people have a conscience? How to fight back? (Is Dick Smith right that we can fight back?)
Everyone in Australian now knows that a terrible ‘worse-than-ever’ drought is afflicting rural communities, and that country towns are really struggling. It’s bad enough that Australian farmers and food-producers especially are often being ripped off by ruthlessly manipulating supermarkets, by foreign competitors heavily subsidized or protected by their own governments, and by international corporations generally with little or no support from many local politicians and businesses. But with tourists and travelers the life-blood of some towns/communities, there comes news of an avoidable rort that is undercutting and holding to ransom the hotels and motels that don’t belong to the big chains and are owned by battlers just trying to survive (i.e. especially in country towns).
It’s reported that more than 50% of Australian now using online booking agencies such as Trivalgo Expedia, Travelocity, etc. Such online agencies are not only convenient but most falsely believe that they are cheaper to book with these agencies than to book directly – and that in any case the booking agencies only take a small booking fee. As Dick Smith has exposed in his recent viral posting (1), this is all part of the manipulation and deception with two foreign billionaires behind the major booking agencies which typically gouge up to 30% commission on bookings, and who have used the money taken from battlers forced to use their services (since most Australians now book this way) to pay Google to ensure their online marketing comes out on top – – whilst the same motels and hotels have websites with often cheaper deals and the money stays are buried below and can’t compete (2). This is how the rip-off online tickets booking agency Viagogo is able to fool people who are searching for music concerts or sporting events into not only booking with them but then paying much higher amounts for the same tickets than even local agencies like Ticketek (3). This and how like Viagogo’s ‘last tickets’ ruse, many accommodation booking sites use ‘one room left’ pressure tactics also.
It gets worse. This obscene creaming of money from battlers held to ransom and often forced into unfair agreements also typically involves foreign tax avoidance as well overseas profiteering and money lost to the economy. So we get a combination here of foreign companies who avoid tax in Australia (in the manner of Apple, Google and Microsoft) (3) and the new focus on use of online technologies to massively gouge customers and destroy local industries. As well as Viagogo we have others like Uber which transfers around 25% of each fare overseas to avoid paying tax , ripping off drivers and destroying local taxi industries – and of course AirbNb is also hotels and motels in the cities and in the main tourist areas (4). And the Australian Competition and Consumer Commission (ACCC – the very agency supposed to be protecting local businesses) – is reported to have done a deal with (to apparently ignore) these two rich billionaires behind all this or rather the duopoly that dominates in Australia and around the world. There is the Expedia group which also owns Trivago, Wotif, Hotels.com, and Staysx.com.au, and there is also the Bookings Holdings group which owns Booking.com, Priceline.com, Kayak and Agoda.
Dick Smith of course is the Aussie adventurer and entrepreneur who also developed Dick Smith Foods to help Australian food producers whilst trying to keep the money in Australia (in other words, a genuine hero who really understands what is needed also to achieve a healthy local economy as well as society). What particularly shocked Dick about this matter is how the powerful hidden algorithms of online apps and booking sites can also go hand in hand with local community as well as regulatory complacency (i.e. governments asleep at the wheel) to gouge Australian society at every level…. While the gougers are assumedly living it up overseas. So we salute Dick for his efforts to make people aware of this new challenge, and how people can circumvent the rort and better support locals by better using search engines to find and book directly from local businesses.