Here’s Why You’re Going To Give In And Start Using Foursquare And Groupon Whether You Like It Or Not


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Most “normal” people we know want absolutely nothing to do with location-aware services like Foursquare and Loopt that let you “check-in” to restaurants and bars, letting your friends know where you are at any given moment.A lot of these people say they would never join a service like that; they don’t feel comfortable sharing that information, and they don’t see the point.

We think they’re wrong, just like all the people — including us — who said they’d never join Facebook were wrong. Here’s why.

Check-in apps are rapidly becoming more focused on deals — coupons and discounts that are only available to people using these services. Loopt CEO Sam Altman describes his new app as “a virtual loyalty card” for participating businesses.

That’s a telling analogy. As Kevin Drum of Mother Jones recently pointed out, the effect of widespread loyalty cards in retail businesses — supermarkets and pharmacies in particular — has been the creation of a tiered pricing system. A universally adopted coupon system can’t change the average price of goods, so the lower prices for participating customers are ultimately subsidized by higher prices for everyone else.

Daily deal savings
Average savings on services from daily deal sites (via the obviously interested parties at aggregator Yipit).

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More recently, Groupon and its clones have created the same dynamic with services like massages and facials. There are now so many daily deals for these services that anyone who lives in a major city and pays full price for a massage is being lazy and financially irresponsible. As more of these businesses’ traffic comes from deal sites, the ‘nominal’ price will essentially become an “idiot tax”, subsidizing the prices everyone else pays.As Groupon-style startups and location-based services both become larger and more numerous, this will be true of ever more categories of local spending.

So sure, you can keep your location data to yourself. But it’ll cost you — and you’ll be paying for our drinks.