The concierge economy

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My Observer essay on the implications of Uber:

In a way, the name of the company – Uber – gives the game away. It has connotations of elevation, superiority, authority – as in Nietzsche’s coinage, Übermensch, to describe the higher state to which men might aspire. Although it’s only been around since 2009, Uber, the smartphone-enabled minicab company, is probably the only startup of recent times to have achieved the same level of name recognition as the established internet giants.

This is partly because Uber is arguably the most aggressive tech startup in recent history and partly because it has attracted a lot of bad press. But mainly it’s because a colossal pile of American venture capital is riding on it. Its most recent investment round valued the company at about $40bn, which is why every MBA graduate in California is currently clutching a PowerPoint presentation arguing that his/her daft idea is “Uber for X” – where X is any industry you care to mention.

What lies behind the frenzy is a conviction that Uber is the Next Big Thing, fuelled by the belief that it is the embodiment of what Silicon Valley values most, namely “disruptive innovation” – as in disruption of established, old-economy ways of doing things…

Read on

LATER

Om Malik has a very thoughtful essay which starts with a meditation on a conversation he had with an Uber driver, and then moves into a meditation on the apps economy.

Keith [Malik’s Uber driver], who aspires to be in the fashion business was pretty ruthless in his assessment of the company and brought up many questions that have coursed through my mind. He appreciates the financial flexibility Uber has provided him — his luxury car rental business wasn’t enough and he has benefitted from this augmented income. He isn’t the first one who felt that Uber look some pressure off their back — the other day I met a $12-an-hour bouncer at a Tenderloin music venue who is happy dealing with traffic rather than drunks and strung out addicts. “It was worth $19 billion three months ago and now it is worth $41 billion,” says Keith, “isn’t that something. And yet they don’t care about their contractors.”

Still, like many others Keith is befuddled by Uber’s treatment of its contractors. Many of the rule changes seem arbitrary and he too is confused by the tone-deafness of the company. He laments the recent directive (later modified) by Uber to classify all cars before 2010 as a UberX and thus relegated them to lower money making tier. When I point out that as a customer if I am paying premium prices, why shouldn’t I get a premium experience. Today, you end up riding in “black cars” who are a pale imitation of their real self. Shouldn’t the car upgrades result in better cars and through process of elimination bring fewer, but better drivers on the road? Like most drivers, Keith agrees, but points out that logic and reality of being a contract driver are two different things.

It is very hard for people to understand that it isn’t easy to upgrade your car, especially when you are trying to make a living driving an Uber in an intensely competitive marketplace where there are more cars on the road and the pie is getting sliced into thinner and thinner slices. Still, Keith said that he was planning to upgrade, though he didn’t care much for Uber’s financial plans or deals with car companies — he is going to get a Mercedes as part of the upgrade. During our conversation, Keith points out that Uber is good for helping him and others make money in the near term, but the current model doesn’t allow much optimism for the future, thanks to too many cars, too many rules and demand which isn’t rising as fast as the cars.

LATER STILL: this:

Dan Sperling, Founding Director of the Institute of Transportation Studies at UC Davis, says that while Uber “will continue to do battle with local and state authorities, it’s pretty clear that they’ve got a very good business model, they’ve got a lot of momentum, and they’ve got a very good product that people love. They’ll figure out a way around the challenges because it’s clear they provide a valuable service. And that’ll force regulators to reassess their rules, some of which were written up years ago and make absolutely no sense today.’’

As Sperling sees it, “while it’s true that taxis are way over-regulated, the answer is not to smother all the babies competing with them; the answer is to regulate the Ubers of the world better while you deregulate the taxi industry.’’

And what about that $40 billion price tag? Uber and its rivals “are entering a marketplace that has seen almost no innovation in many decades,’’ according to Sperling, who says adding courier and food-delivery services could make Uber even more of a behemoth. “There’s a lot of pent-up demand for real-time, on-demand-type services, so there’s huge upside potential here.’’

Coming to grips with where we are now

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This morning’s *Observer column:

Could we live without the net? Answer: on an individual level possibly, but on a societal level no – simply because so many of the services on which industrialised societies depend now rely on internet connectivity. In that sense, the network has become the nervous system of the planet. This is why it now makes no more sense to argue about whether the internet is good or bad than to debate whether oxygen or water are desirable. We’ve got it and we’re stuck with it.

Which means that we’re also stuck with its downsides…

Read on

Quote of the Day

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A journalist once remarked that Harold Wilson’s sons had become a head teacher and a professor of education (in fact, a distinguished mathematician). ‘Well, I certainly hope my children do better than that,’ Blair retorted.

Source

Tells you everything you need to know about New Labour, really.

Justice by PowerPoint

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Did you know that lawyers in US courts are allowed to use PowerPoint in making their arguments? Neither did I, until I read this:

Perhaps the most common misuse of what some legal scholars call “visual advocacy” is the emblazoning of the word “Guilty” across a defendant’s photo. Almost always the letters are red—the “color of blood and the color used to denote losses,” as one court wrote. Two months ago the Court of Appeals of Missouri ruled in a case where the prosecution, in closing argument, presented the following slide:

Gulity

The defendant, Chadwick Leland Walter, had been convicted of attempting to manufacture methamphetamine and of maintaining a public nuisance. The photo used for the slide was Walter’s booking photo—hence, the orange jail clothing. As the appeals court noted, the state could not force Walter to appear before a jury in jail garb, because that could undermine the presumption of innocence. But the prosecution’s use of the booking photo had the same effect.

Piketty on the Middle East

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From an interesting interview with Owen Jones:

The other influence is perhaps more surprising: the first Gulf war that followed Ba’athist Iraq’s invasion of Kuwait in 1990, which shocked him and his colleagues at the école. “It was a very strong event, because sometimes we say that governments cannot do much against tax havens, they’re too powerful. And suddenly we’re able to send 1 million troops 1,000km away from home to give back the oil to the emir of Kuwait. I was not sure this was the right redistribution of wealth.”

The west’s general relationship with the Middle East – “the most unequal region in the world”, he says – is one that troubles him, not least because it exposes grotesque inequalities. “Take Egypt: the total budget for education for 100 million people is 100 times less than the oil revenue for a few dozen people in Qatar. And then in London and in Paris we are happy to have these people buying football clubs and buying apartments, and then we are surprised that the youths in the Middle East don’t take very seriously our democracy and social justice.”

Sanitising history

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I can’t stand Downton Abbey, the current opiate of the couch-potato class. Neither can Polly Toynbee:

To control history by rewriting the past subtly influences present attitudes too: every dictator knows that. Downton rewrites class division, rendering it anodyne, civilised and quaintly cosy. Those upstairs do nothing unspeakably horrible to their servants, while those downstairs are remarkably content with their lot. The brutality of servants’ lives is bleached out, the brutishness of upper-class attitudes, manners and behaviour to their servants ironed away. There are token glimpses of resentments between the classes, but the main characters are nice, in a nice world. The truth would be impossible without turning the Earl of Grantham and his family, the Crawleys, into villains, with the below-stairs denizens their wretched victims – a very different story, and not one Julian Fellowes would ever write.

Much attention is paid to detail. Place settings are measured to perfection with a ruler, the footmen’s buttons absolutely correct, yet everything important is absolutely wrong. Start with the labour: what we see is pleasant work by well-manicured maids in fetching uniforms, healthy and wholesome, doing a little feather-dusting of the chandeliers, some silver polishing, some eavesdropping while serving at table and some pleasant cooking with Mrs Patmore. There is even time for scullery maid Daisy to sit at the kitchen table improving herself with home education. In Downton the hierarchical bullying of servants by one another is replaced by the housekeeper and butler’s benevolent paternalism: what a nice place to work.

What we never see is bedraggled drudges rising in freezing shared attics at 5.30am; slopping out chamber pots, heaving coal, black-leading grates, hauling cans of hot water with hands already made raw by chilblains and caustic soda…

Right on. Terrific rant.

How to teleport a spanner

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socket-wrench

Now here is a lovely story about technology and ingenuity:

My colleagues and I just 3D-printed a ratcheting socket wrench on the International Space Station by typing some commands on our computer in California.

We had overheard ISS Commander Barry Wilmore (who goes by “Butch”) mention over the radio that he needed one, so we designed one in CAD and sent it up to him faster than a rocket ever could have. This is the first time we’ve ever “emailed” hardware to space.

Details are fascinating. Worth reading in full.

The Sony ‘censorship’ controversy

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This just in from Mark Anderson, the guy who told me about the sub-prime mortgage racket nine months before the collapse (and indeed before I knew what a sub-prime mortgage was):

When Dalian Wanda, China’s largest commercial real estate and entertainment firm, bought the US’ second-largest theater chain, AMC, a few years ago, I wondered what the result would be.

Already, we had started to see the effects of China’s desire to move its censorship efforts offshore and into the US film industry, with the increase in various levels of pandering to Chinese censors by US studios in an effort to get Chinese domestic distribution. Double endings, Chinese heros, Chinese settings, and even Chinese script approval, all became part of the new economics of making more money on blockbuster films.

This week, as Sony wrestled with how to manage the damage from North Korea’s hack of its networks, it waited for theater chains to ring in. According to the LA times, Regal decided not to cancel, but to delay showing The Interview, a comedy based on “taking out” Kim Jung Un.

And then AMC announced it would pull all of its US theaters out of distribution for the film. It was AFTER AMC’s announcement that Sony decided to pull not just the single Christmas day showing, but the entire distribution of the film.

Could Sony have launched the film in defiance of AMC’s pullout? I seriously doubt it.

Result: For all intents and purposes, it appears that China censored the American film offerings this season, and not Sony.

For some reason, all of the press seems to have missed this story to date.

Quote of the Day

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“When I get asked in interviews to predict the future, I always have to struggle to come up with something plausible-sounding on the fly, like a student who hasn’t prepared for an exam. 1 But it’s not out of laziness that I haven’t prepared. It seems to me that beliefs about the future are so rarely correct that they usually aren’t worth the extra rigidity they impose, and that the best strategy is simply to be aggressively open-minded. Instead of trying to point yourself in the right direction, admit you have no idea what the right direction is, and try instead to be super sensitive to the winds of change.”

And

“Another trick I’ve found to protect myself against obsolete beliefs is to focus initially on people rather than ideas. Though the nature of future discoveries is hard to predict, I’ve found I can predict quite well what sort of people will make them. Good new ideas come from earnest, energetic, independent-minded people.

Betting on people over ideas saved me countless times as an investor. We thought Airbnb was a bad idea, for example. But we could tell the founders were earnest, energetic, and independent-minded. (Indeed, almost pathologically so.) So we suspended disbelief and funded them.”

Paul Graham