Uber’s Great for the Passenger, But Needs Unionization to Protect its Workers

Hello.

What About Uber?

Uber’s been bringing a whole lot of controversy over the year.  I assume you’ve been reading what I’ve been reading, so I won’t rehash the issues.  To me, they center on two things:

Uber is unregulated, unlike the taxi cab system

Uber is causing traditional cab drivers and their businesses to suffer

Guess what?  I have no problem with those things, nor Uber.  Why?  Because people love Uber.  And in a day where bad news spreads like wildfire, we’d certainly know by now whether they were a disservice to the public.

But…there’s always a but…

I think what needs to be regulated is their pricing and treatment of workers.  Uber has fallen for the trend that is contagion on much of corporate America: cutting compensation to near-break-even levels, requiring excessive hours, and giving its employees no voice.  Anyone who knows me knows that I am against all three of these.  Why?

Because cutting compensation reduces costs and accrues to the stakeholders of Uber, while harming, possibly literally, the lives of its employees.  All of this was discovered back in the days of the robber barons when minimal wages and excessive hours were the norm and their danger made known.  Second, it is a monopolistic practice, because if a competitor, say cabs, is not willing to starve its employees of wages then it suffers a competitive disadvantage and goes out of business.  At which point the monopolist can raise prices to its customers, but often not compensation to its employees.

How would I regulate Uber?

I don’t want to risk my reputation and pretend to be expert in regulation.  I’m not.  But I do point out that Uber resists unionization for a reason.  Because it knows unions give power to its employees.  Worker salaries suffered dramatically historically once unions were disbanded.  And while we all know the downside of unionization, the pendulum has swung too far in the favor of Uber, so unionizing, negotiating wages, and moderating driver hours is a good thing.

Michael Emerald, CFA

Wall Street Analyst and owner, Performance Business Design

Categories: Current Issues

Terrorism is Best Stopped at its Roots, and not its Branches

Hello All.

We’re seeing a resurgence of terrorism, particularly in Europe.  I’m choosing my words generously, since most reading this will feel that it never dissipated.  Fair enough.  I’ve seen over the years increased efforts to have surveillance, security checks, improved metal detectors, greater airline scrutiny, and greater regulations in crowd control and airline travel.  The problem is that law enforcement has to do its job right every time to prevent terrorist acts, while a terrorist only needs to do his (mostly his) job only once.

Logically this is a problem since as the amount of surveillance and defense increases, life becomes more and more uncomfortable for civilians, while terrorists only need to go to where the surveillance is the weakest.  And in a world with 7 billion people, it’s not hard to find such a spot.

REASONS FOR TERRORISM

The solution, I feel, lies in identifying the reasons terrorists are incentivized to join terrorist groups, namely ISIS, and then countering those reasons.  I won’t go into the reasons in depth, but from what I’ve read it’s related to the promise of a better economic life, drugs, self-empowerment, and personal support.

SOLUTIONS TO TERRORISM

Countering those motivating factors might entail a foreign policy that helps further the economies not providing satisfaction to its civilians.  Anything beyond that is beyond my expertise, though a sense a good foreign policy committee could come up with some great ideas.

GLOBAL COOPERATION

Terrorism is global.  So any solutions should be made in concert with other countries, primarily those with a mindset similar to the United States.

 

Categories: Current Issues

What’s to be Done About North Korea? Common Sense if All Else Fails?

Why two question marks in the title?  Because the quick answer is “damned if I know”.  I do have a few semi-formed conclusions, however, see if you agree with them:

  • Their leader isn’t rational.  So the fact that the flea is waging an attack on the big dog, while illogical, makes sense to you-know-who.

  • Thus, when you are dealing with an illogical person, don’t expect logical negotiation to work.  Indeed, we’ve tried to, and to apparently no avail.  We don’t think so, anyway.

  • This is a high-stakes game of poker.  Whether either side is bluffing or not is insignificant when you consider the consequences at stake.

So, here’s my recommendation.  When you are dealing with a 3 year old and they throw the toy you tell them not to.  When the 3 year old then throws it again you tell him that he’s going to be punished if he throws it again.  When he throws it the 3rd time, you pick him up off his feet, put him in bed, and despite all the whining, wailing and complaining, that’s it.  That’s what you do.

In other words, we say that we won’t tolerate nuclear missile tests.  Done.  Did that.  Next we draw the line…or more exactly the president and his staff draw the line on what constitutes over-the-line.  An attack on a US possession, plan or ship would probably be considered over the line.  Then, you let the generals recommend a course of action for taking military action.  What is best I leave to them, not me.  But at that point they’ve been forewarned, the world agrees something must be done (whether they say so publicly or not), and we do it.

Yes?  No?

Michael Emerald, CFA

Owner and Wall Street Analyst

Performance Business Design 

Categories: Current Issues

Global Warming 1, Human Beings 1

Who’s to Blame for Global Warming?

A common issue nowadays is understandably global warming, with the big question being are we, or are we not guilty of causing the warming of the planet?  While no expert on the subject, with my science background (physics) and being a longtime reader of Scientific American, my own feeling is this: global warming is inevitable…

…BUT we can certainly aggravate the process by emitting carbon dioxide (or whatever) and doing whatever bad acts result in global warming.

Thus, my conclusion is that it is useless to curtail everything in order to stop global warming. It’s going to happen. It’s a natural cycle.  But, on the other hand, it doesn’t help to act to aggravate it.  An analogy?  Eventually we are all doomed to die, but it is our responsibility to live well in the meantime, and to prolong our lifetimes in REASONABLE manners.  To act as though we can live eternally by doing everything perfectly is delusional.  Likewise, to reduce emissions to zero and take other acts that harm our lifestyles is delusional.

Have a great week,

Michael Emerald, CFA

Wall Street analyst and owner, Performance Business Design