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

Is Mom the only one thinking about robots?

Northampton Street Scene 1507

The Boston Globe featured an article entitled “Robots Will Take Your Job” (the link is below).  This is what I know: per Jerry Parnell, science fiction writer, such authors have known for years that eventually computers and robots will run everything.  The Globe article estimates that by 2030, half of jobs will be replaced.   According to the Harvard Business Review, everyone is concerned about  how one can stay ahead of the curve and not be replaced by robots.

So here’s my big question, the one not being answered: What’s to be done about this?

Per my respected friend, Doctor Lincoln Rathnam, eventually the government will pay you to perform a social function, such as run a chess club (I like chess) or plant a small community garden (I’ll stick with the chess).  But  are we and the government ready for this?  I hear daily about advances in computers and robots but nary a word about government progress to handle the migration of workers from something… to nothing.

I do know, per an article I read in the Wall Street Journal ages ago that there is an international forum that was put together to talk about this issue and possible limits being put on artificial intelligence.

So, Mom handed me the article, and said “Am I the only one thinking about robots?”  Is she?  What are your thoughts?

 

https://www.bostonglobe.com/ideas/2016/02/24/robots-will-take-your-job/5lXtKomQ7uQBEzTJOXT7YO/story.html

 

Written by Michael Emerald, CFA

Categories: Current Issues

What did you conclude from Microsoft’s Tay AI robot?

Michael Emerald 1506

Meet Microsoft’s Twitter Robot, Tay

Briefly, Microsoft put a robot on Twitter, impersonating an 18-24 year old girl, and users began putting her to her limits, resulting in everything from profanity, to drunk innuendos, to sex innuendos (funny how that works) to antisemitism.  For a full story Google Microsoft Tay and you’ll find something.

My Thoughts: Shows Me that AI Isn’t As Far Along as we are Led to Believe

As a securities analyst I can tell you that every company with a product in development is ready to tell you that their product is “almost” ready to roll.  But it’s not.  CAVEAT: I’m generalizing.  We’ve been told that AI personas are around the corner to be able to talk and act like humans, almost passing the Turing Test (a test where a robot is indistinguishable from humans) with ease.

This told us that these things are a ways away from production-ready, regardless of what a company like Microsoft may believe.

My Thoughts: One BIG Problem With AI is Where It’s Learning From

On the surface, a computer that learns on its own is a wonderful thing.  But, like we humans, socialization comes into play, apparently.  The users who conversed with Tay intentionally enticed her to say things like this.  Microsoft blamed the users (more on this below) but more generally, how do we prevent a computer from learning the wrong things from the wrong people.  Do you have an answer?  I don’t.

My Thoughts: Excuse me?  It’s the Users Who Were at Fault?

The facts: Microsoft puts a robot on line, users conversed with her, and she said she believes in Genocide, against specific ethnic groups, no less.

The Verdict: Well, if I’m the judge I’d say that Tay did a VERY bad thing. Who’s to blame?  The programmers and the ones who decided to put her into production.  But wait…

But Microsoft blames the users!  Were it me, I’d be THANKING them, for testing her right out-of-the gate.

This has broader, more serious, implications.  It’s one thing for a drunk robot to tell you they want to commit suicide and we get blamed by the company for taunting her… but what if it’s a self-driving car and we ask it to drive to a non-existent convenience store?  Or ask it to drive us into a lake? Or ask it to drive full speed on the autobahn and it goes IT”S full speed of 160 miles an hour?  Who’s to blame?  Well obviously the manufacturers of the car.  But if Microsoft can blame us here, I sense the auto makers might try to use the same precedent to tell the courts that a car that drives itself into the lake is OUR – repeat OUR – fault.

So What do we do About It?

The baby boomer in me comes out when I suggest we return to basic product development and first design it well, then build it well, then test it well, then beta test it well, and once this is all done, release it to the public in limited production, distributing it more widely as wrinkles are ironed out.  You know, I’m sure, that products are rushed nowadays.  But with products as serious as AI or robots I feel the downside to rushing production is worse than the upside benefits.

Michael Emerald, CFA

Performance Business Design

Owner, Business Strategy Consultant

 

Categories: Current Issues

So what would you do about job replacement were you President?

Sharon at Newport Polo 1507-3

Hello.

Recently I shed some fears about the loss of jobs by computers and robots, a fear that is shared by many.

So what would I do about it if I were the President?

The quick answer is “Darned if I know!”.  But as a securities analyst and consultant I’m paid to offer intelligent ideas, so here goes:

1.  I sure would set up a large experienced  Forum or Organization to discuss what to do about the problem of what to do with jobs as they become replaced by automation.

2. While I’m at it, I’d also set up an experienced Forum for discussing the limits of artificial intelligence.  Every tech show, namely This Week in Tech (on the TWIT network) talks about the big question: “Once computers have a lot of power, will they want to get rid of humans”?   While they don’t have power I sure as heck would like to debate the issue at a high level, setting limits if needed.

3. Since I’m President, I only have to worry about 4 or 8 years, thankfully, and not the year 3000 when we are commuting to Mars and living to be 200.  I just have to worry about the loss of jobs from robots like Atlas who can stack factory cartons faster than I can and never get a sore back.   With that, I’d  propose something like “For every 1 automated thing you have to hire 9 workers”.  This would include the automated telephone receptionist, robots, and even automated tele-marketing systems “This is Steve from custom solar panels.  Have we got a deal for you.  Just call this number and we will make your house better than it’s ever been.  <click>”.

That’s a start right?  What are your thoughts?

Michael Emerald, CFA

Categories: Current Issues