The NewCo Daily: Today’s Top Stories
Right now the European Union is a lot more serious than the U.S. about protecting users’ privacy. Signaling that it means business, the union has fined Facebook 110 million euros for providing inaccurate information to EU regulators about its acquisition of WhatsApp in 2014 (Reuters).
At the time, Facebook had said that it couldn’t match individual users’ Facebook accounts with their accounts on WhatsApp. But last year the social network did just that. Facebook says it made an unintentional error in its filings. The root of the issue lies in Facebook’s effort to reduce duplicate accounts, which skew the total-user numbers that its market valuation depends on (Quartz).
Given Facebook’s wealth and resources, we have to assume that even this considerable fine won’t make much difference to the company. The cash is less of an issue for Facebook than the blot on its image and its credibility. The more Facebook wants to be the one-stop-shop for its users to connect with information, businesses, and one another, the more it needs users’ trust.
That’s why the continuing drumbeat of privacy-breaching complaints from Europe — five nations there are engaged in investigating or charging Facebook with violating their laws (Quartz) — ought to worry Facebook’s managers. If people lose faith in Facebook’s intentions and behavior, they could slow down posting updates and pictures, or begin to drift away toward other services.
If Robots Are Eliminating Jobs, Why Is Unemployment Down?
Maybe automation, AI, and robotics will kill jobs and lead to “the end of work,” as some observers are predicting. But if that were going to happen, shouldn’t the trend begin to show up in employment and productivity stats?
That’s what tech critic Nicholas Carr is asking on his blog. In the late 20th century, pundits repeatedly predicted that computerization and IT would have a similar dire effect on employment, yet that never really kicked in. For the longest time, economists also had a hard time finding any impact from the digital revolution on productivity — although, arguably, that finally changed in the 1990s.
This became known as “the productivity paradox,” and Carr says that something similar is happening today with automation — a “robot paradox.” He admits that the new wave of tech is changing the nature of work, and also holding wages down, but argues that predictions of a job drought “run counter to the facts.”
We might, indeed, be way off in our fears. It’s also possible that huge transitions are already underway, and industrial-age metrics simply aren’t keeping up with changes in how the economy actually works.
D.C. Moves Taxis Onto Square’s Payment Platform
If you can’t beat Uber, copy it? That seems to be the reasoning behind the Washington, D.C. taxi system’s announcement that it’s ditching old-fashioned meters and replacing them with phones or tablets equipped with Square’s payment system (Joshua Brustein in Bloomberg).
The D.C. taxi department is calling on third-party companies and developers to provide apps that will hail taxis, meter trips, and provide digital receipts. The goal is to shape a transport system in which taxi drivers are able to compete with Uber and Lyft.
If it succeeds, this approach might point the way toward a future in which ride-hailing becomes a more open marketplace, less dominated by one or two centralized platforms. Some taxi drivers are skeptical — but then, doesn’t that come with the territory?
When Does Good Marketing of a Bad Product Become a Con?
Today’s marketers often describe their work as the construction of narrative — telling stories about products. But what happens when the story becomes divorced from the product’s facts?
You end up, writes Carina Chocano in The New York Times, with a “scam economy.” And ours is now “entering its baroque phase.”
Chocano traces a connection from Wells Fargo’s fake accounts to Trump University’s fake degrees to Fyre Festival’s fake music weekend, and asks, “Where is the line, exactly, between a poorly produced but well-advertised product and a con?”
Fraud is neither new nor foreign to our economic history; it’s as American as apple pie. Two new factors are driving it today: First, new communications channels provided by social media and tech tools can let “messaging” get way ahead of reality. Second, at least some portions of 2017’s millennial youth have traded in the cynicism of previous eras for “an admiration of the hustle and an enthusiasm for all the enthusiasm.” How many scams will it take to transmute all that gung-ho energy into a reborn skepticism?