The NewCo Daily: Today’s Top Stories
Engineer Susan Fowler set off a firestorm last week with a post describing her experiences during a year’s employment at Uber. It was hard to tell which was worse to read about — the incidents of sexual harassment she described, or the inadequate (or nonexistent) response to her treatment by the firm’s management and human-resources team.
Uber, of course, has always been known for a brash, bare-knuckles culture. But Fowler’s account somehow broke through the industry’s indifference with telling, all-too-credible detail. Maybe it was the immunity seemingly granted “high performing” managers to hit on, condescend to, and discriminate against female colleagues; maybe it was the petty stuff, like the time everyone on the engineering team got status-conferring leather jackets, except the women, because theirs would cost a little more.
Co-founder and CEO Travis Kalanick, already on the defensive for his willingness to work with President Trump, promised a transparent investigation and speedy reform. That hasn’t calmed talk of canning him (Business Insider). Meanwhile, the company faced further turmoil today with the announcement that Kalanick had asked his SVP of engineering, Amit Singhal, to resign (Recode). Singhal hadn’t disclosed that a sexual harassment dispute lay behind his departure from Google last year. And wait, there’s more: Over the weekend, Uber also got sued by Google, which charges that Otto, the self-driving truck startup Uber recently acquired, stole its technology (Wired).
Transforming ingrained behavior patterns at a startup is notoriously tough: “we’ll fix the culture later” is always an uphill battle. Mike Isaac’s deep dive into Uber’s “unrestrained workplace culture” (The New York Times) makes clear that aggression, rule-breaking, and lack of accountability are fully baked into the company’s DNA.
Still, the pushback now — even publicly from early investors in Uber like Mitch and Freada Kapor (NewCo Shift) — is fierce. Uber critics have long complained that the company still hasn’t demonstrated a clear path to profitability. Now we have to wonder if it will implode from ethical rot before it ever hits a financial wall.
Some Bright Ideas for Labor
The American labor force may be reeling from the speed of technological change, but couldn’t technology help heal the wounds it’s inflicting? Despite the partisan tumult in Washington, Charles Duhigg (The New York Times) finds a considerable amount of bipartisan enthusiasm and optimism for ideas that harness tech innovations on behalf of workers’ needs.
To wit: Benefits could be made truly portable. Federal agencies could spread and share good ideas piloted at the state level. Job training could be modernized and then kept up-to-date. Online jobhunting tools have primarily served white-collar jobseekers till now, but they can and will be adopted to aid blue-collar workers whose jobs are displaced by automation — and the Labor Department could take the lead in making that happen, Duhigg suggests.
In a bigger way, our system’s binary definition of work — you’re either an employee or a contractor, period — has failed to keep up with how Americans actually earn their livings today. More flexible work categories could free employers to offer some benefits to part-time or gig workers without triggering the full “now you’re an employee” requirements. Workers will always fear that such flexibility will end up making it easier for companies to offer them a worse deal. It’s on employers to show that such experiments will pay off for everyone, and not just their own bottom lines.
What’s Wrong With Bill Gates’s Robot Tax?
Earlier this month Bill Gates suggested one remedy for automation-driven unemployment: tax the robots. “Right now,” Gates told Quartz, “the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.” That revenue could be used to fund work in areas where the human touch is still critical, like elderly care and teaching.
The Economist doesn’t like Gates’s idea, for several reasons. When companies buy robots, they’re making long-term capital investments, and economists frown on taxing those. Taxes on robot productivity could raise the cost of manufactured goods and thus hurt human laborers who buy them.
In any case, the real trouble with automation, according to The Economist, is that the fruits of recent productivity gains have gone straight to company profits — neither labor nor capital (which includes robots) have gotten much. That’s because a few “superstar” firms have gained outsize market power — and “when firms enjoy unassailable market positions, workers and machines alike lose out.” If The Economist is right, what we need is not a robot tax but tougher antitrust enforcement. That’s something Gates has experienced firsthand.
Why Fixing NAFTA Isn’t About Bringing Factories Home
NAFTA, the ‘90s-era deal that knit the U.S., Mexico, and Canada into one big free-trade zone, has taken tons of lumps over the years from critics — most recently and loudly, President Trump — who say it killed American jobs. According to Jeff Faux (The Economic Policy Institute), the real problem with NAFTA isn’t that it encouraged U.S. companies to send jobs south of the border; the trouble lies in how it “shifted the benefits of expanding trade to investors and the costs to workers.”
If NAFTA, and similar agreements that followed, was simply about opening up trade and eliminating tariffs, it would have needed only “a few pages,” Faux writes. Instead, the broad impact of the deal lay in a thousand pages that systematically undermined labor and environmental protections in the U.S. Those rule changes protected investors’ profits and assured that workers would have no leverage, on either side of the border.
Trump keeps threatening to tear NAFTA up. But if he’s serious about improving on the treaty, he could instead work to rebalance the deal to better reward workers and bolster their wages. Unfortunately, no such plan actually appears in the works.