Newco Shift | Covering the biggest shift in business and society since the industrial revolution

Is Amazon’s “buy box” shafting you?

Questioning Amazon’s algorithms. Amazon famously puts customers first. But a new report by ProPublica suggests that the company’s code pushes its own merchandise, even when other listings on the site offer better deals. The algorithm that chooses which seller to feature in the rectangular orange “buy box” seems to favor Amazon itself, or the “Fulfilled by Amazon” partners who pay the company to handle inventory and shipping. Read closely, though, and ProPublica’s argument turns out to be almost entirely about shipping costs. For Amazon’s favored Prime customers (who pay $100 a year for free shipping and other perks), and for anyone whose order tops $50, the shipping costs nothing, and the deal Amazon highlights really is the cheapest one. That’s still arguably a problem, but hardly the capital offense the story implies. Watchdogging algorithms is the investigative journalism of the future, and ProPublica does great work. But in its eagerness to tar Amazon it has obscured the real lessons here: Platform owners are always going to give themselves an edge. Amazon deserves credit for running an open platform that lets alert consumers find good deals and gives outside merchants access to its vast market. It has also earned a rap on the knuckles for tilting its listings to goose Prime signups. Instructive, for sure. Scandalous? Probably not.

Nuggets of gold in piles of user comments. Of course you care about user feedback and customer reviews! But who has time to read them all? Now there’s a machine-learning-style data analytics tool that will read them for you and tell you what to do (Buzzfeed). This service is called Metis, and for the moment its eyes are trained on the products of luxury merchants. For instance, it told a high-end hotelier that its guests really, really cared about customizing their breakfasts. We can assume this sort of analysis will quickly move down market as well, where the volume of feedback is even more overwhelming, and the potential payoff for small incremental improvements is that much higher. Anything that helps businesses listen better is valuable — as long as the process still allows individual human voices to make themselves heard.

Grad Students Are Employees, Too

By scott-rosenberg

Unions win admission to Columbia. The National Labor Relations Board ruled Tuesday that graduate students and teaching assistants have the right to unionize at private universities (The New York Times). The Columbia grad students who won the case say it’s less about wages than issues of power and independence and their ability to protect themselves in the “corporatized, hierarchical” world that their university has become. The university says the grad students should be viewed primarily as students; the NLRB disagreed, ruling that if they get paid and supervised like other employees, then, like other employees, they should be able to join a union, too. The students join employees of some digital media outfits in the “unions aren’t as dead as you thought” parade. The NLRB’s move is a sharp reminder to companies and institutions of all stripes: share power and decision-making with stakeholders, or don’t be surprised when they organize. Related: If graduate assistants are employees, why aren’t college athletes? (Pacific Standard)

EpiPen train wreck shows how broken healthcare pricing is. EpiPens are easy-to-use quick-injection devices that save the lives of children and other people who are prone to sudden allergic reactions that block their breathing. The medicine in them — epinephrine — costs about $1. But one company, Mylan, has a monopoly, and it has aggressively marketed EpiPens (Gizmodo) while raising their price roughly six-fold in the past few years (Forbes). An EpiPen two-pack (the only kind available) now costs about $600. People need to keep lots of them around, and they expire every year. So, just another pharma price-gouging tale, right? Here’s the twist: Mylan gives patients discount coupons that cover their copayments, so in theory the customer shouldn’t care about the price— only insurance companies are on the hook. But we’ve spent the last decade pushing people into high-deductible insurance plans,on the theory that, if patients have some skin in the cost game, they will help introduce market discipline. That’s exactly what’s happening: Those sticker-shocked insurees are either raising a stink or forgoing the purchase entirely. Congress is up in arms, too, which surely isn’t what Mylan wanted. (Its CEO is the child of a West Virginia senator.) Moral: A company that views the health marketplace as an arena for maximum profit extraction and puts lives at risk will end up a pariah.

What’s the True Cost of Carbon?

By scott-rosenberg

Carbon accounting passes legal muster. If we’re going to fix the climate, we have to plug it into our numbers — the statistical models and accounting books that drive decision-making in business, government, and ultimately, our lives. The Obama administration has been trying to require its agencies to include the “social cost” of carbon in all their calculations, and opponents have pushed back in the courts. Those challenges got consolidated into one big appeal, and this week, a federal appeals court upheld the White House, maintaining the rules (Bloomberg). That’s good news as we try to imagine retooling the national and global economy so it doesn’t wreck the planet — by, for example, figuring out how to transform coal jobs into solar jobs (Grist). There’ll be plenty of argument about how to price each unit of climate havoc: for 2015, the feds calculate $36 for each ton of carbon emitted. Anything is better than pretending it costs nothing at all.

Old starts to become the new young. Graying boomers at the tail ends of their careers are facing discrimination, many for the first time (Washington Post). That means more bad blood in the inter-generational grudge match between millennials and their elders, and more lost opportunities for companies that snub veteran employees — and lose their expertise. If there’s an upside here, it’s that older workers may gain more empathy for the many other kinds of discrimination so many colleagues face, and embrace diversity wholeheartedly instead of resenting it, as some do. Even if your organization believes (as Mark Zuckerberg once said) that “young people are just smarter,” and isn’t deterred by the legal or moral case against ageism, it may have to get more comfortable with hiring olds: many countries’ workforces are graying rapidly (Bloomberg). When it comes to aging, no one’s exempt.

Beyond Big Oil

By jimmy-guterman

This Shell LNG plant is the size of 600 football fields.

Beyond Big Oil. Even if you don’t believe in Peak Oil (that’s an argument for another day), Big Oil is in for big changes (Bloomberg). “We’re more a gas company than an oil company,” says Shell’s CEO, and that’s an extraordinary statement. The company’s recent $54 billion takeover of BG Group solidified Shell’s standing as a leading player in gas as well as oil, and many are considering gas the key transitional fuel as the world shifts from oil to renewables. That transition may happen very quickly and in an ugly way for incumbents–investment in renewables is growing rapidly and there’s already a glut in the global LNG market–but Shell seems to be diversifying as quickly as it can.

A Deficit of Idealism: Tim O’Reilly on the Next Economy. In the latest entry of our NewCo Shift Dialogs series, our CEO and editor in chief John Battelle talks to O’Reilly Media founder Tim O’Reilly about a broad range of topics, from the responsibility of corporations to why universal basic income, while tempting, might not be the right solution for our current needs.

Facts Matter and the Truth Will Out

By jimmy-guterman

A Brexit promise that turned out to be untrue (Getty Images).

We Can Handle the Truth. One of the key attributes of a NewCo is that it makes decisions based on data, on facts. So it’s particularly distressing when we see truth denigrated in the public arena, whether it’s Brexit advocates refuting their claims hours after they won the referendum or two American presidential candidates having, to different degrees, complicated relationships with truth-telling. Katharine Viner’s long read in The Guardian details how we got into this mess (she blames the imperatives of Internet publishing); more important, it offers some ideas on how we might get out of it by puncturing the filter bubble, modulating the clickbait, and other actions. Her argument is that technology got us into this mess and it’ll be technology that gets us out of it. “The truth,” she writes, “is a struggle,” but it’s a struggle worth undertaking so citizens, like NewCos, can make smart decisions about their future.

New on NewCo Shift. There’s a lot new on NewCo Shift today. Kaya Thomas writes stirringly about how Facebook’s diversity problem has a human impact, and Ben Huh of Cheezburger looks back at his recent gap year. And, if you were away last week (seems like everyone was), catch up on our founder John Battelle’s video interviews with Brad Smith of Microsoft and Max Ventilla of AltSchool.

Microsoft’s Privacy Victory

By jimmy-guterman

Microsoft’s Privacy Victory. As discussed in our recent Shift Dialogs talk with Microsoft president Brad Smith, the Redmond giant is involved in some serious litigation with the US government, this time as plaintiff. Yesterday the company won an appeal on overseas data searches (New York Times). An appeals court “reversed a lower court’s ruling that Microsoft must turn over email communications for a suspect in a narcotics case stored in a Microsoft data center in Dublin.” Microsoft argued that the earlier ruling would make it increasingly difficult for companies to resist attempts by less savory governments to obtain customer data. Plenty of news organizations filed briefs supporting Microsoft; the Department of Justice released a statement saying it is considering options. For now, though, domestic searches stay domestic.

Tech Execs Line Up Before Republican Convention. Peter Thiel, one of the best-known and most-controversial tech investors, is speaking at the Republican Convention in Cleveland next week, but there are plenty of prominent tech voices that won’t be joining him. In this open letter from technology sector leaders on Donald Trump’s candidacy for President, which we’ve published, more than 100 inventors, entrepreneurs, engineers, investors, researchers, and business leaders (among them executives at Google, Qualcomm, Slack, Twilio, and Yelp) lay out the case against Trump’s “divisive” candidacy and, instead “embrace an optimistic vision.” Whichever side you’re on (and we’re not playing false equivalence here; John Battelle, our founder and CEO, signed the letter, as did Ev Williams, founder of Medium, which hosts our website), it is welcome to see tech moguls focus on issues bigger than their own companies.