Management by algorithm. It’s not just the gig-economy platforms that are using code to apply factory-style productivity principles and redefine the nature of employment. Software to manage shifts and boost sales is fast spreading to the retail and service economies (The Financial Times) and turning the lives of workers there upside down. In one sense, this trend is simply the rebirth of the stopwatch-driven “scientific management” techniques that Frederick Taylor introduced a century ago, when “Taylorism” became synonymous with a kind of dehumanizing focus on productivity metrics. In another, it represents an entirely new way of approaching the relationship between employer and worker: less committed on both sides, more fluid, continuously tweaked. If we manage this change thoughtfully and sensitively, it has the potential to make businesses way more efficient and give employees much more freedom. But if we blow it, we could be in for an era of labor-management strife like we haven’t seen since — well, since the era of Taylorism.
The perfect company, piece by piece. In a new series, Quartz sets out to find companies that have aced specific aspects of their businesses. WordPress maker Automattic, for example, makes a fully distributed organization work by regularly swapping new tools into its communications kit. Japan’s MUJI tackles sustainability through nuts-and-bolts thinking rather than flashy do-gooder campaigns. Online furniture merchant Wayfair rethinks customer service by hiring millennials with a passion for gaming who are good at problem-solving, then giving them the power to authorize returns or take other quick steps to resolve issues. You can’t cut and paste these exceptional parts into any kind of “perfect” whole, of course. But there’s plenty to learn from each patch of the quilt.
High rents close doors. In the 1950s, urban planners thought we had to disperse big-city populations to suburbia to protect them from nuclear attack. Then they assumed traffic and inner-city decay would drive people out to “edge cities.” Then they imagined that telecommuting would empty out downtowns. Instead, of course, we have watched as towns like San Francisco and New York turn into “imperial cities” so popular that most of us can’t afford to live there (The New Yorker). Such cities are no longer where you go to make it, but rather where you go once you’ve made it. More housing would help, but it takes a daunting amount to put a dent in sky-high rents. Yes, entrepreneurs and job-seekers will spread out over time to a broader range of regional centers — but that’s a slow process. The failures of foresight of previous generations of planners suggest how hard it is to intervene and remedy such problems. But it’s tough to sit back and do nothing while our cities, once drivers of opportunity, turn into engines of inequality.
Google’s Waze will turbocharge carpooling. Remember when people called Uber and Lyft “ride-sharing services” with a straight face? Both companies, of course, turned out to be more about ride-hailing — they were new-model, distributed taxi services, and despite efforts like Lift Line, that’s mostly what they’ve remained. Now it looks Google will take a run at a true ride-share offering beginning this fall (The Wall Street Journal). Through Waze, its real-time route-finder, it will help users connect with drivers who are already going their way, and charge them fees that are more like “chipping in for gas” than taxi fares. Uber and Lyft, presumably, won’t stand still. This whole business of using our phones and networks to better organize how we get places still has plenty of twists and turns before we figure it all out.
What happens to Uber’s drivers when the car drives itself? Do they just collect unemployment? CEO Travis Kalanick argues that Uber’s demand for human beings, far from evaporating, will only increase — they’ll be needed to take people where the autonomous cars can’t go, and to service the self-driving fleet (Business Insider). Meanwhile, a legal fight over the status of Uber’s drivers is entering a new phase in California, where a federal judge threw out a proposed $100 million settlement between Uber and its contractors (Quartz). That could be good news for the drivers, who are suing to be reclassified as Uber employees. (Such a change would win them benefits but potentially wreck Uber’s business model, which depends on freeing the company from owning a huge fleet and supporting a vast workforce.) Alternately, Uber could now just walk away from the settlement negotiations and gamble on winning an appeals court ruling to throw out the whole suit (Bloomberg).
To see where Uber is heading, hail a ride in Pittsburgh. Before the end of the month in that city, Uber’s souped-up Volvo SUVs will be randomly assigned to customers summoning cars on their phones (Bloomberg). And the trips will be free. For now, though, the autonomy part is still in beta; each test car comes with a backup driver at the wheel. Uber also acquired Otto, a self-driving truck startup in San Francisco founded by exiles from Google’s autonomous-car program. With Google/Alphabet, old-line auto giants like Ford and GM, NewCos like Tesla and Uber, and wild-cards like Apple all racing down the self-driving road, it’s getting crowded out there. That increases the likelihood of crack-ups along the way. It also suggests this market is neither a mirage nor a bubble.
Rana Foroohar’s deeply reported new book takes direct aim at the financial industry and calls for a new compact between business and society.
Every so often a book comes along that works its way into a majority of the interesting conversations you have with both friends and colleagues. Such is the case with Rana Foroohar’s Makers and Takers: The Rise of Finance and The Fall of American Business. Foroohar was kind enough to send me an early draft to read several months ago, and I found myself quoting from it in nearly everything I subsequently wrote, in every talk I gave, and even in various Slack channels at work. Makers and Takers is that rare work of journalism that both appears at a fortuitous moment in history, and captures the essence of that moment’s core narrative.
Foroohar chronicles the rise of the financial industry and its destructive impact on the global economy. And she has the credibility and the chops to pull it off — over the past 15 years she’s covered the financial industry for Newsweek and Time. She’s been the global economic analyst for CNN for the past three years as well. Foroohar is not only passionate and opinionated about her field of work, she’s a lucid and compelling spokesperson for change in not only finance, but also in the purpose-driving business, and the social compact that binds us all as citizens in a global economy.
Austin voters have spoken — and Uber and Lyft have both left town. Officially it was about fingerprint-based background checks, but in reality it was about bruised egos and bad campaign tactics. Joshua Baer argues we need to get everyone back at the negotiating table for a fresh start.
My good friend and mentor Rick Westervelt taught me that when things go wrong, it’s usually not because of just one mistake or failure — it’s because three or four things all failed at the same time. If just one thing had gone wrong, you might have been able to recover, but when mistakes pile on top of each other it can become impossible to dig yourself out.
I believe that’s what happened with Uber and Lyft and the recent Proposition 1 election in Austin, Texas, a local election that pitted the ride sharing services against the city of Austin. In trying too hard to win over new voters, Uber and Lyft turned many of their strongest supporters against them.
Austin Voters to Ride-Hailing Services: Hold Your Horses On Saturday, voters in Austin decided that ride-hailing services need to have the same fingerprint-based background-check services as taxis. As a result, Uber and Lyft are threatening to leave town. As of this morning, both services have suspended operations in the Texas state capital, with second-tier players trying to rush in. It was an expensive defeat: the two companies spent nearly $9 million in Austin’s most expensive local campaign ever, by a factor of seven. Austin’s mayor is tweeting olive branches, with no word yet from the two companies, who claim the requirement make their businesses untenable. Next stop for the companies’ our-way-or-the-highway tour: Houston, which has a similar rule.
The Secrets Behind Our Most Secretive Company BuzzFeed’s William Alden has been through a cache of internal documents from Palantir and discovered that “Silicon Valley’s most secretive company” is both larger than you might think and more wobbly. Its data-analysis deals with companies top $1 million per month each; BP, just one client, in 2014 signed a 10-year deal worth more than $1.2 billion. Alden’s research reveals frustrated clients (three marquee names gone over the past year), key staff departures (turnover this year is expected to hit 20%), and trouble collecting its premium fees (slides and an audio recording from a February presentation suggest 75% of what it’s billed remain uncollected). The most vivid response to the report comes from company cofounder Joe Lonsdale, who wrote on Quora, addressing a few of the specific points in the article and said the article’s “self-congratulatory and negative” tone “is to be expected in the low-paid clickbait environment where some in the media are jealous of the growing and healthy parts of the technology economy.”
New Ridesharing Service for Women May Not Pass Go For a wide variety of reasons, from safety to solidarity, a ridesharing service only for women seems like an outstanding idea. Launching next week in Boston, Chariot for Women will offer better background checks, only female drivers, and no surge pricing. Sounds great, but it’s probably illegal, a bitter irony considering how Uber, whose failings this new service seeks to counter, succeeded at first precisely by flaunting existing laws and policies.
Slacking in Public Slack the software tool is in large part about transparency in organizations, so it shouldn’t come as a surprise that Slack the company is aiming to be transparent with some of its most important partners. Slack’s goal is to be a platform where others create value. Its executives know that the most successful platforms are those that make it easiest for developers to know what’s coming up, so they can be prepared and do their best work. In the service of that, Slack has published an ongoing Trello-based platform roadmap for developers. It’s new and there’s not much there so far — we’ll see how it develops — but it’s a sign that one maturing unicorn knows who it needs to satisfy.