Here is a framework for legislation.

PREAMBLE

1. Data has value. Data as captured produces value endlessly across multiple production processes.

2. Such value must be realized and used in the interest of the public whose data it is in the first place.

 

LEGISLATIVE PRINCIPLES

1. All data must be anonymized and encrypted and stored in a publicly owned NATIONAL DATA INFRASTRUCTURE (NDI)

2. Rules of use: NDI Data usage cost will be according to volume of data being used and size of the firm seeking usage (revenue).

3. Some categories of users such as non-profits, universities, schools etc will be allowed free access to the data.

4. NBI revenue from data usage surcharge will be allocated within the federal budget with some restrictions. It Is mandated that the fund be used primarily for education, health, and housing. It will be mandated that it cannot be used for defence, intelligence etc.

5. The encryption and anonymization of the data will ensure security for the individual and society as a whole while allowing big data sets and the inherent value of such data sets to be used by multiple organization/individuals at minimal cost and will encourage overall innovation and growth.

6.: The anonymization of data severely limits creation of inference data sets that target individuals and manipulate behavior.

---

Respond. Tweak. Comment.

Hope all of you have had the opportunity to listen to the lecture and process it. Several aspects of the lecture is what I want to bring back here up for a discussion.

1. Early in the lecture I create the three expressions often individual-, the consumer, the worker and the citizen. Your response to this categorization and do you feel that the subject position of a consumer or a worker, especially the former, very often overwhelms or even suppresses the expression of the individual as a citizen?

2. Our data creates endless value as it enters multiple other products. Right now such value is privatized by those who extract the data. The continuous production of value from our data can be resolved if there is a technology dividend – – a use-surcharge that every company that collects and stores data has to put into a public fund. This fund could then be used to support anything from education to public health of the citizens. Your responses.

3. Involuntary data and inference data both have a little bit of a mystical character because we don’t know what involuntary data a company is capturing about us or what kind of inference data it is generating based on the involuntary data it captures. A regulatory framework must simply disallow the creation of inference data or at the minimum put limits on its use and trade. Your responses.

TECH & SOCIETY / ETHICS:
MONOPOLIES, BIG DATA AND SURVEILLANCE CAPITALISM: THE FUTURE OF SOCIETY AND DEMOCRACY 

Section B/Topic 6 – Charu Arya, Ervis Bida, Joe Colombo, Christian DeFelice, Jessica Flaherty, Kyle Rusignuolo, Rajat Sinha, Tom Williams

 

The unprecedented rise of the big four — Google, Facebook, Amazon and Apple — many argue, has brought into place a concentration of power unknown in human history. The amassing of power seems to follow two vectors: the first the rapid rise of monopoly power and second, the absolute control over data.

PART 1 – The Problem: MONOPOLY

https://www.forbes.com/sites/johnmauldin/2019/04/11/america-has-a-monopoly-problem/

 

• We have become a nation of monopolies; a large and growing part of our economy is “owned” by a handful of companies that face little competition
• Three companies control about 80% of mobile telecoms, three have 95% of credit cards, four have 70% of airline flights within the U.S. Google handles 60% of searches.
• Creative destruction is the process of companies growing their profits by delivering better products at lower prices than their competitors, but that is not happening today. Creative destruction also means that companies go out of business and workers lose their jobs for a new competitor to hire them eventually.
• Doug Kass predicted in 2019 that Amazon stock prices will be at $3,000 within a few years, and $5,000 by 2025
• We are currently living in a niche market where the world is moving to fewer competitors and larger businesses. 

 

 2 Responses

Roger McNamee — Investor / Venture Capitalist — watch video interview and associated article.

https://www.wired.com/story/this-big-facebook-critic-fears-techs-business-model/ (Links to an external site.)

 

• Roger McAmee, an investor and early Facebook backer, has since soured on the company, along with other early 2000’s Silicon Valley technology that has since exploded.
  • He argues these companies (Google, Facebook, Paypal) behaved unlike any organization before them.
    • They created disruption and harm by trying to gather as much personal information from their users in order to boost their own profits.
• McAmee believes society has accepted the practice of companies tracking users, claiming domain on their personal information, and then analyzing said info through machine learning and AI to steer people towards advertisements and predict their searches.
• McAmee does not blame the CEO’s, including Mark Zuckerberg, for continuing these practices. 
  • He places the blame firmly on the business models which have made these companies so profitable, where it relies on storing and utilizing customer data.

 

FB co-founder says “It’s time to breakup fb” NYT May 2019

https://www.nytimes.com/2019/05/09/opinion/sunday/chris-hughes-facebook-zuckerberg.amp.html

 

• The author condemns Mark Zuckerberg for sacrificing user security & civility on Facebook, Instagram, and WhatsApp for clicks
• Facebook’s news feed algorithm:
  • Changed their corporate culture
  • Had influence on elections
  • Empowered nationalist leaders
• The author finds Mark Zuckerberg’s power unprecedented and un-American
• The author calls to break up Facebook
• Monopolies prevent the competition that spurs innovation and leads to economic growth.
• The Sherman Antitrust Act of 1890 outlawed monopolies. More legislation followed in the 20th century, creating legal and regulatory structures to promote competition and hold the biggest companies accountable.
  • Ex.) Standard Oil & AT&T
• In the past 20 years, more than 75% of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled.
  • Results: ​​less entrepreneurship, stalled productivity growth, & higher prices/less options for customers
• Social media is seeing similar unchecked behavior
  • Facebook faces no market-based accountability
• Mark Zuckerberg’s drive to “dominate” the social media landscape was what drive Facebook to acquire Instagram in 2012 and WhatsApp in 2014
• Facebook’s Monopoly Statistics
  • Worth half a trillion dollars
  • Commands more than 80% of the world’s social networking revenue.
  • EPS have increased by 40% since the previous year
  • Roughly 70% of American adults use social media, most of whom use Facebook products
    • ⅔ use Facebook
    • ⅓ use Instagram
    • ⅕ use WhatsApp
  • Fewer than ⅓ use competing sites such as LinkedIn, Pinterest or Snapchat

 

 

PART 2 – The Problem: BIG DATA AND SURVEILLANCE CAPITALISM

Surveillance Capitalism by Shoshana Zuboff (McMillan 2018)

Review of SURVEILLANCE CAPITALISM 

https://www.theguardian.com/books/2019/feb/02/age-of-surveillance-capitalism-shoshana-zuboff-review (Links to an external site.)

 

• Companies, such as Google & Facebook, have come into a “behavioral surplus” of user personal information based on how their services are being utilized.
  • Allows these companies to take a user’s personal information and wants and trade them for profit in new markets which predict needs.
  • Same companies are spending billions to prevent legislation blocking them from profiting off their user base’s personal information.
  • Author Shoshana Zuboff coined this practice as “Surveillance Capitalism”.
• A majority of people are willing to sacrifice their private information to these companies in return for perceived benefits, in what is known as “Decision Rights”.
• Perceived benefits such as:
  • Ease of use.
  • Navigation features.
  • Access to information and other people

 

• Zuboff argues that the implications to allowing private data to be shared can be dangerous for societal norms in the future. Belief that surveillance capitalism will look to model human behavior and erase both free will and free markets.

 

 

 

A Zuboff documentary on Surveillance Capitalism

https://youtu.be/hIXhnWUmMvw

According to Zuboff, our personal and private experiences have been hijacked by Silicon Valley and used as the raw material and reveals how Silicon Valley deceives us.

We voluntarily provide personal information to technology companies

•       Facebook knows all our hobbies preferences and friends
•       Google knows where we are at all times thanks to its navigation app

Residual (wasteful data) from all the way back to 2001 contains rich user data that these companies use to improve their service, but also used to train their models (patterns of user behavior) to predict consumer behavior in the present and future.

•       Sell this behavior data to business customers who can in turn use it to target those customers with promotion and targeted ads.
•       Maximize the consumer value

We have no idea what today’s algorithms can predict about us or what behavioral data they used to do it

•       Buying a single shampoo can predict our behavior. Walmart case of how Walmart knew a woman was pregnant before she did.

Big tech knows us better then we know ourselves

•       they can predict things like our personality our
•       emotions our
•       sexual orientation our political orientation 

Our data can be sold to totalitarian regimes like China who uses to oppress political dissidents and minorities

Big tech operates in stealth. The systems have been engineered to be indecipherable to be undetectable to Create ignorance in a vast group of all of us that they call users.

•       Facebook experimented with subliminal cues planted in its Facebook pages That would actually influence offline real-world Behavior and emotions to see if they could make people feel happier or sadder.
•       Pokémon go is used as a surveillance system (initially incubated at google) that uses Google Earth which in turn used to be a CIA program called Keyhole.
•       Hidden microphone in Nest security systems

 Functionality of the devices and services we buy/use is held hostage to your agreeing to the privacy contract.

•       For example the way to pay with privacy with privacy for all the free services we get from Google

Google’s free mobile operating system Android means Google holds the key to almost 90% of the world’s smartphones in the world.

Need more whistleblowers to prevent illegal data usage such as the Cambridge Analytica scandal.

21st century citizens should not have to make a choice of either essentially, going analog or

living in a world where our self-determination and our Privacy are destroyed for the sake of this market logic.

 

 

 

A similar argument from Evgeny Morozov on the issue of Democracy and Democratization

https://www.youtube.com/watch?v=Efd14ZC7u4U 

• t the 2019 Univention Summit, writer Evgeny Morozov gave a speech on the dangers of power in the hands of “Big Tech” companies.
• Facebook launched an app and would actually give users $20 a month (mainly ages 13-25) to allow Facebook to gather and study user data.
  • This continued until Apple recognized the act, and removed Facebook’s app from the iOS marketplace.

• Morozov believes the above situation with Facebook represents the three problems facing the digital economy today:
  • American and Chinese tech companies promise security & privacy, when in fact these same companies track user data in order to determine what products to launch.
  • Periods of growth/competition push tech companies to gather more data and new ways to extract this data. There are no current social rules to dissuade this behavior, so these spying techniques are just accepted.
  • Apple has immense power to decide which companies are allowed to continue their activities on their platform and which companies should be relegated away. 

• Danger of all three problems above is that the digital economy right now is not properly regulated. 
  • The strongest companies have the best chance to flourish and continue while others are left to fade away or are pushed out by the larger groups.
• Immediate positives but long-term negatives with the current agreements we have with tech giants.
  • Positives:
    • Increased Efficiency
    • Cheaper or Absence of Prices
  • Negatives:
    • Data is Harvested and Sold 
    • Prices are Subsidized by Venture Capitalists

• Uber is an example of a tech company subsidizing prices in the short-term in order to achieve long-term dominance.
  • In 2017, Uber lost $4.5 billion, but their size and capital backing allows them to continue to operate while smaller firms would die off.
    • Long-term, Uber can outwait competition until they are the remaining company. At that point, they can operate at much more profitable levels in a monopoly.

• Society has accepted these dangerous business practices.
  • While the cheap prices are nice now, if regulations are not put in place, or if social norms do not adjust, the prices will rise and the burden will be placed on society.

• Morozov believes data should be off limits from corporate control, and regulated instead.
  • Build a model to give companies, like Facebook and Google, the right to pay for this data rather than harvesting it like they are now. 

 

Summary:

 

Big tech has amassed power in similar paths with two significant steps: the first, establish a monopoly, and the second, obtain complete control over the collected data. Monopolies have overtaken the United States, and it has been proposed that we are moving towards a market in which monopolies are more significant and competition is fewer. Monopolies like Facebook and Google have been harvesting consumer data to create more advertising revenue at the consumer’s expense. McAmee believes that this business model, which allows for companies to gain unprecedented power through consumer data, is the one to blame. Tech giants, including Google and Facebook, track user data and develop targeted advertisements. Monopolies have been proven to decrease entrepreneurship, decrease productivity growth, reduce options, and increase prices. Facebook is one such monopolistic company, whose significant influence in the social media industry with its platforms, Facebook, Instagram, and WhatsApp, has influenced elections, empowered nationalist leaders without being checked or regulated and has spread misinformation and sacrificed user security. Although Facebook had to pay punitive damages of over $5 billion to settle a U.S. investigation into years of privacy violations, their practices continue to perpetuate the behavior of harvesting user data for their monetization purposes. 

 

In contrast, many people are willing to exchange their private user information for perceived benefits, including better user interfaces, navigation features, and access to other people and information. This exchange has significant implications, including the potential for the erasure of both free will and free markets. For example, on Google, people are willing to forego the risk of having the site violate their privacy rights to get more personalized searches that are more applicable to their interests. In the end, some consumers may not care for their rights to privacy being violated, just so long as they can have their needs fulfilled by these Big Tech companies. Furthermore, because of the data they can gather on large groups of customers, big tech knows consumers better than themselves, and there is little information on what these monopolistic companies do with consumers’ data. The digital economy is facing three critical issues, outlined by Morozov, which are markers for an unregulated digital economy in which only the most substantial and most prominent companies are most likely to flourish. One solution presented by Morozov is to regulate consumer data outside of corporate control and have corporations like Google and Facebook pay for the data they use. 

 

Surveillance capitalism poses a significant threat to both free will and free society. The aforementioned current benefits may not be enough to justify the long-term implications. Indeed, the state of the digital economy cannot continue to go unchecked. There needs to be greater transparency and accountability surrounding data and privacy in the current tech environment. Ultimately, it is up to consumers to determine what they are willing to sacrifice in terms of data privacy in exchange for access to more personalized features and platforms and more customized and relevant user experiences. We can conclude that there is still much to be done on the digital regulation front and how it will undoubtedly shape the future of the technological landscape and how these large corporations manage user data. It’s been discussed whether or not organizations such as the ones mentioned above should have to report data as an asset on a company’s balance sheet. While data can be a significant business asset to an organization offering tangible results in revenue that is hopefully not exploited, there can be severe limitations and consequences to an organization, and it can become a significant liability if not managed properly.

 

Questions:

1. Facebook co-founder, Chris Hughes, believes that the current state of the Social Networking company has sacrificed user privacy and safety for clicks.  As they acquire other apps, their monopoly grows stronger within the social platform industry. Through this power, Facebook can influence elections and empower nationalist leaders with very little checks and balances.  Do you believe that Facebook’s power has gone unchecked and what regulations should be put in place to combat their rising monopoly?
2. What are the three problems Morozov believes are facing the digital economy today? Morozov also feels data should be limited from corporate control, and companies should have to pay to acquire this data. Do you agree with Morozov’s stance, and why? If not, do you feel there is a better way to handle how user data is distributed.
3. Most of us acknowledge a privacy issue with tech and data – how private data is shared and utilized (i.e. targeted ads)? And yet Zuboff points to a much larger problem characterized by what she calls “behavioral futures”emerging as a commodity. What are behavioral futures and how does it help us go beyond privacy?

 

Hope everyone has had the chance to listen to and process the lecture. In the lecture I open up a range of new thoughts and concepts for us to engage each other on. I will frame such issues as hypotheses / questions below.

1.  Human society has gained enormously from the sociality of knowledge. The closing up of knowledge through IPR regimes is fundamentally antithetical to human progress and unethical.

2. A strong regime of intellectual property rights essentially favors the development of monopolies and serves, in large part, big capital / multinational firms..

3. The very concept of intellectual property rights has its origins in a desire to protect the creative talents of an individual and assumes that the seat of creative talent is the individual. With the capacity to trade in intellectual property rights, most often, IPR is a tool through which such property is acquired by those who have lots of capital and no role in the creativity and then locked up as monopolies. Hence, to protect and empower the individual, a weak regime of IPR would entail a policy where IPRs can only be held by individuals / small groups and not by corporate entities.

 

Your thoughts and responses to the above questions/hypotheses.

Group 2: Dhara Gada, Brianna Monroe, Collin Zeffer, David Budzinski, Jared Logan, Arman Ameri, Suguna Srilasya Banigandlapati  

 

In Defense of IPR (CSO)

https://www.csoonline.com/article/2138380/loss-prevention/loss-prevention-intellectual-property-protection-the-basics.html (Links to an external site.)

 

• Intellectual Property is the creation of the mind, whether it be inventions, literary and artistic works, symbols, names, images, or designs.
• Four types of intellectual property include patents (rights to manufacture and market tangible things), trademarks (names, phrases, sounds, or symbols used in association with a product or service), copyright (written or artistic expressions in a tangible medium), and trade secrets (formula, pattern, device, or compilation of data that grants advantage over a competitor).
• Some ways to protect your intellectual property include knowing what intellectual property you have and where its located, prioritizing it, labeling it, securing it physically and digitally, educating employees about intellectual property, knowing the tools to protect it, involving the entire organization in IP protection, applying a counter-intelligence mindset, and understanding the risk at a global level.

 

GIPC

 

https://www.theglobalipcenter.com/why-are-intellectual-property-rights-important/ (Links to an external site.)

 

• An Article from the United States Chamber of Commerce Global Innovation Policy Center explains why intellectual property rights are quite important. IP, short for intellectual property, contributes greatly to our national and state economies. 
• These IPs allow industries and businesses to rely on the enforcement of patents, trademarks, and copyrights. For the customers, IPs are used to ensure that the products are safe and secure. This website provides a few reasons why IPs are extremely beneficial:
• IP creates and supports high-paying jobs.
  • Jobs in industries where IP is growing are expected to increase drastically over the next decade.
• IP drives economic growth and competitiveness.
• Strong and enforced IP rights protect consumers and families.
  • Strong IPs help customers make smart choices about the legitimacy of their product purchases.
• IP helps generate breakthrough solutions to global challenges.
  • Innovative agricultural companies are creating new products to help farmers improve and produce higher quantities of products.
  • Discoveries in alternative energy focused around IPs will help to improve the security of energy, along with the ability to address climate change.
• IP rights encourage innovation and reward entrepreneurs.
  • These rights facilitate the flow of information by sharing the secure information to the patented invention. The process leads to new innovations and improvements on already existing creations.
• With these points being stated, it is clear that having intellectual property being enforced will result in many positive results. These rights are acknowledged by all parts of the industry, between small, medium, and large companies, and along with labor groups, consumer groups, and other trade associations. 

 

Software and Community in the Early 21st Century:

https://www.youtube.com/watch?v=NorfgQlEJv8 

• We are operating to produce superior software at infinitely lower prices.
• Humans cannot make meaningful redistribution fast enough to retain momentum politically without applying levels of coercion or violence which will destroy what we are attempting (human dignity and equality).
• In the 21st century economy production does not occur in factories or by people but in communities. Ebay is a community in which people can buy or sell items. 
• Humans’ sophistication in global coordination of massive social movements will become very good. 

 

The Truth About the Drug Companies Lecture – Dr. Marcia Angell

https://youtu.be/uDbQNBla6aU

Pharmaceutical and  FDA:

• Many companies say that high prices are necessary to cover their high R and D costs which are false statements, as their high prices are really necessary to cover their enormous marketing and administrative expenditures and to maintain their obscene profits. Every large drug company pays off huge fines to settle the charges of their illegal activities.
• Before a drug can be sold in this country, it should be/has to be approved by the FDA. And the approval depends on the company demonstrating in clinical trials that their new drug is reasonably safe and effective but also has a low standard of comparisons. And was categorized into 2 types namely-Nm-II and Me-too drugs
• When a new drug comes to the market, the government grants it exclusive marketing rights for a certain period of time. When monopoly expires, other companies may sell the same drug and these are called Generic Drugs which are cheaper in cost.
• Huge money is contributed for doctors and their resources, as doctors write the prescriptions. Hence, drug companies pay doctors for the extensive education they provide. So, a drug company will influence doctors in terms of clinical practice, research, and education which impact patients.

Needed Reforms:

• Compare new drugs with old ones, Not placebo before FDA approval
• Permit Medicare to regulate prices and create a formulary
• Regulate the prices of drugs stemming from public research.

 

The Fashion Industry

http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture?language=en (Links to an external site.)

• In the fashion industry, there is very little intellectual property protection and the one that is there turns out that those protections that are offered are ineffectual. They have trademark protection but no copyright protection and no patent protection. 
• Anybody could copy any garment on any person and sell it as their own design 
• The only thing they can’t copy is the actual trademark label within the piece of apparel they are copying. 
• There are many other industries that do not have copyright protection like food industry, automobiles, furniture, magic tricks, hairdos, open source software, tattoo artists, jokes, fireworks display, the rules of games, the smell of perfume. 
• The gross sales for low I.P. industries, industries with very little copyright protection are higher than the one which have copyright protection. 
• The two main oppositions within the logic of copyright law can be summarized as follows.  
• First:  
  • Is something an artistic object? If so, then it deserves protection.
  • Is it a utilitarian object? If not, then there is no legal protection for it. 
• The other one is:
  • Is it an idea? Is it something that needs to freely circulate in a free society? Then No protection.  
  • Or is it a physically fixed expression of an idea: something that somebody made and they deserve to own it for a while and make money from it? 

 

And…. Chinese Fast Food

https://www.ted.com/talks/jennifer_8_lee_the_hunt_for_general_tso?language=en

 

• In the United States, there are roughly 40,000 Chinese fast-food restaurants. This is more than the number of McDonalds, Wendy’s, Burger King and Kentucky Fried Chickens combined. 
• Ironically, Lee found that most Chinese people do not recognize any of the American Chinese food dishes. Even fortune cookies, for example, originate from Japan. 
• Across the globe, many countries put their twist on local Chinese food- from places like Europe to South America.
• The interesting phenomenon surrounding Chinese restaurants is that they are not necessarily chain restaurants like McDonalds or Burger King. For the most part, many Chinese restaurants are stand-alone establishments which opens the floor to discussion on intellectual property rights for certain dishes. 

 

Summary

 

    Intellectual property is the foundation of all businesses, no matter the industry. It is an intangible asset, most of the time not even a physical asset, that many strive to obtain. Competitors will seek to obtain any piece of information they can in order to gain a competitive advantage over the market, thus increasing their profits and growth. Intellectual property comes in four different forms – patents, trademarks, copyrights, and trade secrets. Because intellectual property is so sought after, it is extremely important to have the means to ensure that no information is leaked. For large companies, any breach of intellectual property can cause damages of millions of dollars. Once that classified information is known by others, there is no obtaining it back. Beyond being the main source of success for companies, intellectual property is responsible for other important areas. These areas include creating and supporting high paying jobs, driving economic growth and competitiveness, generating breakthrough solutions to global problems, and encouraging innovation and rewarding entrepreneurs.

    Eben Moglen is Chairman of the Software Freedom Law Center and professor of law and legal history at Columbia University. In his keynote address presented at Plone Conference on October 25, 2006, in Seattle, WA, Moglen weaves together the industrial revolution, knowledge of economy, the free software movement, the One Laptop Per Child project, and the long struggle for human dignity and equality. This lecture provides an uplifting perspective on the future of open source development. Dr. Marcia Angell explains that drugs are the fastest-growing part of the health care bill—which itself is rising at an alarming rate. The increase in drug spending is attributed to using more expensive newer drugs instead of older, cheaper ones. Prices of the most heavily prescribed drugs are increasing several times a year. As a consequence, people are unable to pay co-insurances and are not able to complete their full dosages. Pharmaceutical companies falsely claim that they make sure prices are high initially, to cover their huge research and development. Same brand drugs would cost on average twice as much only in the United States. People usually think that FDA approval means the drug offers something better than the existing ones. But this is not always true.

    Opposite of the pharmaceutical industry, the fast fashion industry has little to no intellectual property. Designs are created and produced so quickly that there is no time to protect this property. By the time it is protected, the design will be out of style and it will be of no use. The only item that can truly be protected is any trademark, such as a company name and logo. Other industries that are similar to the fast fashion industry are the food industry, automobiles, furniture, magic tricks, hairdos, open source software, tattoos, Jokes, fireworks displays, the rules of games, and the smell of perfume. 

    Lastly, in her TedTalk, Reporter Jennifer 8. Lee discusses the origins of Americanized Chinese food and how certain popular dishes in the United States have come to be what they are today. Typically, most items that you see in an American Chinese restaurant do not originate from China itself. There have been instances of individuals claiming to have been the creators of certain plates looking to profit off the success of Chinese food around the globe, however no cases have been followed up on.

 

Questions

1. The theory of intellectual property rights protection rests on the idea that human beings will be innovative and creative only when a material system of incentives and rewards is in place. What is your assessment of this characterization? Reflect on it in the context of the fashion industry video.
2. In her talk, Lee compares computer software like Microsoft and Linux to McDonald’s and Chinese fast food restaurants. How does this comparison work and in what ways does she bring in the question of intellectual property rights into these distinctions? 
3. Marcia Angel lays out a trenchant critique of the pharmaceutical industry and it’s use/misuse of intellectual property rights. What are her main conclusions and how does she support such conclusions?

Hope everyone has listened to /processed the lecture. I end the lecture with some new hypotheses/questions.

 

1. First, your overall reaction to the lecture – – most especially to the two curves and what you read from it.

2. History, it seems, is an unreliable analytical companion in the current moment. Given 50 years of low wage growth in spite of dramatic gains in productivity and more recent trends of slowing job growth is it possible that we are in the midst of a very different regime of automation than the ones we have known before.

3. Given such dramatic rise in productivity and the absolute stagnation of wages for half a century should we consider a productivity dividend – – say a Future Of Work Fund — that can be used for meeting basic human necessities, education and training and accelerated responses to the ecological crisis etc.?

Section B / TOPIC 4 – TECH & ECONOMY 1:

AUTOMATION AND THE CONTEMPORARY ECONOMY: The Future of Work

 

Group 1: Joseph Frangione, Yongshi Ouyang, Samuel Adjei, Jake Barbiere, Natalie Colucci, Anthony Fiumefreddo, Jesse Flood, Madhavi Maitri

 

 

A History of the Fear of Job Loss

https://www.politico.com/magazine/story/2018/01/07/the-future-of-work-a-history-216244

• The fear of being displaced as a blue-collar worker by technology is not novel, as it has gripped Americans since the 1920s. 
• In the 1930s Technocrats started a movement to centralize the value of currency to joules and “erg” needed to create things in order to avoid the crisis of overproduction that they purported technology would bear. 
• Anxieties surrounding fear of automation would rollercoaster from World War 2 onward, the gravest news to luddites being the Ford automated engine block factory that cut 90% of manual labor. 
• In 1954 George Charles Devol Jr. essentially invented a robot. A box with memory and a movable arm which changed the labor world as by 1961 the entire GM factory in London was being automated by this technology. 
• Around the same time as the automated GM factory appeared, the Ad Hoc Committee on the Triple Revolution demanded Lyndon B Johnson sign orders for massive infrastructure projects, affordable housing, income redistribution, and unionization in an effort to ward off the “consequences” of advanced cybernetics. 
• Even today, futurists argue that the aforementioned prevailing argument of the 1960’s is still in motion, albeit slow motion, and that many of the economic turmoils of the 90’s onward, are due to the rapidly increasing technological developments (even though this is correlation, not causation). 

 

The Conventional Position: There Will Be New Jobs

https://www.washingtonpost.com/video/postlive/the-future-of-work-ai-and-automation/2018/03/20/1f9f531a-2c59-11e8-8dc9-3b51e028b845_video.html

• AI can help knowledge workers in breaking down complex algorithms by making intelligence tools work on tedious jobs hence their stress is going to be taken away from such work and they can focus on complex human expertise on which they are really good at. Basically, it is a combination of AI trained by data and validated by experts.
• Private sectors should take initiative to invest in learning new technology tools like EdTech to provide retraining on the skills of technology at their own pace (like at home, at work, at school etc.)
• There might be new job opportunities in the field of data scientist, first use of algorithms, qualify quality of data, help industrialists to deploy it that didn’t exist should make everyone update skills as evolution continues to change.
• Key challenging factor will be unpacking the AI algorithm. 
• Many Industries are now pairing up human’s capabilities with robots for more productivity and accuracy.
• AI can be trained, can be developed, can be casted, much more productive, more emotional intelligence, these tools can make human workforce capable of collaborating to work with other humans using machines of being empathic. 
• Young startup/entrepreneurs can pick up the tools and create new products and services which could not have been possible otherwise.

 

How Technology is Destroying Jobs

https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/  

• Technology boosts productivity and makes societies wealthier, but that can also have a dark side: technological progress is eliminating the need for many types of jobs and leaving the typical worker worse off than before.
• Same technologies making many jobs safer, easier, and more productive were also reducing the demand for many types of human workers
• The website of a Silicon Valley startup called Industrial Perception features a video of the robot it has designed for use in warehouses picking up and throwing boxes like a bored elephant. And such sensations as Google’s driverless car suggest what automation might be able to accomplish someday soon.
• The proportion of Americans employed in manufacturing has dropped from 30 percent in the post–World War II years to around 10 percent today—partly because of increasing automation, especially during the 1980s. While such changes can be painful for workers whose skills no longer match the needs of employers, Lawrence Katz, a Harvard economist, says that no historical pattern shows these shifts leading to a net decrease in jobs over an extended period. 
• The big challenge is uncertainty.” In other words, people are still far better at dealing with changes in their environment and reacting to unexpected events.
• It is easier to see how robots could work with humans than on their own in many applications. People and robots working together can happen much more quickly than robots simply replacing humans. In other words, in the race against the machine, some are likely to win while many others lose.

 

 

Technology and Inequality

https://www.technologyreview.com/s/531726/technology-and-inequality/ 

• This article begins with discussing the inequality within Northern California at Silicon Valley where there is a high rate of homeless and poverty while the rich seem to continue to prosper in this technology hot spot.
• The question at hand is whether Silicon Valley is exemplifying the growing inequality or contributing to it?  They are in part producing digital technology that eliminates the need for middle class jobs.
• Inequality continues to get worse and there is the highest gap between the rich and everyone else in the United States.  “The inequality has only gotten worse since the last recession ended: the top 1 percent captured 95 percent of income growth from 2009 to 2012, if capital gains are included” (Rotman).
• One main contributing factor Piketty discusses as a cause of this inequality is the “super managers”.  “About 70 percent of the top 0.1 percent of earners are corporate executives, by his calculations.  Above a certain level, it is very hard to find in the data any link between pay and performance” (Rotman).
• Another main factor is the advancement of technology.  Innovation is accelerating rapidly and as a result of these advancements, GDP and productivity have increased exponentially.  “The biggest factor is that the technology-driven economy greatly favors a small group of successful individuals by amplifying their talent and luck, and dramatically increasing their rewards” (Rotman).

 

Who Will Own the Robots?

https://www.technologyreview.com/2015/06/16/11184/who-will-own-the-robots/

• The company or organization that owns the most capital will benefit from robots and AI inevitably replacing many jobs. The company with the largest checkbook will get to control technology essentially. However, it does need to be approved by the government. 
• People are concerned that jobs will disappear from the creation of robots. This would impact workers with a high school education, criminal record, immigrant families with broken English, and anyone below the poverty level. Could cause a decline in the middle class as well.
• The creation of robots is scaring children from achieving their dreams when in reality it could be replaced by robots in their future. No one has a clear answer. 
• There are arguments that the creation of robots would be the first step towards technological progress and could create some jobs managing the robots. The progress is not inevitable and could happen sooner rather than later. Businesses and the government would need to discuss where the technology would be used and how it is researched. 

 

 

The Beginnings of a Solution?

https://jacobinmag.com/2017/12/shorter-workweek-full-employment-part-time

• In Europe, the average work week is one hour lower per week than it was 10 years ago. This is actually a result of the amount of part time employees, but the shorter work week has shown higher productivity and better mental health for those working 
• The main issues that comes with part time work in Europe is that it comes from the lack of availability of full-time jobs and stalls the process of equality for women in the workplace
• One alternative to a shorter work week that has been used in several workplaces all over the world was established by Volkswagen. They had their employees work 28.8-hour weeks opposed to 40 to avoid laying off 30,000 employees
• Another organization offered employees more vacation instead of extra pay. In this analysis 8-10% of employees chose the time instead of the money
• One of the only ways to make a shorter work week successful is if it is something adopted by all organizations, but could completely throw off the labor force for a long time. If every company reduced the employee work week there would be tons of issues that would need to be resolved
• An American company that has an interesting hourly scheme for employees is Google. They allow all of their employees the option to work in the office or at home, have tons of perks that come with working for the company like free food at the office, nap pods, and more than 3 gyms at the HQ. They also have a policy where employees work on whatever they want for 20% of their weekly hours which is how ideas like Gmail were actually brought to action

 

 

 

 

OVERALL SUMMARY OF ALL ARTICLES

 

Advances in robotics, machine learning and artificial intelligence are steering in a new age of automation. Machines are now capable of matching and sometimes outperforming humans in a range of work activities, including ones requiring cognitive capabilities. Automation is not a new spectacle. Half a century ago, the United States President, Lyndon B Johnson stated that automation did not have to destroy jobs. Instead, they could become an ally of human prosperity. The same concerns have not resurfaced due to the steady technological advancements in today’s society. Now, more than ever, automation has the ability to change the daily work activities of everyone in the workforce. Ranging from the owners and CEOs to the production line workers. We now live in an age where robots can perform the physical work of humans. Almost every occupation has the potential for increased automation. It is estimated that half of all activity’s workers are paid to do can potentially be automated using technology. Automation can enable a growth in productivity for businesses, individuals and economies as a whole. Businesses will reap benefits of saving money on labor costs in addition to performance benefits of these machines on a microeconomic level. On a macroeconomic level, it is estimated that automation has the potential to increase productivity to 1.4 percent from 0.8 percent on an annual basis.

 

Despite the endless possibilities that come with automation, it has created a level of uncertainty among some of the working class. Automation has eliminated its fair share of manual jobs, while creating new positions in that same industry. It has also drastically changed existing occupations in ways that many people didn’t realize. Accountants now rely on technology to crunch the numbers for them, which gives them more time to build client relationships. The same goes for bank tellers and the introduction of ATMs. Tellers spend less time being cashiers and more time addressing financial issues, loans, and investments. Ultimately, automation and the future of work will boil down to level of education. The demand for highly skilled workers has and will continue to increase as technology evolves, while workers with less education and expertise will ultimately suffer. If these displaced workers cannot adapt to the changing playing field, it could lead to an economic crisis if not addressed at the appropriate time. 

 

 

 

QUESTIONS

 

1. Automation will create an opportunity for those in work to make use of the innate human skills that machines have the hardest time replicating. What are some of those human skills and why do machines have a hard time replicating them? Or in other words if automation is primarily driven by big data / machine learning what kind of data is missing in what kind of automation that produces imperfect results?
2. The history of fear of job loss” article and the experts video that followed seem to both conversion diverge. “America would always find ways to put people to work, and technology, ultimately, would always create more (and better) jobs than it eliminated”. Do you agree or disagree with this statement? And on what basis?
3. America has a wealth problem. And the question is whether technology isn’t part or whole responsible.The MIT Tech Review article series you read suggests a connection between rising wealth/income inequalities in America and automation. How do the authors build this argument and do you agree/disagree? Why?

Hope everyone has had a chance to listen to the lecture and process it. I end the lecture with two broad questions / concerns:

 

1. Do we need to reevaluate our understanding of the Uber business model? What is the innovation? Is that innovation easily imitable? And other such questions that go back to the core of the Uber business model. Was it venture capital sustained growth? Will shifts in the independent contractor status of its workers create new pressure?.

2. And coming out of all of those reconsiderations, the new question is simple: IS UBER SUSTAINABLE?

 

I would urge all of you to do some additional research around some of the issues raised in the lecture as you begin to think about your response here.

Disruptive Innovation: Uber & Gig Economy Business Model

Section B/Topic 3 – Charu Arya, Ervis Bida, Joe Colombo, Christian DeFelice, Jessica Flaherty, Kyle Rusignuolo, Rajat Sinha, Tom Williams

 

The Business Model

Wikipedia – Disruptive Innovation 

What Is? – What is the gig economy 

US News – What Is A Gig Economy?

Investopedia – Gig Economy

Reuters – EXCLUSIVE U.S. Labor Secretary supports classifying gig workers as employees

 

Wikipedia – Sharing Economy 

• The Sharing Economy is a socio-economic system reliant on the sharing of resources.
  • Reach clients through Peer-to-Peer (P2P) transactions where individuals interact directly to produce and receive goods and services.
  • Reliant on information technology and digital platforms to distribute and share products.

 

Wikipedia – Disruptive Innovation 

• Disruptive Innovation is an idea/product that establishes a new market or enters an existing market, which then overtakes the incumbent products before it. It does so by providing new benefits which its predecessors do not and cannot provide.  
  • Example – The Ford Model T, introduced in 1908, made horse drawn carriages as a means of primary transportation obsolete.
    • More recently, on-demand ride sharing services, such as Uber and Lyft, have utilized technology to shift the driver market away from taxi companies and limo services.

 

 US News – What Is A Gig Economy?

Investopedia – Gig Economy

Reuters – EXCLUSIVE U.S. Labor Secretary supports classifying gig workers as employees

 

• Gig Economy is a labor market compiled with employees operating on short-term contacts or freelance work. 
  • Workers do not have permanent positions. 
  • Positions can range, such as drivers, journalists, educators. 
  • “Gig” taken from performance arts. Concerts, comedians, speaker appearances known as gigs. 
  • 2017 Reuter’s study reflected that 34% of the US workforce were gig employees. 
  • Technology has rapidly expanded the gig workplace, made possible by companies such as Uber, Care.com, Upwork, TaskRabbit.

 

How It Works: The Gig Envisioned:

Wired – The Gig Economy: The Force That Could Save the American Worker?

• Following the 2008 financial crisis, the United States workforce was reeling and unemployment numbers reached levels not seen in the county since the Great Depression. But the emergence of a Gig Economy represented new opportunities for displaced workers and their families.

• For a long period of US history, professional success was characterized by one’s ability to remain at a position for an extended period of time, all while improving their own positional rank in order to accumulate wealth. To constantly change jobs and work off limited contracts was frowned upon and deemed irresponsible.

• Freelance and contract work is now much more welcomed by both workers and corporations.
  • Organizations hire gig workers for limited roles to help solve specific issues. Also allows a business to save money by not providing a full-time and limited wasted time with no training or guidance provided.
  • Allows workers to develop a strong work-life balance. 

 Forbes – A Disruptive Cab Ride to Riches: The Uber Payoff 

• Technology presents opportunities for a gig economy, allowing workers a place to interact and present their abilities.

 

• Founded in 2009, Uber, a “mobility as a service” provider, took advantage of the idea of a gig economy and emerging freelance workforce by establishing a unique business model.
  • Despite initially beginning as just a rideshare platform, Uber did not own any cabs nor did the company hire cab drivers. Uber would allow anyone, after an extensive background check, to sign up to become a driver and operate on their own schedule. Uber’s app then conveniently connected the driver and their vehicle with a user needing a ride. 

 

• Before Uber, the primary driving service market was cornered by limousine and taxi services, both of which relied heavily on schedules and cash payments, who at times only operated in very limited city markets.
  • Uber’s accessibility with their application, along with the ability to hire drivers at any location across the country, has allowed them to operate in over 900 metropolitan areas across the globe. 
• Has since expanded services beyond ride sharing, such as food delivery, package delivery, and expansions into electric bikes and motorized scooters through a partnership with Lime.
• Uber allows people to apply for a “flexible earning opportunity” as gig workers. 
  • Great independence for workers. Workers are left alone and have their own timetables to complete tasks.

 

The Critique –

The Trouble with the Gig

 NY Times – A Driver’s Suicide Reveals the Dark Side of the Gig Economy

• Bhairavi Desai, a middle-aged woman without a driver’s license delivered emotional testimony in front of New York City’s Taxi & Limousine Commission about the mounting existential difficulties in the taxi industry.
• The disruption Uber brought to the Taxi industry resulted in many casualties among the taxi companies and its workforce. Annual bookings of full-time yellow-taxi drivers in New York, working during the day when fares are typically highest, fell from $88,000 a year to just over $69,000.
  • Economic hardships caused by this deregulation resulted in less pay, longer work hours, loss of insurance and benefits for taxi drivers.

 

The Atlantic – Uber Is Not the Future of Work

• Digital platforms are becoming increasingly important to Americans’ livelihood and the explosion of these platforms, enabling the gig economy, will fundamentally alter the future of work.
• Too much attention on these platforms distracts from the real problems in America: low minimum wage, lax overtime rules, weak collective-bargaining rights, and excessive unemployment.
  • 85% of UberX drivers are part time (meaning they work fewer than 35 hours per week).
• Uber drivers represent significantly less than 0.1% of all full-time-equivalent employment. Based on the fact that uber is the biggest player the gig economy is not as large as portrayed.

 

Forbes – Why Uber Lacks A Sustainable Competitive Advantage

• The rise of Uber has convinced many pundits, economists, and policymakers that freelancing via digital platforms is becoming increasingly important to Americans’ livelihood.
• With more smartphone apps being developed and deployed, reliance on the gig economy workforce is becoming greater and forever changing the fundamentals of our future workforce for all companies.
• The following are the central features when discussing work in America – When it comes to the future of work, these are the aspects of the labor market that deserve the most attention.:
  • a disappointingly low minimum wage
  • lax overtime rules
  • weak collective-bargaining rights
  • excessive unemployment
• Competitive advantage is measured by profit share – a company’s share of an industry’s profits. This definition means that a competitive advantage is impossible if an industry lacks profitability
• Reason for market saturation is mostly due to low barriers to entry and the switching costs are low on both the supply side; the drivers – and the demand side; consumers.
  • As a result, the industry features “numerous players offering virtually the same services. They are in a spending arms race to draw new drivers and consumers, bidding up ads on Facebook and Google and forking out hefty bonuses to new drivers,” according to the Wall Street Journal.

 

Legal Troubles: Courts And Legislatures Push Back

NY Times – Uber Hit With Cap as New York City Takes Lead in Crackdown

• In 2018, New York became the first major American city to pass legislation that will cap the number of for-hire vehicles for a year. This bill also allows New York to set a minimum pay rate for drivers.
• This has led to a clash amongst interest groups with the taxi industry officials saying Uber was dooming their business, while Uber was making a case that yellow cabs have a history of discriminating against people of color.
• Due to this new legislation, Uber warned riders that there could be higher prices and longer wait times for passengers.
• Uber planned to propose congestion pricing. Congestion pricing is to toll drivers entering Manhattan’s busiest neighborhoods. Experts believe that congestion pricing is the best way for New York City to fix congestion and secure the funds needed to fix the subway.
• The taxi industry has been decimated by the rise of Uber. The price of a taxi medallion plunged from more than $1 million to less than $200,000. Taxi workers support the cap and are hoping that the taxi business improves.

 

 LA Times – Sweeping Bill Rewriting California Employment Law Sent to Governor Newsome 

• California lawmakers rewrote the rules of employment in legislation that could grant hundreds of thousands of workers new job benefits and pay guarantees.
• Assembly Bill 5, which curbs business’ use of employees as independent contractors, was approved in the state Senate
• Considered one of the most controversial of the year, it could strain relationships between bosses and employees in a variety of service-based industries such as ride sharing, nail salons, and construction.
• Contractors, including many in multibillion-dollar technology companies, are not covered by laws guaranteeing a minimum wage, overtime pay, sick leave, family leave, unemployment and disability insurance, workers’ compensation and protection against discrimination or sexual harassment. Nor do businesses pay into Social Security or Medicare for contractors.
• Other states have adopted rules to extend benefits such as unemployment insurance and workers’ comp to independent contractors. But California’s bill is arguably the strongest in the nation.
• Thousands of Uber, Lyft and DoorDash workers have filed misclassification lawsuits and mounted public protests over slashed wages and arbitrary terminations. Others, however, fear that employee status would encourage the companies to curtail their hours and prevent them from driving on multiple platforms.

 

NPR – California Voters Give Uber, Lyft A Win But Some Drivers Aren’t So Sure

• In the 2020 election, California voters gave Uber and Lyft a big victory and it caused a big setback for labor unions. Voters approved a measure that would allow the drivers to continue to be classified as independent contractors. This is known as Proposition 22.
• Drivers who did not want the rules to change were featured on TV, radio, and internet ads speaking about why they support the way things are.
• Uber, Lyft, and DoorDash spent more than $200 million in support of Proposition 22. The opponents of Proposition 22 raised less than a tenth of that amount and their campaign was backed by free publicity and driver protests.
• The drivers who were not supportive of Proposition 22 felt that drivers were being taken advantage of and that their working conditions needed to improve. The proposition was also opposed by labor groups that helped create the state law that Uber and Lyft were rejecting.
• Organizers are not going to back down and they will still continue to organize drivers and push for greater labor protections. Uber and Lyft are still facing a lawsuit from the California government. Labor groups are also looking beyond California and other states that are facing off with Uber and Lyft over whether drivers are employees.

 

 LA Times – Prop 22 Ruled Unconstitutional

• A California Superior court judge invalidated a 2020 ballot proposition that allowed Uber, Lyft, DoorDash, Instacart and other app-based businesses to classify their workers as independent contractors.
• Proposition 22 claims to protect Californians who choose to work as independent contractors, but it also “obliquely and indirectly” prevents them from bargaining collectively, he wrote
• Uber vowed to appeal in a statement: ““This ruling ignores the will of the overwhelming majority of California voters and defies both logic and the law”.
• The ruling comes at a time when the companies are battling efforts in Massachusetts and other states to classify their workers as employees rather than independent contractors.

 

And European Courts

BBC – Uber drivers are workers not self-employed, Supreme Court rules

Washington Post – Could Europe’s Uber ruling affect the future of the gig economy?

• In February 2021, the United Kingdom’s Supreme Court ruled that the country’s Uber drivers must be considered workers rather than self-employed. This decision leaves Uber drivers with the potential to receive minimum wage salaries and paid federal holidays. 
  • The court’s decision served as the ending to a long-running legal battle dating back to 2016 brought to the courts by Uber drivers seeking employment rights. 

 

• The Supreme Court considered Uber drivers as subordinates to the company, who could only increase their pay by working egregious hours. The following elements influenced the Court’s decision:
  • Uber sets the terms of each ride on their app, which determines how much a driver can earn. 
  • The company has the ability to penalize drivers who reject too many rides.
  • Driver relationships are measured through a star-rating system, where Uber may terminate drivers if their rating diminishes and/or does not improve.

 

• Ruling could have larger implications on gig economy, and the benefits gig workers (drivers, delivery drivers, couriers, etc.) currently receive. 
  • Tim Vickers, a sociology lecturer at Nottingham Trent University, believes the ruling goes beyond company control over labor, but ensure that an organization is responsible for the conditions and wellbeing of their staff.

 

• In 2017, the European Court of Justice determined that Uber must be classified as an actual transportation service, leaving the company open to stricter city imposed regulations and laws. Uber, who considers itself a digital platform rather than a transportation service, would not be forced to employ certified drivers and strengthen their background checks on workers.
  • Previously, Uber had utilized their classification of an on-demand service to skirt the region-specific laws, allowing them to strengthen and expand their market position across the globe.

 

The Future?

Covid… Gig Workers Strike back:

Wired – This Pandemic Is a ‘Fork in the Road’ for Gig Worker Benefits 

•     Gig economy forces workers to extremes in order to make ends meet. 
  • Many out-of-pocket expenses (health and car insurance, gas) while working long hours due to the minimal pay.
  • To take a day off would mean lost wages many cannot afford.

 

•  COVID-19 pandemic has put an extreme reliance on gig workers.
  • Delivery workers help provide supplies and groceries to people quarantining in their own homes.
  • Deemed “essential workers” by many cities on lockdown.

 

• The 20th century economy saw workers spending a long period of time with one company.
  • Adopted policies such as unemployment insurance, employer-sponsored health care, and FMLA (Family Medical Leave Act) laws to respond to the needs of the time.
  • Today, the workforce and economy have adjusted, and rising non-traditional work arrangements need to provide workers with similar benefits.

 

• Legislators, in response to COVID-19, have adjusted policies to provide relief benefits for gig employees, allowing these citizens to apply for unemployment benefits.
  • This change provides visibility to the gig economy and its workers, allowing the public to understand how not all workers are treated equally. 
  • Growing sense of urgency from both the government, and pressure against companies like Uber, to provide benefits to freelance employees.

 

• While targeting certain gig sectors and companies, like ride-sharing and Uber, is beneficial to the worker, in order for long-term change to occur then the gig economy as a whole should be considered.
  • Larry Mishel, a member of the Economic Policy Institute, argues that passing rules against one business model is not enough, when there are millions of gig workers employed in separate industries still fighting for equality. 
  • Growing belief that new legislation defining employees and going against the gig economy business will help account for all gig employees and allow for greater worker rights and benefits. 

 

 

Overall Summary of Articles:

During the 20th century, the United States worker was expected to remain at one place of employment for a majority of their careers. To leave a decent position, or even work freelance, was frowned upon and considered irresponsible. However, at the turn of the 21st century and as a result of the 2008 financial crisis, many citizens found themselves out of work and instead turned to freelance and contract work to make ends meet. Over time, cultural opinions would shift and this limited type of work was becoming more commonplace, as the gig economy began to rise, with nearly a third of the entire US workforce being recorded as gig employees.

Uber, founded in 2009 as a “mobility as a service provider”, took advantage of the growing gig workforce through their technology and seemingly lax corporate policies. The company’s business model allowed them to attract freelance and limited workers by appealing to their ideals: flexible hours, quick payments, and guaranteed work. Uber created a sense of worker independence, and their rapid growth and innovation allowed them to quickly expand globally and dominate the driver service market. Over time, though, as the gig workforce began to grow more popular, pressure began mounting on Uber and similar gig employers to provide for their staff as if they were regular full-time employees.

    New York and Los Angeles were both proposing bills to limit the amount of activity that Uber and Lyft drivers could do. In LA they left it up to the citizens to decide on in a vote called Proposition 22 which was voted against, in NY the government voted on it and passed the bill. This limited drivers to the number of for-hire drivers the city could have. By doing this in NY specifically, it is supposed to help the taxi industry as their worth has fallen from $1 million to about $200,000. In LA, the bill was not voted on by the general public which meant that Uber and Lyft drivers would not become independent contractors that would be offered benefits and a set wage. Some drivers are happy with this as they are able to make their own schedules, and some can even earn upwards of $100,000. The drivers who are not happy with it are still continuing to fight to try and get the bill passed into law.

The COVID-19 pandemic forced the world to rely on the services of gig employees to support those quarantined due to the virus. The public opinion on freelance and contract workers have quickly shifted, deeming their efforts as vital to society, and pressure was put on legislations across the globe for employment equality. Courts in both Europe and the United States have begun to pass sweeping legislation for the employment benefit rights of freelance workers, allowing them to secure items such as unemployment benefits and paid-time off. Governments have even begun to come down on gig employers, such as Uber, forcing them to obey regional regulations and provide certain rights to their contracted staff. 

With these changes, there is a growing sense of belief that greater benefits and laws will soon pass in favor of the gig employee. But in order for true change to come the legislation must account for all gig employees and companies, while at the same time not restricting the foundational ideas of the gig economy. 

 

 

Questions:

1. What is the Uber business model?
2. Uber is often used as an example of Disruptive Innovation. It has indeed been disruptive off the traditional taxi industry. But is there a significant innovation? If so, what is the innovation? And finally, will it be disruptive for long enough for it to qualify as a disruptive innovation?
3.  The United Kingdom’s Supreme Court ultimately ruled that Uber must consider their drivers as workers rather than self-employed independent contractors, which entitles Uber drivers to employment benefits. California’s AB5 legislation did the same but was overturned by proposition 22 which in turn has been declared null and void by a low court in California. As the case rises back up to the California supreme Court on appeal it’s indeed possible that Uber drivers in California could be declared as employees. What would be the impact of such a decision? 

 

 

 

Hope all of you have had the chance to listen to my intervention lecture. As I said in the lecture what began to happen about a decade ago has now created a whole new playing field and there was strategy at the back of it. So let’s think of two questions to respond to:

1. Would you have anticipated that open source software could be part of business strategy? From within the metaphor of a playing field we can see that the use of a non-market force –such as software that resists being a commodity –Can be used to reshape the playing field. In the same way that regulation shapes / reshapes the playing field would you see the use of open source as an anti-market / anti-competitive practice?

2. Microsoft has moved into the cloud market and established itself as one of the significant actors. Intel is still struggling to find a new foothold. Do you believe that these two giants can rebuild their dominance and do you see ways in which open source will be used to reshape both the two emergent markets — cloud and AI?