Category: Economics

Pull it together, Ontario

Dan DickinsonLeave a comment

True to form (which is to say, consistently formless and unpredictable) the Ontario government on Friday announced restaurants and bars could open their patios. With no warning.

First of all, in my opinion, we shouldn’t be opening up anything right now. There were 1,791 new COVID-19 cases in Ontario yesterday, and 18 people died. There’s a “growing consensus among medical experts that the province has entered a third wave of COVID-19 cases” in Ontario. (source) I get that businesses, especially small businesses, want to re-open. But re-opening early just prolongs the pain of this half-measure. Is it really worth it?

Second, if you’re going to make this decision, you don’t drop it on all these beleaguered business owners with less than 24 hours notice.

I don’t know why I expected anything else from this clown car of a government who is clearly prioritizing the economy over lives — as if the economy doesn’t count on alive-ish people.

Meanwhile, in Canada’s New Zealand:

Source: https://twitter.com/gmbutts/status/1372496677769207808

Desperate counties

Dan DickinsonLeave a comment

Last fall StatsCan published a report showing, as of 2016, the percentage of Canadian households living below the low-income threshold. It was unsurprising, but still upsetting, to see the statistics from the rural area where I grew up.

Of the 70 census tracts in Nova Scotia, the place where I grew up ranked 61st. More than 1 in 3 homes in that area live below the low income threshold. Apart from a nearby area where the homes are nicer, the whole county was around that same 1-in-3 mark. Meanwhile, the country average (for tracts that could be reported) is only 21.5%.

As I said, it’s not surprising that Nova Scotia in general struggles economically, nor is it surprising that where I grew up (which is rural and economically depressed) would be at the low end even of that. It’s just hard to reconcile the factual hardness of these flaws with the filter of my nostalgia (and ongoing love) for the place.

Please, Molson and Labatt and Sleeman: save us from ourselves

Dan DickinsonLeave a comment

Oh, for the love of Pete.

For those who don’t live in Ontario, here’s the background: the Beer Store, a foreign-owned monopoly on beer sales (outside of the provincially regulated LCBO) is worried that public sentiment has turned against them and toward a more open market for alcohol sales. One of the proposals has been to allow booze in convenience stores, as in several other provinces. So this ad is what their marketing geniuses has produced. Not surprisingly, the predominant reaction to the ad has been strong criticism and even outright mocking.

I believe the technical term for this kind of flailing is “death throes”.

Cover photo by Marcin Wichary, used under Creative Commons license

It’s time to abolish tipping

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Can anyone explain to me why we observe this absurd practice known as tipping? Many other countries have simply done away with it by paying service staff what they’re worth, but we in North America cling to this flawed practice even though…

It’s arbitrary. There’s no rulebook for who deserves a tip vs. who doesn’t. It’s generally accepted that waiters, bartenders, baristas, doormen, and taxi drivers should be tipped, but why not other similar job? Why not hotel clerks? Why not bus drivers? Why not bank tellers or flight attendants or nurses? Even after years of participating in this economy and tipping constantly I still don’t understand the rules fully, and can’t imagine tourists visiting North America could figure it out. All I know is that we’re meant to feel deep shame if we don’t tip, regardless of how good or bad the service was. I steadfastly refuse to tip bathroom attendants for handing me a towel I could have reached myself, but still find myself skulking from the room quickly without making eye contact.

It needlessly complicates things. Customers have to search their pockets for an appropriate tip. Businesses have to use up scarce counter space with a tip jar. Waiters have to stand  idly at a table while a customer mentally calculates 20% instead of waiting on someone else. A barista has to watch the line grow while every customer punches in 3 unnecessary steps on the POS device, essentially doubling the time for every transaction.

It actually slows the adoption of more efficient technology. Many of the afore-mentioned industries, which value fast customer turnover, have been reluctant to add speedier contactless payment terminals to their checkout process because employees are afraid their tips will disappear. Early trials of MasterCard’s Paypass terminals in Canadian coffee shops resulted in the machines being mysteriously unplugged, since customers — who were in the habit of simply leaving the small change from each transaction on the counter as a tip — had no change left over after tapping their card to pay. Employees, no longer seeing the change in their tip jars which would supplement their minimal pay, simply sabotaged the machines. Some coffee shops have found ways to address this, including Starbucks’ new automatic tipping feature in their mobile app, but that’s a classic example of simply paving the cow path.

Companies use it for nefarious means. Because of course they do. In Canada the minimum wage in most provinces hovers around $10/hour (some have slightly lower levels for alcohol servers) but in the United States 19 of 50 states actually pay $2.13 per hour, leaving servers to make up the rest of the $7.25 Fair Labor Standards Act minimum wage through tips. Essentially, this forces the burden of paying the employee a fair wage onto the consumer. By the way, 16 of those 19 states voted Republican in the 2012 election. Take from that what you will.

All this said, I’m not going to stop tipping. It’s unfair to the people currently earning minimum wage (or worse) who would bear the entire brunt of my little protest. But as long as businesses and merchant associations are able to screw employees with their tipping policies they won’t give it up, so at some point governments have to make it an unattractive option for merchants. It doesn’t have to affect the bottom line of a single business — they can increase their prices by 15% to cover the wage difference, just as some restaurants have already done.

It’s time.

.:.

Cover photo by Marcin Wichary, used under Creative Commons license

Photo by pgaif13, used under Creative Commons license

On buggy whips, rogues, and stoned cabbies

Dan Dickinson2 Comments

Anyone following my Twitter feed or spending a moderate amount of time with me lately would have seen my rant about Uber. I was intrigued by the idea because of the potential for technology to disrupt a long-standing, stagnant industry: taxis. And, as someone who’s spent a little time over the years thinking about corporate strategy, I always have a morbid curiosity to see the next buggy whip industry begin to rage against the dying of the light.

Usually, when an industry is caught with their pants down and eventually admits to themselves that they see the end coming, you’ll see a variety of tactics by the incumbents. Some companies resign themselves and try to adapt, while  others try to hold their ground, usually out of cultural stubbornness or an outright inability to make the change. In the latter case, companies will try to appeal to any existing sense of nostalgia for their products (see: Kodak). In other cases, they’ll fall back on regulation — either saying the threatening companies don’t comply, or trying to ensure they’re included in the regulation, knowing that burden placed on a small company with no industry lobby/alliance would crush them. Often the regulations are valid, but in the cases where the incumbents invoke arcane and irrelevant regulation, or make attempts at scaremongering, then you know they’re in trouble.

Hence, the taxi industry has begun railing at Uber in its various cities, saying it doesn’t met regs. Last week the Taxicab, Limousine & Paratransit Association sent a document to media outlets in Toronto making their case against “Rogue apps” like Uber. Speaking of scaremongering, note the title and subtitle of the report: words like “rogue” and “threat to public safety” are classic examples, meant to scare the townsfolk. Taxi associations in Washington, D.C. started pushing back earlier this year as well.

Really, though, the buggy whip is the wrong analogy. That was an example of an industry failing to adapt to the advent of replacement technology — the car — which quickly became the decided preference of most customers. But Uber isn’t that. The core product remains the same: a car takes your from point A to point B. There are two ways in which Uber differs from regular cabs: 1) the smart phone app used to summon Uber cars, and 2) the quality of the service itself. Let’s examine those:

The technology

Sure, it’s slick that smart phone users can summon a car from their iPhone, get an ETA, see the assigned car on a map as it approaches, easily call the driver if plans change, get an email receipt upon arrival, and rate their driver. But most of those things are nearly as simple with a traditional cab: you call a number, you give the dispatcher your address (I’ve not stumped one yet), and you can get a (paper) receipt on arrival if you need one. Seeing the car inching across a map is nice, as is getting an email receipt, but they’re not game-changers. To me, the two key features are being to rate your driver (and knowing those ratings inform future drivers, and knowing the reverse is true), and another one I didn’t mention: convenience of payment. With Uber you simply have a pre-loaded credit card that’s charged when you arrive. You don’t have to fumble for cash. You don’t have to linger in the cab while the cabbie rummages for correct change (which they often don’t have), while the irate drivers behind you honk incessantly. I like all the features of the technology, but the ease of payment is a killer feature. Still, it’s not enough to scare the taxi industry, and it doesn’t play much part in their complaints to regulators.

The service

This, to me, is the key. This, not the technology, is what creates Uber devotees. When I hail a Toronto cab, the very best I can hope for is an experience that’s not terrible. That’s it. That’s the bar. If you’re lucky you’ll get a cab that isn’t a mess, doesn’t stink of cigarette smoke (like the one I was forced to take yesterday) or something worse, runs well, and is temperature-controlled (I’ve had cabbies refuse to turn on the AC on heat-warning days). Meanwhile, Uber cars are immaculate, spacious, and comfortable. Sometimes they provide free bottled water, though I suspect that’s something the drivers pay for themselves.

The TLPA warned against the inaccuracy of the GPS in Uber cars. Personally, I’ve never had (or heard of a problem), unlike Toronto taxis where I have on countless occasions been forced to give my driver directions after he has started driving in the wrong direction, even though I live at major downtown cross-streets. Moreover, I’ve caught two deliberately taking longer routes; when I challenged them they claimed it was faster, which was patently false. Upon arrival I asked them to adjust the meter. Both times they refused; one threatened to call the police. All I could do was refuse a tip; even then, one claimed he didn’t have change. I called the cab company to complain, but the driver wasn’t displaying his medallion or cab number. Conversely, with Uber I’ve had only one incident where a driver missed a turn, got confused and took a roundabout trip to our destination, for which he apologized. When I provided my post-trip rating to Uber along with the explanation for the low rating, Uber instantly took $5 off my fare and apologized again.

Never, in my dozens of Uber rides, have I witnessed unsafe behaviour on the part of their drivers. Meanwhile, since moving to Toronto I’ve been a passenger in a taxi which drove through a red light and ran into a dump truck (I wasn’t seriously injured, but the driver couldn’t have cared less anyway; he was only interested in the damage to his car, and didn’t so much as apologize). I was never contacted by the cab company for an apology. I’ve been stuck inside a taxi as he chased a car — at higher speeds than were prudent on city streets — which had cut him off earlier, and refused to pull over. I got out at a light as he got out to confront the driver; he told me to get back in the cab as I still had to pay. I’ve also been hit by a cab driver doing a rolling right turn at a red light. He was on his cell phone and didn’t notice me on the cross-walk. I wasn’t hurt, but I fell on the hood of his car. He simply kept driving and talking on his phone. I recently took a taxi driven by a man who clearly hadn’t bathed in days. I took a cab (with my parents, no less) driven by a guy who had just smoked a joint. I could go on and on and still not recount all the poor experiences I’ve forgotten over the years. I’ve had good cabs/drivers too, but they’re the distinct exception. Like I said, the best I can hope for when hailing a Toronto cab is a not-terrible experience. When an Uber cab shows up, I expect a superb experience. And I get it. For a 10-15% premium (not the laughable 40-60% premium the TLPA claims) I’ll take that option whenever I can.

Taxi companies have begun to copy the technology side of  Uber’s offering. Interestingly, Uber now allows you call a regular cab from their app too, suggesting at least some cab drivers are willing to work for/with them. Perhaps replicating Uber’s service will be cost-prohibitive for traditional taxi companies under their current regulatory requirements, though that doesn’t seem to be the thrust of their complaints, and I’ve certainly not seen taxi companies make a move in the better-service direction. If the playing field is to be evened, then the regs should be applied fairly to Uber, not in a punitive manner resulting from their lack of  safety-in-numbers the taxi industry enjoys.

Even if the TLPA and others do manage to temporarily impose limits or regs on Uber, it won’t kill the idea. Buggy whip manufacturers likely raised issues of public safety concerning the automobile. The ice delivery industry probably declared refrigerators safety hazards. The music industry wailed and gnashed their teeth at Napster ostensibly on behalf of poor starving artists, but really on behalf of their profits. Uber found a way to deliver a better product. That scares the people who’ve made a lot of money (I mean the taxi companies, not the drivers) delivering the bad product, and so they’ll rail against the progress.

But that never lasts long.

.:.

Photo by pgaif13, used under Creative Commons license. And I was by no means trying to single out Beck Taxi in relation to my story — I just liked the picture. Beck is actually one of the better companies in Toronto…though that’s not a high bar.

"The last chance for progressive politics for an awfully long time"

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“It is time to stop listening to the voices who plead for calm moderation and for a cotton-candy centrism that melts at the first sign of resistance. It is time for politicians on the other side to be as fervent in their calls for economic justice as Newt Gingrich is in his calls for kiddie janitors and adolescent wage-slavery. It is time for someone — anyone — to step to a very big microphone and say that the problem with Americans is not that they are lazy, or coddled, or anesthetized by 70 years of the welfare state, or morally unmoored (Thanks, David Brooks!), but that the problem with Americans is that a bunch of expensive suits stole all their money, looted their pensions, made a mockery of their hard work, and labored for decades to develop dozens of ways to swindle them, all the while fashioning a politics that told them that the ultimate freedom was the freedom to have your pockets picked.”

Charles P. Pierce, on esquire.com

A tale told by an idiot, etc., etc.

Dan DickinsonLeave a comment

I’m listening to both the US Congress and US Senate debate the deal to raise the debt ceiling, and shaking my head. What theatre. What grandstanding. What utter bullshit.

You don’t have to search long to find opinions condemning the entire exercise as political masturbation and a display of leverage by a vocal minority of the American body politic. CNN alone has posted two opinions on their front page in which a professor of history and public affairs at Princeton criticizes the entire situation, while David Frum — yes, that David Frum!! — slams the Republican party itself for letting itself become hijacked by an extremist arm.

Perhaps the best summary I’ve heard of the whole mess, and of the consequences likely to follow — is another CNN contributor: Fareed Zakaria.

“My basic point is that this is a crisis that we have manufactured out of whole cloth. We have created a circumstance in which the world doubts our credibility, rating agencies are thinking of downgrading our debt and the dollar’s role as the world’s reserve currency could be jeopardized.

Please understand that none of these things are happening because the United States is running deficits. There was no indication – by any metric – that the United States was having difficulty borrowing money one month ago. In fact, the world has been lending money to the United States more cheaply than ever before.

We face downgrades and investor panic not because of our deficits but because we are behaving like deadbeats, refusing to pay our bills, pouting while the bill collector waits at the door.”

I urge you to read (or listen to) the entire piece. It gives some indication of the potential consequences looming in the distance, still blurry and hard to hear what with the political cacophony going on in Washington. Not just for America, mind you; we shouldn’t be surprised if some of that sound and fury radiates out to the rest of the world.

Side note: if by chance you feel like throwing up your hands and completely disavowing any faith in humanity, I urge you to read the comment section of that — or nearly any — CNN article.

"How can a guy who can't speak English lie?"

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A few days ago I finished the new Michael Lewis book The Big Short (amazon). In typical Lewis fashion it’s a somehow-entertaining story about markets, their bizarre circumstances and the equally bizarre personalities who dwell there.

While it does get a bit dense when it delves into the intricacies of credit default swaps and tranches of debt and so on (it reminded me of the middle portion of Moby Dick where Melville just goes on and on about whales) it’s still a very entertaining and unbelievable story. Few people actually saw the subprime mortgage crisis coming (which in itself is remarkable) and those who did were on the very fringes of the market, and it’s their stories Lewis follows.

You should read it, if only to see how a one-eyed recluse with Asperger’s (seriously) outsmarted the whole system.

Rage, rage against the dying of the idealized past

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I used to love reading the newspaper. For years I had the Globe and Mail, and then the Toronto Star, delivered to my home. I’d read it on the subway, or on my couch, and feel I was reading something important. Five years ago, the Globe pissed me off by charging me twice to read the same content, and I canceled my subscription out of protest. Shortly thereafter I began reading the Star, but once newspapers rolled out RSS feeds I basically threw the paper versions over for this more efficient (and more environmentally friendly) method.

I read this as my own example of how mainstream media was dying, though not already dead, as ‘new’ media liked to claim. It caught my attention, then, that NPR’s Intelligence Squared podcast dealt with the statement “Good riddance to mainstream media” last week. For those of you who haven’t heard NPR’s Oxford-style debates before, the debate is book-ended by audience votes for or against the proposition, and whoever changes the most minds during the debate (according to the audience poll) is declared the winner. Now, forgive the spoiler (as if any of you are going to sit through it!) but those against the proposition win the day. In my opinion this had less to do with the efficacy of anyone’s argument and more to do with the phrasing of the proposition.

I’ll explain: I’d wager that, apart from investors in blog networks, no one wants the mainstream media to collapse and disappear. In fact, most people probably just don’t care. Few, then, would vote for a proposition that sounds rather gleeful about the demise of mainstream media.

Even then, the nays might have won it on a low blow, as those backed into a corner sometimes throw. Again, I’ll explain: the classic tactic of any industry which finds itself under siege is to ignore the facts and appeal to emotion. Think of the music industry: there was no debate about one medium (the CD) being superior to the other (the MP3), and there was certainly no attempt to produce profit by matching supply to the obvious demand; instead, sensing a threat to their existing business model, they wept for the poor artist starving now that he was deprived of album royalties. That was, of course, horseshit, but that’s the tactic: obfuscate by tugging at the heartstrings. Likewise opponents of gay marriage (who purport to defend the very fabric of society), gun ownership lobbies (“You couldn’t be more wrong, Lisa. If I didn’t have this gun, the King of England could just walk in here any time he wants, and start shoving you around.”) and union organizers (who still cast their negotiations as Dickensian urchins struggling under the boot of wealthy land barons).

In this case the MSM tries to equate their business model — print, newsrooms, and on on — with the moral righteousness of pure journalism. Kill newspapers, they say, and you’ll lose the Woodwards and Bernsteins and Murrows of the world who expose corruption and tweak our collective conscience. Leaving aside for a moment the false sanctity of journalism this supposes, there’s a gaping logical flaw in their argument. Just because the mainstream media is where journalistic triumphs have tended to happen, does not prove that only the mainstream media that can produce beneficial journalism.

This notion did float up during the podcast — someone arguing for the proposition did say that no one would debate that journalism is good — but it didn’t garner much discussion, probably because the ‘no’ side benefits from marrying the ‘how’ and the ‘what’. Would should have been debated was the probably longevity of the ‘how’, but it became — as such debates often do — a discussion on the merits of the ‘what’. If the proposition is that the MSM is no longer the most viable model for journalism, but the MSM successfully convinces people that they are journalism, the inferred extension of this is that the end of the MSM equals the end of journalism. It’s a logical fallacy, but an effective tool.

This deceptive tool is usually wrapped up in the banner of tradition or ‘way of life’. Five to ten years from now we’ll be listening to the auto industry explain that conservation and urbanization make us drive less, and driving is synonymous with freedom, and therefore environmentalism is killing freedom.