The future will have car insurance

May 17, 2013 Business No comments

Courtesy of Flickr Commons

It used to go without saying that you’re playing with fire when you lend your car to other people. In anyone’s circle of friends and family, there travels at least one cautionary tale about wanton car lending, passed down from generation to generation.

“I lent my car to a friend so he could pick up his mom at the airport he hit a priest at a crosswalk.”

“I let my friend borrow my car to go to the outlet mall in the suburbs and she broke an axle getting out of the garage.”

No qualms about blaming the victim here – if you lend your car, you’ve got it coming. Doing so for money makes no difference to this maxim.

New York Superintendent of Financial Services Benjamin M. Lawsky agrees. This week, he issued a press release ordering car-sharing service RelayRides to shut down in the state. RelayRides is a bit like AirBnb for cars; individuals rent their cars to strangers through the service. RelayRides takes care of insurance and vetting potential renters according to a few basic criteria. With these dual assurance, it stands to reason, you’ll do through RelayRides what no sane person would do without it.

Lawsky reminded RelayRides that New York insurance policies were drafted long before they came into existence:

RelayRides tells vehicle owners that the Hudson liability policy [provided by RelayRides] will cover the owner, and that the owner’s own policy will not be involved if there is an accident while a person is renting the vehicle.  However, an owner’s personal liability insurance policy provides coverage to any person who drives the vehicle with the owner’s permission. New York law does not permit an insurer to exclude coverage for a renter. As a result, an owner may be personally liable for any accident that occurs while the vehicle is being rented.

Additionally, RelayRides advises renters to display Hudson ID cards in the event of an accident.  In the event of an accident, however, New York law requires a vehicle operator to show a police officer and the other party involved in the accident the owner’s insurance ID card.  Moreover, if the owner’s primary car insurer does not receive timely notice of the claim, then their insurer may not cover the damage, leaving the owner at greater risk of being personally financially responsible.

It would be a quick fix to allow insurers to exclude coverage for renters. It stands to reason that the more incidents the insurer doesn’t have to pay for, the better. On the other hand, what if the renter shreds the breaks, causing the owner to crash the car? We could spend hundreds of hours of experts’ and lawyers’ billable time to assign exact degree of blame for each incident, or we could just shut the whole thing down, which is usually the solution of first resort.

Perhaps the only solution workable solution is to require the participating owner to get all car insurance through RelayRides’ insurer. To do this, RelayRides would have to convince every other insurance company to forever cede their ability to sell to insurance to a subset of people who participate on a car sharing site with strong network effects. Good luck with that.

Unlike the Uber situation, in which black car services are attempting (and failing) to protect their monopoly for call-ahead service from a new smartphone app, the insurance companies and their regulators have a valid point. Regulations should catch up, but not be abolished. Insurance is one of those unsexy services necessary to the operation of a modern economy. A stable insurance market requires a degree of interoperability and reliability that only regulation can provide.

Let’s just hope they figure this out quickly, because Zipcar is expensive and the Fairway in Red Hook is too far from the dang train.

Drink deeply from the fountain of haterade

May 15, 2013 Blog Posts No comments

Haterade-psd6916

If you watch only one restaurant-based reality show on network TV this year, please make it the season finale of Gordon Ramsey’s Kitchen Nightmares. It’s available on demand and is absolutely, positively worth your time.

[skip this if you've seen the episode]

In this episode, the owners of a bakery/restaurant in Scottsdale, Ariz. call in Ramsey to refute the bad Yelp reviews they are convinced come from an organized mob of people who don’t like them for some reason. Chef and owner Amy Bouzaglo lashed out at Yelpers in 2010, to localized mockery. Now, it’s worldwide.

Ramsey finds a clean and orderly kitchen (unusual for this show, apparently), but a hostile, abrasive Samy Bouzaglo working the front of the house, stealing tips and tossing people out of the restaurant for disliking the food. The food, if you believe the portrayal in the show, is dreadful. Normally, Ramsey berates the owners a bit, who then make the changes he recommends. The changes work out and business booms. This time, there was no such happy ending. Amy refused to believe that anything was wrong and was so obstinate about it that Ramsey gave up on a restaurant for the first time in the show’s multi-season history.

“Reality show features delusional subjects generating their own drama,” isn’t exactly a headline, but their reaction to criticism on their Facebook page certainly is. Since the Bouzaglos have taken most of the more ill-considered postings down, you need to go over to Buzzfeed to read it all.  And you really need to read it all.

[you can start reading again]

Though originally a product of hip-hop culture the term “haters” is now square enough for these two restauranteurs to abuse. During the show, Amy tells Ramsey, “These reviewers and bloggers decided to make up lies and say that the food was disgusting. We lost a tremendous amount of business because they’re just ****ing haters.” On one Facebook rant, Samy (and I think it’s Samy because Amy uses all caps) writes “We will not bend to the will of these haters and sinners.”

A hater, in the simplest terms, is one who irrationally dislikes someone because they are successful. It’s not so much jealousy as the desire to “knock someone down a notch,” according to the Urban Dictionary. The term is now completely mainstream – now anyone delusional and rich, including (and especially) Real Housewives – use the term.

“Hater” is the perfect epithet for our time.

It’s a humblebrag because it allows the speaker to insinuate that they are successful while simultaneously attacking someone else. It’s impossible to refute, since it requires making the Fundamental Attribution Error of assuming you know what motivates someone else, usually in a manner most flattering to you.

It also has some basis in reality. We live in a time of rapidly rising inequality fueled by complex financial instruments and the regurgitation of meaningless buzzwords to investors in lieu of actual profits or demonstrated consumer demand.

If you’re in the right place at the right time with just enough ego to believe your own B.S., it’s possible to get quite a lot of money without actually doing much of anything besides look confident – the greater fool theory relies on it. If someone is successful in certain fields in 2013, it’s easy to believe they did so without displaying any of the virtues we associate with successful people who “earned it.”

In finance especially, it is very possible to see a banker’s material success (and occasionally corresponding Randian smugness) as proof that they actively screwed over someone else. Justified or not, that’s haterism.

So how do I make haterism work for me?

I’m becoming convinced that some degree of “hater theory” is needed in today’s world. We are constantly being told to develop a personal brand and sell it relentlessly to potential employers and investors. Do traditional brands take criticism from smaller competitors seriously, at least in public? Of course not. Why should Brand Me meditate on the flaws pointed out by lower-status brands in front of viewers I need to convince of my brilliance? Ignoring or belittling the hater, regardless of the validity of the criticism, increases one’s status through the humblebrag and establishes (or solidifies) one’s place in the pecking order. When all of your life and thoughts are online and your online presence is your resume, humility and self-doubt, however thoughtful, is weakness.

“Haters gonna hate,” is just a way of saying “it’s all about confidence” while actually building confidence.

How does one embrace the benefits of treating critics like haters without going bonkers like the Bouzaglos?

The Bouzaglos use hater theory not as a branding and positioning tool but as an ironclad law of cause and effect. Since they believe they are good at what they do, it follows that anyone who disagrees does so out of jealousy. Sometimes they’re right; a much younger woman getting a million dollars from an older former-playboy to follow her dream can cause real resentment. But all criticism isn’t cause and effect, especially when it happens over and over again from all kinds of people. When people don’t like what you do, it is entirely possible that what you do is simply no good, no matter how much you think you’re hated.

Recognize your weaknesses and evaluate criticisms on the merits, but be aware that haters exist. Don’t be so self-depricating that it diminishes your brand or bend over backwards to satisfy would-be haters. Nobody needs to know if you think you’re a talentless phony, because just toying with the idea makes you one. The brooding loner bit got tired in college.

And if anyone out there thinks I’m a talentless phony, well, haters gonna hate.

I can be self-aware and have something to say about branding and marketing? There is hope!

May 14, 2013 Books No comments

I’m reading Rob Walker’s Buying In: What We Buy and Who We Are. I was a little wary of his introduction, in which Walker casually drops the term “murketing” to describe the kind of collaborative, fan-driven events and communities that are supplementing traditional advertising.

“Here we go again,” I thought, “another techno-schmuck who thinks he’s too innovative for his native tongue.” But read a few chapters in:

Murketing, you will recall, is a word that I made up. And to be perfectly honest, I originally meant it as at least partly as a joke, a satire of the annoying tendency of branding wizards to clutter the language with endless streams of silly neologisms.

Thank goodness! I really do like the idea and I see the concept he describes around me every day. To an extent, it begs for its own word, since “non-traditional marketing” is so bloodless and broad. Useful word or not, it’s nice to see someone with the awareness that his neologism is joining a long, long line of far worse self-important marketing babble.

Smorgasburg: Bolivian Llama Party

May 14, 2013 Food 2 comments

After a couple of weeks doing other things with my Sundays, I headed back to the Tobacco Warehouse for Smorgasburg. This week’s treat was the Sandwich de Chola from Bolivian Llama Party. What’s in a Sandwich de Chola? This is where a cliche-heavy writer would tell you that llama is not an ingredient. But my literary style is far more dynamic than that. Instead, I’ll just let the BLP menu list off what’s in this amazing festival of all things porcine:

chola

Wow. That’s a lot of stuff for one little sandwich.  Oh, and I got bacon on it as well ($1 extra). Speaking of little, it’s not some two-fisted porkmonster – the portion size is very reasonable. This is what mine looked like:

sdchola

I have two main wishes with something this rich and loaded with heavy meats and garnishes:

1) Please do not let half the sandwich drip, plop or otherwise fall out the back as I’m eating.

2) Please let the bun maintain its integrity until the very end. I do not have a fork.

Success on both counts! I lost a tiny bit of meat, but that was due to a little bit of sharing and a botched hand-off. All told, Sandwich de Chola passed the greasy sandwich test with flying colors. And I didn’t even feel like there was a giant deep fryer burbling within me for hours after eating it, either! Sensible portions of heavy foods – who knew?

Oh, and about that name: the first definition on Urban Dictionary is “The girls my brother gets pregnant.” Wikipedia has an Indian dynasty of that name. Neither appears to apply to this sandwich. According to La Enciclopedia del Sandwich (my go-to source on sandwiches of the Hispanophone world) the name comes from a park in La Paz, La Parque del Cholas.

There’s a park where these came from? Forgive me the lazy Tumblr convention, but:

go-to-there

Stuck between stereotypes

May 10, 2013 Blog Posts No comments



OR
?

Joel Stein of Time says Millennials are selfish and lazy. This is quite unlike their predecessors in Generation X, who were also selfish and lazy until they became the generation of Internet visionaries. Like the Millennials, Gen-Xers and the ’70s “Me Generation” before them, I must ask: what does this mean for meeeeeeeeeeeeee?

I was born in 1981, which Pew considers the first year of the Millennial generation. Wikipedia suggests I’m a digital native, which makes sense until you compare having email at 13 (which I did, back when there was nobody else to email) to growing up having never used the Yellow Pages. When the Joel Steins of the early ’90s were griping about the slackers of Generation X, I was in middle school. The kids with flannel shirts, Sonic Youth t-shirts and nowhere in particular to be were generally significantly older siblings. Sure, I listened to Nirvana, Soundgarden and the Breeders, but only once they’d been mixed in with a healthy dose of Ace of Base on Z100.

Now Stein has it out for the Millennials, but I don’t really feel like he’s out for me. I think Tumblr is just endlessly repackaged garbage, sexting is about the dumbest thing you can do with a phone and it’s better to wait tables after college than “intern” for free. After all, who would voluntarily start to pay someone who will work gratis? A little self-respect, people!

For the sake of navel-gazing (one point for Millennial!), here’s a short tally of where this ’81er stands on the generational divide.

Gen X

- Somewhat cynical, or at least have the feeling of seeing things fail before

- Used the <BLINK> tag on a website in 1995

- “Don’t use the phone mom, I’m online!”

- “He’s got a beeper? Is he a drug dealer?”

- Remember the Soviet Union, albeit vaguely

- Voted in the 2000 election, stayed glued to the TV set for a month after

- Have a blog, not a Tumblr

- Understand the concept of privacy

- Unironically complained about “kids these days” once

 Millennial

- Resigned to security theater nearly everywhere I go

- I can text without looking at my phone

- My annual college tuition was more than the cost of many entry-level luxury cars

- Totally drank the Obama Kool-Aid in 2008 (though I still think he’s pretty cool)

- Don’t pay for recorded music

- Have not worked at the same job for more than three years

- Uninterested in car ownership

- Willing to write a post like this

Result: I’m a marketer’s nightmare.

TLD;R

May 9, 2013 Technology No comments

How could this website be easier to use?

Perhaps it could be easier to get to. Typing 11 characters into a keyboard is an awful lot of work, so maybe the user experience could be improved with a domain hack* in which the Top Level Domain (TLD) conveys information that is usually on the left side of the dot. Thus “delicious” becomes “del.icio.us” and internet becomes “inter.net.” If I switch to donef.er, You type over 27% less!

There is a .er TLD and it’s assigned to the small East African nation of Eritrea. Neither wealthy nor rich in untapped resources, a small windfall from clever webmasters could go a long way. By comparison, the small Pacific island nation of Tuvalu, though at constant physical risk of being swallowed whole by the unforgiving sea, has some great Internet real estate: their .tv domain brings in 13% of GDP.

Were I Eritrean dictator Isaias Afewerki**, I’d cash in! According to Scrabblefinder, the web’s top source for finding words that end in a certain combination of letters, there are many, many, many words in the English language that end in “er.” What plumber wouldn’t want “plumb.er” or even “plung.er”?

So how does one get a .er domain? Supposedly, the TLD is run by state telecom company EriTel, which managed to snag itself a .er, but offers no domain services. Major domain sites like Marcaria and GoDaddy won’t do it. 101domain.com flatly states that you can’t. One webhost forum participant wrote to the Eritrean technical contact and was told that foreigners can’t register.

That’s right. If you’re a foreign.er, you can’t regist.er to be a domainhack.er. Could there be a dumb.er or more count.er/productive/ policy for one of the world’s small.er and poor.er countries like Eritrea? Consid.er me confused.

* Don’t get me started on the recent trend of using the word “hack” in place of the simpler but less edgy “make.”  I simply don’t have the time right now, as I need to hack some breakfast using only the cereal and milk available in my kitchen.

**An Amnesty International report released today says that the Eritrean government holds at least 10,000 political prisoners. For the moment, that government might not be the best one to send money to. That said, bit.ly gladly paid Ghadaffi for a Libyan domain.

The somewhat insane yet sort of reasonable logic behind Y Combinator

May 6, 2013 Technology No comments
How disruptive!

How disruptive!

It’s the kind of coincidence that makes me wish I spent my college years as a miserable Computer Science major instead of a happy-go-lucky political science and economics major.

In a Sunday New York Times Magazine piece, Teespring, one of the startups vying for funding at Y Combinator, is described by its founders as “Kickstarter for T-Shirts.”

Not half an hour earlier, I purchased this NPR Planet Money t-shirt on Kickstarter.

Kickstarter for T-Shirts is Kickstarter.*

Teespring walked out of Y Combinator with $1.3 Million. One of the rare startups with revenue, they aren’t exactly the most outrageous examples of a Silicon Valley private equity market that even its participants charitably describe as “frothy.”

More representative are vital but profit-free businesses like Reddit and Hipmunk. Outside of Y Combinator, businesses with no revenue model at all like Pinterest and Instagram are fetching valuations far above and beyond those of established businesses with actual profits and dividends.

To understand these valuations, you need to think of these VC-funded businesses less like a business and more like a speculative commodity.

“The general public doesn’t understand start-ups at all,” [entrepreneur Paul] Buchheit said. “They’re mystified how a company with no revenue can be worth a billion dollars. It’s because of this power law: If a company has a 1 percent chance of being a hundred-billion-dollar company, then it’s worth about a billion dollars. That kind of thing doesn’t happen in your normal life experience. If I get a cup of tea, it’s a cup of tea — there isn’t a chance that it’s actually made out of solid gold. But that’s how this works.”

As a member of the general public, I take offense.

There, offense taken. Let’s move on.

How do we value a cup of tea? The value of tea is that it is tasty, thirst-quenching, good for you and can be thrown at an uncouth suitor in a pinch. These are all valuable qualities. This supports a price varying from free with your Chinese food order to hundreds of dollars an ounce for the rare stuff. A regular old “cup of tea” is not that expensive.

Compare this to gold. You can wear it as jewelery or use it in certain semiconductor applications. If you had a big enough brick of gold, you could use it to break a window or keep a door open. It will not save you if you’re dying of thirst and is far too malleable to fashion into a useful tool. What makes it valuable is that other people think it’s valuable and people who want to buy gold at any given moment are easy to find.

The goldbugs are mistaken in their belief that gold has some sort of intrinsic value that holds over time in a way that other commodities or currencies do not. They took the recently ended run-up in the price of gold as a sign that “fiat money,” more commonly known as the stuff you get from an ATM, was losing value and primed for massive inflation. If you only value dollars (or Euros or Yen) as something you can buy gold with, then fiat money did in fact lose a lot of value since the financial crisis. But when it comes to buying everything else, inflation remained at historical lows.

What do the massive sums of money investors are throwing at companies with no revenue and no business plan containing a path to profitability have to do with the price of tea in China (or anywhere else)?

It’s all about the difference between value and price. Instagram is worth $1 billion because Facebook will pay $1 billion on the off chance someone else will buy it and figure out how to make money with it. Buchheit’s hundred-billion dollar company doesn’t need to sell $100,000,000,000 of anything. It just needs a pool of people who will convert their dollars into equity. The model is based on the idea that at least a few of these investments will attract buyers who in turn think they can sell that same equity for a higher price to some third party, and so on.

Valuations of the Pinterests and Hipmunks of the world can be maintained so long as the small pool of people who accept equity for dollars continues to do so. This is not a bet on profit or product, it’s a display of confidence in the market itself. Right now, the market itself, or at least market participant and Y Combinator co-founder Paul Graham, will trust in a business because one of its pitchmen look like Mark Zuckerberg. Really.

In Zuckergangers we trust.

* I know it’s not exactly the same. Teespring will make your shirt. But still, what a coincidence!

One Man Book Club: Cognitive Surplus, Chapter 7

May 4, 2013 Books No comments
morans

That’s not very nice to the Moran family.

In the final chapter, Shirky discusses what makes successful online communities tick and what makes unsuccessful ones fail. His observations, in one way or another, all addressed the size of a community. Even on Facebook, which is populated by pretty much everyone except for the kind of people who sniff “I don’t have a TV” at you, the size of the community you participate in is limited by the number of friends you have.

The Internet has been a boon to narrow groups without a critical mass in any one location. If you have an unusual hobby or obsess over an obscure cancelled TV show, there is simply no other way to have a real community. See Smoking Meat Forums. There, you can find someone who has every kind of commercially available smoker, every style of homemade device and every cooking style out there. Before, you may have had a couple of people in town with smokers to rely on. As someone who tried to set up a smoker for Thanksgiving, SMF was a godsend.

But what about trolls? Won’t somebody please think of the trolls?

SMF doesn’t really have them, as nobody interested in stirring things up would find it. Why Google “how to get a more even temperature from your Brinkmann Smoke N’ Grill” in order to sling homophobic and sexist slurs when there are YouTube videos to comment on? Smaller communities self-police and have fewer ne’er do wells to deal with.

What if there was a community built around a topic that affects everyone and engenders very strong opinions?

It’s called politics, and it has a mixed record in terms of creating effective online communities. It certainly has its more than its share of vitriol and trollery, but hasn’t been as transformative to electoral politics as it has been to smaller, geographically-dispersed, narrowly-focused interest groups.

Unlike our helpful meat smokers – who stand in here for the successful online communities cited by Shirky – the online political community is bifurcated between top-down party and candidate machines and squabbling forums filled with trolls.

First, the top-down apparatuses. The Obama campaign built a massive voter targeting system in 2012 that pointed volunteers to the doors that most needed to be knocked according to a massive database and GIS system. The 2012 election may have been Big Data’s biggest moment, but the implementation entirely top-down using a national campaign.

The very nature of free publishing of information has made message discipline of paramount importance. Former Sen. George Allen’s “macaca moment” to Mitt Romney’s “47%” gaffe to President Obama’s “bitter clingers” blunder, were all made possible by individuals with small recording devices and a means to disseminate what they recorded. A politician simply can’t say one thing to the die-hards and one thing to everyone else. This is why campaigns are loath to cooperate too closely with independent online communities with the potential to be loose cannons.

Then we have the independent online communities. Take Free Republic, the message boards of which are filled with noxious hate, rage and conspiracy theories. It is the perfect example of how a community of like-minded people left to its own devices will only get more extreme.

The operative concepts here are epistemic closure (not listening to those who disagree with you) and confirmation bias (giving more weight to facts that bolster your beliefs and discounting arguments that don’t). These two phenomena build on one another until one can only see the other side as pure evil. Julian Sanchez wrote what I believe to be one of the definitive articles on conservative* epistemic closure in 2010. The nut of his argument:

Whatever conflicts with that reality can be dismissed out of hand because it comes from the liberal media, and is therefore ipso facto not to be trusted. (How do you know they’re liberal? Well, they disagree with the conservative media!)  This epistemic closure can be a source of solidarity and energy, but it also renders the conservative media ecosystem fragile.

Meat smokers don’t have hundreds of well-funded organizations cranking out content with the stated goal of making biased partisan arguments over, for example, which type of wood chip is best for which type of smoker. This happens to be exactly why the meat smoker community is so vital – the participants themselves are best source of information on the topic they’re discussing. Creativity loves a void. Nobody’s biases are being flattered because there is nobody with both a vested interest in flattering them and the resources to do it effectively.

Online communities about broad topics devolve into extremism, trollery and backstabbing. Shirky’s example communities, from the Josh Groban fans to sufferers of rare diseases, succeed because they are narrowly-focused, which is the point of his final chapter.

* It’s no secret that I consider myself a liberal. There is certainly epistemic closure on the left, especially in social justice circles. People can (and do) argue about which corner of the political spectrum suffers from it the worst, but that’s not the point.

Four (Million) on the Floor

May 3, 2013 Blog Posts No comments

roy

What’s that in the window of Phillips on 57th and Park?

It’s just an old Roy Lichtenstein on the floor propped up against the wall. Yep, just $4-6 Million worth of art, sitting behind something bulky, just waiting for a hapless unpaid “intern” to trip over it. How long do you have to work making $0 to pay for that?

Now that’s what I call postindustrial!

May 3, 2013 local No comments

cruiseship

 

Well, not quite “post,” but certainly “less.”

The Red Hook Cruise terminal, developed in 2004, sits next to the cranes of the Red Hook Container Terminal in Brooklyn. The cruise terminal, which served half a million passengers in 2010, has grown quickly in terms of the number of ship calls and overall passenger traffic. The shipping terminal has not fared so well, thought by some to be better used as beer gardens and hotels, it almost lost its customs station last year.

The 110,000 containers the terminal handles every year might be small in comparison to larger ports (Shanghai handles 29 million), but those containers laid out end to end would make a line over a mile long every day of the year. That doesn’t include the length of the truck cab or the space between trucks on the road, so you could double or triple that in terms of actual impact. Given that there are only seven bridge crossings to Long Island open to truck traffic, that’s a lot of pollution-spewing truck traffic not trundling through Manhattan or the Bronx.

(photo by Charles Donefer)

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