Airbnb for cars is here. And the rental car giants are not happy.

Airbnb for cars is here. And the rental car giants are not happy.
By Peter Holley
Mar 30 2018

They have fleets with hundreds of thousands of vehicles and command multibillion-dollar streams of revenue.

But in the rapidly shifting transportation landscape, even the Goliaths of the rental car industry — some of the best-known brands in the world — worry about being left behind.

That may explain why some of the largest rental car companies have spent several years waging a quiet legislative war against start-ups led by a company called Turo that are trying to change the way people rent and own vehicles. Turo is a peer-to-peer car-sharing company — think Airbnb for cars.

Like Uber versus the taxi industry before them, this fight is a clash between an old-school business model and a modern technology platform inspired by the sharing economy.

The traditional model is run by hulking corporate brands that promise safety and predictability. At any airport in the land, for instance, a customer is assured he will get a car (“Nissan Sentra or similar”).

The new model offers a more customized experience. In a process that mimics online dating, a customer can choose that flashy Tesla for a joy ride or that Ford F-150 to haul garden mulch.

While each offers a way to rent a car, the ultimate factor in their long-term success might actually depend on changing attitudes about the value of car ownership.

In America, the average price of new vehicles has zoomed over $33,000, leaving people to wonder whether there’s a way to get more value from them.

Turo, and other car-sharing companies, say they offer car owners a way to maximize the value of these expensive assets (or even help to pay for them) by earning money off them when they might otherwise sit parked. For drivers, they offer flexibility and convenience.

If you’ve rented a car at an airport, you may understand why such start-ups think they should come out ahead. After landing and baggage claim, you wait in line for a shuttle that drives you to a rental car company, sometimes miles away.

Once there, you may encounter another line, as well as paperwork and prices that can vary depending on the city and demand. Sometimes the process goes smoothly, but other times — when inclement weather or rowdy children strike — picking up a rental car can be the punctuation mark on an exhausting day of travel.

Jon Norris, 42, a  former rental-car company employee who lives in Bethesda, Md., and works in cybersecurity, believes that sort of unnecessary stress explains the growing appeal of Turo, a peer-to-peer car-sharing network that he’s been using since November to rent out two Audis he owns. He often meets his customers at the airport, handing them the keys to their rental as soon as they walk outside. There’s no paperwork, no credit cards and no hassle, Norris said.

“When I do curbside delivery, everything is downloaded to the app beforehand, and, literally, within two or three minutes, they’re in the car and on their way,” said Norris, who earns about $1,500 a month renting out his vehicles. “At the airport, people want to get the car and go.”


Telegram Raises Nearly $2 Billion In Largest-Ever ICO

[Note:  This item comes from friend Steve Schear.  DLH]

Telegram Raises Nearly $2 Billion In Largest-Ever ICO
By Tyler Durden
Mar 30 2018

After raising an astounding $850 million in a presale for its token, Telegram, a popular encrypted messaging app that was created by the same people behind VKontakt – better known as the Russian Facebook – has raised $1.7 billion, making it the largest ICO on record. 

It managed to raise this staggering sum through a public token sale despite not having any plans to monetize its service. In fact, the company’s CEO, Pavel Durov, has explicitly said he plans to use the money to develop the Telegram Open Network blockchain, a payments system based off Telegram’s Gram token that he hopes will one day rival Visa Inc. and MasterCard.

Telegram recently passed the 200 million monthly active users mark, with more than 700,000 new users signing up each day. Despite this, Durov has said the company has no plans to try and monetize its users. Instead, he hopes to keep the app free and unsullied by ads for as long as possible.

Telegram raised $850 million from 94 investors in March after completing its earlier funding round in February. The company “may pursue one or more subsequent offerings,” the British Virgin Islands-registered firm said in a filing to the US Securities and Exchange Commission on Thursday.

We imagine the news of Telegram’s success will help sooth nervous crypto investors following bitcoin’s worst-ever quarterly performance (once again, cryptos lead the broader market as the “just BTFD” strategy used by countless traders has been rendered obsolete).

“Raising the planned amount is a success for Telegram, given that the Bitcoin decline in recent weeks made investors more cautious toward crypto-assets,” said Gennady Zhilyaev, a former executive of Templeton Emerging Markets Group in Russia, who now invests in virtual currencies and initial coin offerings.


President Trump’s worst behaviors can infect us all just like the flu, according to science

President Trump’s worst behaviors can infect us all just like the flu, according to science
By Ashley Merryman
Mar 29 2018

Since taking office, President Trump has all but dismissed the need for decorum and civility, saying he’s “modern day presidential.” However, 97 percent of Americans say it’s important for a president to be civil. Given this disconnect, perhaps it’s time to stop wishing Trump adopts a more dignified persona and instead ask if his presidency is affecting our character, collectively and individually.

Behaviors such aggression, anger, blaming, bullying, dishonesty, greed, narcissism, negativity, profanity and incivility are all social contagions.

A social contagion describes how others’ actions infect mood and behavior, just as you might catch someone’s flu. With prolonged exposure, you’re at greater risk, but even a brief event — reading one tweet or watching a video clip — can affect behavior.

Think about when a baby cries, others soon wail. Or how you walk into a room and feel tension in the air. We don’t have the wherewithal to investigate every threat so, as social animals, we evolved to subconsciously pick up cues from others. An efficient early warning system, social contagions trigger fear and furor, and they can have a stronger effect when someone is in leadership.

Of course, we shouldn’t pin every current social pathogen on the president. Inhumanity contaminates the entire political spectrum, and we’ve all succumbed to a pointless argument on Facebook. But what’s remarkable about the recent venom, according to Texas A&M; professor of political rhetoric Jennifer Mercieca is, historically, from the Boston Tea Party on, Americans without power resort to incivility in a last-ditch effort to be heard.

Now, says Mercieca, those in power are often the most uncivil. And rather than a last resort, it’s the first inclination.

“Modern day presidential” includes belittling and demeaning citizens (e.g., “dumb as a rock,” “wacky & totally unhinged,” “lost his mind”). Months before he talked about “s—hole countries,” the president used inappropriate innuendo in a speech to Boy Scouts.

Directly and indirectly, Trump has accused officials, reporters and a Gold Star widowof falsehoods, while The Washington Post Factchecker determined he made more than 2,000 false statements during his first year as president.

Already, this may be changing the nation’s discourse. Analyzing 462 million comments in Reddit, from 2005 to the 100th day of Trump’s presidency, researchers determined the site’s political dialogue was the most offensive in its history. But the president’s impact may go beyond virulent speech.

For example, Trump blamed Republican senators for failure to pass health insurance reform and blames Democrats for the stalemate on immigration.

University of Southern California professor of management Nathanael Fast found that after people read about their governor blaming others for a legislative defeat, they were more likely to blame others for a failure in their own lives. As leaders regularly blame others, avoiding responsibility becomes ingrained in the culture, research shows. People band together to “blamestorm” — find scapegoats for mistakes.

When leaders brag about their superiority and achievements, it makes “narcissism seem normal and what winners do,” said Jean Twenge, San Diego State University psychology professor and co-author of “The Narcissism Epidemic.”


Trump distracts America from the task of facing three existential threats

Trump distracts America from the task of facing three existential threats
As Trump forces America’s attention span to shrink, we are unable to address the threats that could fundamentally endanger American national security
By Michael H Fuchs
Mar 30 2018

Donald Trump’s daily assaults on American democracy and the pillars of America’s role in the world are disastrous – and they are also distracting America from even bigger global challenges. At just the moment when the United States must be joining together with the rest of the world to confront three existential threats – climate change, challenges to democracy, and the rise of China – Americans are forced to spend every waking minute mitigating Trump’s damage.

In Trump’s America, it’s hard to keep up. The news and controversies come so quickly they eat into each other’s news cycles. Actions by the Trump administration that previously might have brought down a presidency (or at least merited a congressional inquiry) pass in a matter of hours as the next jaw-dropping scandal explodes. 

As Trump forces America’s attention span to shrink (was that even possible?), we are unable to address the three threats that could fundamentally endanger American national security. 

First, climate change. It’s hard to overstate the magnitude of this threat. The seas are rising, imperiling hundreds of millions of people in coastal communities from Shanghai to Miami. Climate change is likely enhancing the devastation of extreme weather like storms and heatwaves.

Unless national and global actions are taken, the World Bank estimates that by 2050, more than 140 million people in Latin America, sub-Saharan Africa, and South Asia will be forced to leave their homes because of climate change. The near to mid-term effects of the heating planet could affect hundreds of millions. The long-term effects could wipe out humanity. 

Preventing the worst effects of climate change and reversing its course would require a global effort the likes of which we’ve only seen in the movie Independence Day, in which the countries of the world put aside their disagreements to fight an alien invasion threatening all of humankind. That’s how difficult this would be in normal circumstances.

But in Donald Trump’s world, we are moving backwards, from announcing the intention to withdraw the United States from the Paris climate agreement to guttingthe federal government’s role as a defender of the environment. 

The necessary efforts of actors like the US Climate Alliance to encourage US states to continue the transition away from dirty fuels can only do so much in the absence of presidential leadership. And America has vacated the global effort – and abandoned its leadership role – to forge solutions. 

Second, the rise of China. China is increasingly willing to throw its weight around the world and to invest in the foundations of long-term global influence. China’s bullying of neighbors in the East and South China Seas and Doklam reveal a brazenness of a more militarily powerful China.

The creation of the Belt and Road Initiative, the Asian Infrastructure Investment Bank, and the Brics (Brazil, Russia, India, China, South Africa) bank are Chinese moves to extend its economic and strategic sway. In the coming years, China may have an extraordinary ability to shape the world’s economic and strategic landscape in ways that could undermine the interests of the United States, from sparking instability in Asia to bolstering the strength of authoritarians.


In Defense of the ‘Ugly’ Facebook Memo

[Note:  This item comes from reader Randall Head.  DLH]

In Defense of the ‘Ugly’ Facebook Memo
An executive’s deliberately provocative post offers an encouraging sign that the company is grappling with the forces it has unleashed.
Mar 30 2018

On Thursday, Buzzfeed published a controversial internal Facebook memo titled “The Ugly.” It features Facebook Vice President Andrew Bosworth’s 2016 reflections on the company’s aggressive efforts to connect people—and their fraught implications.

So far, Facebook is standing by its VP, who said this about his intentions on Twitter: “I don’t agree with the post today and I didn’t agree with it even when I wrote it. The purpose of this post, like many others I have written internally, was to bring to the surface issues I felt deserved more discussion with the broader company.”

That seems consistent with the intentionally provocative way that the memo was phrased.

Bosworth wrote:

We connect people.

That can be good if they make it positive. Maybe someone finds love. Maybe it even saves the life of someone on the brink of suicide. So we connect more people.

That can be bad if they make it negative. Maybe it costs a life by exposing someone to bullies. Maybe someone dies in a terrorist attack coordinated on our tools.

And still we connect people.

The ugly truth is that we believe in connecting people so deeply that anything that allows us to connect more people more often is *de facto* good.

He adds, “That’s why all the work we do in growth is justified. All the questionable contact importing practices. All the subtle language that helps people stay searchable by friends. All of the work we do to bring more communication in. The work we will likely have to do in China some day. All of it.”

Many insiders will view this as a PR disaster. After all, it’s inspiring headlines like this:

A prominent leader in the company admits that its growth team used “questionable” tactics to increase the number of users, and expresses the belief that the platform’s work is justified even if it leads to a suicide or even a terrorist attack.

What’s more, he reasons that the incentives of their industry itself inescapably push Facebook and its competitors to aggressively “push the envelope” on user growth:

The natural state of the world is not connected. It is not unified. It is fragmented by borders, languages, and increasingly by different products. The best products don’t win. The ones everyone use win. I know a lot of people don’t want to hear this. Most of us have the luxury of working in the warm glow of building products consumers love. But make no mistake, growth tactics are how we got here. If you joined the company because it is doing great work, that’s why we get to do that great work.

We do have great products but we still wouldn’t be half our size without pushing the envelope on growth. Nothing makes Facebook as valuable as having your friends on it, and no product decisions have gotten as many friends on as the ones made in growth. Not photo tagging. Not news feed. Not messenger. Nothing. In almost all of our work, we have to answer hard questions about what we believe. We have to justify the metrics and make sure they aren’t losing out on a bigger picture. But connecting people. That’s our imperative. Because that’s what we do. We connect people.

If there are Facebook users who’ve never pondered the matters raised in this memo, its contents should cause them to take a dimmer view of the company than before. Facebook deserves criticism for its dubious growth tactics. And the incentives of its industry will lead to future abuses, absent consumer backlash or regulation.

Georgia Passes Anti-Infosec Legislation

[Note:  This item comes from friend Geoff Goodfellow.  DLH]

Georgia Passes Anti-Infosec Legislation 
Mar 30 2018

Despite the full-throated objections of the cybersecurity community, the Georgia legislature has passed a bill that would open independent researchers who identify vulnerabilities in computer systems to prosecution and up to a year in jail.

EFF calls upon Georgia Gov. Nathan Deal to veto S.B. 315 as soon as it lands on his desk.

For months, advocates such as Electronic Frontiers Georgia, have descended on the state Capitol to oppose S.B. 315, which would create a new crime of “unauthorized access” to computer systems. While lawmakers did make a major concession by exempting terms of service violations under the measure—an exception we’ve been asking Congress for years to carve out of the federal Computer Fraud & Abuse Act (CFAA)—the bill stills fall short of ensuring that researchers aren’t targeted by overzealous prosecutors. This has too often been the case under CFAA.

“Basically, if you’re looking for vulnerabilities in a non-destructive way, even if you’re ethically reporting them—especially if you’re ethically reporting them—suddenly you’re a criminal if this bill passes into law,” EF Georgia’s Scott Jones told us in February.

Andy Green, a lecturer in information security and assurance at Kennesaw State University concurred.

“I’m putting research on hold with college undergrad students because it may open them up to criminal penalties,” Green told the Parallax. “It’s definitely giving me pause right now.” 

Up until this week, Georgia has positioned itself as a hub for cybersecurity research, with well-regarded university departments developing future experts and the state investing $35 million to expand the state’s cybersecurity training complex. That is one reason it’s so unfortunate that lawmakers would pass a bill that would deliberately chill workers in the field. Cybersecurity firms—and other tech companies—considering relocations to Georgia will likely think twice about moving to a state that is so hostile and short-sighted when it comes to security research.


How Amazon Delivers on Its Core Product: Convenience

How Amazon Delivers on Its Core Product: Convenience
By Katja Seim
Mar 23 2018

Amazon sells more goods than any one person could count – but the e-commerce giant’s true “core product” is convenience, and how quickly it can get an order from customers’ virtual shopping carts to their real-life doorsteps. 

Part of what makes it so easy for Amazon to offer two-day or even same-day shipping to customers is its vast network of distribution centers, which are located across the U.S. and store and ship products to their final destinations. New research from Wharton business economics and public policy professor Katja Seim takes a closer look at how significantly expanding that distribution center network over the past decade has been key to Amazon’s growth strategy. 

Seim recently spoke to Knowledge@Wharton about her paper, “Economies of Density in E-Commerce: A Study of Amazon’s Fulfillment Center Network,” which was co-authored with Cornell’s Jean-Francois Houde and Penn State’s Peter Newberry.

An edited transcript of the conversation follows.

Knowledge@Wharton: Your research is about Amazon’s distribution network. What is a fulfillment center and why is it important?

Katja Seim: What we look at in the paper is how Amazon’s distribution has changed over time. In online retail markets, just like in offline retail markets, the company typically uses one or multiple distribution centers, which in Amazon’s case would be called fulfillment centers. They come in multiple types. Some might be specialized and carry high-value items. Some might carry groceries. We are interested primarily in general merchandise fulfillment centers, which Amazon has placed all over the country. We’re interested in how this diffusion of distribution might have helped Amazon in trying to reach more customers and whether it has helped on the cost side.

Knowledge@Wharton: Amazon’s fulfillment network has grown dramatically over the years, and that comes with an important trade-off that you talk about in your paper.

Seim: Yes, we were interested in looking at how they choose where to put fulfillment centers. You might think that there are general demand conditions. I might want to be near a big city with a lot of demand, especially if those people value things like same-day distribution. But in the early days of online retail — not so much today — where you put your distribution center network also determined whether you would charge your consumers sales tax. We wanted to look at to what extent differences in sales tax across local markets drove where Amazon might have placed distribution centers, at least initially. Today, that’s less of an issue. Initially, you might think that I have a trade-off in that I want to be close to a big population center, and that helps me save on distribution costs, helps me maybe in attracting more consumers if they value the convenience of getting a package quickly. But it might also have downsides if sales tax in those locations is high, so the consumer ends up paying a higher price for getting products because Amazon has chosen to have a distribution center in the location.

Part of that was driven purely by the fact that online retailers are treated differently from offline retailers from a legal perspective in how they have to report and collect sales tax from their consumers. Until recent developments that challenged those laws, most of them had to collect sales tax from their consumers only in locations where they had a physical presence, and a distribution center would qualify as a physical presence. In locations where they don’t have a physical presence, the consumer is supposed to pay use taxes instead of sales taxes directly as part of their annual tax filing to the state. As you might imagine, the vast majority of consumers don’t do that. As a result, if Amazon entered a distribution center into a new state that has high sales taxes, then it is effectively as though consumers experienced a price increase.