Tuesday, June 14, 2016

AI-as-a-Screenplay Writer: Computer overlords strike again?

Normally when I discuss artificial intelligence on the impact of work, it's in the context of the automation of accounting and auditing work (A3W). However, a story that's been circulating for past few days in my Google alerts is the story of the movie Sunspring. Unlike most movies it's not written by human being, but rather it is written by a computer.

Ars Technica, who hosted the online debut of the movie, noted that the script was "authored by a recurrent neural network called long short-term memory, or LSTM for short. At least, that's what we'd call it. The AI named itself Benjamin."

The movie is really odd to put it nicely. However, it does comes across as one of those art movies that (also) don't make any sense. The song in the movie is also generated by the machine.

However, this is not the first time that algorithms have been trained to be artists. Chris Steiner in his book "Automate This: How Algorithms Came to Rule Our World" notes that Emmy,  an algorithm, "produced orchestral pieces so impressive that some music scholars failed to identify them as the work of a machine". In a piece he authored for the Wall Street Journal he notes "analyzing only the script, an algorithm from Epagogix, a risk-management firm that caters to the entertainment industry, predicts box office grosses. Epagogix broke into the business when a major studio allowed the firm to analyze script data for nine yet-to-be released films. In six of the nine cases, its predictions were spot-on. Algorithms have since become an essential tool in Hollywood."

If the chaotic world of creative works can be automated by algorithms, then I think the predictable, routine world of debits and credits can't be too far behind.

Monday, June 13, 2016

Can accounting errors ruin your life? JohnOliver explains how they can.

In this episode Last Week Tonight, John Oliver explores the world of debt buying:

The segment received wide publicity as he tried to out do Oprah by conducting the biggest giveaway on television - he bought $15 million worth of medical debt and forgave it. This article on Fortune does a good job of summarizing the show:
  • US households owe $12 trillion in debt of which $436 billion is 90+ days past due. 
  • Companies who discharge the debt sell it for pennies on the dollar to a growing number of companies that specializes in debt buying.  
  • One company, Encore Capital, notes that in 1 in 5 Americans owes or has owed them money. 
  • Debt that's been paid "come back to life", which is affectionately known as Zombie debt.
There was some controversy, however, about who he worked with to write-off the debt (they noted their grievances here, to which John responded here) and the value of the debt. On the latter count, is it really fair to criticize an act of charity that improved the lives of approximately 9,000 people?  

Nothing good happens in Excel. 
But the segment which is most relevant to us is when he starts talking about how the information is actually sold.  It is sold on spreadsheets. Oliver gets quite dramatic as he shares his his phobia of Excel and notes how "nothing good happens in Excel". He also explains that the spreadsheets are sold "as is"; meaning that the seller does not guaranty accuracy of the information related to the debt contracts being sold.

And that's where the jokes stops.

In the segment, he has footage from interviews with Jake Halpern, who wrote "Bad Paper: Chasing Debt from Wall Street to the Underworld". The book follows the life of a debt buyer of Aaron Siegel, who is born to a rich family in Buffalo, New York. He takes an array of characters, including his Brandon, who is an ex-con who does that gritty part of work of finding the debt, ensuring its good and collecting on it.

What caught my attention as I was going through book, is that it gave a bit more detail to what John Oliver mentioned about the banks selling the paper "as is". Halpern notes on page 58 of his book (see below for the link to the book), that when Washington Mutual sold Joanna and Theresa's debt to Aaron, the credits awarded against their accounts that were not reflected in the spreadsheet that was given to the debt buyer.

And that's how accounting errors can ruin lives.

When you read the life stories of these two ladies it's heart wrenching to think that a few lines on an Excel spreadsheet could have a detrimental impact on their lives. Some would cynically say this is over dramatic and try to find reason to blame Joanna and Theresa falling into this problem. But I don't think that's fair. When you read the lives of these people, it's clear that they were affected by factors beyond their control. It's really this broken system of debt collection that is responsible for them failing to get the debt relief that they were owed.

The way accounting systems and spreadsheets are designed and operated can have real impact on real people. As an accountant myself, I often wondered what value is accounting in the grand scheme of things. But as Halpern's story illustrates the accountants, bookkeepers, etc. had a real impact on the livesof these two women.

No one is saying that accountants have the same impact on the lives of people the way a cancer specialist does. But at the same time a few a lines on Excel spreadsheet could be the difference between perpetual anxiety and a good nights sleep.

Monday, May 16, 2016

CATS2016: Exponential Tech & the CPA

Today, I presented at the Canadian Accounting Technology Show and discussed how exponential technologies and their potential impact on the profession.

During the presentation, I promised a blogpost for the attendees who wanted to dig deeper in the presentation. So here it is!

IBM Watson's Victory over Ken Jennings
During the talk I refer to Ken Jennings and Brad Rutter's defeat at the hands of IBM's Watson. (See Engadet's video for more on this "exponential event".)
This post gives some background on the new "space race" between the tech-giants for the killer AI app and also gives a link to Ken's talk.

For additional information on Watson and the medical profession check out this video.

Exponential versus Linear Technological Change
Kodak - who invented the digital camera in 1975 - was ultimately disrupted by that very same technology. In fact, one of their employees applied Moore's Law to pixel's per dollar in digital cameras.


The problem illustrate that Kodak (as well as Polaroid) had linear thinking and didn't realize how quick digital technology would become the norm and preferred way of consuming photography. In this post, Peter Diamandis talks about how 30 exponential steps contrasts to 30 exponential steps (and talks more broadly about linear vs exponential thinking) and Ray Kurzweil talks about the infamous story of how the inventor of chess requested an exponential amount of rice (and is rumoured to have lost his head).

Predictions on the Automation of White Collar Work:
These stats are what actually prompted me to propose to CPA Canada that we should have a talk that would discuss this phenomenon. The variety of sources that have chimed in on the topic - combined with the understanding of exponential change - highlights the importance of looking deeper into the trend instead of dismissing it as just fear, uncertainty and doubt (FUD). This of course is not just limited to the accounting profession, but impacts all white collar worker (check out IBM's Watson latest application to automate aspects of the legal profession
  • "Job destruction will happen at a faster pace, with machine-driven job elimination overwhelming the market's ability to create valuable new ones.” (Gartner)
  • “…knowledge work automaton tools and systems could take on tasks that would be equal to the output of 110 million to 140 million full-time equivalents (FTEs).”’ (McKinsey)
  • ‘94% probability accounting/auditing will be automated’ (Oxford Study)
  • Finance Department has seen a decrease from an average of 119 people (2004) to 71 people (2014); a reduction by 40% (Hackett Group; as taken from this WSJ article "The New Bookkeeper Is a Robot")
Exponential Technologies
As noted during the presentation, the key exponential technologies that are likely to enable the automation.

Artificial Intelligence: "Science of making computers do things that require intelligence when done by humans." During the presentation, I mention this pharmacist robot being able to dramatically reduce medications errors, which according to the FDA is responsible for 1.3 million injuries.

For other information check out this Deloitte publication on AI and Cognitive.

Internet of Things: "Billions of interconnected sensors and devices will soon exchange data; effectively the physical flow of goods, people, and things will now leave a “digital trail”." RFID inventory does provide some insights in how this digital exhaust left by physical goods can improve inventory management and responsiveness to customers (see this RFID Journal article for more details).

For more on IoT, check out the Deloitte TMT Prediction regarding the technology.

Blockchain: "The blockchain disintermediates the need for a centralized trusted authority to administer an exchange of value between parties." As I note in the presentation, I feel the blockchain needs a lot of nuance when discussing how the technology has the potential to disrupt the profession. The technology (as implemented in the exchange of the cryptocurrency Bitcoin) itself won't replace the audit because its controls are designed for the purposes of giving comfort to a retailer, such as Overstock.com, that the buyer has not spent the currency somewhere else. However, if a retailer was then to tell an auditor that they sold goods to these public addresses, the auditor would need to verify that the retailer was not selling the goods to itself (i.e. they would need to verify that the addresses that the retailer sold to are not controlled by the retailer). In other words a sale for the purposes of Bitcoin is not a sale for accounting purposes.

That being said, auditors can’t ignore blockchain as it is the first decentralized approach to exchange value that eliminates the need for a trusted intermediary.

To understand the blockchain better, check out the following videos:

  • Blockchain technology will drastically change our lives: This video gives a good overview of the implications of bitcoin and illustrates the role of the network in maintaining the ledger.
  • How Bitcoin works under the hood: There is a 5 minute non-tech video, 5 minute tech video and a 22 minute video, which all do a good job of using animation to explain how bitcoin is tamperproof
  • Khan Academy: The videos are about 90 minutes in total, but it is comprehensive. 

Crowdsourcing: "Process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers."

For more on crowdsourcing, I wrote a post on the potential impact on crowdsourcing. The post gives a good background exploring the use-cases brought up by Jeff Howe (who coined the term crowdsourcing).

Near the end of the post, I noted that:

"Can accountants/auditors be crowdsourced like the way professional photographers were? It seems were crowdsourcing works best is an arena where you find hobbyists who do such things out of passion instead of obligation."

Since writing that post I found Gigwalk which illustrates how non-expert tasks within accounting or auditing can be done by the crowd (see this post near the bottom). Also, during the CATS conference it was noted that 50% of practitioners will be retiring over the next 5 to 10 years. Such retirees could form a huge pool of people who want to work casually in their retirement thereby enabling the audit to be crowdsourced.

Concluding thoughts
To meet the challenge of the exponential change, I feel that we need to do the following:

  • Hands-on Approach to Technology: University courses on programming, data analytics and data sciences should become a standard part of the accounting student's education. Although tools change over time, I think accounting students who have an open-source statistical package like R would have more options in terms of employment. With respect to data science, (audit) sampling belongs to an era of small data. Consequently, for auditing theory to be keeping pace with the way big data is transforming the way organizations are dealing with their data auditors need to be able traverse data science and auditing theory. 
  • Bring in the "hackers": An extension of the above recommendation, is to get the people who think outside the box and disrupt the way we do things.
  • Greater focus on cyber security: According to Alec Ross, cyber security is currently a 400 billion dollar problem and is expected to be a $175 billion industry by 2020. Security is a natural extension for CPAs who already need to understand internal controls, governance and concepts of risk (impact, likelihood, threats, etc.). With IoT, the security risks can only be expected to grow exponentially as now even the IoT-enabled fridge can be hacked (and the FTC thinks so as well).
  • Smart Contracts+AutoRepos of Smart Cars = Flash Crash10: As I have written previously about AlgoTrust (second post and first post), I noted that this was another area that CPAs can focus on - auditing algorithms. Just imagine how, these algorithms can feed into blockchain enabled smart contracts that could trigger a massive repossession of smart cars - leaving a city in chaos as people try to figure out how to get home. In other words, CPAs can act as independent monitors of algorithms to ensure such risks are safeguarded against. 
  • CPAs-as-a-Crowd: CPAs should leverage the combined power of social and cognitive to get smarter by sharing knowledge and using "smart rooms" that use machine learning and other AI technologies. 
To brings such change the profession, will not the work of one entity alone. Firms, educators, professional bodies and companies need to work together to ensure that the CPA profession will thrive in the world of exponential change that is just around the corner. 

Friday, April 22, 2016

Cloud vs corporate IT: Insights into how the share-economy will play out?

When thinking about disruption we often attempt to look to the past for how it will affect our future. However, we can also explore how disruptive tech is impacting our world today.

Consider a recent WSJ article that gave us insights in to how cloud and mobile is disrupting "classic tech":
  • EMC, Intel and IBM are being disrupted. The move to cloud and mobile is impacting the ability of these companies to meet earnings expectations. For example, EMC's sales of storage products declined by 10%, while Intel has seen an overall decline in PC Market sales.
  • Companies are slashing their workforce in response to such trends. The shift to cloud & mobile is resulting has resulted in the hemorrhaging of 12,000 jobs, or 11% of the workforce, at Intel alone. 
  • Overall decline in revenues/profits despite strategic shifts in product mix. IBM's cloud computing business grew 34%, while Intel's data centre business, serving cloud providers grew 9% (for more on this "corporatification trend" see here). However, IBM's total revenue fell almost 5%. Intel had a tough time keeping up with rivals like ARM who posted revenue gains of 22%. This compares to 7% of which the WSJ attributes a chunk of that rise to an acquisition Intel made. 
Reflecting on these trends, is it fair to think of cloud as the original use case for the share economy? 

When we think of Uber, Airbnb, etc., we see how users can use these platforms to monetize their excess or underutilized asset by renting it to others.

However, isn't that also the story of the cloud?

Amazon, Intuit, and other cloud computing companies decided to "share" their excess computing capacity to others. In a sense, we are talking about servers instead of houses, but the concept is really the same.

And this goes to my initial point. We are living through the disruptive impacts of cloud and mobile on legacy-tech and we can quantify, analyze and understand its impact.

Given this premise what does this above tell us about the share-economy?

Firstly, better utilization of assets leads to the sale of less assets.  This should be expected as there is a more efficient use of assets leads to  (servers, car, house, etc) less market size as demand remains constant. As I had noted in the post a few months ago, Uberization of the taxicab industry would ultimately lead to a fleet of cars that are owned by a company like Google - leading to a net reduction of cars used by society. GM probably understands this concept as they have invested $500 million into Lyft; a competitor to Uber.

Secondly, it illustrates how the share-economy is subject to concentration of wealth: the cloud computing landscape is dominated by large players, including Amazon, Google and Microsoft. As noted by Douglas Rushkoff in the following video, since these innovations emerge out of the "operating system of capitalism", they inevitably result in the formation of a handful of platforms dominate the industry and capture the lion's share of the profits.

(Also check out his book that discusses this in more depth)

Thirdly, its difficult for behemoths to adjust to these types of shifts. Despite Intel and IBM investing in the disruptive technologies, it's hard for them to adjust to the dynamics of the new economy. This illustrates how much more challenging it will be for those disrupted by such platforms to re-tool and compete in the landscape.

For accountants and auditors, one such platform to watch out for is Gigwalk. As per their website, their value proposition is that by leveraging the 350,000 “professional services” workers (see graphic below) the manufacturer or other upstream supplier can get visibility into the actual retail outlet. For example, Whirlpool wanted to “Audit the presence of its Swash product on showroom floors, communicating back to corporate compliance gaps in real-time”.

And the "starter Store Audit Package" begins at $10.

Creative destruction is not inevitable, but we should learn from the lessons of these tech giants and plan prudently to meet such challenges head on.

Friday, April 8, 2016

Hacking law firms: A shift in trends? A closer look at the data.

Before the infamous, Panama Papers breach Wall Street Journal reported in late March on cyber security incidents that occurred at two major law firms. As WSJ noted,  that "[h]ackers broke into the computer networks at some of the country’s most prestigious law firms, and federal investigators are exploring whether they stole confidential information for the purpose of insider trading, according to people familiar with the matter. The firms include Cravath Swaine & Moore LLP and Weil Gotshal & Manges LLP, which represent Wall Street banks and Fortune 500 companies in everything from lawsuits to multibillion-dollar merger negotiations."
The attack is a shift in the traditional targets of hackers, which has largely been focused on stealing personal data. Based on UWCISA's review of public news sources from , we recently analyzed data from cyber attacks  based on a review of public new sources from 2010 to 2016 (unless otherwise stated) we found the following:
  • Personal data stolen at higher rate than financial data: Of the breaches analyzed, about 33% of attacks related to stealing financial data. In contrast, approximately 53.5% pertained to stealing personal data. 
  • What does the data say? Hackers want to go phishing: When analyzing the different data elements (from 2010 to 2014), 35% of elements stolen  could be potentially used by hackers to conduct further phishing and spear-phishing attacks. Of these, 13% relate to user credentials (username + password), while the balance fields includes things such as email, name, address, and social security numbers. This is not to say hackers don't want financial data - approximately 11% of the data elements related to things such as debit/credit cards and even intellectual property.  
  • Malware is attack vector of choice: Malware represented 21% of the attack vectors used, while SQL injection was the next favourite at 11% and phishing and spear -phishing was third at 6%. 
  • Industry trends: In terms of industry, software publishers (8%), hotels (5%) and AV equipment manufacturers (~4%) and limited service restaurants (3.5%) were the top of the list . However, this compares to an average attack of 1% by industry (when excluding attacks that were not attributed to an industry). 
The move by hackers to target law firms illustrates how the infamous risk formula, likelihood X impact, needs to go beyond  financial assets, like credit cards or bitcoins. As noted in the data analysis above, firms also need to protect intellectual property or anything that can be converted to cash. Consequently, organizations need to be astute as the perpetrators in assessing how information - such as that held by law firms - can be used for financial gains.

Friday, November 27, 2015

Will Accountants be Uberized? Part 2: Crowdsourcing and the rise of Pro-Ams

This is part 2 of a series of blogposts that I will write (aiming for 3 parts, but let's see) on how CPAs can be uberized. In this exciting installment, we explore how crowdsourcing and the rise of ProAms (professional amateurs) has altered other professionals, such as photography.

In the last installment, we explored how Uber was actually not a 1:1 replacement of the taxicab profession. Cab drivers fill a social function that ensures that people can from point A to point B safely, accommodates their disabilities and at a regulated rate. However, taxi cab still actively cash out now as we can expect Google to fill in the societal gaps that Uber appears to be unable to. Google could actually revolutionize car ownership by make their driverless cars they sell "ready-to-share" thereby enabling people to benefit from the share economy (imagine your car running around town earning money while work, sleep, play, engage in activism, etc!). Alternatively, they could go own a fleet of cars that people effectively rent in a way that's cheaper than owning a car altogether.

Crowdsourcing as Jeff Howewho authored the original 2006 Wired article that brought notoriety to the concept, where he was trying to describe the phenomenon of using the Internet to outsource work to individuals, defines it as: “is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.”
 In his book he highlights the following uses to illustrate the impact of crowdsourcing on how companies do business:
  • Threadless: Is a great example of how the crowdsourcing brought life into the commodity business of selling t-shirts. In a nutshell, the crowd submits t-shirts designs, then the crowd votes on what designs are best and the designs that win are sold to the same crowd who already voted on them being the best! (For more details see the wiki article on Threadless)   
  • P&G hires scientists via Innocentive to solve problems that they can’t. As noted in the Wired article, Colgate-Palmolive "needed a way to inject fluoride powder into a toothpaste tube without it dispersing into the surrounding air". So the posted the challenge on Innocentive and Ed Melcarek, who has Master degree that is related to particle physics, "knew he had a solution by the time he’d finished reading the challenge: Impart an electric charge to the powder while grounding the tube. The positively charged fluoride particles would be attracted to the tube without any significant dispersion".  
  • iStock Photo: Instead of hiring professional photographers to make stock photos, iStock solicits photos from the crowd. The Wired article explains how the Claudia Menashe, director at the National Health Museum, was about to buy $600 worth of stock photos from a professional photographer Mark Harmel. However, she bought the photos from iStockPhoto for a fraction of the price at $1 a piece. iStockPhoto was snatched up by GettyImages “the largest agency by far with more than 30 percent of the global market, purchased iStockphoto for $50 million”. 
  • Howe's book (see pages 61-63) also discusses how NASA relied on the crowd to classify the age of craters. A professional had taken 2 years to complete a similar study that was done by these “clickworkers” over a month with results yielding a “comparable degree of accuracy”.
Can accountants/auditors be crowdsourced like the way professional photographers were? 

It seems were crowdsourcing works best is an arena where you find hobbyists who do such things out of passion instead of obligation. My dad was a hobby photographer and although I am no way near talented as he was, I love trying to capture those unique moments. For example, I was able to capture this unique division sunset with my Samsung Note 4

In other words, if I decided to put my mind to it, I could be potentially competing with Mark Harmel. 

However, are there hobby auditors or accountants out there that would compete with CPAs? 

I have yet to find one!

There's a case that can be made for the impact of David Weinberger's "networked knowledge" (book, YouTube video below) on the dilution of expert knowledge in general (law, medicine, accounting). What he proposes is that the ability to share, link and debate information on the Internet transforms knowledge into a more fluid state in contrast to the static nature of books. 

With respect to accounting, non-professional accountants can network with each other to get an understanding on how to account for stock provisions, but would management or the SEC find it acceptable that a company determining its accounting position by looking it up on Google Groups?

And that takes us back to the issue we discussed in the last blogpost: when disrupting a profession it's not just about the production of a good or service but also the social function that the profession was fulfilling. Public accountants have a fiduciary responsibility to the users of financial statements to ensure that they are free of material misstatements. Failure to fulfill this responsibility can result in fines, disciplinary measures or even loss of one's designation.

However, as Google's driverless cars could step in where Uber can't, could IBM's Watson step in and fulfill that societal function that accountants currently do?

To be concluded next time...

Tuesday, November 17, 2015

Will Accountants be Uberized? Part 1: Examining the Google-Uberization of the Taxi Profession

This is part 1 of a series of blogposts that I will write (aiming for 2 parts, but let's see) on how CPAs need to take lessons from the Uberization of taxi cab drivers and see whether CPAs can themselves be uberized.

A recent article in the Toronto Star highlighted the latest turn of events in the battle between taxi industry and those that want to bring Uber to Toronto

What is Uber? 
Uber enables the "sharing economy" by bringing together people who need a ride with those who have spare time and a spare ride via a mobile application. In other words, Uber does for car owners what Airbnb did for homeowners.

Who's resisting? 
Taxi cab owners have fiercely resisted the arrival of Uber into their cities as it can dramatically impact their ability to make a livelihood. The article attacks the position of the cab drivers as follows; "For decades, Toronto idled as taxi permits were traded among owners for obscene prices, pushing up meter rates while service declined". Taking the argument to the logical conclusion: Uber breaks the monopoly by enabling non-traditional competitors to enter into the marker.

The argument from the cab drivers side of things is that they are a profession: they have to pass examination standards that enables them to be qualified by the public to fulfill their duties. Furthermore, as noted in this article on the Walrus, taxis have a public duty in terms of assisting the handicap whereas Uber appears to be shirking this responsibility:

"Then there are disabled passengers, who don’t fare well at all with the Uber model of transportation. Indeed, nothing demonstrates the fundamental gulf between market-driven and civic-minded car services as much as the issue of accessibility. From a purely commercial point of view, passengers in wheelchairs represent a niche market. And unless compelled to by regulation or personal circumstance, most drivers are not going to invest the $60,000 needed to buy an accessible van.
For the most part, Uber pretends that the issue doesn’t even exist: In California, where a 2013 law requires ride-sharing services to report data about disabled passengers, the company has stonewalled the government. In July, a state judge recommended that Uber operations be suspended statewide and the company fined $7.3 million (US) for violating reporting requirements."

These protests are not limited to Toronto but are worldwide. Take for example the following video posted by Russell Brand actor-turned-activist who brings the issue of cab drivers in UK to light:

Other issues to note:
  • Is Uber cheaper? Not always. As noted in this Forbes article and this article on Business Insider, Uber is not always cheaper. Business Insider notes how that Uber you pay for both the distance and the length of ride. Although there are certain times that it's cheaper to use a cab than Uber, the reality is that it's significantly different in price between the two options and you need an app . 
  • Taxis have to charge standard pricing, Uber does not. The company engages in what it calls "surge pricing", which means "[a]t times of high demand, the number of drivers we can connect you with becomes limited. As a result, prices increase to encourage more drivers to become available." This is in contrast to taxis which are regulated in terms of how much they can charge.
  • Tax implications of Uber: Beyond the licensing fees a cab driver would pay to the municipal and other governments, Uber uses transfer pricing techniques - like any multi-national corporation - to minimize the taxes it pays. As noted in this Fortune article, Uber takes a 20% cut - meaning governments stand to lose the income taxes associated with this revenue that could have been taxed as income as from the local cab driver or the company that owns the plate. 
  • "Creative destruction" meets nest eggs, loans and food-beverage cart vendors. The disruption of Uber doesn't just impact taxi industry but also the retirement plans of drivers, financial institutions as well as tertiary industries that are ancillary to cabbies. In Toronto, plates were pricey costing as much as $360,000 (but are now selling for 120K). The logic of paying such an exorbitant amount was that it would provide a nest-egg for the purchaser and his or her family. But they weren't only ones betting on these assets. As noted in the Wall Street Journal, BankUnited Inc. lent $214 million against 577 cab licenses (also known as medallions). Finally, as noted by the cab driver in the video above, there are the food and beverage carts, restaurants, etc. that serve cab drivers who will also face a decline as cab drivers exit the business. 
Uber vs Taxis: What does the taxi-cab profession add to society?

Isn't it essentially trust? 

Prior to Uber, we had relied on municipal governments to license and vet cab drivers to ensure that they would get from us point A to point B in a safe, efficient (e.g. the fastest route possible) and cost-effective manner (e.g. fair pricing). 

Not to feed into the classical techno-phobic mantra of fear-uncertainty-doubt (FUD) but Uber drivers have violated that trust.

What Uber essentially proposes, is that municipal governments can be dis-intermediated in terms of oversight of the taxi profession. 

In terms of trust, what Uber purports is that the rating that drivers assign to passengers and passengers assign to drivers can serve as an effective substitute for the licensing and vetting function. Although this may work for the vast majority of time, it does not help those that have been victimized by Uber drivers. To use auditing-speak, the rules & regulations around cab drivers serve as a more effective control around cab drivers than Ubers rating system. 

The other issue is that Uber does not seem to be able to replace the public service function of the taxi profession: they openly "surge price" customers and are stone-walling the government around how they can serve the disabled community. 

Google's Driver-less Cars: Taking Uber to its logical conclusion 
Although the cab drivers can have a solid argument against Uber in terms of trust and public service, they may not fare so well at the next incarnation Uber: "Google's Uber". This is where we take Google's driverless cars to the concept of and apply it to Uber. I had mentioned the implication of Google's driverless car in a previous post - examining the impact on car insurance and the industry that has grown up around it. But I didn't explore how such a future will evolve. Google can effectively fill the role of cab services as follows:
  • Getting us there the fastest: With its Maps offering, we all have come to trust Google to get us to our destination the fastest which incorporates live traffic data. 
  • Safety:  Google's driverless cars have proven to be safer than human driven cars. Assuming it is not taken over by homicidal program like Skynet, the issue of assault basically is eliminated from the equation. 
  • Cost effective: This perhaps the most important part of the value proposition: Google's advanced algorithms could bring a level of optimization that would take the sharing economy to unparalleled heights. Imagine if Google sold driverless cars that would be earning money while the people are working. In such a scenario, the cost of the service would not only reduced by the amount of by the amount of wages and benefits paid out (regardless if it's a cab driver or an Uber driver), but it would also effectively share the cost of capital with the owner of the car. Alternatively, Google could offer, or supplement such an offering, with its own fleet of cars. Ultimately, would such an offering cannibalize car ownership altogether? If it's cheaper and faster to Google-Uber it, why bother owning a car and being held ransom by some insurance-feudal-corporate overlord? 
  • Public service: Given Google's experience with working with municipal government via its high speed internet offering, it is uniquely positioned to see such a service fulfill its public service role. As noted in the previous bullet, Google's own fleet of cars could be special purposed to serve the disabled.  In fact, Google openly advertises its driverless cars as something that will give the blind their independence (see video below as proof)

In the next installment (or set of installments), I will explore the prospects of how the CPA profession can be Uberized and what we can learn from the Uberization, and ultimately Google-Uberization, of the taxi cab profession.