Five Top Tech Takeaways: Apple's Carbon Neutrality Questioned, Fairphone 5 Launches, Binance US's CEO Leaves and a Privacy Nightmare on Wheels

E-Waste: A Smoldering Problem (Pic Link) (Article Link)

"Carbon Neutral" Apple Watch: What Does It Really Mean?

Apple's recent launch of its "carbon neutral" 9th-generation Apple Watch has stirred both interest and skepticism in the tech community. While Apple has certainly made strides in cleaning up its supply chain and investing in renewable energy, experts like climate scientist David Ho question whether any product can genuinely be carbon neutral. The phrase "carbon neutral" is seen by some as misleading when companies use carbon credits to offset their emissions, a practice that has drawn scrutiny from regulators. Apple's "carbon neutral" watch relies heavily on these credits, which are tied to nature-based offset projects that are themselves subject to criticism. As noted in the article:

"Part of the problem is the slipperiness of attempting to tie a carbon credit—an abstract financial instrument—to any particular product in Apple’s armada of product offerings or the wider global economy. The Watch doesn’t have any role in creating those credits. They’re only brought together by an accountant’s sleight of hand."

The company's ambitious goal to have its entire product lineup carbon neutral by 2030 might sound good on paper, but given the complexity of global supply chains and the limitations of current carbon offset systems, it raises the question: how 'neutral' can a consumer product really be? (Source: Wired)

iPhone 15 Launch: Analyzing Apple’s Eco-Friendly Claims Amid New Product Launches

In case you missed it, we examined Apple's annual iPhone launch last week. Amid the spectacle of technology and innovation, Apple's environmental initiatives were in the spotlight. The tech giant unveiled four new iPhone models and two Apple Watches, all with improved features and performance. At the same time, Apple made significant claims about their Environmental, Social, and Governance (ESG) efforts, such as a 95% reduction in transportation emissions and a carbon-neutral Series 9 Apple Watch—a claim that has been questioned, as noted in a previous Wired article. Check out our post where we assess Apple's eco-claims in the context of their past green initiatives. (Source: UWCISA)

Fairphone 5: A More Sustainable and Repairable Smartphone?

The Fairphone 5, released by Dutch smartphone company Fairphone, aims to be a game-changer in the smartphone industry by offering up to 10 years of software support, a first in the industry. It also has built-in eco-sustainability, unlike the competition. The previous model, the Fairphone 4, got an industry-leading iFixit Score of 10 out 10 for its repairability. Designed with longevity, repairability, and eco-human-friendly-sourcing in mind, the phone retails at £619 (€699). It features a 6.46-inch QHD+ OLED screen, a Qualcomm QCM6490 processor, and an array of recycled and sustainable materials. While it may not lead in performance, it offers other unique benefits such as a removable battery, a five-year warranty, and modular spare parts for easy repairs. Fairphone is setting new standards for manufacturing and tech waste reduction, although compromises include a less impressive camera and mid-range performance. (Source: The Guardian, Fairphone)

Driving into the Privacy Abyss: The Dark Side of Modern Cars

Modern cars are becoming more like computers on wheels, boasting advanced tech features that unfortunately come with a price—your privacy. An exhaustive research study into 25 car brands revealed that every brand collects more personal data than necessary, and 84% admit to sharing or selling your data to third parties. Only two brands, available only in Europe, give drivers the right to have their personal data deleted. Surprisingly, car manufacturers perform worse in terms of security and privacy practices compared to other tech products like dating apps or mental health apps. The study also exposes how these companies manipulate "consent," forcing drivers and even passengers to give away their privacy. Given that every brand reviewed was flagged for privacy issues, the situation paints a grim picture for consumer choice and control over personal data. (Source: Mozilla)

Turmoil in Crypto Continues: Binance.US CEO's Departure and the SEC Crackdown

Brian Shroder, CEO of Binance's U.S. arm, has stepped down and will be temporarily succeeded by the firm's Chief Legal Officer, Norman Reed. Amid regulatory scrutiny, the company is also reducing its workforce by approximately one-third. This move follows allegations from the SEC that Binance.US has been operating an illegal trading platform. These organizational changes are part of a larger trend affecting the crypto industry, as U.S. regulatory bodies ramp up enforcement measures. (Source: WSJ)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist who is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

Five Top Tech Takeaways: Nvidia's Billions, UN on AI & Jobs, Smucker's Approach to Hybrid, RoboTaxis Put on Pause and more

RoboTaxis Are Stopped

Nvidia Outpaces Rivals: How AI Fuels the Trillion-Dollar Company

Nvidia continues its meteoric rise in the tech world, fueled by unprecedented growth in its AI division. In its Q2 2024 earnings report, Nvidia disclosed a staggering $13.5 billion in revenue, with $10.32 billion coming from data center sales. The revenue in data centers more than doubled within just one quarter. Overall, the company made a profit of $6.188 billion, marking an 843% YoY increase. While the PC industry wanes, Nvidia's generative AI chips have found enormous demand. Moreover, the company is optimistic about the gaming sector, which rose 22% YoY to $2.48 billion in revenue. Nvidia is also forecasting a revenue of $16 billion in the next quarter, attributing much of the expected growth to its data center sector. Their next AI chip, GH200, is scheduled for a mid-2024 release, which aims to cater to growing demand. Meanwhile, rivals like Intel and AMD are yet to pose serious competition in the generative AI chip market. (Source: TheVerge)

Why AI Won't Spell Doom for Jobs: The UN's Take

A United Nations expert, Ekkehard Ernst, refutes the common notion that AI and robots will replace human labor in manufacturing sectors, especially in developed countries. Instead, jobs in the service sectors like construction, health care, and business are most likely to undergo transformation. Ernst suggests that AI will automate routine tasks, freeing humans to focus on emotional and interpersonal skills. In developing nations, sectors like agriculture are benefiting from AI. The impact of AI on labor markets can be shaped by local, national, and global policies, and isn't pre-ordained. Ernst argues that a broad skill set and flexible regulatory framework are crucial for optimizing the opportunities presented by AI. (Source: UN)

Tornado Cash Founders in Legal Turmoil: What It Means for Crypto

Tornado Cash co-founders Roman Storm and Roman Semenov are facing serious legal charges in the U.S., including conspiracy to commit money laundering, following the Department of Justice's unsealed indictment.  This comes after U.S. sanctions on Tornado Cash and the arrest of third co-founder Alexey Pertsev in the Netherlands. Roman Semenov has also been sanctioned for alleged support to North Korean hackers via the privacy tool. The case has wide-ranging implications, sparking debates about the legality of open-source development and unlicensed money transmission in the crypto space. Regulatory inconsistency also seems apparent, as the charges contradict FinCEN's 2019 guidance stating that "anonymizing software providers are not money transmitters. (Source: Forbes)

In terms of background on the company, Tornado Cash is a decentralized non-custodial privacy solution built on the Ethereum blockchain-based zero-knowledge proofs. It is an open-source, fully decentralized cryptocurrency tumbler that runs on Ethereum Virtual Machine-compatible networks². Tornado Cash offers a service that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source. (For more see: Coingecko, Wikipedia)

J.M. Smucker’s Tailored Hybrid Strategy: A Case Study

J.M. Smucker has adopted a unique return-to-office strategy, setting it apart from other U.S. companies. The company, known for its diverse portfolio of brands from Jif peanut butter to Folgers coffee, has designed its headquarters to include a variety of specialized spaces, such as a coffee-tasting room and a mock grocery store. The hybrid strategy is tailored to accommodate the unique needs of different departments, allowing for a blend of remote and in-person work. The company expects its roughly 1,300 Orrville-based corporate workers to be on site as little as six days a month, amounting to about 25% of the time, depending on their roles. Employees are guided to meet this requirement by attending 22 'core' weeks a year. Remarkably, the strategy allows many employees to live anywhere in the U.S., as long as they cover their travel expenses to Orrville for these core weeks. This has led to a rising number of 'super-commuters' who live elsewhere but work in Orrville. The approach aims to leverage the company's historical strengths while adapting to the evolving work landscape. (Source: WSJ)

GM Agrees to Halve its Robotaxi Fleet Amid Ongoing Investigations

California's Department of Motor Vehicles has called for General Motors' self-driving subsidiary, Cruise, to halve its active fleet after two incidents involving the autonomous vehicles (AVs) occurred in San Francisco. The move comes shortly after Cruise was green-lit by California authorities to charge for robotaxi services around the city at all times of the day. One incident involved a collision with a fire truck, resulting in a passenger requiring hospital treatment for minor injuries. Another collision happened when a car ran a red light and struck a Cruise AV. A separate incident involved a Cruise AV driving into wet concrete. These developments pose significant challenges for the AV industry, emphasizing the complexity of creating fully autonomous, safe vehicles. (Source: CNN)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

Five Top Tech Takeaways: AI Bans at Work, Disney Hiring AI to Cut Costs, RoboTaxis are Here, Anxiety over Voyager 2 and ChatGPT can't add?

RoboTaxi Watching a Lost Satellite

BlackBerry Research Reveals Workplace Caution Against Generative AI 

BlackBerry's new research indicates that 75% of organizations globally are either implementing or considering bans on ChatGPT and other generative AI applications on work devices. The study involved 2,000 IT decision-makers from eight countries, with 61% of them considering a permanent ban. Risks to data security, privacy, and corporate reputation are driving up the decisions to take action, with 83% voicing concerns that unsecured apps pose a cybersecurity threat to their corporate IT environment. Despite this inclination towards blocking widespread use of the technology, most IT decision-makers recognize the opportunity for generative AI applications to have a positive impact in the workplace. (Source: CTV)

Robotaxis Take Over San Francisco: A Glimpse into Waymo and Cruise's Future

Driverless cars have become a common sight in San Francisco, with Waymo and Cruise offering robotaxi services to the public. These services work similarly to traditional ride-hailing apps like Uber and Lyft but are operated by autonomous vehicles. Currently, San Francisco is the only city where two companies provide 24/7 driverless services to the public, though there are limitations in areas of operation, and Waymo is yet to charge for its rides. Despite some minor safety incidents and political opposition, the experience with these services has been mostly positive, with conservative driving behavior and smooth rides. Waymo's current fleet consists of about 200 cars and is doing around 10,000 trips per week, aiming to increase this tenfold by next summer. Cruise, operating with 300 customized Chevy Bolt vehicles, averages 1,000 trips a day in San Francisco. Both companies are planning to expand, with Waymo seeking a permit to charge for rides and Cruise targeting $1 billion in robotaxi revenue by 2025. (Source: Bloomberg)

Magic or Menace? Disney's AI Task Force and the Debate Over Jobs in Hollywood

Walt Disney Company has formed a task force to study artificial intelligence (AI) applications across its various businesses, ranging from movie and TV production to theme parks and advertising. The task force aims to develop in-house AI solutions, forming partnerships with startups, and is looking to hire experts in artificial intelligence and machine learning. Disney's embrace of AI could help control the ever-increasing costs of producing big-budget films, enhance customer support in theme parks, and even create lifelike characters that interact with guests. Although the task force was established earlier in the year, the company's decision to hire during the writer's strike raised eyebrows. More broadly, the move towards AI has ignited tensions in Hollywood, particularly among writers and actors, who see AI as a threat to their livelihoods. This concern has become a central issue in contract negotiations with both the Screen Actors Guild (SAG-AFTRA) and the Writers Guild of America (WGA), resulting in an ongoing strike. (Source: Reuters)

Decline in ChatGPT's Mathematical Abilities: A New Research Study

New research from Stanford University and the University of California, Berkeley has revealed a decline in the mathematical abilities of ChatGPT, specifically in identifying prime numbers and other basic operations. This deterioration is an example of a phenomenon known as "drift," where attempts to improve one aspect of the complex AI models can cause other parts to perform worse. Between March and June, the premium GPT-4's success rate in identifying whether numbers were prime dropped from 84% to 51%. The research showed that GPT-4 became worse at six out of eight different tasks, although GPT-3.5 improved in some measures. This inconsistency in performance, along with the unexpected rate of drift, emphasizes the complex challenges in AI development and calls for systematic and continuous monitoring and testing to understand their evolving capabilities. 

OpenAI responded to the research with the following: "When we release new model versions, our top priority is to make newer models smarter across the board. We are working hard to ensure that new versions result in improvements across a comprehensive range of tasks. That said, our evaluation methodology isn’t perfect, and we’re constantly improving it." (Source: WSJ)

37 Hours of Anxiety: How Voyager 2 Was Nearly Lost Forever

On July 21, Suzanne Dodd's team at NASA's Jet Propulsion Laboratory accidentally sent a wrong command to Voyager 2, causing its antenna to point slightly away from Earth, resulting in a loss of communication with the probe that's 12.4 billion miles away. Recognizing the error, the team crafted a solution to send a "shout" command to adjust the antenna back. Utilizing the high-elevation, 70-meter, 100-kilowatt S-band transmitter at the communication station in Canberra, Australia, they sent the highest-power signal and anxiously waited 37 hours for a response. Contact was restored on August 3, much to the team's relief. Had the attempt failed, a backup option of onboard flight software’s fault protection routine would have been the last resort. Despite this two-week gap, the scientific work was not interrupted, but the incident served as a stark reminder of the spacecraft's age and vulnerability. (Source: Wired)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

Data Tsunami: How big is the Data Deluge? (Part 1)

Was invited last year to speak about the Data Tsunami at the AICPA Engage conference, but I didn't quite make it there! Instead, I presented virtually. 

So, will be breaking out some of the topics that I will be discussing over a few blog posts. 

How big is the data tsunami?

Probably, the first thing that comes to mind is social data. The Internet truly unleashed the first torrent of the data tsunami. Google's search index alone is 100,000,000 GB. In terms, of social data we are looking at the following:

• Twitter: 200 billion tweets per year (Twitter)
• Facebook: 4 petabytes of data per day (WEF)
• WhatsApp: 65 Billion Messages per day (WEF)
• YouTube: 250 million hours per day (Variety)
• Apple: 50 billion podcasts downloads (Fast Company

It's interesting how the data tsunami encompasses print, sight and sound. This is of course lends itself to analytics, but we will discuss that in a future post.

In terms of organizational data, Walmart generate 2.5 petabytes of data per hour. According to American Banker, 12 million petabytes (per year) of data flows through the financial industry. In terms of manufacturing, 6,000 fan blades manufactured by Rolls Royce generates 3 petabytes. It gives an idea of how much data is generated by the millions of parts that go into airplanes, trains and automobiles.

In terms of medical data, Stanford published the following: 

“The sheer volume of health care data is growing at an astronomical rate: 153 Exabyte…were produced in 2013 and an estimated 2,314 Exabyte will be produced in 2020, translating to an overall rate of increase at least 48 percent annually.”

This obviously has tremendous privacy concerns. 

How big will the data tsunami get? 

According to IDC, "the collective sum of the world’s data will grow from 33 zettabytes this year  [2018] to a 175ZB by 2025". 

A couple of key contributors to this 'tsunami of data', will likely be the Internet of Things (IoT). 

IDC predicts that 40+ billion IoT devices will generate 79.4 ZB of data by 2025. The other generation of 'digital exhaust' will likely be autonomous vehicles, which according to Intel produce about 4 terabytes of data per hour. 

But the big question is so what?  

We'll take a look at this question in the next post. 

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.

 

Telsa Autopilot Fatality: Let's not blame the robots...yet.

By now most have heard of the fiery crash involving a Tesla roadster. This episode from the Young Turks does a good job at examining incident:

For more sensationalist coverage of the incident, watch the following:


The gentlemen at the end of the video notes how he would never trust a computer to drive him and his family.

So are such fears of computers warranted? 

If you look at the original press release from Tesla, it notes:

"What we know is that the vehicle was on a divided highway with Autopilot engaged when a tractor trailer drove across the highway perpendicular to the Model S. Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied. The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer impacting the windshield of the Model S. Had the Model S impacted the front or rear of the trailer, even at high speed, its advanced crash safety system would likely have prevented serious injury as it has in numerous other similar incidents."

So analyzing the incident both the auto-pilot system and the driver didn't recognize the truck in the distance. With the fear of robots, it's easy to fan the flames of "robotophobia" and quickly blame the robots. For example, some could claim the driver would have been vigilant had he not had such an auto-pilot system. But this is mere speculation and hard to prove. 

A couple other things should be noted when evaluating this incident.

• Robot record is superior to the human only record: As Tesla has noted, that the car has driven safely 130 million miles, contrasting this to a fatality every 94 million miles driven in the US and 60 million world wide. In other words, the robot record is superior to the human only record. 
• What about the times the robot has saved people from crashes? The other problem is how do you balance this bad news with the good news that never gets reported. This refers to the time the autopilot acted to save the human beings from crashes. It similar to investments in information security that save the company from countless malware incidents. However, because nothing happens no one really notices the value of technology. Similarly, we're not able to balance the "fear, uncertainty, doubt" associated with this incident with all the times the auto-pilot system actually avoided a crash. 

The incident does point out, however, a bigger looming issue of how human beings and machines work together. Despite the caveats, people are already eager to let the auto-pilot drive them around. And really why not? Commuting is giant waste of time and we could be more productive while letting the computer drive us around. 

Nicholas Carr explores this issue in his latest book The Glass Cage. In the book, he explore how the more reliant we are on a technology, the less connected we are to the world. For example, by moving from manual to automatic transmission, in his opinion, driving is less fun. He also points out how airplane pilots are really just babysitting the computer that actually flies the plane. The trouble occurs when there is a crisis situation where the pilots are unable to handle the situation because they have lost their ability to actually fly planes. 

To be fair, this was not the issue in the Tesla crash - it's way too soon to say that the individual driving the car was overly dependent on the car. However, it is plausible to see how this will occur quite quickly if someone like Google were to offer driverless cars to the massed (as I noted in this  post). However, the government didn't made it mandatory to learn to ride a horse - just in case all the cars stopped worked. So I doubt they will force us to learn to drive cars, just in case the autonomous cars stop driving. 

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 Howe, who 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...

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. 

Driverless Cars and the end of car insurance (can't we dream?)

Great piece on Brookings on Driverless Cars, or what they call Autonomous Vehicles. As it turns it, driverless cars are safer than human driven cars. The Brookings refers to the following DW article to note the safety record of the Google driverless car experiment:


"Google's 11 accidents happened during 1.7 million miles of driving, working out to 0.6 percent per 100,000 miles (160,000 kilometers). The national rate for reported "property-damage-only crashes" in the United States is about 0.3 per 100,000 miles driven, according to the National Highway Traffic Safety administration. But as Google noted, as many as 5 million minor accidents are not reported to authorities each year."

(On a side note: Google's analysis of the official accident rate is a valid one. The real rate of human accidents is quite significant in determining how safe autonomous cars actually. Data integrity strikes again!)

What Brookings points out is that for years the various governments across north America have been able to exploit human weakness and use that to prop up their revenues: speeding, accidents, and driving related fines. They also point that there will be tremendous savings in the US (approximately $10 billion a year to the overall infrastructure) as state and federal governments will be paying less for the damages caused by accidents.

With the rise of "smart machines" such as, driverless cars or IBM's Watson, the society will under go economic shifts that are going to cause massive impacts on the way we do things. Just think of all those who currently benefit from the "human inefficiency" of traffic errors and infractions:

• Insurance companies: Ideally, governments will eliminate mandatory insurance as it can no longer by justified in such a low-accident environment. We can dream can't we? Perhaps the manufacturer can take on the risks associated with the vehicle instead of the driver
• Police departments: Police spend time catching motorists speeding, etc. They will need to be re-assigned to other areas. Although these areas are likely potentially less revenue generating, they may be more helpful to society. 
• Courts: Courts get bogged down and take months to process cases. This backlog will be a thing of the past and then they can work on other cases. 
• Lawyers and paralegals: If there are no court cases, then there's no need for these guys either.
• You and me: People will no longer to take time off work and spend time defending themselves against these charges and extra tithes we have to pay to our insurance-feudal-corporate overlords.

The counter-argument is that there's less freedom to drive as you please. But should you be able to driver faster than the speed limit if it's illegal? It's an inconvenient truth, but either speed limits are not necessary or fast cars are unnecessary. But why are we driving so fast? It's usually we are needing getting places to do things.  If we can shift our schedules to handles those task as we are taken where we need to go in our "e-chauffeur driven car" doing what needs to get done while driving at safe speeds. I, for one, welcome our new autonomous-car future.