Fred's Views - Issue 15
Fred's Views
Issue 15
A weekly summary of what I've found interesting at the intersection of economics, finance and technology.
It was a busy week for news last week, so no context links today, although the headlines section below attempts to blend the two.
Headlines
California approved a bill that requires companies to treat contractors as employees. This is a good development and hopefully the first of many such laws. The effect on the already shaky economics of ride-sharing companies remains to be seen (Uber denies it will be affected), but presumably will be negative. Uber coincidentally announced job cuts in its engineering teams earlier in the week (during Apple's new iPhones announcement, in an attempt to bury the news).
In an attempt to tame its news feed, Facebook is planning to enlist human editors, a marked departure from its exclusive reliance on algorithms previously. As mentioned in previous issues, all social media platforms will end up having to take sides... But in worse news, it turns out it's trivially easy to forward and share posts made privately on Facebook and Instagram, to people who were not meant to see the content. The problem is that Facebook’s whole DNA and therefore also technical architecture is based on indifference to, or even disdain of, privacy. Hence turning it into a "privacy first" social network will turn out to be impossible.
Stripe launched a commercial finance product that uses the data it has on clients’ payments to provide loans to them. The past payments info is factored into credit risk calculations, and repayment is by taking a percentage on subsequent transactions. This seems to make sense from a product perspective, and it is therefore a good example of the threat the banks are facing.
WeWork's IPO appears to be in trouble, with the company making last minute changes to its governance and trying to remedy other worrying items found in its initial disclosure.
Wide-angle
Nobel-prize winning economist Paul Romer reckons the Burning Man festival is a good template for urbanisation in the future. Along the way, he seems to land on more state intervention than initially anticipated. The evocative description of the evolution of Romer's thought process is fascinating. Read
That's it for this week's edition. As always, thanks for reading and please forward this to anyone who you think might be interested, it would be much appreciated.