Weekly Roundup, Friday 17 February, 2017

Good morning

My ‘new era of transportation’ series took another detour this week.  What was supposed to be a couple of sentences on the shifting balance of ‘should you/shouldn’t you own a car’ ended up with almost 5,000 words of commentary and a complete full article, then a couple of reader responses caused me to add another section and push well through the 5,000 word total.  The final piece follows tonight’s roundup.

I hope you’re enjoying this series.  It is exciting for us all to be living through what truly is an astonishing revolution in personal and public transportation, with a ‘perfect storm’ of seemingly unrelated things all coming together in a way that will totally alter our future travel patterns.

It is often hard to realize what is happening when you’re wrapped up in the day-to-day changes; I hope this week’s article, the ones before it, and the one still to come, helps give you a perspective.

I read an interesting article on this general topic yesterday, that ties together both the ‘changing type of transportation’ theme, the ‘self driving’ theme (and automation in general), and combines it with some fascinating perspectives on Mr Trump’s avowed intent to ‘bring back the jobs’ to the US.

Ostensibly reporting on the onset of automated self-driving trucks, the article, in Britain’s left-wing Guardian newspaper, goes beyond that and points out some of the broader implications of this.  It reports that while the US has indeed had some manufacturing shift off-shore, the total level of industrial activity in the country has been steadily growing rather than shrinking over the last several decades.  Since 1990, the total inflation-adjusted value of goods produced in US factories has increased 73%.

The real loss of jobs is not to Mexico and China.  The article says that even though factory output increased by 73%, factory employment reduced by 30% – representing a loss of more than 5 million actual jobs (and the non-creation of another 12+ million jobs that would otherwise be implied by the 73% increase in output).

I’ve several times written about the future implications of increased automation, robotics, and AI.  But I have been blindsided and wrong.  These impacts are not going to start evolving over the next 10 – 20 years.  As this 17+ million gap in employment clearly shows, they have already been happening, and we are already feeling their effects.

May I move one step further from the central theme of ‘travel and travel related technology’ for a few paragraphs to raise an issue that we will be forced to confront, and apparently sooner than any of us expected.

There is continued discussion, in a growing number of countries, about guaranteeing everyone a minimum level of income; this being a response to the growing concern about the ‘what will we do when none of us have jobs any more’ problem.

I might be the first to look a bit further down that line of reasoning.  At present, it is everyone’s unquestioned right, in almost every country in the world (except China with a primarily ‘one child per couple’ policy), to have as many children as they wish, no matter the circumstances of the parents, the possibility or even certainty that the children will be born into lifelong poverty, or with severe defects preventing them from ever living normal lives, or whatever else.  Some people in more generous countries deliberately choose to have as many children as possible, so they can profit from all the welfare payments they get from the state.

To argue against this notion gets automatic angry cries of Nazism and accusations of eugenics leveled against one.  Everyone hides behind unchallengeable social fictions and pretend that all children start with equal potential and all children may become useful contributors to society and positive forces for good.  Maybe that is even true – who knows.  Most of us avoid arguing the point and simply accept, in a case where maybe 80% of us are indeed productive, it is easier for us to support the other 20% than to confront really difficult issues and come up with alternatives that would be deemed acceptable in open free societies.

But what will happen when there is an automatic cost to society for every child born, because of the near certainty that the child will never get to have any type of productive job?  We no longer have 80% supporting 20%.  We will have maybe 1% supporting 99%.  Will our (possibly by then AI) rulers impose limits on the number of children we can all have?

Truly, we are living in extraordinarily ‘interesting’ times.  So much so that anything else this week must seem anti-climactic.  But, may I still humbly offer you :

• AA Pilots Ostensibly Upset Their CEO Didn’t Meet Trump
• Lufthansa’s Pilots Make Up With Their Airline
• Boeing Trounces the Machinists’ Union in SC
• Barcelona – Perhaps Not the Best Choice for a New Hub?
• Another Manifestation of the ‘Sharing’ Economy
• My Mother’s Maiden Name is “Ff926AKa9j6Q”
• Elon Musk is Truly Boring
• And Lastly This Week….

AA Pilots Ostensibly Upset Their CEO Didn’t Meet Trump

It seems the entire world is now having conniption fits when it comes to our new President.  Should they be seen with him, or not?  Should they buy his daughter’s fashion line items?  And so on.  If they associate with him, they risk being boycotted, but if they ignore him, they’re distancing themselves from an important element of the nation’s hierarchy.

As I mentioned last week, when President Trump held a summit with the nation’s major airline executives, one person was conspicuously missing – AA’s CEO, Doug Parker.  He had a ‘scheduling conflict’ and was instead due to attend a ‘leadership conference’.

Whatever the reason for his no-show, he has disappointed his pilots, who, through their union, seized upon his absence as a reason to pass a vote of no confidence in his leadership.  To be fair, the pilots seem to be generally spoiling for a fight more than specifically upset that Parker snubbed the President.

As for President Trump’s reaction, well, let’s just say we’d be surprised if any businesses around DFW proved to be an early recipient of any federal largesse.

Not wanting to be left out, AA’s flight attendants have been picketing outside the airline’s Fort Worth headquarters this week, and also at LAX, CLT and MIA airports, complaining about ‘broken promises’ dating back to the airline’s 2013 merger with US Airways.

Lufthansa’s Pilots Make Up With Their Airline

After five years of dispute, and I think 15 strikes during that time, it seems that Lufthansa and its fractious pilots have finally agreed to bury the hatchet (other than in each other’s skulls).

The deal sees pilots getting one-time cash bonuses around €5,000 – €6,000 per pilot, plus an 8.7% pay rise in four equal annual stages, with the first stage being backdated to 1 Jan 2016.

Lufthansa however gets to exclude the pilots of 40 new planes it is adding to its fleet from the agreement (presumably for its Eurowings operation) – which had been one of the sticking points – Lufthansa’s desire to get some low-cost operations separate from the full mainline operations.

At one point last year, the pilots were asking for asking for 3.66% a year raises, to be backdated to 2012 when their previous agreement expired – ie, about 20% in total, and with a huge amount of backdating.  So it seems they ended up with very much less than they were hoping for.

Although the deal requires ratification by the pilot union’s members, it seems likely to be accepted.  Hopefully that might mean we can start booking LH again, and not worrying anxiously if booking an international UA flight that will end up being operated by LH.

Boeing Trounces the Machinists’ Union in SC

Talking about unions, more often than not, Boeing has experienced a parlous relationship with the IAM and their local 751 in the Puget Sound area.  It is thought that opening a second facility in Charleston, SC was motivated in large part by Boeing’s desire to escape the clutches of the IAM and the sometimes extended strikes that occurred.

Certainly, now that they have a facility – and one conspicuously capable of considerable expansion – it is a new ballgame for Boeing in its union negotiations.  As a result, the IAM have been strongly focused on unionizing the SC assembly plant.  Here’s a great article that recounts much of the contentious events between Boeing and the union over the last couple of decades.

A vote to unionize was held this week.  The workers chose overwhelmingly not to join the union (2,097 against, 731 for).  This buys Boeing a further year before the IAM can hold another vote.  Even if the IAM should win a future ballot (and for sure it will keep trying) it may prove to be a hollow victory – there are plenty more states where Boeing could set up shop in the future, too.

In the meantime, perhaps Boeing had better hope that their current ‘best friend’ status with our new President isn’t jeopardized by the IAM pointing out to him how little of Boeing’s planes are actually made in the US these days.  This exploded picture shows how so much of a 787 is actually made somewhere else in the world.

Barcelona – Perhaps Not the Best Choice for a New Hub?

I wrote, a couple of weeks ago, about how Barcelona is seeking to limit the number of tourists visiting each year, by freezing the number of hotel rooms in the city.

So, imagine you were the head of an airline group – the British Airways parent company now known as IAG, and you were thinking of adding a new series of ‘low-cost’ long-haul flights, under a new airline brand, from a hub somewhere in Europe.  Where would you choose to base this airline?

Keep in mind an inviolable rule for airline hubs.  They need to not only be a convenient point for flights to connect through, but they also need to have a generous amount of traffic to and from the hub itself.  Simplistically, this is why, the world over, the major hubs are invariably located in major population centers rather than in the middle of nowhere.

One more thing.  If you’re operating a low-cost carrier, it helps if you are in a moderately low-cost destination.  Budget travelers seek low-cost destinations.

So, let’s think about larger sized cities with the opportunity to considerably grow their incoming tourist numbers.  Several cities immediately come to mind.

In the case of IAG, they have announced they’ll base their new low-cost airline in, as you’ve probably guessed, Barcelona – the city least likely to be able to accept more tourists, and the city most likely to see skyrocketing costs of what little accommodation is available.

Well done, IAG.  You win the prize for ‘new budget airline least likely to succeed’.

And in other BA news, stand by for their latest cabin-crew strike, with Heathrow based crew planning to strike between 22 – 25 February.  They want more money, and have already had 11 days of strike action so far this year.  Their earlier strike action has been only minimally impactful on BA’s flights.

Another Manifestation of the ‘Sharing’ Economy

The internet is finally being used effectively in the way many of us predicted, two decades ago.  It is a great tool for disintermediation – it readily puts people in touch with other people when one has a need and the other has an effective service or solution to match the need.

Much of the ‘old’ economy involved businesses that, while claiming to offer various different services, in reality were nothing more than knowledge brokers and connectors between people wanting something and people offering the same thing.  A classic example would be travel agents.  With my agency, the reason that hotels and tour operators in far away parts of New Zealand and Australia would pay us 10%, 20%, sometimes 25% or even 30% commission, was because there was no other way they could reach and sell their products to potential tourist customers.

The internet promised to change all that, although in the case of travel, the more things change, the more things remain the same.  What no-one initially predicted was that there would still be ‘connectors’ between suppliers and customers – in the case of travel, those far away hotels and tiny tour operators have ended up paying much the same commissions they have always paid, but now to companies such as Expedia.  Progress is sometimes a funny thing.

The internet hasn’t so much eliminated the role of intermediaries, as it has created new intermediaries and new ways of connecting niche suppliers and consumers of items, theoretically instantly and at low cost.  Hence, the rise of companies such as Uber (connecting people with a car and a willingness to drive you somewhere with people who are looking to be driven somewhere) and Airbnb (connecting people with a spare room and a willingness to rent it overnight to strangers with people who are looking for somewhere to stay), and so on.

The latest interesting example of this is a company, Roadie.com.  They offer to connect people who wish to ship packages, small and large, with people who are driving their vehicle between where the person with the package is and where they wish the package to be delivered.  This is not a million miles different to what Uber is looking at doing too, but whereas Uber is focused on local pickup/delivery, Roadie is offering to move items across the country.

Clearly this is a business that desperately needs to grow to a point where they have reached critical mass and there’s a reasonable likelihood of people wishing to ship items being able to quickly connect with people willing to transport them.  On the face of it, it might prove to be an excellent idea, but we’re not yet sure of the economics of it, or how long it takes for items to be delivered.

If you’re planning a road trip and have spare space on your back seat or in your trunk, it seems to cost nothing to sign up to be a driver, and the possibility of picking up a several hundred dollar ‘gig’ becomes very appealing.  If you need something shipped that isn’t time sensitive, the possibility of having a normal person take good care of it, rather than needing to entrust it to a commercial freight company, is also appealing.  I bought a chair on eBay a couple of years ago, and the freight that I had to pay to move it half way across the country was more than the cost of the chair ($500 for freight).

One curious thing with its shipping comparison service – the numbers don’t add up for the competing services.

My Mother’s Maiden Name is “Ff926AKa9j6Q”

We all know that it is a bad thing to use the same password on every site we visit.  Clearly, if our password is stolen on one site, it becomes easy for identity thieves to then try other websites we might frequent and see if the same password works there, too.

But something not so immediately obvious is how to answer the other security questions that some sites have for situations where we (or someone pretending to be us) say we’ve forgotten our password.  In theory, these are questions to which only we know the answers.  In reality, some of the question/answer pairs are easily found out, perhaps by looking at a person’s Facebook profile.  What is the name of your pet?  What was the name of your high school?  What is the name of your best friend?  In what city were you born?  And so on.

A recent theft of user data from Yahoo is said to have compromised not only our User IDs and passwords, but also the other security questions and answers to ‘safeguard’ our account.  The really scary part of that is that we tend to answer these security questions correctly, and the same way, on every site that asks us.

So, what you should do is answer the security questions not with the correct answers, but with password type answers too – but don’t forget the answers.  Write them down in a book, or use a password manager program (I use Roboform, there are plenty of other good ones too).  The sites don’t care what you enter for your pet’s name or any of the other questions, all they care is that the answer you entered when creating your account matches the answer when you’re trying to recover your account.

So, when asked your mother’s maiden name, don’t say Smith.  Say Ff926AKa9j6Q on one site, and d$d23*KW!9 on the next site, and so on.  This will transform the ‘extra layer of protection’ from what is currently more akin to an extra layer of vulnerability, and make it truly secure.

Elon Musk is Truly Boring

Electric cars.  Rockets.  Hyperloops.  Mars.  Hasn’t the man set enough wheels in motion already?  Apparently not.  Challenged by dense traffic around his Hawthorne office at SpaceX in Los Angeles, he came up with a ‘solution’ to his daily commute – the type of solution that us lesser mortals would neither consider nor implement.

I used to work next door to a wealthy individual who solved his own transportation problem (loss of license after a DWI) by simply buying a helicopter to commute between home and office.  But Mr Musk has a possibly better idea.  He will dig a tunnel.

Actually, the idea is potentially very sensible.  I’ve never understood why digging tunnels is such an expensive business.  These days, it isn’t like the olden days with a gang of men armed with pick axes, wheel barrows, and the occasional stick of dynamite.  Enormous tunnel drilling machines (see picture at top) do the entire thing, semi-automatically, and due to a glut of the devices on the market (surplus from some Chinese construction projects) they can be purchased at one tenth of new price.

It is not clear that even the redoubtable Mr Musk will be able to address some of the problems that seem to beset such devices – unexpected changes in substrate that either prove too hard or too soft – but let’s hope he might.  He makes the point that we are building a three-dimensional world (ie multi-storey buildings) but to travel between such structures, we are limiting ourselves down to two dimensions.  He suggests that multiple layers of tunnels would open up a new infrastructure of highways – for our cars and for his Hyperloops.

It seems that he is a man of action, because he has already started digging for a tunnel in his car park.  No-one is quite sure where the tunnel will go, but hopefully somewhere.

More details here.

(In other Musk/Tesla news, an article about yet another possible Tesla beater.  They truly are becoming a dime a dozen, aren’t they – well, not literally – at least, not yet.  This particular car is guesstimated as selling for $160,000 and up.)

And Lastly This Week….

Have you ever tried one of the new VR headsets?  One of the problems many users experience is that watching something through a VR headset can make them motion-sick.  But for some of us, we can feel queasy with something a lot less all-encompassing than a VR headset.  For example, particularly if you’re not at your most relaxed on the edge of a cliff, expand the video at the top of this page to full-screen size and see if even the sight of a beautiful lady is enough to stop you looking away.  (There is a possibility that this is the start of a new craze.  Oh my.)

As a proud New Zealander, you might think I’m delighted at the news that scientists have managed to discover that New Zealand is not just two tiny islands in the South Pacific, but actually the eighth continent.  But, instead, I’m rolling my eyes at what is surely the most ridiculously mislabeled ‘discovery’ of the week.

On the other hand, if it gives us an advantage against Australia, I’ll be all for it!

If you’re taking Monday off, and particularly if you’re traveling somewhere for a long weekend, I hope it is a great one, and, of course, always, until next week, please enjoy safe travels.

David.