Why Does China Love The 'Sharing Economy'? Not Because Of Communism...
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Something strange has been happening in China. People have been going nuts about bicycles. Specifically, investors have gone crazy over startups that allow people to rent bikes for a fraction of a dollar per hour, and then leave them anywhere, rather than only at special bike stations -- what is known as "dockless" bike-sharing. And now that sector is in trouble, as Bloomberg reports:In the space of 18 months, dockless bike-sharing has become one of the hottest investment trends in China, with the two biggest players each having raised over $1 billion in venture funds, respectively. That money has funded a revolution on the traffic-choked streets of Chinese cities, giving urbanites a low-cost, carbon-free means to get around quickly. What it hasn't produced is a viable business model. A little over a year into China's bike-sharing boom, the industry's future looks precarious. Given the extremely low margins, that's no surprise. What is more surprising is that billions of dollars have been invested in these startups, and in similar ones based on renting out everyday objects for short periods of time, letting people pay by using smartphones to scan in QR codes. Other examples include companies offering umbrellas, basketballs, refrigerators, luxury handbags, phone chargers, and even sex dolls (that one didn't last long). An illuminating article in the New York Times has a plausible explanation for China's fascination with the so-called "sharing economy", even though it has nothing to do with real sharing:None of China's bike-sharing companies are turning a profit yet. But even as they fight for market share, the data is the destination. "Collecting data is the first goal of the sharing economy," says William Chou, the head of Deloitte's telecoms, media and technology practice in China. Every time consumers scan the QR code on a bicycle -- or basketball, handbag, umbrella -- they provide information about habits, locations, behaviors and payment histories. That's invaluable not just to [Chinese Internet giants] Tencent and Alibaba but also to city planners seeking precise information about where to build roads, bridges and subways. In other words, these "sharing" services are conceptually similar to Facebook or Google: they are provided (nearly) free of charge, but you pay with detailed information about what you do. In the case of Facebook and Google, it's data about your online activities; for the "sharing economy", it's about what you do in the physical world. That's highly prized by companies that want to sell something to people. In China, it's also of great interest to someone else -- the government:what happens as this data filters into China's new social-credit system, which promises to rate every individual by her financial, social and political worth? In fact, Beijing has authorized Tencent and Alibaba to conduct social-credit pilot testing, and their bikes serve as the perfect vehicles. There are no walls of privacy. The government has the ability to access company data, good or bad, faster than you can scan a QR code. The ability of "sharing" companies to capture, and governments to access, highly-personal data is an important issue for potential customers in the West, which currently lags behind China in the uptake of these kinds of services. However convenient some of them seem, it's worth considering whether you may be paying more than just the attractively-low fees when you use them.Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+
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FCC Boss 'Jokes' About Being A 'Verizon Puppet' At Tone Deaf Industry Gala
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As we've well-documented, Trump's FCC is currently under fire for not only gutting net neutrality, but for giving a crash course in what regulatory capture looks like. In just a short period of time the agency has moved to protect cable's monopoly over the cable box, gut media consolidation rules exclusively for the benefit of Sinclair broadcasting, protect prison phone monoplies, weaken broadband deployment metrics, kill broadband funding for the poor, and make it easier for business broadband monopolies to hamstring competitors and keep prices absurdly high.That said, every year like clockwork, the FCC holds its "telecom prom" in Washington DC. It's traditionally an event where telecom industry executives, lobbyists, FCC staffers, consumer advocates and policy wonks all have a much-needed laugh and blow off steam. It's also a wonderful opportunity to line up to kiss the ring in the hopes of impacting future policy. Normally this sector shindig barely makes a blip on the media radar. But given the FCC's decision to continually give consumers the policy equivalent of a massive middle finger throughout 2017, this year's event took on a notably different tone.Unsurprisingly, FCC staffers clearly thought this year's event was a great opportunity to make a few jokes about Pai's reputation as a walking rubber stamp for the telecom sector. After all, a little self-deprecation and ribbing has been part of the proceeding for years. But apparently, nobody told FCC staff writers that parody, satire and other forms of humor are supposed to be notably different from the reality you're lampooning.After making numerous jokes about how he was "colluding" with industry giants like Sinclair broadcasting (you can watch a video of Pai's presentation here), Pai (a Verizon regulatory lawyer from 2001 to 2003) went so far as to present a video he made with Verizon exec Kathy Grillo. In it, Pai and Grillo engage in an adorable little skit where they collude to install Pai as a "puppet" chairman of the FCC at Verizon HQ back in 2003:Verizon executive: "As you know, the FCC is captured by industry. But we think it's not captured enough. We want to brainwash and groom a Verizon puppet to install as FCC chairman. Think Manchurian Candidate."Ajit Pai: "That sounds awesome."Verizon executive: "I know, right? There are only two problems. First, this is going to take 14 years to incubate. We need to find someone smart, young, ambitious, but dorky enough to throw the scent off."Ajit Pai: "Hello."Verizon executive: "So you will do it?"Ajit Pai: "Absolutely. But you said there was another issue?"Verizon executive: We need to find a Republican who can win the presidency in 2016 to appoint you FCC chairman. I think our best bet is an outsider, but I have no idea who that would be. If only somebody can give us a sign. Get it? Get it? The joke is that Pai, who used to work for Verizon, now works at the FCC to largely do Verizon's bidding, whether that's supporting the erosion of consumer broadband privacy rules or gutting net neutrality. The problem of course is that this "joke" is predominately true. If you dig back through Pai's record over the years as boss and as vanilla FCC Chairman, you'd be hard pressed to find a single time he stood up to Verizon or AT&T on any issue. That loyalty has even extended to voting down attempts to hold AT&T accountable for the outright defrauding of its own customers. Too funny!Pai of course then proceeded to make several zingers that make light of concerns that he's gutting decades old media consolidation restrictions solely to the benefit of Sinclair broadcasting:"People ask me, 'what keeps you up at night?' and it's actually pretty easy: the thought of the FCC having to resolve a retransmission dispute between Verizon and Sinclair," Pai said. "I mean, how do you choose between a longtime love and your newfound crush?" Oh my! A revolving door regulator making light of the fact he can't decide which giant company he should mindlessly placate is utterly hilarious! Where oh where do you get your material from?I'm sure there will be plenty of folks that try to argue that this isn't a big deal because they were just making a joke. But the destruction of net neutrality and the massive, negative impact it will have is decidedly unfunny. The FCC's refusal to help law enforcement discover who's behind the massive fraud and identity theft that occurred on the agency website is decidedly unfunny. The fact that the current FCC is the tech policy equivalent of a giant middle finger to consumers, startups, the poor and the health of the internet couldn't be any less funny. The closest it might get is absurdist.There's healthy debate and ribbing over policy and then there's what the Ajit Pai's FCC is up to: a massive, wholesale dismantling of nearly all oversight of one of the least competitive and least liked duopolies in American industry. Followed by petty gloating and Orwellian missives about how giving a blanket policy handout to Comcast somehow restores internet freedom. We really haven't seen public anger at tech policy on this scale since SOPA, and that anger is likely to triple once the real-world impact of these protectionist policies begin to be truly felt over the next few years.As we noted when the FCC tried to hide its plan behind the Thanksgiving holiday, these folks appear to have zero awareness of the massive backlash these extremist policies are fermenting (especially among Millennial voters). So while it's kind of adorable the FCC thinks regulatory capture and corruption are such a fucking hoot, we'll have to see if folks like Pai are still laughing in a few years when their obvious post-FCC political aspirations run face-first into those who remember this attack on net neutrality -- and the fact that 2017 sure as shit wasn't anything to laugh about.
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