Strategic CSR - Sharing

I like the article in the url below because it explains how market forces are being used to solve a societal problem. The problem is the misallocation of resources (people have more of certain things than they need and other things they don't want), but solves it through the barter system (instead of the exchange of money):

"Who on earth wants fish tank wastewater, chicken poo, tumble-dryer lint, loo roll tubes, 'a plaster mould of a Komodo dragon's foot' or half a broken toilet? No one, you might think, but the Buy Nothing community begs to differ: these are all real 'gifts' snapped up by more than 5 million members worldwide, who give away their unwanted items in the local community."

For example:

"There is nothing unique or original about giving and getting stuff for free. It's a practice as old as humanity. The juggernaut giveaway network Freecycle was founded in 2003 – but what distinguishes the Buy Nothing project … is that the emphasis is less on stuff, per se, and more on community. In what Buy Nothing describes as its 'hyperlocal gift economies,' users are encouraged to let items 'simmer' rather than giving them away to the first person who asks, perhaps suggesting they share a joke or provide a story explaining why they would like the item. In addition to 'gifts' and 'asks,' users are encouraged to post 'gratitude,' with a message or a picture showing what a gifted item has meant to them."

The project has radical roots:

"It's a 'social experiment,' explain the project's founders, Rebecca Rockefeller and Liesl Clark, from their respective living rooms in Washington state, effecting a fundamental shift in our attitude to material goods by building a sense of community, and treating items as community-owned and shared. 'If you come at it from an angle of joy and human connection,' says Rockefeller, "you're more likely to inspire lasting change than when you come at it from telling people: 'You have to do without this.'"

And, the underlying philosophy appears to be realistic, rather than idealistic:

"There's no expectation or even aspiration that users will somehow forge a fully cashless economy. Indeed, during the pandemic, Buy Nothing changed its rules to allow members to give gifts of cash. 'Quite literally, that's a lifesaving gift you can give another person in a lot of cases,' says Rockefeller. 'This was never meant to be an exercise in purity: that doesn't serve us well. What serves us well is flexibility. A banana, a chunk of concrete or $10 – those are all good gifts.'"

For more on the buy nothing phenomenon, see: https://youtu.be/T2Saa_NVotY

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

'A banana, concrete – these are good gifts': The recycling group turning strangers into friends

By Emma Beddington

January 13, 2022

The Guardian

https://www.theguardian.com/lifeandstyle/2022/jan/13/a-banana-concrete-those-are-good-gifts-recycling-group-turning-strangers-into-friends

 

Strategic CSR - Uber

The article in the url below does a good job of quantifying the effects of the gig economy on individual earnings:

 

"How much money do Uber drivers really earn? Since launching in 2009, the company has often changed its pricing model, and the amount of money Uber drivers make has shifted as well. Yet the company has become so large, and been studied so much, that a clearer picture has emerged of what a driver can truly expect to make."

 

The data summarized in the article comes from a lending company, Earnest, which drew upon loan data where applicants had reported the income they earn from Uber-like jobs. The results do not include information on whether the income is gross or net; or how many hours it took to earn the income:

 

"Earnest found that the median Uber driver makes $155 a month — third most among the nine gig platforms surveyed. (People working with Airbnb and Lyft tended to earned more.) Meanwhile, the average Uber driver makes $364 a month — fourth most — suggesting some drivers are taking home the lion's share of possible earnings."

 

Additional studies are also summarized and reveal some fascinating data. There are some great graphics in the article. Here is one comparing earnings across different firms in the sharing economy:

 

https://timedotcom.files.wordpress.com/2017/07/screen-shot-2017-07-05-at-12-14-36-pm.png

 

Here is another that breaks down earnings for Uber/Lyft drivers by age group:

 

https://timedotcom.files.wordpress.com/2017/07/gross-hourly-earnings-for-uber-and-lyft-drivers-by-age-1.png

 

And, here is another one showing earnings for Uber/Lyft drivers, by state and per trip, across the U.S.:

 

https://timedotcom.files.wordpress.com/2017/07/3048563-inline-i-1-uber-lyft-prices.png

 

Other studies reveal the variations among drivers across cities:

 

"For even more background on how much Uber drivers make, consider a 2015 study funded by Uber, which found that in its top-20 cities drivers averaged more than $19 an hour in earnings before expenses. However, a year later, internal Uber figures provided to Buzzfeed showed that after expenses were factored in, drivers in three markets — Detroit, Houston, and Denver — earned only $8.77, $10.75, and $13.17 per hour, respectively."

 

A key question the article doesn't raise, though – does the flexibility offered by such jobs outweigh the relative insecurity/low wages on offer? When I travel in an Uber car, I often ask the driver what s/he thinks about working for Uber. The most common answer I get is that they do not want to be an 'employee' and welcome the flexibility that Uber offers them. If so, are we (society as a whole) best served by letting these people structure their work lives as they wish, or by stepping-in to constrain them 'for their own good'? In other words, in a freely voluntary exchange of labor for money, is the driver working for Uber because s/he has to or because it provides them with the flexibility they otherwise cannot find in other jobs that may pay more (and include benefits), but ultimately are deemed to be less fulfilling?

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Here's How Much Uber Drivers Really Make

By Rob Wile

July 10, 2017

Money

http://time.com/money/4845407/uber-drivers-really-make-per-hour/

 

Strategic CSR - Sharing economy

The article in the url below sheds light on China's sharing economy. On the surface, the sharing economy in China is expanding at a rate that is almost incomprehensible in the West:

 

"Three years ago, bike-sharing didn't exist in China. Today more than 40 companies offer the service. And the top two alone, Mobike and Ofo, handle more than 50 million rides every day, solving the 'last mile' problem of getting people from public transportation to their homes."

 

As a result of this rapid expansion (or perhaps the reason it has been permitted), the Chinese government has now adopted the 'sharing economy' as a centerpiece of the country's economic development:

 

"The state-run press agency, Xinhua, has trumpeted bike-sharing as one of China's 'four great new inventions.' (The other three are mobile payments, e-commerce and high-speed rail.) It may sound absurd to compare a dockless bike to the world-changing inventions of China's past: paper, gunpowder, the compass and movable type. But the boast conveys the importance that Beijing assigns the 'sharing economy' in helping China make the leap from a manufacturing-based to a service-oriented economy. Last year, according to government figures, China's sharing economy accounted for more than $500 billion in transactions involving roughly 600 million people. (An estimated 55 million Americans will use a sharing service this year, according to a CBS report.) And with Beijing planning on an annual 40 percent growth rate, officials are commanding this new economic engine to account for 10 percent of the national gross domestic product by 2020 and 20 percent by 2025."

 

Digging deeper, however, the author highlights the differences between how the sharing economy is defined and how it is practiced:

 

"China's sharing economy has veered sharply away from how the term was originally defined: as a peer-to-peer exchange of underutilized goods and services. In China, 'sharing' now means almost any short-term rental of a product or service activated by a smartphone. Moreover, the things on offer, like Ofo's 6.5 million bikes, are not spread out among individuals but are owned by the tech companies themselves. The same is true for the spoils, from revenue to data. As a result, the ideals that still animate the concept in many other places — the reallocation of unused resources and the community that forms around it — are essentially absent in China."

 

What I found interesting about the article, however, was the underlying reason for the Chinese government's fixation with the sharing economy:

 

"Robin Li, the chief executive of the internet giant Baidu, said last year that 'the idea of a sharing economy is quite similar to that of a communist society,' because both focus on 'distribution according to need.'"

 

The problem with this is that it runs into the reality of human nature that, even in post-Communist contemporary Chinese society, suggests the 'sharing economy' may be more about convenience than 'need,' let alone trust:

 

"The prize for puffery, however, goes to The People's Daily, the Communist Party mouthpiece, which in August celebrated umbrella-sharing enterprises as 'a show of human care, releasing the warmth of the city.' A few weeks after that, nearly all 300,000 umbrellas distributed by a new company called Sharing E Umbrella had been either lost or stolen."

 

In reality, I think the term is also being stretched in the West. Now, it seems, most Uber/Lyft drivers treat the service they provide as a job, rather than 'sharing' an under-used asset with a stranger, while most Airbnbs seem to be investment properties, rather than someone's couch or spare room. Whether this matters, of course, is another thing. At a minimum, the 'community' that underpins the sharing economy suffers and the technology that founded it becomes merely another platform to bring together buyers and sellers. I remember back to the .com boom around the turn of the century when a company's share price would jump if the company changed its name from Widgit Inc. to widgit.com. The same is happening today with cryptocurrencies, while stories abound about excessive capital flooding Silicon Valley startups seeking returns in a low-interest rate world. While this reduces the importance of the stock market as a means of raising capital (a good thing), it is hard to escape the feeling that there are lots of flimsy ideas floating around fueling speculative bubbles.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

China's Revealing Spin on the 'Sharing Economy'

By Brook Larmer

November 26, 2017

The New York Times Magazine

Late Edition – Final

14

https://www.nytimes.com/2017/11/20/magazine/chinas-revealing-spin-on-the-sharing-economy.html

 

Strategic CSR - Trust

The article in the url below discusses the role of trust in the modern economy:

 

"One of the underrated achievements of the modern world has been to develop ways to extend the circle of trust by depersonalising it. Trust used to be a very personal thing: you would trust your friends or friends of friends. But when I withdrew €400 from a cash machine, it was not because the bank trusted me but because it could verify that my bank would repay the money. This is a cold corporate miracle."

 

Trust is essential for strangers to interact in an exchange of things of value. For example, if I buy a food item from my local supermarket, I trust it will not give me food poisoning (or worse); when I buy something on Amazon, I trust the company will send it to me; and so on. Of course, I do not base my trust purely on the goodness of strangers. Things like government regulations and NGOs provide seals of quality and there are penalties for transgressions that incentivize producers to not make me sick (or kill me). Repeat interactions are another incentive – if Amazon does not send my purchase, I am less likely to shop there again. Nevertheless, trust is a big part of our everyday experience. This becomes most obvious when it is abused, and it is surprising how infrequently that happens. Given this, the purpose of the article is to discuss whether the role of trust has changed with the emergence of online platforms that increase interactions at arm's length – specifically, the sharing economy:

 

"One example is Airbnb, which lets people stay in the homes of complete strangers, a considerable exercise of trust on both sides. We successfully used it on another stop in our Bavarian holiday. Airbnb makes personal connections but uses online reviews to keep people honest: after our stay, we reviewed our host and he reviewed us."

 

Rather than celebrate the mechanism developed to preserve trust, however, the author says this surface-level analysis of why Airbnb works misunderstands what is really going on:

 

"We're misunderstanding the reason that eBay and Airbnb work. … It's not because of the brilliance of the online reputation system but 'because most people aren't crooks', an idea any Bavarian hotelier would understand."

 

Recent research suggests, however, that, as with the everyday economy, there is a limit to the kindness of strangers that skirts the evaluation systems currently in place:

 

"When Harvard Business School researchers … conducted field experiments on Airbnb, they found that both hosts and guests were discriminating against racial minorities. Other researchers have found evidence of discrimination in places from Craigslist to carpools. New online tools are giving us the ability to treat faraway strangers as though they were neighbours — and we do, in good ways and in bad."

 

In other words, any system involving human behavior (i.e. all systems) at some level will be subject to the biases, emotions, and prejudices that define human nature. While, in the majority of cases we can limit the negative effects (because "most people aren't crooks"), we cannot rule them out completely. The author's conclusion is that the increased commercial interactions we have with individuals (as opposed to companies) as part of the sharing economy is tweaking our economic system, rather than revolutionizing it. It is not a better system, just different:

 

"Trust is sometimes given to people who do not deserve it. And it is often withheld from people who do."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Trust in the age of Airbnb

By Tim Harford

August 13/14, 2016

Financial Times

Late Edition – Final

Life & Arts, 15

http://www.ft.com/cms/s/0/751bd21e-5e7e-11e6-a72a-bd4bf1198c63.html

 

Strategic CSR - Venmo

The article in the url below signals yet another way in which our social norms are 'changing' (if you are optimistic), 'breaking down' (if you are concerned), at the intersection of virtual reality and social media. It does so by discussing the emergence of Venmo, a digital payment service that facilitates the transfer of small amounts of money among friends:

 

"When a cash register rings in Silicon Valley, one often sees the person who is paying being told: 'I'll Venmo you' by their friends. The peer-to-peer payments app Venmo has fast-tracked its way to being a verb as the cashless crowd adopts it to split their bills. This easy pinging of money means people have started paying each other back for the smallest things: a burrito, a cocktail, a coffee."

 

The shift that is occurring as a result, according to the author, is from a more trusting society (based on multiple repeat interactions) to a more transient society (where relationships are seen as single interactions and, as a result, less valued):

 

"Venmo and its rivals are of course convenient when splitting the cost of large purchases: a ski chalet for the weekend or a utility bill with roommates. But they have rapidly led to the expectation that you will count dollars and cents between friends."

 

As the author notes, trust is the foundation of our economic system of market exchange. Money (cash, in particular) came along later as that trust began to break down:

 

"In his 2011 book Debt: The First 5,000 Years, anthropologist David Graeber describes how credit came before coins. … Debt was a sign of trust: you knew you would see that person again and they would behave fairly. Money was used by the military, the soldiers passing through who could not be trusted."

 

In other words, we are now holding each other accountable for small amounts of money that, in a more trusting society based on long-term ties, would not be tracked:

 

"New technologies often encourage us to do something because we can, leaving us to weigh the social consequences only after these innovations have been taken up on a massive scale. Just because it is easier to pay a friend for a $4 coffee on Venmo rather than by counting out the change, why should we? Would it not be better to wait until we can buy them a coffee or a beer at a later date? Not wiping the slate clean at the end of every date may in fact show, in Graeber's words, a desire to develop ongoing relations."

 

The author also shows how trust is ebbing away from many of the social interactions that used to be the foundation of what constituted friendship. In other words, the sharing economy is a sign of weaker, not stronger, relationships among people:

 

"When I first moved to San Francisco, I told my mother I was considering hiring someone from TaskRabbit, a service that allows people to bid to do your odd jobs, to help me hang curtains and assemble flat-pack furniture. Her reaction was: 'But isn't that what neighbours are for?' … Before Uber, it would be kind to offer to drop someone at the airport. Recently a friend was confused when he was asked to drive a classmate to the departure hall, and wondered if she'd heard the ride-hailing service could take her there."

 

The author concludes that we are in danger of "substituting community for convenience." Rather than concede, however, she is preparing to resist:

 

"Next time someone tells me: 'I'll Venmo you,' I will reply: 'I got this,' knowing I am showing my trust in my friends, as people have done for thousands of years, through the small debts that bind us."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/ 

 

 

Real friends don't bother to sweat the small change

By Hannah Kuchler

February 9, 2017

Financial Times

Late Edition – Final

8

https://www.ft.com/content/abb88726-edea-11e6-ba01-119a44939bb6

 

Strategic CSR - Uber

The article in the url below raises an interesting question:

 

"What if Uber kills off public transport instead of cars?"

 

While this may not be a very pressing concern in most U.S. cities, where public transport is generally less well-developed; in Europe, public transport is central to most city life:

 

"The perceived wisdom is that Uber has disrupted taxis and that private automobiles are next, but what if we've misread what is happening in our cities? Traditional thinking would suggest that UberPool, which allows users to split the cost of trips with other Uber riders heading in the same direction, will always be inferior to public transport. Sitting in the backseat of a Prius may be more comfortable than standing on a crowded bus or train, continues this reasoning, but carpooling can't substitute for mass transit at rush hours without massively increasing congestion."

 

Rather than simply offering an alternative method of transportation for those who can afford it, the aggressive pricing on Uber Pool appears aimed directly at public transportation – seemingly with the goal of eventually replacing it:

 

"This is wrong. In the last six months, Uber has begun offering shared rides for as little as $1 (81p), introduced optimised pickup points that algorithmically recreate bus stops, and started testing semi-autonomous vehicles it hopes will solve its increasingly contentious labour issues."

 

A standard economic answer to this problem would be that Uber will only succeed in replacing public transportation if it ultimately adds more value than buses and trains. If it is cheaper (shared costs), more comfortable (no standing), and more convenient (picks you up at your house), then it may indeed add more value. The danger, I guess, is if Uber follows the pattern it has demonstrated with its drivers (see Strategic CSR – Gig economy and also here), where it offers financial incentives to sign-up, but then decreases those benefits slowly over time. The equivalent with public transportation is if it is initially much cheaper to use Uber, but becomes more expensive once government has cut the relevant funding.

 

Have a good weekend

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

What if Uber kills off public transport rather than cars?

By Greg Lindsay

January 13, 2017

The Guardian

https://www.theguardian.com/sustainable-business/2017/jan/13/uber-lyft-cars-public-transport-cities-commuting

 

Strategic CSR - Gig economy

The article in the url below provides some fascinating insight into the lives of people working in the gig economy for firms like Uber, Deliveroo, and TaskRabbit:

 

"There are no good estimates on the global scale of the gig economy but in the US there are about 800,000 people earning money this way without being anyone's employee."

 

"Algorithmic management" is the term academics have devised to explain how the working lives of these people are increasingly being dictated by software (via apps) as opposed to by managers (as in a traditional organization and employer/employee relationship):

 

"For companies like Uber, which aspires to 'make transportation as reliable as running water,' algorithmic management solves a problem: how to instruct, track and evaluate a crowd of casual workers you do not employ, so they deliver a responsive, seamless, standardised service."

 

These algorithms essentially track every aspect of the work being conducted for the company as soon as each worker logs on to the app. It dictates everything from how quickly they must respond once an opportunity is sent to them (within 30 seconds for Deliveroo) to assessments of performance:

 

"Deliveroo's algorithm monitors couriers closely and sends them personalised monthly 'service level assessments' on their average 'time to accept orders,' 'travel time to restaurant,' 'travel time to customer,' 'time at customer,' 'late orders' and 'unassigned orders.' The algorithm compares each courier's performance to its own estimate of how fast they should have been. … Drivers for Uber's ride-hailing app, of which there are about a million around the world, are subject to similar algorithmic control. They choose when to work but once they log on to the app, they only have 10-20 seconds to respond to 'trip requests' routed to them by the algorithm. They are not told the customer's final destination until they have picked them up. If drivers miss three trip requests in a row, they are logged out automatically for two minutes. Uber sends drivers a weekly report including their confirmation rate and average customer rating (out of 5)."

 

Rather than something new, however, "algorithmic management" is increasingly thought of as an extension of innovations that were the foundation of the field of management:

 

"'Algorithmic management' might sound like the future but it has uncanny echoes from the past. A hundred years ago, a new theory called 'scientific management' swept through the factories of America. It was the brainchild of Frederick W Taylor, the son of a well-to-do Philadelphia family who dropped his preparations for Harvard to become an apprentice in a hydraulics factory. He saw a haphazard workplace where men worked as slowly as they could get away with while their bosses paid them as little as possible. Taylor wanted to replace this 'rule of thumb' approach with 'the establishment of many rules, laws and formulae which replace the judgment of the individual workman.' To that end, he sent managers with stopwatches and notebooks on to the shop floor. They observed, timed and recorded every stage of every job, and determined the most efficient way that each one should be done. … For Jeremias Prassl, a law professor at Oxford university, the algorithmic management techniques of Uber and Deliveroo are Taylorism 2.0. 'Algorithms are providing a degree of control and oversight that even the most hardened Taylorists could never have dreamt of,' he says."

 

As companies tighten the screws, however, these workers are beginning to pushback, complaining that they were lulled into working for these companies with elevated pay rates and conditions that are then gradually reduced. The recent lawsuit against Uber (in California and Massachusetts) is a good example of this. Something similar (although less formal) also occurred over the summer in London – "one of the first industrial disputes to hit the city's so-called gig economy":

 

"These are workers without a workplace, striking against a company that does not employ them. They are managed not by people but by an algorithm that communicates with them via their smartphones. And what they are rebelling against is an app update."

 

While it is clear that many people self-select into these jobs because they fit their lifestyle at present ("Some 85 per cent of couriers have told Deliveroo they use it for 'a supplementary income, or short-term flexible work'"), it is also clear that the structure of these jobs are redefining the nature of 'employment' in a way that poses significant challenges to courts (that have to deal with grievances today) and public policy planners (who will have to deal with the social consequences in the future if these jobs fail to provide the healthcare and pension support these people will need at some point). There is also, of course, a moral component to the way these jobs are structured. While some see them as facilitating 'flexibility' and others see them as incentivizing 'abuse,' the danger is that whatever we gain in productivity in the short term ("Taylorism 2.0"), we lose in our humanity over the longer term.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


When the boss is an algorithm

By Sarah O'Conner

September 10/11, 2016

The Financial Times

Late Edition – Final

Life & Arts, 1

https://www.ft.com/content/88fdc58e-754f-11e6-b60a-de4532d5ea35