Category Archives: Sharing economy

Smart cities – dream of future or surveillance horror?

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Gandhinagar smart city's integrated central command and control goes fully  operational, Government News, ET Government

The idea that technology is reshaping every aspect of life is not a revolutionary statement anymore – rather a common knowledge across society. Recently, we experienced numerous technological advancements in the scope of livelihood and city improvement. Among many inventions, we can enlist things like autonomous cars, boldly introduced to the mainstream market by Tesla, or light sensors which allow for efficient utilization of energy in the buildings. 

By leveraging all these technological incentives, around 10 years ago, the concept of smart cities emerged on the horizon as an idea to make it easier for people to live in urban areas. As the foundation for developing such solutions, policymakers and tech enthusiasts picked the interconnection of the Internet of Things (IoT) – mostly sensors – and “urban” artificial intelligence algorithms. The reasoning behind those technologies comes from the IoT’s possibility to gather profound loads of data, whereas AI usage allows for its processing and development of further analysis, conclusions, and eventual recommendations. 

Before we go further, it is worthwhile to unpack the term “urban AI” as it will be necessary to understand the lining of presented inventions. As an example of it, we can analyze lamp posts packed with sensors and cameras which allow for intelligent light adjustment based on current weather, luminosity, and traffic. Each day when you go down a highway, the AI algorithm learns about the city and captures different urban features such as rush hours, sundown, or weather forecasts. By processing this information and historical data, urban AI implemented within this solution allows for adjusting the lamp posts in the most optimal way and the most sustainable one. Not only does such action can prevent possible accidents on the road due to the correct lighting, but also provide the city with savings based on leveraging daily sunlight. 

With the promise of improving functionalities, sustainability, and mobility, the concept of smart cities quickly became a buzzword under which many towns are now being developed. Analyzing the technological and regulatory framework, we can admit that there is still no chance of developing a completely self-maintaining city thanks to the introduced IoT, however, traveling around the world we can spot major improvements. As one of the best examples of a smart city, we can list Copenhagen which utilizes “wireless data from mobile devices, GPS in buses, and sensors in sewers and garbage cans to assess the state of the city in real-time and make improvements to decrease traffic, air pollution, and CO2 emissions.”

However, looking at those sensors and the loads of data they gather, we should also reflect on the possible dark side of smart cities. The regulatory framework is still not developed in many areas such as data protection and processing. This can cause ethical and legal dilemmas regarding who can access these databases and whether the government should have such profound access to the daily life of its citizens. The implementation of face recognition and sensors all over the city could actually provide information on your daily routine, who you meet up with, and where you go. As an interesting example of analysis of such data by the government, we can mention Social Credit System introduced in China. Is there a possibility that this practice will extend to Western countries with the bright idea of increasing cities’ sustainability by making them smart?

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Aerial Taxi is closer than you think

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An American startup based in California has been working on aerial transportation of people for almost a decade. A decade of work is finally starting to give hope for a service launch in the near future. Especially as more and more information about the project’s development has been coming to light in recent months and tests.
Joby has been working for years to develop its own production of lightweight electric aircraft that could serve as air cabs. The vehicles would be fast, quiet, and able to carry at least a few people. Although development is still ongoing, at this point it can be admitted that many of the goals have been met. The planes are able to take off horizontally, thus eliminating the need for runways, can carry a pilot and four passengers, and have a top speed of over 320 kilometers per hour.
According to the organization’s calculations, air travel can prove to be up to an hour faster than ground transportation when driving through urban traffic jams. As demo inventors provide a simulation of driving thru New York City by car and flying over it in their proposition.
In addition to the machines themselves, the challenge for the project is to obtain permits to fly in urban areas and to reach customers. With help come companies that have the resources and know-how. Because of that, the recently established partnership with Japanese airlines and Korean SK Telecom gives hope that entering the Asian markets within the next few years is reasonable and at least remotely possible.
By partnering with Uber, the company hopes to make ordering its services as easy as regular cab and take advantage of the already existing huge base of customers.
Although the idea seems genuinely futuristic we have to remember that the future is now and the development of new technology is quicker than ever. Especially when it comes to solutions to improve our everyday life.

Millennials invented communism

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The title was my first thought when I started my research about the sharing economy. The concept of it is so easy that it seems to be even obvious : you own a thing (car, cake recipe, room)  that you do not currently need, so you lend it to someone else in exchange for money (using third parties, like Uber or Airbnb). To be honest, it is too simplified, but the main point is the same. The purpose of this article is to clarify whether the title’s statement is true or not. Also, the professor has told us that it is supposed to be witty, so be ready for stupid jokes. 

Let’s see what we can find in common of sharing and collaborative economy  – people share things ( goods and services); environmental benefits of non- over consuming, higher level of tight communication between communities, central control and decreased competition. I would like to extend my thoughts about some of these points. Thus, we receive environmental benefits when we decrease the need of owning things for every person, as a result we make the demand of its production much lower and some factories might be closed or reduce their working hours. Besides, we observe  the slap in the capitalistic face, because this also means that my ( me as an average citizen)  productivity will also be decreased a little bit, as I do not see the point of buying some expensive goods as car or university degree, so I can work less and do not have long term savings. Nevertheless, I personally do not consider it to be a negative phenomenon because in the long term perspective it might change values of our society. As a result, one day people may catch a thought that they exist not only to work to get a lot of money and consume everything they can see.  

Overall, the previous paragraph, which I wrote a day ago and now trying to understand what it was about, explains the positive influence of the sharing economy as a part of a collaborative one. Now I would like to write about their differences and negative consequences.  First of all, these two both have centralized hierarchy. Let me clarify, now we are talking about a sharing economy and not peer-to-peer one. So, what it means for us, as the participants of market relations. It leads to lack of control at the low parts of organizations. For instance, CEO of Uber has no idea what their freshman driver is up to – he is rapist, serial killer or worse – he has a horrible music taste and likes talking during the road. Additionally, the core difference between sharing and collaborative economies is hiding here. This centralized hierarchy shows us that the sharing economy is much closer to capitalism than it might seem at first, because in the end the drivers actually have low salaries and only people at the highest positions receive all the money. Of course, Uber helps them to find clients, but this scam still being unfair and rich people try to pay their workers as low as possible. 

There is one more difference that proves us that the sharing economy is a child of McDonald’s and Zara. The main point of collaborative economy is that everyone owns approximately the same amount of assets, but sharing economy shows that rich people on Airbnb rent their apartments (they them own) to other people ( who do not actually own it) . It is especially highlighted in today’s realities, because there a lot of flat owners who raised the month rent to unbelievable prices to cash in on Ukrainian refugees.  

To sum up, sharing economy is a nice invention from some points of view, but most likely it is not going to change society in a better way, but probably will help rich people to pay less and earn more. Answering the main question, sharing economy is too far from collaborative economy, so the title was just a clickbait, sorry guys. 

Sources:

https://climate.selectra.com/en/environment/sharing-economy

https://theconversation.com/the-sharing-economy-could-end-capitalism-but-thats-not-all-45203

The Politics of the Sharing Economy

The Lost Decade of the Japanese economy

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The Japanese economy boomed in the 1980s (particularly from the mid-80s onwards). Life was very good (a sense of optimism everywhere!), people bought luxury goods like no tomorrow and in the West, many people started learning Japanese and taking Japanese business classes (learning how to conduct business in a more Japanese way, etc) as many thought that the Japanese economy was set to take over the world (and that all future business transactions worth their salt, would happen in the language of Japanese). People both hailed and feared the economic giant Japan had become (in only 30 or so years since its dim post-war days)!!

Then the bubble economy began to collapse in January 1990 as stock prices crashed (and continued declining through the year)…By 1991 the economy had gone bust and a huge recession had started. Between December 1989 and August 1992 the Nikkei average dropped from 38,915 to 14,309, producing a loss of $2 trillion. With the declining value of land factored in assets shrank by around $10 trillion.

Japanese City Pop:A Trip back to Japan's Capitalist ...

The decade beyond 1991 is known as “The Lost Decade” (失われた十年).

Like in all economic bust periods, no one person or single factor was to blame for the burst of the bubble economy. But whoever or whatever was to blame, it was little consolation for the endless amount of ordinary souls involved whose livelihoods were destroyed or were severely negatively affected by the disaster.

People struggled in all sorts of ways- many people lost their jobs (and struggled to find any new jobs at all) while those who managed to keep their jobs saw their salaries drop significantly. Many people also found themselves being forced to continue paying for huge loans they had taken out on properties whose value plummeted after the crash (sometimes by 50% or more!). The number of people committing suicide or filing for personal bankruptcy also went up considerably.

The collapse of the real estate values was devastating to Japanese banks. Banks had traditionally relied on the property as collateral for loans. But when real estate values plummeted, the banks were reluctant to call in the loans (because the value of the collateral was considerably less than it was before, causing the banks to lose money).

So Japanese banks were saddled with billions of dollars in debts (and may have accumulated as much as $1 trillion in bad loans, or $5,000 for every Japanese). No one was sure how bad the situation really was…The Japanese government prevented the Japanese banking system from being properly investigated and hid the full scale of the losses sustained by the banks (in a bid to prevent the crisis from being worse than it already was).

And things weren’t necessarily any better by the late 90s! In the late 1990s, the introduction of performance-based salary systems produced higher unemployment rates and coincided with high suicide rates.

Hear The Sound Of '80s Japan With This Playlist Full Of ...

Over the years the Japanese government tried many things to rejuvenate the economy. For example, over $10 trillion was pumped into projects between 1991 and 2001. The projects offered temporary relief but generated huge debt. But a lot of money was spent on projects (dubbed “Bridges to Nowhere”) that Japan didn’t really need.

Ultimately (long story short) none of the government stimulus measures worked very well and Japan ended up building the largest national debt of any industrialized nation in the world. In 2003, the public debt reached $6.4 trillion (130 percent of GNP, and half Japan’s savings and triple the debt rate in 1992). By contrast, the public debt in the United States was $3.4 trillion (or 35 percent of GNP). Most of the debt is held by the government. Even though there is enough money in the banks to cover the debt, most of it is in the form of personal savings (which the government can’t touch).

Japan also suffered from deflation. National wealth declined as property values continued to fall. Companies didn’t invest, so they didn’t expand. So people worried about the future (and save their money rather spent it, figuring that things would be cheaper in the future). Prices declined more, people saved more because they figured prices will drop further.

https://www.worldatlas.com/articles/all-about-the ...

Companies lost money and laid-off workers…

There were worries about a deflationary spiral and a depression. Some wanted the Bank of Japan to create inflation, believing that would solve Japan’s problems (but others saw deflation as a symptom of Japan’s deeper problems).

In more recent times…

The New York Times once reported: “Deflation has left a deep imprint on the Japanese, breeding generational tensions and a culture of pessimism, fatalism, and reduced expectations. While Japan remains in many ways a prosperous society, it faces an increasingly grim situation, particularly outside the relative economic vibrancy of Tokyo…A new frugality is apparent among a generation of young Japanese, who have known nothing but economic stagnation and deflation. They refuse to buy big-ticket items like cars or televisions, and fewer choose to study abroad in America.”

Even in 2019, Japan’s economy is still troublesome (and ultimately, all the massive monetary and fiscal stimuli have so far over the years since the bust has failed to really spur faster and more sustained growth). Some of the current ideas to boost and strengthen the Japanese economy are;

  1. Expand the workforce, including by hiring and promoting more women, and by allowing older workers to keep jobs longer.
  2. Counteract aging demographics via immigration.
  3. Generate more revenue to lower government debt.
  4. Institute industrial and labor market changes aimed at more flexible work practices and eventually, wage gains

But the main obstacles to these proposals are:

  1. Cultural workforce “traditions,” rigid seniority systems at companies.
  2. Deep aversion to increased immigration (by both policymakers and the general population).
  3. Pressure against tax increases from consumers and companies.
  4. Resistance from various quarters, including industries, labor unions, and some in workforce, along with a lack of political will.

…And so the difficulties continue.


Links:

https://www.investopedia.com/articles/economics/08/japan-1990s-credit-crunch-liquidity-trap.asp

https://fee.org/articles/80s-fears-of-a-japanese-economic-pearl-harbor-look-silly-today-but-theyre-instructive/

https://en.wikipedia.org/wiki/Economy_of_Japan

https://www.nytimes.com/2010/10/17/world/asia/17japan.html?_r=1&scp=1&sq=the%20great%20deflation&st=cse

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The Positively Pessimistic Future of Ridesharing Companies

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Much to the surprise of the public, Uber revealed its first profitable quarter after a decade of nothing but losses on Thursday (07/11/2021) announcing an adjusted profit of just US$8 million.

This is very low for a company for a net worth of their total assets coming to around US$33.252. Even better a company whose value is around US$91 billion.

This is accompanied with Lyft earning a net profit of around US$67.3 million, for the second quarter in a row. Lyft went public in April of 2019 with a net valuation of US$24 billion dollars.

On interviewing the co-founder and president of Uber, it was found out that airport rides had gone up by a factor of 3 compared to last year. Considering the impact COVID-19 had on public movement this is a good sign. More movement on the weekends with more cab rides being booked indicates that the effects of the pandemic are slowly but surely reverting. While Uber still is missing 4 million active riders it had in 2019.

Across the world, cab sharing services like Ola (India) and Grab (Southeast Asia) are seeing similar results with profitable margins as well.

But this has not come without a cost. Based on research from Rakuten Intelligence, the cost of a ride from an app like Uber or Lyft in North America has gone up by up to 92%.

But what do these numbers mean for the average consumer.

  1. Costs have increased across the board for a ride in these apps which is not good.
  2. Uber making its first profitable quarter is an indication that the direction they are taking is a valid one.
  3. This can cause prices to increase
  4. Not to forget that as drivers protest for more rights, it puts pressure on the company to make margins elsewhere which is most likely from the pocket of the consumer.
  5. Another place where it can hurt is that companies will start engaging in aggressive cost cutting strategies which can affect the job market
    1. An example of this is Ola who recently cut 1400 jobs in the company as a method to save costs and reduce driver incentives
    1. Uber and Lyft also have deployed self-driving divisions in certain cities to reduce the role of drivers in the transaction.

On the bright side, increasing costs encourages innovation much like how it did with Grab. Grab is now southeast Asia’s no.1 startup and is reaching a merger which will allow it to list in wall street. It is an all-in-one payment app, taxi app, food delivery and postal service app in one. This points to the future that now apps will to have diversify.

Looking at Uber alone proves this point. Uber earns 10% of its income from Uber Eats alone which is for food delivery.

So, to conclude, I would like to say that the return of Uber and other like-minded services starting to make profits in this year is a net positive as it indicates a return to life before pandemic where economic opportunity is available much more readily. But we must be careful of the future these cab sharing companies impose. A total control of the market by private companies is a sure shot way of creating a monopoly and crushing those who stand against it by force. Much attention must be paid to these companies and regulations need to be imposed to prevent them from using aggressive tactics to earn profits.

Sources:

https://www.ft.com/content/bcd71e2a-9ff2-4477-b995-ff82c5530bfb

https://en.wikipedia.org/wiki/Uber

https://www.cnbc.com/2021/08/03/lyft-earnings-q2-2021.html

https://markets.businessinsider.com/news/stocks/lyft-stock-how-valuation-compares-to-other-tech-names-at-ipo-2019-4#:~:text=%2424%20billion%20valuation.-,Here’s%20how%20that%20compares%20to%20other%20high%2Dprofile%20tech%20companies,back%20to%20the%20dotcom%20bubble.

https://www.businessofapps.com/data/uber-eats-statistics/

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Energy Clusters in Poland, promise for growth?

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The creators of energy clusters want the local community to be strengthened, to be aware that thanks to the production of local energy – not only in the form of electricity, but also in the form of heat or even cold – it has a chance to create an energy autonomous region. Such a region can be an energy cluster.

There are currently 66 energy clusters in Poland. Those certified can take the challenge of communication, negotiation and all that is associated with the national level, such as the Polish Power Exchange, because that is where you can buy energy cheaply and sell it dearly.

Energy clusters are a topic that finally has a chance to develop. Clusters are very interesting places also in terms of developing photovoltaics. Why? If we would look at the precise selection of photovoltaic installation, which is the key when it comes to the individual user, in the balance we can see a clearly defined amount and value of energy consumed for our own needs. This energy can be obtained from two sources: from the grid or from your own roof. In fact, the owner of a micro photovoltaic installation would like his house to be supplied primarily with energy from his own roof. Special energy meters used in heat pumps from brand-name manufacturers make it possible to significantly increase self-consumption, i.e. to increase the use of energy from one’s own roof.

Energy clusters are an alternative form of redistributing energy from photovoltaics and other RES sources. A good example of energy cluster is the municipality of Michalowa in Podlasie, which took a very ambitious challenge on many levels. An almost autonomous system was created, which operates almost independently from the entire power grid. Why? Because they have their own biogas plant with a 0.5 MWp cogeneration system (producing heat and electricity at the same time), a 0.5 MWp photovoltaic farm, their own micro-installations (e.g. on a school complex) and interesting local solutions in the form of electricity and district heating networks. All this makes this municipality, developing together with its coordinator, the IEN ENERGY team, create a certain new order.

We try to make the systems that work within the energy cluster as interconnected as possible. This is especially true for heat pumps. Imagine thousands or millions of heat pumps that can act on a single signal and use the excess energy to balance the whole system. It’s possible, it works, and you can already see it in our own backyard.

Energy clusters – what are the perspectives?
The EU Directive on Renewable Energy Sources RED II, which has been in force since December 2018, has introduced new conditions for the development of renewable energy, to which European Union countries are adapting. Many changes apply to distributed energy and prosumers.

The directive regulates the principles of increasing the share of renewable energy sources in the EU energy mix to 32% by 2030, and the effect is to reduce EU CO2 emissions by 40% compared to 1990 emissions. It is this directive that has somewhat changed the approach to energy communities. Why? Well, it is the EU law that singles out “group-acting renewable energy prosumers,” defined as “a group of at least two renewable energy prosumers acting together in accordance with the definition of a renewable energy prosumer, located in the same building or in a multi-apartment building.”

It is this directive that says “renewable energy community” means a legal entity based on national law, on open and voluntary participation, independent and effectively controlled by shareholders or members located in close proximity to renewable energy projects owned and developed by that legal entity.

The participants of this community – according to the guidelines of the directive – can be individuals, SMEs or local authorities, including municipalities. By 2030, the plan is therefore ambitious and the legal framework generally clear and readable.