Uber, surge pricing, and data at work (at work)

The on-demand black car service Uber took quite a bit of flack over the weekend for implementing what is known as 'surge pricing' during a pretty nasty snowstorm in New York City. If you are not familiar with Uber, (and you should be because it really is an amazing service), the basics are pretty simple. Users use a smartphone app to summon a black car or equivalent that picks them up and then are taken to their desired destination. The entire payment transaction (including leaving the driver a star rating) is executed via the app, for prices (at least in my experience) ranging 15-20% more expensive than 'regular' taxi service.

But during times of extremely high demand for rides and low supply of on the road drivers (like on a Saturday night in a bad storm), Uber implements 'surge pricing', essentially increasing the cost of rides anywhere from 2 to even 6 or 7 times the normal fares in order to balance demand with supply. The ECON 101 logic is pretty simple - the increased prices (which users are warned about in advance of booking a ride) will serve to simultaneously reduce demand while increasing supply, as more drivers will be enticed to get out on the road in order to earn increased fees during the surge pricing period.

In addition to using basic pricing flexibility to manage and try and balance supply and demand, Uber also is attempting to mitigate the one really frustrating piece of the typical customer's experience, (I can attest to this one), which is the simple lack of availability of a car when you need/want one.

But the backlash from last weekend's surge pricing in NYC seemed pretty harsh as people took to Twitter to vent about their frustration with Uber for radically increasing their prices during a time of "crisis" in the city - it seems like there were scads of celebrities that were particularly peeved about having to pay what they felt like were exorbitant prices for transportation around town.

Putting aside the natural lack of sympathy I have for anyone complaining that their on-demand, door-to-door, black car service costs too much (on a Saturday night in the busiest city in America and during a snowstorm), I wanted to highlight this story as one of the very few that we see that showcases how data, technology, and the combination of the two are actually conspiring to benefit the front-line worker - in this case the Uber affiliated black car drivers.

Normal taxi drivers or even limo drivers might see a little extra in their pay rates for working a Saturday night, but certainly could not take advantage of the dramatic increase in demand for their services as the Uber drivers who braved the storm were able to realize.

Through a combination of new technology, absence of the pricing regulations imposed on traditional taxi services, more flexible labor rules, and most importantly, the presence of information of the increased demand, these Uber drivers were able to make better and hopefully, more informed, data-driven decisions about whether, where, and when to provide their services.

Most front-line workers never really get the exercise the kind of labor pricing power that we see in this example. Last Saturday night lots and lots of pretty well-off people wanted black car service on one of the worst weather nights of the year. The kind of night that most folks would rather stay home and stay warm, much less venture out into the cold and wet and storm to work for their normal pay.

Thanks to data and technology at least in this example, the Uber drivers who did venture out into the weather did a little better than most front-line workers.

It looks like they were paid what they deserved. Which is not always easy to say, both for black car drivers and for the celebrities they ferried up and down Manhattan last Saturday night.

If the entire economy can fit on one slide, then you probably have too many slides

...and this blog post title is way, way too long.

Check the below image, spotted over the weekend on Business Insider's piece titled Here's The Entire Debate About The US Economy In One Huge Slide:

The slide presents, (simply I admit), what the financial services company sees as the key assumptions and challenges for the US economy in 2014, offers up some alternative and plausible implications of these assumptions, and then presents what it feels are the most important data visualizations (that are not too hard to look at), that support both the assumptions and the conclusions.

Think about it, they are attempting to distill a subject as large and complex as the economy of the USA down into one slide. Sure there are lots of data points and subject areas that are not and can't be covered in just one slide, and sure, the presentation gurus out there will cringe at the notion that there are way too many words in way too small a font to pass muster, but the overall effect I think is outstanding.

All the important data points, the reasoning, the charts - everything that this presenter needed to lead his/her talk about the state of the economy all laid out on one page.

I know I have gotten into a really bad presenting habit over the years of simply adding more and more slides to just about every presentation that I have done. Slides are free, right? Just add another one with a cool picture and a word or two in 64-pt font. 

But I think that approach makes you a little lazy and also can easily result in ponderous presentations that end up going everywhere and nowhere at the same time.

The tightness and the focus required to distill your content into its smallest container possible also forces you to consider what is truly important about the information and arguments you are presenting and to think much more about what you are going to say about that content, rather than spending umpteen hours scouring the stock photo sites for the 'right' images.

This has to be the next HRevolution contest - the 10 minute, one-slide presentation.

Have a great week all!

FOLLOW-UP: More on Home Ownership and Employment

Yesterday, I posted about the downward trend in home ownership rates in the United States, coupled with the sharp rise in 'all-cash', primarily investment-driven home purchases, (which almost always are converted into rental properties), and the implications these trends might have on work, employment, and mobility.

So it was really interesting to me that this morning more on the topic of the relationship between home ownership and employment was posted on Business Insider in an article called 'High Home Ownership Is Strongly Linked To High Unemployment [STUDY]", a look at some recent research out of Warwick University on this very subject. 

The piece is relatively short, but I will pull out the most pertinent points below:

High levels of home ownership are strongly linked to subsequent rises in unemployment because labor mobility becomes reduced, according to new research.

Using data going back to 1950 across all U.S. states except Alaska and Hawaii, Warwick University economics professor Andrew Oswald finds that the lag from ownership levels to unemployment rates can take up to five years to show up.

But he said the linkage, established using data on millions of randomly sampled Americans, was extraordinarily robust.

Doubling home ownership in a state can lead to more than a doubling of the jobless rate.

"I have become convinced that by boosting home ownership we have ruined our labor market," Oswald said.

Oswald said the research may go some way to explaining why Spain, with a home ownership rate of 80 percent, has unemployment above 25 percent, whereas Switzerland, with a 30 percent ownership rate, has a jobless rate of just 3 percent. Germany, another nation of renters rather than home owners, also has relatively low unemployment.

Home ownership unwittingly impairs the labor market by deterring people from moving in search of work, a process that is time-consuming and expensive; long commuting times might also discourage a householder from taking a particular job, his research suggests.

A nation of renters, if indeed that is where America is moving towards, might not be all that bad for the future of work and employment, if this study has any truth and validity.

And aren't we seeing and hearing from pretty much every front that surely one element of the nature and future of work is that it will be, for many more people that before, more fluid, more temporary, more 'project-based' and not 'employer-based'. 

A future where many more people will bounce around from assignment to assignment, from 'employer' to employer, and from city to city even, as they chase the much more transient opportunities to ply their trade and earn a few bucks.

Many of us have tales we like to tell about the 6 crappy apartments we lived in after college before we 'settled' somewhere and maybe bought a house, got married, or at least decided to live with a significant other, and maybe even had some kids.

But that 'settling' process almost always came after the steady, 'permanent' jobs were landed. Maybe they were not the jobs or companies you saw yourself staying in forever, but they would be secure enough to save up some dough, prove to the mortgage company that you could in fact afford your new house, and even convince skeptical in-laws to be that you would be a suitable partner for their child. 

But in a economic climate where 'permanent', (if there was really ever such a thing), work is fast-becoming a relic of the past, then too, it seems like some of the follow-ons that came from landing those jobs, (getting married, buying houses, having 2.2 children), are also naturally going to be impacted.

If there are far fewer permanent jobs than it stands to reason that more and more workers will end up living like many of us did in our twenties - bouncing around from one place to another, living out of a few suitcases and boxes, only staying until the next job takes us somewhere else, since no 'job' is going to last too long.

It is a great deal for the companies that want to engage with labor and talent in this manner, but I am not at all sure that as a society we are prepared for a much more transient, less-rooted, nomadic population of professionals, wandering from place to place, and rental house to rental house, chasing a dream that is receding further away all the time.

But think about it, if we were all willing/able to move much more freely in pursuit of work and opportunity, how many of us would stay right where we are and how many would pick up and find something better?

Happy Weekend all!

CHART OF THE DAY: The American Dream of Renting

Ok, so perhaps that title was not totally fair, as the while the below chart could be interpreted in a couple of different ways, depending on your point of view and level of relative optimism/pessimism/cynicism.

But first, the chart in question, showing the trends in American home ownership for roughly the last two decades, (my comments of course, after the jump):

The current percentage of Americans owning their homes stands at about 65%, roughly equal to the rate in 1995, prior to the last two recorded recessions, (as indicated by the gray areas on the chart).

And the rate has been declining since about 2004, well before the American financial crisis of 2008/9, the ensuing economic slowdown, and the dramatic tightening of the availability of mortgage credit.  Combine tighter credit standards with the sharp rise in unemployment (and employment security) in the period of 2008 - 2010, then you have the basic root causes for the fall in home ownership. Even the historically low mortgage interest rates of about 2011 until, well, until now, have not been able to reverse this trend. Oh, and one more data point to consider - all cash sales of property (primarily from banks and other investors), have continued to rise - some estimates say these cash sales now constitute half of all transactions. Even if a prospective individual home buyer has a stable job, and can qualify for a home mortgage, they often find themselves losing out to a competing all cash offer from an investor or syndicate.

In the depths of the recession it was often theorized that employment mobility was becoming compromised by people's inability to sell (at a price that would be acceptable if they could sell at all), their existing homes in order to facilitate a job change or even a transfer inside their current company. In many parts of the country large numbers of homeowners were underwater on their homes, owing more to the mortgage holder than the home could expect to fetch in a sale.

In 2013 and perhaps in the future, the trends in the rate of home ownership and in the increase of all cash and investor-driven residential home sales, while seemingly not positive developments for the average employee, could be ones that end up benefiting the organization. In 2009 and 2010, organizations were probably finding it hard, (or very expensive), to facilitate employee transfers around the country or to convince that desirable candidate to relocate from one state to another when selling a home at a loss simply was too much of a financial burden to take on, no matter how fantastic the job opportunity might have been.

But with the home ownership trends heading downward, and the investor-driven all cash sales on the rise, the chances are increasing that the great candidate or that high-potential manager you'd like to send on a rotational assignment to Kentucky are going to much more able to make these kinds of moves in the future. Without the need to sell the house, well, most folks are just a few months away or a broken lease from taking the next great gig.

Of course, while not being burdened by home ownership makes someone more likely to listen to your opportunity or offer, it also makes them equally able and receptive to everyone else's offers as well.

Happy Halloween my friends.

SPORTS WEEK #4 - Visualizing data - sports and otherwise

Note to readers: As I have had a really busy Summer and early Fall preparing for the now recently concluded HR Technology Conference, the posting frequency here has been pretty diminished lately. Additionally, I find myself well behind my regular number of 'sports' posts that form the basis of my contribution to the annual 8 Man Rotation E-book on sports and HR. So I have declared this week of October 21 to be 'Sports Week' on the blog. I'm shooting for 5 days of sports-themed posts to make sure I don't get dropped from the 8 Man crew. So if sports takes are not your thing, check back in a week of so, when I will probably have another equally inane theme working.

Onward..

As I wrap up 'Sports Week' on the blog I figured for a Friday I would keep it simple take the easy way out and point your attention to the always interesting, frequently amazing Information is Beautiful site where the contenders for their annual Information is Beautiful awards are being featured.

The awards are meant to showcase and honor excellence in data visualization, infographics, interactive data presentation, and tools with which to analyze and interpret data and information. And, as luck would have it, several of the submissions in the Data Visualization category have sports themes, as sports continues to be a ripe area for advanced data analysis, and for new ideas about how to examine and interpret existing data sets.

The chart on the right side of this post, a graphic that presents some analysis and comparisons of the playing statistics of the 2013 NBA All-Stars naturally caught my attention, and there are similarly well-crafted and visually appealing submissions about soccer, bike racing, baseball, and more.

But beyond the mundane world of sports, there are more serious and probably more important visualizations and tools that you should check out over on the Information is Beautiful site.

With the seemingly endless amounts, types, and increased speed with which we are becoming inundated with data about our business, our workforces, our labor market and more, it has become more and more important that the ability to understand and present complex data in a relevant, meaningful, and accessible manner is a skill set any successful modern leader will need to possess.

Sure, the charts and tools that are over at the Information is Beautiful site might be a little bit beyond your capabilities with design, and might be a little too much for the presentation of the more banal kinds of data we often deal with as HR and Talent pros, but there is certainly lots in terms of ideas and inspiration that anyone can take from such visually stunning displays.

Ok, that's it, 'Sports Week' is wrapped, be sure to come back next week for an equally hard hitting series on the types and properties of the various Halloween candies and treats.

Have a great weekend!