Thursday January 23, 2020
 

End Run

Uber is so upset with California’s new law making Uber drivers employees that it is experimenting with an end-run to get around the legislation.  It is telling some of its drivers to set their own fares for passengers.  While this might survive a legal challenge, it could well be a PR and marketing nightmare.  What will passengers say when a driver jacks the usual fare by 25 percent because he thinks he can get away with it?  Not only will there be an upset customer but it will lower chances the rider will ever use Uber again.  Uber can give a suggested fare and leave it up to the driver to determine if that is what he wants to charge, but inevitably pricing will go awry.  Taking an Uber will be rolling dice in a casino.  It’s not a great idea and there is a good chance Uber will not roll it out to all of its California drivers because of an administrative nightmare and consumer agita.  Maybe Uber will have to give in after all and treat its drivers like employees.

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Short Sellers

Short sellers of a company’s stock are acid in CEOs’ stomachs.  The shorts are betting a company will fail and its equity will fall.  That’s why this is an interesting case.  A short is betting against Tesla based on unintended acceleration claims.  Tesla says it has proof that drivers who experienced the phenomenon had accidentally hit the accelerator pedal.  Not only that, but the vehicle is engineered to go only when the accelerator is pushed.  There are no gears in which a defect of the transmission can cause the cars to lurch forward.  Lastly, a Tesla critic has offered money if anyone can prove the vehicles have the defect.  So far, it is not looking good for the short, but it is still a serious PR issue that must be addressed.  Shorts are a seamier side of stock trading.  They won’t go away so one has to be aware of them.  There is a sense of satisfaction when one is proved wrong and a company’s stock price is not affected.

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Branding A Nation

Holland isn’t Holland anymore.  Forget that.  It’s the Netherlands, or so Dutch officials would have it.  They are doing it for tourism and international relations and to acknowledge that the name, “Holland”, consists of only two of 12 provinces.  It will take years for the world to make the shift, so the Netherlands shouldn’t be in a hurry.  Of course, one can change signs, logos, correspondence and run advertising, but that won’t shift habits for a long while to come.  Essentially, the Dutch will lean on a new generation of citizens raised under the banner of the Netherlands to make the name change stick.  Then, it can work on the rest of the world.  Over time, they might succeed in getting everyone to say the Netherlands rather than Holland.  But, it will take time measured in decades. 

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Piss Poor

This is the worst kind of flackery, and it is good it was caught as quickly as it was.  One wonders what Facebook employees think about it and the ham-handed way it was handled.  There is little excuse for running paid editorial that looks like real copy.  There is far less excuse for the chief operating officer to spotlight the article and react as if it was actually an editorial product.  Clearly, Sheryl Sandberg knew, or, if she didn’t, she should have known.  Facebook had the humiliation of admitting the copy was paid-for, then it took it down but not before social media mavens began to chatter.  How dumb can one be?  It’s not PR and it’s not even good publicity.  One hopes Facebook doesn’t try something like this again.

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Anniversary

The Hubble Space Telescope is celebrating the start of its 30th year with an image of a gigantic galaxy.  This is amazing for an instrument that was defective at the start and needed several astronaut visits over its lifetime.  It is a PR success, the like of which NASA scientists did not think possible.  Hubble has been so successful that the astrological community howls in protest whenever NASA tries to shut it down.  Its life has been extended several times as a result.  But Hubble hasn’t many more years to go if the new James Webb observatory launches successfully in 2021.  Eventually, its machinery will break and there will be no more space visits to get it running again.  Hubble will become a piece of space junk, but its history will live on, a monument to man’s search for answers to the universe.

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Publicity And Facts

Christina Koch has just set a record for the longest time a woman has spent in space.  NASA is using it for publicity.  But should it?  We know now that lack of gravity has effects on the body, not all of them good.  Koch surely will have trouble when she returns to earth.  Her muscles will have atrophied some in spite of regular exercising in the space lab.  She will have trouble walking at first.  Her heart may be enlarged.  Her vision might be affected. Gravity will feel like a weight and not a welcome one.  We know this because everyone who has spent time orbiting the earth has had similar changes in physiology.  Koch will be extensively tested when she is on the ground, and NASA will learn how space affects the female body.  One can only hope it won’t be too serious. Humans did not evolve in zero gravity, and we are learning what that means for interplanetary travel.

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Short-term Thinking

This report reveals that SUVs are growing larger.  No one is thinking of the mileage for these behemoths nor the cost to operate them.  As long as gas prices remain low, they will sell.  It is short-term thinking in a warming climate.  The attitude is “I want more.”  The reality is that for every SUV put on the road, there is an environmental impact.  Something will give eventually — either fuel prices or regulation.  It can’t continue as it has with the world heating up.  All the PR efforts to inform the public about the warming climate have amounted to nothing as long as consumers ignore the warnings.  We won’t be a carbon-neutral country until citizens act individually to reduce emissions.  There needs to be a sense of personal responsibility.  Short-term thinking must run up against harsh reality.

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Off With His Head

The CEO of Boeing has received a cruel Christmas present.  He has been summarily fired and the chairman is taking his place.  His failure to get the 737 Max back into the air was a proximate cause but also his ham-handed PR attempts made the situation worse.  He apologized to the victims of two air crashes too late.  He predicted when the plane would be back in the air and missed the date several times while ticking off the Federal Aviation Administration because they felt pressure from him.  A failure of the software system has exposed the engineering department to withering criticism.  As the story notes, “Two years ago, Boeing Co. could do no wrong. Lately, it can do nothing right, and someone had to pay the price.”  Boeing will get through this time of trial but its reputation will be set back for years with regulators and the public.  It might have forgotten that it is in an industry where even one mistake is too much.

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Shouldn’t Have Done It?

Elon Musk has pitted his Model S Tesla against the Porsche EV, Taycan.  The Taycan won.  Now it is winning the social media chatter as well.  Some commentators are predicting that Musk will need to do a total redesign of the Model S to stay up with the competition.  He can barely afford to do that alongside his many other projects, including an EV pickup truck.  One wonders if Musk has taken on one too many risks, but then, he has been on the leading edge for years and so far, has pulled off his boasts.  It would not be wise to bet against him.  On the other hand, Porsche has time and again designed and built leading sports cars since its founding in 1948.  The company is methodical and driven by racing where it tests components over long distances.  Who might win a competition is in the air.  It should be fascinating to watch.

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Big Fine

If Goldman Sachs settles fraud charges relating to 1MNB, it is possible it will pay $2 billion as a fine.  That’s a huge amount even for the legendary trading and banking house.  It, however, will not win the Wall Street firm’s reputation back.  The fine will serve as a reminder for Goldman and competitors that there are limits in the world of finance.  Unfortunately, greed will out eventually, and someone else will attempt to get away with chicanery.  They might succeed or they might be caught, but they will have forgotten the penalty.  Goldman will remember because the size of the fine will impact its bottom line and bonuses for employees.  That doesn’t mean, however, that someone else will find new and creative ways to bilk the public.  

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