26 June 2017

Linkage


I cam across an interesting video talking about the political context of the John Carpenter movie They Live. The movie's message is even more apropos today:


We Sleep: On the Enduring Propheticism of John Carpenter's THEY LIVE from Daniel Clarkson Fisher on Vimeo.

25 June 2017

Seymour Hersh Has Another Blockbuster

Publishing in Die Welt, Hersh reveals that the US intelligence services were categorically contradicting the story of a Syrian gas attack Khan Sheikhoun which led to a US cruise missile attack on the Shayrat Air Base:
On April 6, United States President Donald Trump authorized an early morning Tomahawk missile strike on Shayrat Air Base in central Syria in retaliation for what he said was a deadly nerve agent attack carried out by the Syrian government two days earlier in the rebel-held town of Khan Sheikhoun. Trump issued the order despite having been warned by the U.S. intelligence community that it had found no evidence that the Syrians had used a chemical weapon.

The available intelligence made clear that the Syrians had targeted a jihadist meeting site on April 4 using a Russian-supplied guided bomb equipped with conventional explosives. Details of the attack, including information on its so-called high-value targets, had been provided by the Russians days in advance to American and allied military officials in Doha, whose mission is to coordinate all U.S., allied, Syrian and Russian Air Force operations in the region.

Some American military and intelligence officials were especially distressed by the president's determination to ignore the evidence. "None of this makes any sense," one officer told colleagues upon learning of the decision to bomb. "We KNOW that there was no chemical attack ... the Russians are furious. Claiming we have the real intel and know the truth ... I guess it didn't matter whether we elected Clinton or Trump."
The implication of the last statement, of course, is that the notoriously bellicose Hillary Clinton would seize any pretext for a strike against Syria and the Russians.
To the dismay of many senior members of his national security team, Trump could not be swayed over the next 48 hours of intense briefings and decision-making. In a series of interviews, I learned of the total disconnect between the president and many of his military advisers and intelligence officials, as well as officers on the ground in the region who had an entirely different understanding of the nature of Syria’s attack on Khan Sheikhoun. I was provided with evidence of that disconnect, in the form of transcripts of real-time communications, immediately following the Syrian attack on April 4. In an important pre-strike process known as deconfliction, U.S. and Russian officers routinely supply one another with advance details of planned flight paths and target coordinates, to ensure that there is no risk of collision or accidental encounter (the Russians speak on behalf of the Syrian military). This information is supplied daily to the American AWACS surveillance planes that monitor the flights once airborne. Deconfliction’s success and importance can be measured by the fact that there has yet to be one collision, or even a near miss, among the high-powered supersonic American, Allied, Russian and Syrian fighter bombers.

………

"The rebels control the population by controlling the distribution of goods that people need to live – food, water, cooking oil, propane gas, fertilizers for growing their crops, and insecticides to protect the crops," a senior adviser to the American intelligence community, who has served in senior positions in the Defense Department and Central Intelligence Agency, told me. The basement was used as storage for rockets, weapons and ammunition, as well as products that could be distributed for free to the community, among them medicines and chlorine-based decontaminants for cleansing the bodies of the dead before burial. The meeting place – a regional headquarters – was on the floor above. “It was an established meeting place,” the senior adviser said. “A long-time facility that would have had security, weapons, communications, files and a map center.” The Russians were intent on confirming their intelligence and deployed a drone for days above the site to monitor communications and develop what is known in the intelligence community as a POL – a pattern of life. The goal was to take note of those going in and out of the building, and to track weapons being moved back and forth, including rockets and ammunition.

………

The Execute Order governing U.S. military operations in theater, which was issued by the Chairman of the Joint Chiefs of Staff, provide instructions that demarcate the relationship between the American and Russian forces operating in Syria. “It’s like an ops order – ‘Here’s what you are authorized to do,’” the adviser said. “We do not share operational control with the Russians. We don’t do combined operations with them, or activities directly in support of one of their operations. But coordination is permitted. We keep each other apprised of what’s happening and within this package is the mutual exchange of intelligence. If we get a hot tip that could help the Russians do their mission, that’s coordination; and the Russians do the same for us. When we get a hot tip about a command and control facility,” the adviser added, referring to the target in Khan Sheikhoun, “we do what we can to help them act on it." “This was not a chemical weapons strike,” the adviser said. “That’s a fairy tale. If so, everyone involved in transferring, loading and arming the weapon – you’ve got to make it appear like a regular 500-pound conventional bomb – would be wearing Hazmat protective clothing in case of a leak. There would be very little chance of survival without such gear. Military grade sarin includes additives designed to increase toxicity and lethality. Every batch that comes out is maximized for death. That is why it is made. It is odorless and invisible and death can come within a minute. No cloud. Why produce a weapon that people can run away from?”

………

“It was a totally Trump show from beginning to end,” the senior adviser said. “A few of the president’s senior national security advisers viewed the mission as a minimized bad presidential decision, and one that they had an obligation to carry out. But I don’t think our national security people are going to allow themselves to be hustled into a bad decision again. If Trump had gone for option three, [a massive air strike] there might have been some immediate resignations.”
Nothing about the official White House account makes sense in the initial reports:
  • Assad had no reason to use chemical weapons, he was winning decisively at the time.
  • There were no reports of any sort of special handling of the munitions by the crews.
  • The films on the net show actions by the first responders which would have had them contaminated, and effected, as well.
  • The reports of a strong smell indicate that the toxin was not military grade Sarin.
And now we know that this strike had been communicated with US forces days in advance as part of the US-Russia deconfliction protocol, and that the professional staff in the US state security apparatus did not believe that there had actually been a chemical weapons attack.

And Today in Charter Schools………

We have a multi-state charter school chain facing allegations of systematic corruption.

This is not a surprise.  Charter schools as currently structured are a uniquely criminogenic enterprise.

Truth be told, the 18% management fee referenced in the article is rather larcenous in and of itself, since most of the managing is done by the staff on each campus.

If anyone believes that allowing charter schools to "unleash the market" will produce better results for less, I have a bridge in Brooklyn to sell you:

The founder of an Akron-area charter school company is accused of using thousands of dollars parents paid for student lunches and uniforms and millions more from Ohio and Florida taxpayers to fund home mortgages, plastic surgery, extensive world travel, credit card debt and more.

Criminal charges filed last week in Florida against Marcus May also allege he improperly used private and public funds earmarked for students’ education to expand his charter school empire in Columbus, Akron, Cleveland and Dayton.

Florida State Attorney William “Bill” Eddins brought the charges of racketeering and organized fraud against May, the founder of Newpoint Education Partners and Cambridge Education, a Fairlawn company that manages about 20 charter schools in Cincinnati, Dayton, Columbus, Akron, Youngstown, Canton and Cleveland.

In a prepared statement provided to the Beacon Journal on Friday, Cambridge Executive Director John Stack said: “My co-owners and I asked for and today accepted Mr. May’s resignation as managing member of Cambridge. We are now in discussions to remove him completely from ownership in the company because we feel it’s in the best interest of our schools.

“Despite this distraction, my colleagues at Cambridge and I will continue to focus on our core mission and the students we serve as we have always done.”

Cincinnati businessman Steven Kunkemoeller also was charged in the First Judiciary Circuit, a regional court in Florida. Kunkemoeller is a longtime business partner of May, according to a Beacon Journal/Ohio.com report from December and a multi-state investigation that included help from the Summit County Prosecutor’s Office.

………

The Florida prosecutor alleges that the men fabricated invoices, embellished enrollment, misappropriated public funds and created an elaborate network of limited liability companies in order to bilk the federal and state governments, as well as parents and students.

………

School and business records obtained by the Beacon Journal and detailed by a forensic accountant working on the case show that May and Kunkemoeller marked up the price of services and supplies provided to the charter schools they managed in Ohio and Florida, sometimes more than doubling the cost of school uniforms, desks, computers, chairs and website design.

………

Between 2010 and 2015, $350,000 was collected from students and parents for uniforms, and another $11,000 for school lunches, the Florida investigation found. Beyond Newpoint’s 18 percent management fee, millions more have been collected from inflated or allegedly fictitious invoices, according to court filings.

I am So Not Sorry About this Computer Hack………

It turns out that thousands of speed camera reports have been invalidated because a technician was updating machines with a tainted memory stick:
A contractor in the Australian State of Victoria has managed to infect an unknown number of speed cameras with a virus, over sneakernet.

Details aren't so much sketchy as they are confused: the virus has been identified as WannaCrypt, but the government's been told it infected both Linux and Windows-based cameras; there was no ransom demand; the main symptom was repeated camera reboots, and; contractors apparently hoped to keep things quiet by patching cameras without telling anyone.

The lid came off on Friday, and Victoria Police decided to cancel 590 fines issued by 55 cameras infected by a contractor visiting the cameras to perform software upgrades with a USB drive that also carried something nasty.

The number of known infections rose to 97 out of the state's total of 280 speed cameras, after one of the state's speed camera contractors, Redflex, told the Department of Justice it had identified and patched a further 42 infections earlier in June.

………

In excess of 7,500 fines issued between June 6 and June 22 are to be “quarantined” during the investigation, but may be reissued once the investigation is completed.
I want to state that I have no direct knowledge of any hacking operations, but if, for example, the good folks at 4Chan decided to hack speed cams and red light cams, I would donate to a GoFundMe of their legal defense.

In the United States, at least, these programs are more about revenue generation and getting money to private contractors who operate the systems.

Least Surprising News of the Day

An intelligence evaluation of the Manning leaks has been leaked, and no real harm was caused:
In the seven years since WikiLeaks published the largest leak of classified documents in history, the federal government has said they caused enormous damage to national security.

But a secret, 107-page report, prepared by a Department of Defense task force and newly obtained by BuzzFeed News, tells a starkly different story: It says the disclosures were largely insignificant and did not cause any real harm to US interests.

Regarding the hundreds of thousands of Iraq-related military documents and State Department cables provided by the Army private Chelsea Manning, the report assessed “with high confidence that disclosure of the Iraq data set will have no direct personal impact on current and former U.S. leadership in Iraq.”
So, we're talking about embarrassment, and little else.

Our culture of over-classification leads to poor decisions and generally stupid sh%$.

I'd really like to see the Swedish concept of Offentlighetsprincipen (openness) written into our constitution:
In the 18th century, after over 40 years of mixed experiences with parliamentarism, public access to public documents was one of the main issues with the Freedom of the Press Act of 1766. Although the novelty was put out of order 1772–1809, it has since remained central in the Swedish mindset, seen as a forceful means against corruption and government agencies' unequal treatment of the citizens, increasing the perceived legitimacy of (local and central) government and politicians. The Principle of Public Access (Swedish: Offentlighetsprincipen), as the collection of rules are commonly referred to, provides that all information and documents created or received by a "public authority" (local or central government, and all publicly operated establishments) must be available to all members of the public. It also states that all public authorities must provide information promptly (skyndsamt) upon request. 
Secrecy makes the holders of secret information feel unjustifiably exceptional, which builds arrogance, which in turn leads to stupidity and insane plans, which in turn leads to disaster.

It's a Greek tragedy writ unbelievably small.

Tweet of the Day

H/t naked capitalism

More IP Shenanigans

The Department of Defense is planning to grant the pharma giant Sanofi an exclusive license to manufacture and market a vaccine for the Zika virus that the US Army has developed:
………

It concerns something really exciting and important: a vaccine that shows great promise against the devastating Zika virus, which can cause microcephaly, blindness, deafness, and calcification of the brain in children whose mothers were infected during their pregnancy. If effective, such a vaccine could be a tremendous boon not just for developing countries, but for Western ones too, since the Zika virus has already begun to spread in the US, and Europe. The vaccine was developed at the Walter Reed Army Institute for Research, and the Department of the Army funded its development. Great news, you might think: the US public paid for it, so it's only right that it should have low-cost access to it. Moreover, as an act of compassion -- and to burnish its international image -- the US could allow other countries to produce it cheaply too. But an article in The Nation reports that the US Army has other ideas:

the Army is planning to grant exclusive rights to this potentially groundbreaking medicine -- along with as much as $173 million in funding from the Department of Health and Human Services -- to the French pharmaceutical corporation Sanofi Pasteur. Sanofi manufactures a number of vaccines, but it's also faced repeated allegations of overcharges and fraud. Should the vaccine prove effective, Sanofi would be free to charge whatever it wants for it in the United States. Ultimately, the vaccine could end up being unaffordable for those most vulnerable to Zika, and for cash-strapped states.
The Knowledge Ecology Institute (KEI), led by Jamie Love, made a reasonable suggestion to ensure that those most at need would have access to the drug at a reasonable price. KEI asked that, if Sanofi does get an exclusive deal, it should be obliged to make the vaccine available at an affordable price. The Army said it lacked the ability to enforce price controls, but it would ask those nice people at Sanofi to commit to affordable pricing on a voluntary basis. According to The Nation, those nice people at Sanofi refused. Speaking of nice people at Sanofi, the article notes the following:
………


When there is an entire Web page dedicated to listing Sanofi's problems going back to 2009, you really have to wonder why the US Army is so keen to give the company a monopoly on this promising new treatment. The usual argument for the sky-high prices of drugs is that firms must be rewarded for taking on the financial risk of drug development, otherwise they won't proceed, and the world would be the poorer. Except, of course, in this case that risk was entirely borne by the US public, which paid for the early stage development of the vaccine with their taxes. So Sanofi risked nothing, but now looks likely to reap the benefits by being allowed to price the vaccine out of the reach of the people who most need it. You might think there ought to be a law against this kind of behavior. It turns out that there is:

KEI's Jamie Love pointed out that under the Bayh-Dole Act of 1980, it is already illegal to grant exclusive rights to a federally owned invention unless the license holder agrees to make it available at reasonable pricing. But that provision has rarely, if ever, been enforced.
Now would be a really great time to start enforcing that law.
Indeed.

I'm inclined to believe that Bayh Dole is a bad law, and it has been made far worse through the rather lackadaisical attitude toward applying any sort of public benefit to technologies that were developed at public expense.

It would be nice if  the law's march in rights, which allow for compulsory licensing, had been applied even once.

Trump is a Real Friend of the Jews

Trumps State Department is shutting down its anti-Semitism monitoring office:
The U.S. State Department’s office to monitor and combat anti-Semitism will be unstaffed as of July 1.

A source familiar with the office’s workings told JTA that its remaining two staffers, each working half-time or less, would be reassigned as of that date.

The Trump administration, which has yet to name an envoy to head the office, would not comment on the staffing change. At full staffing, the office employs a full-time envoy and the equivalent of three full-time staffers.
So not a surprise.

Trump is dancing with what brung him.

24 June 2017

Fasten Your Seatbelts, Europe

Because European regulators just shut down two Italian banks:
Friday, in another sign that the eurozone financial system remains vulnerable even as the economy improves.

The central bank said in a statement that Veneto Banca and Banca Popolare di Vicenza, both based in northern Italy, had failed or were likely to fail because they did not have enough capital to meet regulatory requirements.

They become the second and third banks to be declared effectively dead by the central bank, which acquired power to supervise eurozone banks at the end of 2014.

The first, earlier this month, was Banco Popular, Spain’s fifth biggest bank.

Shareholders of the two Italian banks will lose their money, as will investors in so-called junior bonds that are intended to absorb losses first.

But deposits in the bank will be protected, as will investors in so-called senior bonds.

After 3 years, 3 banks in a month.

I'm wondering what is going to happen when (and it's when, not if) the ECB actually tries to down a German bank.

23 June 2017

A New Definition of Chutzpah………

The Orange County Sheriff is now defending endemic lying by her staff in sworn testimony by saying that deputees did not know that they were required to tell the truth.

I guess that whole oath, where they swear to, "Tell the truth, the whole truth and nothing but the truth," just wasn't clear enough:
The Orange County (CA) District Attorney's office remains in the news. It's not often an entire prosecutors' office gets booted off a high-profile murder case, but that's what happens when misconduct occurs on a massive scale. An open-and-shut murder case with eight victims is now the DA's perpetual nightmare. Judge Thomas Goethals kicked the agency to the curb after uncovering repeated discovery violations committed by prosecutors.

But the problems go back further than this case. The office has hidden the existence of a law enforcement database from defense lawyers (and judges) for a quarter century -- a database holding all sorts of information about jailhouse snitches that may have made the difference in a number of cases.

………

Those in charge of the sheriff's snitch program have been asked to testify in response to perjury allegations. They have chosen not to, with each sheriff's office witness called pleading the Fifth. This chain of events has led to the most jaw-dropping law enforcement statement I have ever read, and that includes arguments made in support of setting toddlers on fire with carelessly-tossed flashbang grenades.

Sheriff Sandra Hutchens claims the veteran officers were unaware they were required to testify honestly during prior court appearances for the death penalty case marred by astonishing degrees of government cheating.
Officers, especially veteran ones, are aware they are required to testify honestly. This is why they're sworn in before testimony. There's a promise made at that point. Not testifying honestly is called "perjury," as the officers are surely aware. High school students taking civics classes are aware of this. No one's really unclear on the whole "tell the truth in court" thing.
The whole of Orange County law enforcement apparatus needs to be disbanded and taken over by outside agencies.

Damn!

While we are on the subject of immoral companies, Mylan Pharmaceuticals board was reelected, and the vote limiting executive compensation is almost certain to be ignored:
Mylan shareholders today did not unseat the drug maker’s board of directors, despite calls for an ouster over the EpiPen pricing scandals and remarkably large executive salaries.

In a vote during an annual meeting in Amsterdam, shareholders approved all incumbent nominees, including Chief Executive Heather Bresch, President Rajiv Malik, and Chairman Robert Coury, who earned a nearly $100 million salary last year amid intense backlash over EpiPen price hikes. The majority of shareholders did, however, reject such executive compensation plans—in a nonbinding vote.

………

However, analysts say the vote is unlikely to have any effect. Speaking to Bloomberg Markets, Ronny Gal, an analyst with Sanford C. Bernstein & Co., said: “There’s no way for this to be enforced.” He noted that, when shareholders have pushed back on salaries in the past, “Mylan’s position was that they need to educate shareholders more on the drivers of why they compensate management the way they do. I would be surprised if they pursue a different path here.” 
It should be noted that binding shareholder votes on compensation are illegal under US law.

This is something that needs to be changed, because control fraud is a staple of the MBA class of managers these days.

It needs to stop.

Your Uber Dead Pool

Uber's week from hell is over, and it starts with Uber's psychopath in chief Travis Kalanick has been forced out by investors following revelations that he was trafficking in stolen medical records of a rape victim in order to discredit her claims:
Travis Kalanick stepped down Tuesday as chief executive of Uber, the ride-hailing service that he helped found in 2009 and built into a transportation colossus, after a shareholder revolt made it untenable for him to stay on at the company.

Mr. Kalanick’s exit came under pressure after hours of drama involving Uber’s investors, according to two people with knowledge of the situation, who asked to remain anonymous because the details were confidential.

Earlier on Tuesday, five of Uber’s major investors demanded that the chief executive resign immediately. The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark, which has one of its partners, Bill Gurley, on Uber’s board. The investors made their demand for Mr. Kalanick to step down in a letter delivered to the chief executive while he was in Chicago, said the people with knowledge of the situation.

In the letter, titled “Moving Uber Forward” and obtained by The New York Times, the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership. Mr. Kalanick, 40, consulted with at least one Uber board member, and after long discussions with some of the investors, he agreed to step down. He will remain on Uber’s board of directors.

………

The move caps months of questions over the leadership of Uber, which has become a prime example of Silicon Valley start-up culture gone awry. The company has been exposed this year as having a workplace culture that included sexual harassment and discrimination, and it has pushed the envelope in dealing with law enforcement and even partners. That tone was set by Mr. Kalanick, who has aggressively turned the company into the world’s dominant ride-hailing service and upended the transportation industry around the globe.

………

In the letter, in addition to Mr. Kalanick’s immediate resignation, the five shareholders asked for improved oversight of the company’s board by filling two of three empty board seats with “truly independent directors.” They also demanded that Mr. Kalanick support a board-led search committee for a new chief executive and that Uber immediately hire an experienced chief financial officer
That last bit about, "Truly independent directors," seems to me to be a critique of Uber board member Arianna Huffington, who has been a steadfast defender of Kalanick.

Meanwhile, as soon as Travis is out the door, Uber adds tipping to the app, a policy whose only justification was that it would make it harder to claim that its drivers are not its employees.

BTW, in addition to the above, a recent court filing states that Kalanick knew that the recent head of its autonomous driving division had stolen documents and data from his previous employer:
Uber's recently fired CEO, Travis Kalanick, knew that his top self-driving car engineer had Google files in his possession in March 2016, according to newly filed court documents.

The admission was made by Uber lawyers as part of a response to Waymo discovery demands. Uber lawyers served the response on June 8, and it was revealed in a public court motion (PDF) filed by Waymo lawyers late yesterday.

According to Uber, former self-driving car chief Anthony Levandowski told Kalanick that "he had identified five discs in his possession containing Google information." Kalanick told Levandowski not to bring any Google information into Uber. Levandowski later told Uber he destroyed the discs, and Uber never got the discs, according to Uber lawyers.

Waymo sued Uber in February, claiming that the company had trade secrets brought in by Levandowski, an engineer who once worked at Google but quit abruptly in January 2016. Levandowski went on to found his own self-driving car startup, which was purchased by Uber for $680 million. Google has accused Levandowski, who is not a defendant in the case, of downloading more than 14,000 files that contained Google trade secrets and taking them with him. Levandowski has not denied those allegations and has declined to answer most questions, instead asserting his Fifth Amendment rights.
It's no wonder that the Harvard Business Review is calling for Uber to be shut down:
………

But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.

Uber’s Fundamental Illegality

Uber brought some important improvements to the taxi business, which are at this point well known. But by the company’s launch, in 2010, most urban taxi fleets used modern dispatch with GPS, plus custom hardware and software. In those respects, Uber was much like what incumbents had and where they were headed.

Nor was Uber alone in realizing that expensive taxi medallions were unnecessary for prebooked trips — a tactic already used by other entrepreneurs in many cities. Uber was wise to use smartphone apps (not telephone calls) to let passengers request vehicles, and it found major cost savings in equipping drivers with standard phones (not specialized hardware). But others did this, too. Ultimately, most of Uber’s technical advances were ideas that competitors would have devised in short order.

Uber’s biggest advantage over incumbents was in using ordinary vehicles with no special licensing or other formalities. With regular noncommercial cars, Uber and its drivers avoided commercial insurance, commercial registration, commercial plates, special driver’s licenses, background checks, rigorous commercial vehicle inspections, and countless other expenses. With these savings, Uber seized a huge cost advantage over taxis and traditional car services. Uber’s lower costs brought lower prices to consumers, with resulting popularity and growth. But this use of noncommercial cars was unlawful from the start. In most jurisdictions, longstanding rules required all the protections described above, and no exception allowed what Uber envisioned. (To be fair, Uber didn’t start it — Lyft did. More on that later on.)

………

Rotten to the Core

Uber faced an important challenge in implementing this strategy: It isn’t easy to get people to commit crimes. Indeed, employees at every turn faced personal and professional risks in defying the law; two European executives were indicted and arrested for operating without required permits. But Uber succeeded in making lawbreaking normal and routine by celebrating its subversion of the laws relating to taxi services. Look at the company’s stated values — “super-pumped,” “always be hustlin’,” and “bold.” Respect for the law barely merits a footnote.

Uber’s lawyers were complicit in building a culture of illegality. At normal companies, managers look to their attorneys to advise them on how to keep their business within the law. Not at Uber, whose legal team, led by Chief Legal Officer Salle Yoo, formerly its general counsel, approved its Greyball software (which concealed the company’s practices from government investigators) and even reportedly participated in the hiring of a private investigator to interview friends and colleagues of litigation adversaries.

Having built a corporate culture that celebrates breaking the law, it is surely no accident that Uber then faced scandal after scandal. How is an Uber manager to know which laws should be followed and which ignored?

A Race to the Bottom

The 16th-century financier Sir Thomas Gresham famously observed that bad money drives out good. The same, I’d suggest, is true about illegal business models. If we allow an illegal business model to flourish in one sector, soon businesses in that sector and others will see that the shrewd strategy is to ignore the law, seek forgiveness rather than permission, and hope for the best.

………

But because Uber’s problem is rooted in its business model, changing the leadership will not fix it. Unless the model itself is targeted and punished, law breaking will continue. The best way to do this is to punish Uber (and others using similar methods) for transgressions committed, strictly enforcing prevailing laws, and doing so with little forgiveness. Since its founding, Uber has offered literally billions of rides in thousands of jurisdictions, and fines and penalties could easily reach hundreds of dollars for each of these rides.

In most jurisdictions, the statute of limitations has not run out, so nothing prevents bringing claims on those prior violations. As a result, the company’s total exposure far exceeds its cash on hand and even its book value. If a few cities pursued these claims with moderate success, the resulting judgments could bankrupt Uber and show a generation of entrepreneurs that their innovations must follow the law.

Uber fans might argue that shutting down the company would be throwing the baby out with the bathwater — with passengers and drivers losing out alongside Uber’s shareholders. But there’s strong evidence to the contrary.

Take the case of Napster. Napster was highly innovative, bringing every song to a listener’s fingertips, eliminating stock-outs and trips to a physical record store. Yet Napster’s overall approach was grounded in illegality, and the company’s valuable innovations couldn’t undo the fundamental intellectual property theft. Under pressure from artists and recording companies, Napster was eventually forced to close.

But Napster’s demise did not doom musicians and listeners to return to life before its existence. Instead, we got iTunes, Pandora, and Spotify — businesses that retained what was great and lawful about Napster while operating within the confines of copyright law.
On top of all of this, it appears that Lyft has spent years for the rocks at Uber to be turned over revealing the putrescence underneath, and has hit the ground running:


There was nothing inevitable about discomfort with Uber’s scandals driving a rush to Lyft. But Lyft, consciously or not, had correctly identified Uber’s weakness years ago. Uber was unfriendly, so Lyft would be friendly. Uber’s logo was sleek and silver and black, and so Lyft’s would be a bright pink mustache. Uber’s vision of driverless cars sounded like Skynet. Lyft painted a picture of a world with wider sidewalks and more parks.

Some of this was embedded in the company’s origins. Lyft originally distinguished itself by trying to make ride hailing a social experience. You sat in the front seat and fist-bumped the driver. Payment was made through “donations.” This was, in part, Lyft’s way of sidestepping the taxi regulations that Uber simply bulldozed past. And, to be honest, it was annoying — today, Lyft offers much the same frictionless, professionalized ride-hailing experience Uber does. But it seeded an idea of Lyft as a gentle, human company, and Lyft continued to build on that brand.

To Uber, Lyft’s business model was maddening. It took an Uber to pound through the regulations, to take the risks, to build the future. Then Lyft rolled behind with its dumb mustaches and friendly PR operation and did much of what Uber did without incurring the reputational cost.

But the wisdom of that strategy is apparent now. The risk with Uber wasn’t that it would fail at ride hailing. It was that it would lose the public’s trust. For a competitor to benefit from that stumble, it would have to be able to give anxious riders what they wanted: a ride-hailing company that really did seem nice enough, an Uber alternative you could actually trust.
I'm not sure that Lyft consciously positioned itself as an alternative to the deep inhumanity of Ubers Randian vision, but that is where it stands now, and it is in most of same markets, and right now, at least on the basis of the ads I see, Uber is begging for drivers, and Lyft is not.  (I've seen at least 20 Uber ads, and non from Lyft) for drivers over the past week.)

It sucks to be Uber right now, not because Uber has had a bad week, or because the future of the enterprise is in serious doubt, but because Uber is simply evil, much like the SS in that hysterically funny Mitchell and Webb sketch.

It sucks to be Uber right now because being Uber simply sucks.

This is Beyond Contempt

You know that someone is doing something very wrong when Facebook is the hero of the story.

In this case, Facebook refused a warrant from Minnesota cops against Philando Castile's girlfriend after they shot him to death in what is clearly an attempt to dig up dirt on the young woman: (There was no similar review of Jeronimo Yanez who shot Castile)
Everything anyone has ever said about staying safe while interacting with the police is wrong. That citizens are told to comport themselves in complete obeisance just to avoid being beaten or shot by officers is itself bizarre -- an insane inversion of the term "public servant." But Philando Castile, who was shot five times and killed by (now former) Officer Jeronimo Yanez, played by all the rules (which look suspiciously like the same instructions given to stay "safe" during an armed robbery). It didn't matter.

Castile didn't have a criminal record -- or at least nothing on it that mattered. Otherwise, he wouldn't have been allowed to own a weapon, much less obtain a permit to conceal the gun. Castile told Yanez -- as the permit requires -- he had a concealed weapon. He tried to respond to the officer's demand for his ID, reaching into his pocket. For both of these compliant efforts, he was killed.

Castile's shooting might have gone unnoticed -- washed into the jet stream of "officer-involved killings" that happen over 1,000 time a year. But his girlfriend, Diamond Reynolds, immediately live-streamed the aftermath via Facebook. Her boyfriend bled out while responding officers tried to figure out what to do, beyond call for more backup to handle a dead black man sitting in his own vehicle. Only after Yanez fired seven bullets into the cab of the vehicle did officers finally remove his girlfriend's four year old daughter.

To "win" at killing citizens, you must start the spin immediately. Yanez spun his own, speaking to a lawyer less than two hours after killing Castile. Local law enforcement did the same thing. Documents obtained by Tony Webster show Special Agent Bill O'Donnell issued a warrant to Facebook for "all information retained" by the company on Diamond Reynolds, Castile's girlfriend. This was to include all email sent or received by that account, as well as "chat logs," which presumably means the content of private messages. The warrant also demands any communications that may have been deleted by Reynolds, as well as metadata on photos or videos uploaded to Facebook. It came accompanied with an indefinite gag order.

Why would law enforcement want (much less need) information from the victim's girlfriend's Facebook account? It appears officers were looking to justify the killing after the fact. The following sworn statement was contained in the affidavit:

………

The only upside -- and it's incredibly small given the surrounding circumstances -- is Facebook refused to hand over the information on the grounds that the indefinite gag order was unconstitutional. Faced with this pushback, Minnesota police withdrew the warrant. But in the end, Yanez was acquitted and Philando Castile is still dead -- a man who did nothing more than try to comply with an officer's orders.
Seriously, law enforcement in the United States is deeply and profoundly broken.