Google has a Justice problem, and Tesla moves the AV goal line — again

Here's the beef

One of the most heated discussions among watchers of The Wrap this week was about a minimum-wage law that impacts relatively few people in only one state. But since data from the six months since California began mandating $20-an-hour for fast-food workers (only) defies conventional wisdom, there was … pushback.

The conventional wisdom is that a cost shock like this, especially in a margin-challenged slice of an industry whose customers are particularly price sensitive, means that there would be either material job cuts or material price increases, or both. What the University of California Berkeley’s Institute for Research on Labor and Employment found, however, was that neither happened. Per @Quartz:

Using an analysis of over 35,000 Glassdoor job postings, menu prices from nearly 1,600 restaurants, and Bureau of Labor Statistics (BLS) employment data, the results were compelling: The average hourly wage for fast food workers surged by 18%, yet employment levels remained stable.

The study contradicts the common belief that higher wages would require workforce reductions. The policy change did lead to a modest price increase of about 3.7% for menu items, translating to an additional 15 cents on a $4 burger.

However, the increase is significantly lower than industry predictions, suggesting that many fast food chains absorbed the costs rather than passing them onto consumers, the study noted. It’s likely that the price increases raised restaurant revenue, partly because fast food is “price-inelastic.”

There was a caveat: Separate data showed that the chains "had actually been raising prices by 7% in the six months leading up to the wage increase." Does that pre-mandate 7% undermine the study's findings?

I was fortunate to have a very thoughtful exchange with Shannon Linville , who pushed back on just about every aspect of the study and the reporting around it:

In the CA minimum wage article it states that after the law went into effect prices went up by 3.7% and after it was passed but just before enactment they went up 7%. So that is a total of 10.7%. That doesn't sound insignificant to me. And most people get an actual meal, not just a small $4 burger. That means a likely $1.50-$2 increase for the typical customer.

Also, it didn’t state employment numbers or number of hours or benefits that were cut. The restaurants could be employing the same number of workers but with 25% less hours than they had before.

Lastly, even if things were to be as rosy as the article makes it out to be and the costs were completely absorbed, that is not a good thing either because it is not investors or multi-millionaire executives that are absorbing the costs. It is the small business owners and franchisees that have to absorb it, or not, and just go bankrupt.

We went back and forth a bit — too much to excerpt here — but Ms. Linville got the last word. And, for the record, this is the kind of constructive conversation about professional issues that we editors here at LinkedIn covet.

The reason stories like this raise passions, I think, is because they are about some degree of social engineering. Everybody who gets only the minimum doing manual labor probably deserves a raise — why should fast-food workers be a protected class?

And while governments have an interest in seeing their citizens get a fair shake, they also have the power to do so without impairing the private sector — it's called the tax code. Because it's not what you make — it's what you keep. Both presidential candidates have embraced this approach for workers who depend on tips, saying they'd support legislation that would no longer consider them taxable income.

You may love or hate that idea — but it would relieve SMB restaurateurs from having to figure out NOW how are we going to balance the books?!?!

The Department of Justice dropped the second shoe, and it was a big one. Among the remedies it says it will recommend to a court that found Google a monopolist was a break-up of the tech giant. They have other ideas, but there is a common theme: Prevent Google from extending its past dominance into AI.

This, too, raised passions, and not just at Google. Ordinarily laconic CNBC anchor Jim Cramer — just kidding — went off on the pursuit not only of $GOOG but $AAPL and $AMZN — “I find this endless string of government investigations wrong-headed, pointless and, frankly, even anti-American,” he said.

“Google’s an aggressive company. It has big reach, got a lot of power, operates in many markets," he opined on his aptly-named evening show, @Mad Money. "But I defy you to find any regular people in this country who think of Google as a bad actor,” he said. “Google search is the most incredible bargain in the world, and the same goes for YouTube.”

Which may or may not be the point. The purpose of DOJ suit and of other regulatory actions against Big Tech players who are big enough to control massive market share is to protect the entry for little tech — which each of these companies once was.

The backstories are all a little different, but the outcome the same. 谷歌 didn't invent internet search — it was an upstart at a time when Yahoo ruled. 苹果 didn't invent the smartphone — 诺基亚 dominated with sleek feature phones, and BlackBerry's were so sought-after that they were called crackberries. And shopping? Been around for millenia. 亚马逊 wanted to be the world's biggest bookstore when that title had been held by Barnes & Noble, Inc. for more than a century — and then decided it wanted to be the world's biggest store, and didn't report a profit for its first eight years.

The argument: Being a monopoly — 70% market share per antitrust law — is fine, unless you start acting like a monopolist by doing things like charging onerous prices to app developers who have no recourse, making it inconvenient to leave your walled garden, and by sheer sway prevent seedlings from emerging that, in time, might just put you on your back foot.

The problem is, we don't know what we don't know. Which is why we have rules. In the meantime, a confused or indifferent public might be wondering what all the fuss is about.

Driverless, but a bit directionless

So, let’s get this out of the way: I am not an autonomous-vehicle denier, but I am an AV doubter, and I have been in the doubt column for a very long time.

Back in 2015, the Dawn of the AV era, I wrote a piece arguing that it was a super cool idea whose time would never come. (I included a gem that Google was in talks with major automakers to — ahem — bring self-driving cars to market by ... 2020. But I digress).

My skepticism was not entirely because the necessary and sufficient tech would have to make decisions that are hard to anticipate and execute spontaneously — even now, in the age of AI that nobody that saw coming during the decade that ensued. But also because adoption would be a tough sell, and coexistence with vehicles driven by humans would mean AVs would be at a disadvantage, obliged to always follow the rules.

Little did I know that pedestrians in a bastion of liberalism and tech open-mindedness like San Francisco would be the first to take to the streets to keep AV off the streets.

Elon Musk has long been a major proponent of the dream of Level 5 full self-driving. He has put his money where his mouth is. In this arena, like the many others in which he chooses to compete, he has enormous street cred. But the devil is in the details, especially when it comes to large, heavy, moving objects that can kill and destroy if not properly controlled.

Now, about last night…

Tesla ’s robotaxi unveil did not impress people who have influence at least in the investor community on whether Musk is on the right track or whether he's maybe pulled back that football one time too many. The seven-minute event included an admittedly good-looking prototype, a proposed MSRP of $30,000 and a release date "probably" before 2027.

But ... Per Investor's Business Daily :

"That's it? Disappointing lack of detail," Adam Jonas, Morgan Stanley's high-profile auto analyst and a TSLA bull, proclaimed in his investor note Friday morning. Wells Fargo analysts echoed that sentiment, writing that Tesla's robotaxi event was mostly "razzle-dazzle" with "little substance."

LinkedIn members also had fun with this one. "So we will actually see them in 2029 and they will cost $80,000 and the passengers will have to wear helmets," shared Thomas Abelmann .

I genuinely am a true believer in technology's ability to spontaneously, spectacularly solve. But will we live in a Minority Report world, where your car is your office or living room, by 2054 — the year in which the movie is set? That seems as likely as Pan Am offering commercial shuttle flights to an orbiting space station by 2001 …

For now, the enthusiasm still seems spectacularly exuberant.

There are only a few hundred self-driving taxis operating in about a dozen U.S. cities. None are Level 5, and none are privately owned and operated.

Tech finds a way. But not on any schedule.