Can Mitchonomics Fix the Broken Business of Higher Ed?

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Under Daniels, things have been generally cheery at Purdue. With return on investment increasingly important to students, given the price of attending and the corresponding debt, Purdue has something to sell: static costs and a good job if you graduate, especially in the science, technology, engineering, and math (STEM) fields. Since Daniels started in 2013, undergrad applications and enrollment have hit record levels, as have alumni donations, graduation rates, and the number of startups launched by researchers. Purdue has added 75 tenure-track positions in engineering and increased the number of students earning STEM degrees by 24 percent, with big gains among women (40 percent) and underrepresented minorities (65 percent). Daniels has rolled out initiatives that range from the audacious, such as interest-free financial aid in exchange for a percentage of future earnings, to the alcoholic: Boiler Gold, a craft beer that went on sale in West Lafayette this fall, is a collaboration among a local brewer, the university, and its food science department.
Daniels’s moves are driven by necessity. Founded in 1869, Purdue was part of a wave of public universities established after the Civil War that helped expand the middle class and propel the research advances that fueled the manufacturing boom in the 20th century. Today, tighter public spending means more schools are getting less state funding. Some, including the University of California at Berkeley, UCLA, Michigan, North Carolina, Texas, and Virginia, have replaced that loss with a combination of jacked-up tuition, even-more-jacked-up out-of-state tuition, successful sports programs, and donations from exuberant—and wealthy—alumni. Other large public universities, especially in the Midwest, have struggled to replace state funding cuts, making it tough to keep faculty from seeking higher salaries and bigger research budgets elsewhere. Professors at Midwestern public universities make about 30 percent less than their Northeastern counterparts.

If You Love Interesting Cars, You Owe Kenichi Yamamoto A Debt Of Gratitude

Patrick George:

Outside of Japan, Kenichi Yamamoto isn’t a household name. Not the way Henry Ford and Carroll Shelby and Lee Iacocca are. Yet most people who enter the auto industry don’t get to produce one of the greatest alternative engines ever made, or oversee the development of one of the most beloved sports cars of all time. Kenichi Yamamoto got to do both.
 
 Yamamoto died this week at the age of 95, according to news reports. His life and career saw him rise from the literal ashes of post-World War II Hiroshima to key roles within Mazda, and along the way, he would help the automaker rise in much the same way.
 
 Along the way he brought the world Mazda’s Wankel rotary engine—and Mazda remains the only car company to ever really get it right—and the MX-5 Miata. On two fronts, Yamamoto helped make Mazda the company it is today and inspired generations of enthusiasts along the way.
 
 Like many in Japan who came of age in the aftermath of WWII, Yamamoto didn’t have it easy. As a 1995 profile by Automotive News recounts, he graduated university in 1944, and briefly oversaw a fighter airplane factory. The year after that, his hometown of Hiroshima was essentially wiped out by a horrifying new kind of weapon the world had never seen before:

A bike-sharing war is coming to the U.S. as investors pour money into new entrants

Johana Bhuiyan and Rani Molla:

Forget the ride-sharing wars. Transportation has a new battleground: Bike-sharing.

After seeing great success in places like China and Europe, dockless or free-floating bike-sharing has started to expand aggressively into the U.S. — but with that comes staunch opposition from incumbent players and, in some cases, the very cities they’re trying to court.

For the uninitiated, dockless bike-sharing works a lot like today’s bike-sharing systems, except you can, in theory, park the bikes anywhere, locking and unlocking them by scanning a QR code with an app. That differs from current bike-sharing programs in places like New York and San Francisco, where bikes are docked to fixed locations.

Dockless bikes are also GPS enabled, allowing companies to easily track and move them around to places of high demand.

Fixing Manhattan’s Traffic Problem: Empty Seats, full streets

Schaller Consulting:

The rapid growth of app-based ride services such as Uber, Lyft and Via, also called Transportation Network Companies (TNCs) raises the question of how anti-congestion plans being developed by Governor Andrew Cuomo and Mayor Bill de Blasio should address the impact of TNC trips on traffic congestion, particularly in the most congested areas of Manhattan.

Using newly available data on TNC trips, this report examines the impact of TNC growth on Manhattan traffic conditions. Findings indicate that TNC growth has generated large increases in the number of TNC vehicles in the Manhattan Central Business District (CBD) between 2013 and 2017. Highlights:

Taking into account the decline in yellow cab trips, the combined number of taxi/TNC vehicles on weekdays in the CBD increased by 59 percent between 2013 and 2017.

In the afternoon peak from 4 p.m. to 6 p.m., there are over 10,000 taxi/TNC vehicles in the CBD, more than double the number in 2013.

One-third of the vehicles are empty, meaning between the drop-off of one passenger and pick-up of the next passenger, clogging the streets without any mobility benefit to anyone.

This rapid growth is the product of several factors: increased number of trips, a trend toward longer trips (in distance), slower traffic speeds, and drivers spending more time between fare-paying trips.

Subprime Auto Defaults Are Soaring, and PE Firms Have No Way Out

Gabrielle Coppola and Claire Boston :

Private-equity firms that plunged headlong into subprime auto lending are discovering just how hard it might be to get out.
 
 A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.
 
 In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit. At rates of 11 percent or more, there was plenty to be made as sales boomed. But now, with new car demand waning, they’ve found the intense competition — and the lax underwriting standards it fostered — are taking a toll on profits.

The Beginning of a Big Tech Backlash?

David Dayen:

The Beginning of a Backlash
 
 “I think you do enormous good … but your power sometimes scares me,” said Republican Senator John Kennedy of Louisiana in October to the general counsels of Facebook, Google, and Twitter at the first major congressional hearing on Big Tech in years. The topic was Russian interference with the 2016 presidential election, but the testimony illuminated the platforms’ domination of large parts of American life, without any interest in managing that control. Malign actors could so easily penetrate platform defenses because there weren’t any. Facebook has five million advertisers at any one time; it couldn’t possibly vet them if it tried.
 
 Furthermore, tech firms have no incentive to interfere with the source of so much revenue. That’s why ProPublica could list discriminatory rental housing ads excluding races and ethnicities in 2016, and then again in 2017, after Facebook claimed to fix the problem. That’s why Google is purging videos and disabling comments on YouTube’s predatory, sexualized user content aimed at children, but not always removing the predators’ accounts. Allowing the narrowest possible targeting and the maximum possible targets has built the most lucrative ad mechanism in history, and it generates big bucks, even if the bill is paid in rubles.
 
 The hearings were important more for their explanatory power than for the technicalities of election integrity. “The end of the story is not Russia hacking the election, but that gross harm exists,” says Marshall Steinbaum, research director at the Roosevelt Institute. It filled out the picture on these platforms, whose operations we understand as much as the proverbial blind man feeling around an elephant. “We need to make sure that the public fully understands the scope of the problem we face, and how it could be dramatically worse, given the speed at which these companies are growing,” says Lina Khan, legal policy director at the Open Markets Institute.
 
 We don’t know how our data is handled. We don’t know how algorithms nudge us into certain apps or products. We don’t even have a confirmed figure of Amazon Prime memberships (recent estimates range between 52 million and 85 million households). There are nearly 270 million fake and duplicate accounts on Facebook, a number they quietly updated only in November.
 
 Platforms like Google have invested heavily in the academic research establishment. The search giant has funded around 100 public research papers since 2009, with up to $400,000 in seed money for each, according to data from The Wall Street Journal. Most of the research papers failed to disclose Google’s funding; Google even gives notes on the studies before they get published. This academic payola tilts the debate about how these businesses work, and in whose interest.

Subprime Auto Defaults Are Soaring, and PE Firms Have No Way Out

Gabrielle Coppola:

Private-equity firms that plunged headlong into subprime auto lending are discovering just how hard it might be to get out.
 
 A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.
 
 In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit. At rates of 11 percent or more, there was plenty to be made as sales boomed. But now, with new car demand waning, they’ve found the intense competition — and the lax underwriting standards it fostered — are taking a toll on profits.

Uber Dealt Blow as EU’s Top Court Rules It Is a Transport Company

Natalia Drozdiak:

Uber Technologies Inc. suffered a major defeat in its effort to overturn strict rules and licensing requirements in Europe, after the bloc’s highest court Wednesday ruled the ride-hailing company should be regulated as a transportation service, rather than a digital service.

The judgment by the European Court of Justice won’t force Uber to curtail most of its services in Europe, but the decision is a blow to the company’s efforts to use courts to lighten its regulatory load—and forces it to deal more directly with national and local governments that set rules governing car and transport services in Europe. Those authorities have sought to hold Uber to often-strict rules and licensing requirements that apply to taxi and traditional car-hire services.

“This ruling will not change things in most EU countries where we already operate under transportation law,” an Uber spokeswoman said. “As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.”

Still, the decision could have wider ramifications for Uber, and other sharing-economy firms, in markets beyond Europe. Officials here over recent years have taken a more aggressive stance than other jurisdictions on a wide array of regulatory and enforcement issues affecting Silicon Valley firms—including taxes, privacy and alleged anti-competitive behavior. While the legal reach of such rulings extends only to Europe, other jurisdictions have started looking to the continent as an example when tackling regulatory and enforcement issues on their own turf.

China Blocks Foreign Companies from Mapping Its Roads for Self-Driving Cars

Stephen Edelstein:

Self-driving cars need high-quality digital maps to function properly. They not only use digital maps to find their general location, but also in some cases to locate landmarks that aid maneuvering in low-viability situations, or when a GPS link isn’t available. Consequently, accruing map data has become a major priority for automakers and tech companies. But the world’s largest new-car market is throwing up a major roadblock to these efforts.
 
 The Chinese government is blocking foreign companies from mapping its roads in great detail, according to a Financial Times report. The restrictions, which reportedly do not apply to Chinese firms, are being instituted in the name of national security. China is concerned about spying.
 
 China has restricted the recording of geographic information for more than a decade because it believes giving other countries access to that information constitutes a security risk. Geographic surveys can’t be performed without permission from the government, and many digital cameras don’t record GPS coordinates for geotagging, as they do in other countries, according to Fortune.
 
 The restrictions on mapping mean foreign companies looking to sell or operate self-driving cars in China may have to partner with local firms to gain access to all of that precious map data. This wouldn’t be too different from the situation foreign automakers currently face in China.

China to spearhead US$1 trillion autonomous driving revolution

Karen Yeung:

Car-based “mobility services”, such as car-sharing, ride-hailing as well as driverless cars with entertainment, information and communications services, are projected to generate US$1 trillion in revenue for suppliers globally in 2040 from nearly zero a decade ago, according to latest industry figures from information and analytics provider IHS Markit.

And China, the world’s largest market for electric cars, is predicted to be in pole position to shape the future of such services, transform global business models, improve road safety conditions and cut pollution, according to industry experts.

So far, 290 cities have initiated “smart-city” pilot projects controlled by artificial intelligence (AI) technology, including 93 that are focused on mobility that could potentially use infrastructure interlinked by software to allow driverless cars, or autonomous vehicle (AV), and shared-driving models.

How the auto industry is preparing for the car of the future

McKinsey:

Autonomous and electric cars, connectivity, and ridesharing are changing the way auto industry players think about value chains, data analytics, and manufacturing.

Behind all the talk of robo-cars, electric vehicles, and increased car connectivity is a focus by major car companies on serving customers’ more intricate technological needs. In this episode of the McKinsey Podcast, senior partners Asutosh Padhi and Andrea Tschiesner speak with McKinsey’s Simon London about how four trends—autonomous driving, connectivity, electrification, and ridesharing—are paving the way for entirely new forms of mobility.

Some go to production hell. I went to production heaven

Bertel Schmitt:

The car factory has been built by Swedish carmaker Volvo. The factory is “owned by Geely, financed by Geely, and operated by Volvo,” tells me the plant’s manager Benoit Demeunyck, a bearded Belgian with an imposing figure, especially when surrounded by smaller Chinese. Demeunyck has been mass-producing car factories for many years. Luqiao is the third he built in China, “after Daqing and Chengdu,” and it looks like there will be more.

How Volvo came to China is another platitude-defying story.

When Volvo’s former owner Ford was perilously short of money during carmageddon, Geely bought Volvo in 2010 for a bargain-basement $1.5 billion. It was one of those rare deals that worked all around. Ford came through alive, if not entirely unscathed (it also sold Jaguar Land Rover to India’s Tata, Aston Martin to private investors, and its controlling share in Mazda to Japanese banks.) Volvo was not dismantled and shipped-off to China, as many predicted.

Geely did not buy Volvo for its worn-out toolings, or its dated manufacturing lines from the Ford era. Geely bought Volvo for its ability to come up with class-leading, future-proof technology. Volvo engineers gave Geely a head-start in autonomous tech, and they developed the Compact Modular Architecture (CMA), a smaller but equally advanced version of Volvo’s acclaimed Scalable Product Architecture (SPA). Flexible and scalable architectures are the secret to success in the auto business. Volkswagen has MQB and MLB, Toyota has TNGA, Renault-Nissan-Mitsubishi has CMF-A, B, and C.

Signs Of The Peak: These 10 Charts Reveal An Auto Bubble On The Brink

Tyler Durden:

U.S. auto sales have hovered well north of replacement rates for several years now on the back of an improving labor environment and more importantly an extremely accommodating financing market characterized by $0 down, 0% interest loans to subprime borrowers, with perpetually longer maturities to help manage monthly payments…because if your monthly payment is $500 you can afford it, right?

China Goes All In on the Transit Revolution

Nathaniel Bullard:

In 2009, the southern Chinese city of Shenzhen rolled out its first electric city bus. As of May of this year, it had 14,500 of them on the road — and by the end of this month, the city plans to have an all-electric fleet. Shenzhen’s efforts are another example of how China is leading the way in transforming urban transportation.

Shenzhen’s effort is striking in its scope. The largest city bus fleet in North America is in New York City, whose 5,700 buses put it well ahead of Los Angeles, New Jersey, suburban Chicago and Toronto. These five fleets total 14,200 buses.

Shenzhen’s fleet of electric buses is bigger than the five largest North American bus fleets combined. Not their electric bus fleets — their entire bus fleets.

China Will Lead an Electric Car Future, Ford’s Chairman Says

Keith Bradsher:

The world’s automakers are just starting to bet on an electric car future — and already, one of the most powerful people in the industry says that future belongs to China.

The Ford Motor Company said on Tuesday that it planned to introduce 15 battery electric or plug-in gasoline-electric hybrid car models in China by 2025. Speaking in Shanghai, William C. Ford Jr., Ford Motor’s longtime executive chairman, outlined why in an unusually blunt comment.

The Latest Bull Case for Electric Cars: the Cheapest Batteries Ever

Mark Chediak :

The kind of battery that powers electric vehicles is now the cheapest it’s ever been thanks to a global ramp-up in production.

Lithium-ion battery packs are selling at an average price of $209 a kilowatt-hour, down 24 percent from a year ago and about a fifth of what it was in 2010, a Bloomberg New Energy Finance survey shows. The rate has further to fall — reaching below $100 a kilowatt-hour by 2025, according to a report by BNEF analyst James Frith.

That’s a magic number for the electric car business. According to Frith, $100 is widely seen as “a tipping point in the adoption of EVs.”

Total cost of ownership and market share for hybrid and electric vehicles in the UK, US and Japan

Kate Palmer and John Nellthorp:

New powertrain technologies, such as Hybrid Electric Vehicles, have a price premium which can often be offset by lower running costs. Total Cost of Ownership combines these purchase and operating expenses to identify the most economical choice of vehicle. This is a valuable assessment for private and fleet purchasers alike. Studies to date have not compared Total Cost of Ownership across more than two vehicle markets or analysed historic costs. To address this gap, this research provides a more extensive Total Cost of Ownership assessment of conventional, Hybrid, Plug-in Hybrid and Battery Electric Vehicles in three industrialized countries – the UK, USA (using California and Texas as case studies) and Japan – for the time period 1997–2015. Finally, the link between Hybrid Electric Vehicle Total Cost of Ownership and market share is analysed with a panel regression model.

In all regions the incremental Total Cost of Ownership of hybrid and electric vehicles compared to conventional vehicles has reduced from the year of introduction and 2015. Year on year Hybrid Electric Vehicles Total Cost of Ownership was found to vary least in the UK due to the absence of subsidies. Market share was found to be strongly linked to Hybrid Electric Vehicle Total Cost of Ownership through a panel regression analysis. Financial subsidies have enabled Battery Electric Vehicles to reach cost parity in the UK, California and Texas, but this is not the case for Plug-in Hybrid Electric Vehicles which haven’t received as much financial backing. This research has implications for fleet purchasers and private owners who are considering switching to a low-emission vehicle. The findings are also of interest to policymakers that are keen to develop effective measures to stimulate decarbonisation of the fleet and improve air quality.

Via Steve Crandall.

Estimating the Cost of Waiting for Nearly Perfect Automated Vehicles

Nidhi Kalra, David G. Groves :

How safe should highly automated vehicles (HAVs) be before they are allowed on the roads for consumer use? This question underpins much of the debate around how and when to introduce and use the technology so that the potential risks from HAVs are minimized and the benefits maximized. In this report, we use the RAND Model of Automated Vehicle Safety to compare road fatalities over time under (1) a policy that allows HAVs to be deployed for consumer use when their safety performance is just 10 percent better than that of the average human driver and (2) a policy that waits to deploy HAVs only once their safety performance is 75 or 90 percent better than that of average human drivers — what some might consider nearly perfect. We find that, in the long term, under none of the conditions we explored does waiting for significant safety gains result in fewer fatalities. At best, fatalities are comparable, but, at worst, waiting has high human costs — in some cases, more than half a million lives. Moreover, the conditions that might lead to comparable fatalities — rapid improvement in HAV safety performance that can occur without widespread deployment — seem implausible. This suggests that the opportunity cost, in terms of lives saved, for waiting for better HAV performance may indeed be large. This evidence can help decisionmakers better understand the human cost of different policy choices governing HAV safety and set policies that save more lives.

What SUVs Reveal About the Erosion of American Society

Olga Khazan:

Millennials don’t always buy cars. But when they do, they apparently buy SUVs.
 
 “The floor at this year’s Los Angeles Auto Show will look a lot like America’s roads: full of SUVs,” the AP wrote this week. Car sales overall are actually slightly down this year, but SUV sales are up 6 percent.
 
 The AP speculated that the boom in Wranglers and Explorers is the result of “a combination of low gas prices, growing millennial families, and a host of new models.”
 
 But according to the authors of The Spirit Level, a book about the human costs of social inequality by epidemiologists Kate Pickett and Richard Wilkinson, skyrocketing SUV sales could also be tied to declining levels of social trust in U.S. society.
 
 Fewer Americans now agree with the statement “most people can be trusted” than at any point in the past 40 years, and plummeting social trust tends to motivate individuals to make decisions that will protect their own family, class, or tribe.

Living in cars, working for Amazon: meet America’s new nomads

Jessica Bruder:

Millions of Americans are wrestling with the impossibility of a traditional middle-class existence. In homes across the country, kitchen tables are strewn with unpaid bills. Lights burn late into the night. The same calculations get performed again and again, through exhaustion and sometimes tears.
 
 Wages minus grocery receipts. Minus medical bills. Minus credit card debt. Minus utility fees. Minus student loan and car payments. Minus the biggest expense of all: rent.
 
 In the widening gap between credits and debits hangs a question: which bits of this life are you willing to give up, so you can keep on living?
 
 During three years of research for my book, Nomadland: Surviving America in The Twenty-First Century, I spent time with hundreds of people who had arrived at the same answer. They gave up traditional housing and moved into “wheel estate”: RVs, travel trailers, vans, pickup campers, even a salvaged Prius and other sedans. For many, sacrificing some material comforts had allowed them to survive, while reclaiming a small measure of freedom and autonomy. But that didn’t mean life on the road was easy.
 
 My first encounter with one group of the new nomads came in 2013, at the Desert Rose RV park in Fernley, Nevada. It was populated by members of the “precariat”: temporary laborers doing short-term jobs in exchange for low wages. Its citizens were full-time wanderers who dwelled in RVs and other vehicles, though at least one guy had only a tent to live in. Many were in their 60s and 70s, approaching or well into traditional retirement age. Most could not afford to stop working – or pay the rent.