Uber And The False Hopes Of A Sharing Economy

Regulating Ride-Sharing: New York May Be The Model For The Future

Writing On The Wall: London and Vancouver Moving In A Similar Direction

At its inception, Uber touted itself as a shining example of the “sharing economy” described by Jeremy Rifkin, in this now famous book, The Third Industrial Revolution. As time has passed the reality has been radically at odds with a sharing economy.  Among the many issues that have emerged has been the legacy of Uber’s ugly corporate culture, secret apps used to confound regulators, and to intimidate journalists, a Justice Department investigation of illegal practices, including 200 Uber employees conspiring together to attack Lyft’s operations. The proverbial chickens have come home to roost, as municipalities around the world have begun to regain control of transportation policy within their jurisdictions, and the inflated valuations of these unicorns begin to deflate.

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READ MORE: Wharton Newsletter: Regulating Ride-Sharing: New York May Be The Model For The Future

From the Wharton Newsletter/Podcast, August 14, 2018

The largest market for Uber, Lyft and other ride-hailing app companies — New York City — last week had its first successful attempt at regulating the growth of the nascent industry. On Wednesday, the New York City Council passed a series of bills, notably one that places a one-year moratorium on the issue of new for-hire vehicle (FHV) licenses. Other bills establish minimum wage levels for ride-hailing service drivers; require FHVs to submit data on ridership with penalties for failure to do so; and create driver-assistance centers to provide counseling services.

New York City had little option to act, especially after a similar move by Mayor Bill de Blasio fell apart following intense lobbying by Uber. Increasing road congestion by cars was the biggest contributing factor to the passage of the bill capping new licenses, corroborated by a decline in subway ridership. The number of FHVs in the city had grown from 65,000 in 2015 to about 130,000 currently. Uber is the biggest gainer, as shown by its almost hockey-stick growth in ridership.

New York City took the right steps to regulate the FHV industry, according to Wharton professor of operations, information and decisions Senthil Veeraraghavan. “This is the right way to go,” he said. “This is a great experiment that we’re [witnessing].”

“They had to do something,” noted Wharton management professor John R. Kimberly. “This is part of an obviously much deeper story … and the timing seems to be right.”

The move to ensure that drivers receive a minimum pay of $15 an hour after they cover expenses is also significant, said James Parrott, director of economic and fiscal policies at the New School’s Center for New York City Affairs. He had worked on an extensive study for the city’s Taxi and Limousine Commission that looked at the ride-hailing sector and its growth, and in particular its impact on driver earnings.

Kimberly, Veeraraghavan and Parrott discussed the implications of the legislative actions governing New York City’s for-hire vehicle industry on the Knowledge@Wharton radio show on SiriusXM. (Listen to the podcast at the top of this page.)

“This is the right way to go. This is a great experiment that we’re [witnessing].”–Senthil Veeraraghavan

Incentive to Improve

The establishment of a minimum pay for drivers is an important incentive for ride-hailing app companies to increase the utilization of drivers’ time, said Parrott. Drivers currently have a passenger in the car for only about 36 minutes of every hour, which means they don’t have a paying passenger for 42% of their time, he added.

Up to now, Uber’s business model has been “to flood the streets with cars,” since the firm gets a commission based on every fare, Parrott said. “There’s been no incentive for them to better utilize the drivers’ capital,” he added. “Keep in mind; this is an industry where the capital investment in the rolling stock – the cars – is entirely put up by the drivers. The pay standard gives them an incentive by allowing them to pay a little bit less if they make better utilization of the drivers’ time.”

The city will use the year ahead to study congestion levels in the city and find ways to redress that, including through congestion pricing mechanisms. Last week’s actions took a step in that direction with a surcharge on cabs below 96^th Street ($2 per ride for medallion trips and $2.75 for ride-hailing app cabs). It will also allow the city to monitor how the pay standard works out, and how the ride-hailing app companies make better utilization of drivers’ time, Parrott said.

“Even if you increase utilization by 10 percentage points – from 58% to 68% – you would only increase average wait times across the city about 20 to 30 seconds,” said Parrott, citing his study’s findings. “We sense that most people can live with that.”

According to Parrott, the number of Uber trips in the city increased 100% in 2016 and 70% in 2017. Going forward, he said that figure could probably grow another 40% over the next year, “even without any additional cars on the street – just from increased efficiency.” Those increased efficiencies could come from a variety of quarters, including urging part-time drivers to go full-time and recruiting some of the drivers from the non-app services, such as the traditional livery car segment that has no minimum pay standards.

“Uber and the drivers are on both sides of the story,” noted Veeraraghavan. Riders want low waiting times, which can be achieved with more vehicles. But drivers want fewer drivers, because that would allow them to get better pricing, he said.

“Granted it might have been done a lot sooner, but it seems to me that at least in the city of New York there’s a real, serious effort to get their arms around the problem.”–John Kimberly

Worsening Congestion

Parrott said New York City had first started talking about capping Uber and Lyft cars in 2015, drawing “heavy pushback” from the ride-hailing industry at that point. Between then and now, the number of trips using ride-hailing apps has skyrocketed to 600,000 a day, which is more than five times the level in 2015, he noted. A 2016 study by the mayor’s office proposed several remedial measures including those to reduce congestion, improve air quality, protect drivers’ interests and enhance passenger experiences.

Parrott said that while the city bears some responsibility for not acting sooner on the unbridled growth of the FHV industry, it faced a different climate when it attempted that in mid-2015. Uber at the time controlled 90% of the market in the city as opposed to 66% now, he pointed out. Suicides by six cab driversalso highlighted the “economic crisis” and changed public opinion in favor of the changes, he said.

“Theoretically speaking, there’s always a gap between what firms will want to optimize and what society wants to optimize,” said Veeraraghavan. “And it’s hard for individuals to see what’s optimal for this society.” However, as city residents have begun seeing the impact of the FHV industry’s growth — including on public transportation ridership numbers — they now have had a better understanding. “So we have a redo from 2015 to 2017 … and we’re seeing better support for this.”

“Granted, it might have been done a lot sooner, but it seems to me that at least in the city of New York there’s a real, serious effort to get their arms around the problem and to figure out how to solve it,” said Kimberly.

Congestion in New York City has worsened in recent years with not just the influx of cabs, but also other vehicles “providing instant service for a variety of needs that people believe they have,” including delivery vehicles, said Kimberly. “The density of tourists on the sidewalks is so great it spills over into the street – that slows down traffic and makes it hard for cars,” he added. The option of levying congestion pricing is being seriously considered also at the state headquarters in Albany, he noted.

At the same time, “the growth of FHVs has meant that there’s much better transportation access in the outer boroughs, so the city doesn’t want to diminish that newly available service,” said Kimberly. “And yet the city also has a great interest in making sure that the drivers are able to remain economically viable to meet their expenses and to earn a decent living.” Higher wages would also enable drivers to work fewer than the 10-12 hours a day they now put in, he added, and that would have safety benefits as well.

“If they can show that they have stability and regulatory certainty in their largest market in the U.S., that will give investors a lot more certainty….”–James Parrott

Congestion pricing will also help fund investments in maintaining and upgrading the city’s aging subway and public bus system, Parrott said. The decline in mass transit ridership is not just because of the growth of the FHV industry, he noted; commuters are turning away because of “under-investment and under attention to adequately maintaining the mass transit system.”

Uber’s Leadership Challenge

The changes also highlight a “leadership challenge” for Uber, said Kimberly. “They have hundreds of markets around the globe, and each market has its own political configuration, and its own way of doing business,” he noted. “When you think about the challenges of operating an enterprise like Uber on a global basis with all the local idiosyncrasies that need to be taken into account both economically and politically, it’s a really interesting [problem].”

Uber, which is currently valued at about $62 billion, is said to be preparing for an initial public offering of its stock next year. “If they can show that they have stability and regulatory certainty in their largest market in the U.S., that will give investors a lot more certainty about the potential prospects for the company,” said Parrott.

Uber’s impact on employment is also large, Parrott noted. Uber drivers are not legally considered employees, but if they were to be treated as full-time equivalent (FTE) employees, Uber would be the largest private-sector employer in New York City, with about 35,000 FTEs, he said. “[Ride sharing] has become a huge enterprise in New York City, and it and it’s not what people usually think of as gig work where you are doing this to supplement other income. We found that 80% of the drivers bought their cars mainly for the purpose of providing transportation services, and two thirds of the drivers are full-time drivers.”

Parrott noted that both Uber and Lyft embraced the pay standard proposal. But Kimberly thought they had little option in the matter. “I don’t think it’s by accident that they’re embracing the pay standard,” he said. “Left to their own devices, they probably would not have done that. But there’s been so much social criticism – and valid criticism – of their models that they’ve really had no choice.”

OOPS!! Amazon’s Vancouver expansion tightens local competition for tech talent

SOMEONE FORGOT TO THINK OF THE UNINTENDED CONSEQUENCES

Marc-David Seidel, UBC Apologist for the Amazon Deal Predicts Pie In the Sky Bye and Bye

Tech workers are already in short supply and Amazon’s increased presence likely to lure workers away from local technology-based startups

What upsets me most about this well-written article by Jenny Peng, is that she has exposed the fact that the enthusiasm for bringing Amazon to Vancouver appears to have caused long-term economic blindness in exchange for short-term political gain. Prime Minister Justin Trudeau, BC Premier John Horgan, Vancouver Mayor Gregor Robertson,  and the Vancouver Economic Commission’s acting CEO Brian Buggey, and Sean Elbe, head of VEC’s Technology Sector all need to address serious questions about the probable negative economic impacts of the Amazon deal, not to mention the disconnect with earlier official enthusiasm for Vancouver as an entrepreneurial hub. Which will it be, Amazon or high-tech startups?

READ MORE:  Canada Is Not Silicon Valley

Prior to the Amazon deal, the Trudeau government, BC and the Vancouver Economic Commission had been promoting the Global Talent Stream visa initiative, which will indeed most likely benefit Amazon, but the situation for the Canadian government’s Startup Visa for immigrant entrepreneurial companies is far from favorable. So the Amazon deal seems to have sent another torpedo into the growth of the high-tech entrepreneurial economy in Vancouver.

Poignantly, one UBC Professor, Carson Woo, offers strong prima facie evidence from local companies of the probable damage, while another UBC Professor Marc-David Seidel acts as an apologist for Amazon, claiming that Amazon will create high-tech spinoffs sometime mañana. While Seidel may have a point, the reality is that such spinoff economic growth can literally take decades to develop, which offers weak justification for the Amazon decision. I offer the underwhelming examples of other such deals.  Portland, Oregon is one such example. Intel and Nike remain the anchor employers of thousands of employees between them, and though there has been some spinoff growth over the years, it has been not much to write home about or to rival the economic importance of Intel and Nike.  It is Seattle’s problem with Boeing.  Vancouver has just done the identical thing.

By JENNY PENGStarMetro Vancouver

Mon., April 30, 2018

Source: Amazon’s Vancouver expansion tightens competition for tech talent | The Star

VANCOUVER—Following Amazon’s announcement Monday that the company plans to add 3,000 jobs in Vancouver by 2022 with a new office, observers say this could increase the competition for highly skilled tech workers already in short supply.

The Seattle-based retail giant, which opened its first software development site in Vancouver in 2011 with over 1,000 employees, announced that the new jobs will be in e-commerce technology, cloud computing, and machine learning. Employees will be working in a tower the company plans to build on top of the old Canada Post office in downtown.

Carson Woo, associate professor of accounting and information systems at UBC’s Sauder School of Business, said hiring is “a zero-sum game” for tech companies.

He recalls sitting in on board meetings among high-level executives from some of the city’s top employers, who hoped Amazon doesn’t expand in Vancouver. Their reservation, Woo said, comes from the time and money they’ve invested in training these workers.

“Essentially, you’re taking people from other companies,” Woo said.

This is why Woo believes the Canadian government will eventually allow Amazon to hire from overseas like it did for Facebook and Microsoft in the past.

“Because otherwise, the local companies will really suffer,” he added.

Bill Klug, an instructor of cloud computing at the British Columbia Institute of Technology, said small and medium-size companies will feel the pressure especially in what they pay their staff when competing with large multinational tech corporations.

In addition to demand outweighing the supply of tech workers, Amit Venugopal, managing director at Ecenta Canada Services, said Vancouver’s high costs of living has deterred workers he tried to recruit from the east coast who said the salaries offered don’t always match the cost of living.

“Vancouver has a very small native growth of technology workers and the cost of living is prohibiting people from other parts of Canada” moving to B.C., he said. In addition, workers aren’t always interested in being a programmer and opt for work in business or technology management that create a skills gap that employers need to fill.

Despite the growing competition for skilled tech workers, Marc-David Seidel, associate professor at Sauder, said his research in labour mobility indicates that these jobs will help Vancouver’s ecosystem to grow because as some employees will stay with Amazon long-term, others will create start-ups of their own, invest in other start-ups or work for other organizations, adding to the diversity of the workforce.

He highlighted Austin, Texas and Silicon Valley as examples of where the spin-offs helped grow the local tech economy.

“These types of announcements are more a sign that the ecosystem has been growing,” he said, “and that the culture that’s developing the ecosystem is being recognized by international players.”

Jenny Peng is a Vancouver-based reporter covering business. Follow her on Twitter: @JennyPengNow

As Trump Tightens Legal Immigration, Canada Woos Tech Firms: But Canada Is Not Silicon Valley

There Is More To High-Tech Immigration to Canada Than Meets The Eye

My long-time business partner and I, one of us in Canada and the other in Silicon Valley, earlier this year launched a business targeted at bringing immigrant entrepreneurs to Canada, Vendange Partners. http://www.vendangepartners.com

From our years’of experience in Silicon Valley and with technology entrepreneurship around the World, we knew that many of the best and brightest young entrepreneurs abroad dreamed of bringing their ideas to the United States to forge their skills and their new companies.  But from our discussions both in California and overseas it is clear that Trumpism is having a profoundly negative effect on this flow of talent into the American economy, both individual technical talent and entrepreneurial teams looking to start companies and raise capital.

The Canadian government and some of the provinces, particularly British Columbia, Ontario, Quebec, and to some degree the Maritimes, have done a commendable job of promoting high-tech immigration and entrepreneurship.  The Global Talent Stream visa is an excellent vehicle as described in The New York Times article included in this post. Global Talent Stream attempts to address the need for technical talent for companies already operating in Canada.  The competition for such talent and the salaries offered in the United States are a major problem for Canadian companies, particularly in AI and robotics. Theoretically at least, a Global Talent Stream applicant with an employer lined up can be working in Canada within about two weeks.

The so-called “startup visa” program for founders and already established teams wishing to set up in Canada is more complicated.  The program requires a committed investment from a “designated” Canadian investor and a letter of endorsement among other requirements before the visa is granted. The difficulties of doing this are something of a Catch-22. In practice in the past, endorsement letters were written by government listed “designated” investors without actual investment, but this still did not result in a wave of high-tech startups coming to Canada. The only other option is for entrepreneurs to bring a significant amount of their own capital with them to Canada.  This option has led to abuse. At its original launch under the Harper government, the startup visa program, unfortunately, became a magnet for immigration scams.  Hence, the startup visa program remains over-subscribed with applicants bringing their own capital to qualify for the “startup” visa for up to five founders.

Finally,  There is also simply too little smart Canadian venture capital and too many startups competing for the limited funds. It is also commonly acknowledged that Canada’s investment institutions and the Canadian financial mentality are not well-aligned with the Silicon Valley investment culture. Major U.S. pension funds like the California Public Employees Retirement System (better-known as CalPERS) annually invests 10% of its entire portfolio in venture capital funds. The same cannot be said generally about Canadian pensions funds and investment banks, as one example of the differences. Much lower risk debt capital and convertible debt seem to be more popular products in Canada.  In defense, it is often pointed out that the Canadian economy is roughly one-tenth the size of the United States. Yet, on a relative scale, the Canadian venture capital industry still does not compare well. Add to this the fact that the Canadian government has historically been far behind other OECD industrialized nations in R&D investment in innovation and you have major problems.  Anecdotally, the sheer amount of money and number of available investors in Silicon Valley alone is well-over 5oo compared with a mere handful in Vancouver. When the more than one thousand local indigenous BC startups actively seeking capital are layered onto the available sources of risk capital in Vancouver, there is major local competition before the immigrant entrepreneurs even arrive in Canada. Looking for risk venture capital in Canada, a la Silicon Valley is problematic.

With that candid and sobering analysis of high-tech immigration to Canada, for individuals who have taken the time to do an in-depth analysis of themselves, and the pro’s and con’s of such a major move, Canada may still offer many advantages to entrepreneurs, and those advantages are only likely to improve over time.

Vendange Partners

 

Vancouver Technology Industry On Verge Of New Era

The Vancouver technology industry may well be on the verge of an extraordinary period of growth.  Global, national, and regional factors appear to be aligning in ways that could create an extraordinary economic opportunity for the Lower Mainland which could not have been anticipated.  Vancouver has been an endless topic of discussion about its comparability (or not) to Silicon Valley, the historical Canadian investment conservatism, and the lack of other resources necessary to create the “secret sauce” that makes a region achieve critical mass. That may be changing if only the convergence of factors is grasped and exploited.

In an expansion of regional cooperation, the University of British Columbia and the University of Washington today announced the establishment of the Cascadia Urban Analytics Cooperative.

Universities establish joint centre to use data for social good in Cascadia region

Media Release | February 23, 2017

University of Washington President Ana Mari Cauce, Microsoft President Brad Smith, and University of British Columbia President Santa J. Ono at the Emerging Cascadia Innovation Corridor Conference in Vancouver, B.C., September 20, 2016.

In an expansion of regional cooperation, the University of British Columbia and the University of Washington today announced the establishment of the Cascadia Urban Analytics Cooperative to use data to help cities and communities address challenges from traffic to homelessness. The largest industry-funded research partnership between UBC and the UW, the collaborative will bring faculty, students and community stakeholders together to solve problems, and is made possible thanks to a $1-million gift from Microsoft.

“Thanks to this generous gift from Microsoft, our two universities are poised to help transform the Cascadia region into a technological hub comparable to Silicon Valley and Boston,” said Professor Santa J. Ono, President of the University of British Columbia. “This new partnership transcends borders and strives to unleash our collective brain power, to bring about economic growth that enriches the lives of Canadians and Americans as well as urban communities throughout the world.”

“We have an unprecedented opportunity to use data to help our communities make decisions, and as a result improve people’s lives and well-being. That commitment to the public good is at the core of the mission of our two universities, and we’re grateful to Microsoft for making a community-minded contribution that will spark a range of collaborations,” said UW President Ana Mari Cauce.

Today’s announcement follows last September’s Emerging Cascadia Innovation Corridor Conference in Vancouver, B.C. The forum brought together regional leaders for the first time to identify concrete opportunities for partnerships in education, transportation, university research, human capital and other areas.

A Boston Consulting Group study unveiled at the conference showed the region between Seattle and Vancouver has “high potential to cultivate an innovation corridor” that competes on an international scale, but only if regional leaders work together. The study says that could be possible through sustained collaboration aided by an educated and skilled workforce, a vibrant network of research universities and a dynamic policy environment.

Microsoft President Brad Smith, who helped convene the conference, said, “We believe that joint research based on data science can help unlock new solutions for some of the most pressing issues in both Vancouver and Seattle. But our goal is bigger than this one-time gift. We hope this investment will serve as a catalyst for broader and more sustainable efforts between these two institutions.”

As part of the Emerging Cascadia conference, British Columbia Premier Christy Clark and Washington Governor Jay Inslee signed a formal agreement that committed the two governments to work closely together to “enhance meaningful and results-driven innovation and collaboration.”  The agreement outlined steps the two governments will take to collaborate in several key areas including research and education.

“Increasingly, tech is not just another standalone sector of the economy, but fully integrated into everything from transportation to social work,” said Premier Clark. “That’s why we’ve invested in B.C.’s thriving tech sector, but committed to working with our neighbours in Washington – and we’re already seeing the results.”

“This data-driven collaboration among some of our smartest and most creative thought-leaders will help us tackle a host of urgent issues,” Gov. Inslee said. “I’m encouraged to see our partnership with British Columbia spurring such interesting cross-border dialogue and excited to see what our students and researchers come up with.”

The Cascadia Urban Analytics Cooperative will revolve around four main programs:

• The Cascadia Data Science for Social Good (DSSG) Summer Program, which builds on the success of the DSSG program at the UW eScience Institute. The cooperative will coordinate a joint summer program for students across UW and UBC campuses where they work with faculty to create and incubate data-intensive research projects that have concrete benefits for urban communities. One past DSSG project analyzed data from Seattle’s regional transportation system – ORCA – to improve its effectiveness, particularly for low-income transit riders. Another project sought to improve food safety by text mining product reviews to identify unsafe products.

• Cascadia Data Science for Social Good Scholar Symposium, which will foster innovation and collaboration by bringing together scholars from UBC and the UW involved in projects utilizing technology to advance the social good. The first symposium will be hosted at UW in 2017.

• Sustained Research Partnerships designed to establish the Pacific Northwest as a centre of expertise and activity in urban analytics. The cooperative will support sustained research partnerships between UW and UBC researchers, providing technical expertise, stakeholder engagement and seed funding.

• Responsible Data Management Systems and Services to ensure data integrity, security and usability. The cooperative will develop new software, systems and services to facilitate data management and analysis, as well as ensure projects adhere to best practices in fairness, accountability and transparency.

At UW, the Cascadia Urban Analytics Collaborative will be overseen by Urbanalytics (urbanalytics.uw.edu), a new research unit in the Information School focused on responsible urban data science. The Collaborative builds on previous investments in data-intensive science through the UW eScience Institute (escience.washington.edu) and investments in urban scholarship through Urban@UW (urban.uw.edu), and also aligns with the UW’s Population Health Initiative (uw.edu/populationhealth) that is addressing the most persistent and emerging challenges in human health, environmental resiliency and social and economic equity. The gift counts toward the UW’s Be Boundless – For Washington, For the World campaign (uw.edu/boundless).

The Collaborative also aligns with the UBC Sustainability Initiative (sustain.ubc.ca) that fosters partnerships beyond traditional boundaries of disciplines, sectors and geographies to address critical issues of our time, as well as the UBC Data Science Institute (dsi.ubc.ca), which aims to advance data science research to address complex problems across domains, including health, science and arts.

Find other stories about: Cascadia Urban Analytics Cooperative, Emerging Cascadia Innovation Corridor Conference, Microsoft, University of British Columbia, University of Washington

Source: Universities establish joint centre to use data for social good in Cascadia region

More Evidence of the Massive Scale of Foreign Dark Money in Real Estate

UC Berkeley Professor, and former U.S. Secretary of Labor, Robert Reich posted this article providing further evidence of the massive scale of foreign investment in North American real estate, driven largely by dark Mossack Fonseca money.

The Surge in Foreign Real Estate Investment in the United States

By Laura Agadoni · Feb 25, 2016 · Real Estate

Image courtesy of BeSmartee, Foreign Real Estate Investment

Foreign real estate investment in the United States, both commercial and residential, is a huge phenomenon that is only expected to accelerate, maybe even to skyrocket, in 2016.

In fact, the United States, New York to be exact, is the top global destination for foreign real estate investors.

Here are the top cities attracting foreign real estate investment, according to a 2015 report from the Association of Foreign Investors in Real Estate (AFIRE):

1. New York City, New York
2. San Francisco, California
3. Houston, Texas
4. Los Angeles, California
5. Washington, D.C.
6. Atlanta, Georgia
7. Boston, Massachusetts
8. Chicago, Illinois
9. Seattle, Washington

The top three U.S. cities, New York, San Francisco, and Houston, also ranked among the top global cities for investors. Here is the ranking of the top global cities for real estate investment:

1. New York City, USA
2. London, England
3. San Francisco, USA
4. Tokyo, Japan
5. Madrid, Spain
6. Houston, USA
7. Berlin, Germany
8. Sydney, Australia
9. Shanghai, China

A strong U.S. economy is the driving factor for foreign real estate investment. Compared with other countries that are seeing an economic slowdown, such as China and Brazil, the United States makes for a safer investment.

Residential Real Estate Investment

Combine the relative strength of the U.S. economy with low interest rates and low prices after the housing crash, and you have a foreign real estate investment frenzy. From the period between April 2014 and March 2015, 8 percent of all home sales in the United States were to foreign investors.

Foreign investors buy residential real estate for different reasons. Some buy a home with the intention of it being their primary residence. But other times, foreign investors use the property as a vacation home, an investment, or as a way to diversify their assets.

Investments from China

Many foreign investors have large amounts of money, which they need to invest somewhere.China has been one of the most active players investing its capital in U.S. real estate. From April 2014 to March 2015, the Chinese invested $28.6 billion in the United States. And the investing is still happening. Chinese developer, Zhang Long, for example, bought land in late 2015 north of Dallas, Texas, to turn it into a subdivision populated with 99 McMansions for Chinese buyers.

But the Chinese buying spree in the United States didn’t start in Texas. It began in Manhattan and Silicon Valley and was a major factor in inflating home prices in those areas. California, overall, has been an attractive place for Chinese investors who often think nothing of paying cash for a $500,000 home in Orange County (mainly Irvine) or the San Gabriel Valley. And that’s just the average price. Some investors shell out millions of dollars for U.S. real estate. China’s impact did wane since its economic slowdown of 2015, but the investing lull might be only temporary.

Investments from Other Countries

Other large-scale investment activity into the United States comes from Canada, India, Mexico, and the United Kingdom. These four countries plus China made up 51 percent of all foreign purchases into the United States between April 2014 and March 2015. Although Chinese buyers focus largely on the West Coast, especially California, foreign investment in real estate happens throughout the country. Here’s a breakdown from the National Association of Realtors of where the other top foreign investors buy:

• Canadians tend to buy in the warm climates of Arizona, Nevada, and Florida, mainly as vacation homes to escape Canadian winters.
• Investors from India buy all over the United States, mainly as business ventures.
• Mexicans tend to buy in Texas, particularly in the cities of San Antonio, Houston, and El Paso. San Diego, California, and Miami, Florida are also popular investment areas. Investments are a combination of business ventures and vacation homes.
• K. investors tend to buy for business or vacation reasons in Los Angeles and San Francisco, California; New York City, New York; Orlando and Kissimmee, Florida; and Houston, Texas.

Pros and Cons of Foreign Investment

Having large amounts of money coming into the United States from foreign investors seems like a great thing. And it can be, but there is also a downside to all this foreign investment in U.S. real estate.

Pro: If you already own property in areas that are now attractive to foreign investors, you’ll see foreign investment as a benefit. Your house will be worth more with all the increased demand from foreign buyers, and you’ll probably make a profit if you decide to sell. If you decide to stay, you’ll enjoy a stronger local economy and potentially new housing developments that come with added amenities for the community.

Con: If you live in an area that’s attracting foreign investors, you might find that your neighborhood has a lot of vacant homes. Not all foreign investors, as was pointed out earlier, buy residential real estate to use as a primary residence. The home might be a vacation home that sits empty for much of the year. Or if foreign investors do intend to live in the home, it might take a long time for them to make the move from their country, again leaving the house vacant for a significant period.

Con: If you live in a hot investment area but don’t already own property there, you might be forced out of the housing market from the spike in real estate prices. Foreign investment can create a housing bubble in certain areas, making it difficult or practically impossible for Americans to buy a home in their own country. Although foreign investors typically are not in the same market as first-time homebuyers are (they are generally in a more upscale, higher-priced market), there could be a trickle-down effect that could ultimately raise prices for all price points.

Con: If you’re currently renting, you’ll probably be renting for a while longer, and rent prices will likely go up if demand increases.

Bottom Line

Whether you like the idea of foreign investors buying up property in the United States or whether you don’t, as long as wealthy foreign buyers see the United States as a safe place to park their money, the practice will continue. Although there are some cons to foreigners investing in the Unites States, the money they bring here strengthens local economies.

Energy Aware Riding Wave of Innovation and Investment in Energy Efficiency

Energy Aware Neurio Sensor/Data Collection Technology

In October of 2013, I first met Energy Aware’s management team, led by UBC alumni founders Janice Cheam and VP of Software, Ali Kashani in their modest East Vancouver offices.  I had encountered Ali commenting on the Internet of Things (IoT) on LinkedIn, and I challenged his arguments, as the skeptic that I am. Ali very graciously invited me to meet with him to discuss it further. Home automation and its new iteration, IoT, has been around for at least twenty years and had been going absolutely nowhere. Added to that was what I termed “The Tower of Babble,” a term now also used by Qualcomm to describe the data communication hairball in the IoT space. Indeed, Energy Aware had struggled for quite awhile in this immature market.  What I learned in that first meeting with Ali and Janice turned this skeptic into a believer, and I have enjoyed the opportunity to work with Al and Janice since that time providing them with tidbits of advice here and there.  My gut told me that Energy Aware was on to something with significant potential, as IoT was finally achieving technological “convergence,” and the Big Dogs in Silicon Valley were now gearing up their own IoT efforts. There is a Tsunami coming, and Energy Aware is well-positioned to ride it.

Energy Aware’s Management Team: CEO Janice Cheam & VP Software Ali Kashani

Reblogged from the Seattle Times:

Energy efficiency becomes hot market for tech companies

Long overshadowed by wind turbines, solar panels and other fashionable machines of renewable power, energy efficiency is sparking innovation and interest from tech entrepreneurs, big-data enthusiasts and Wall Street speculators.

By Evan Halper

Originally published by Tribune Washington Bureau, July 6, 2014

WASHINGTON — As President Obama pushes ahead on a strategy to confront climate change that relies heavily on energy efficiency, some Americans may see flashbacks of Jimmy Carter trying to persuade them to wear an extra sweater and turn down the thermostat.

The technology world sees dollar signs.

Long overshadowed by wind turbines, solar panels and other fashionable machines of renewable power, energy efficiency has lately become a hot pursuit for tech entrepreneurs, big-data enthusiasts and Wall Street speculators.

They have leveraged multibillion-dollar programs in several states, led by California and Massachusetts, to cultivate a booming industry. This onetime realm of scolds, do-gooders and bureaucrats has become the stuff of TED talks, IPOs and spirited privacy debates.

“This is not about extra sweaters anymore,” said Jon Wellinghoff, a San Francisco lawyer who formerly chaired the Federal Energy Regulatory Commission.

Power companies are tapping databases to profile intensely the energy use of their customers, the way that firms like Target track customer product choices.

 

Google spent $3.2 billion this year to buy Nest Labs, a company that makes thermostats that resemble iPhones and are designed to intuit the needs of their owners. Energy regulators are providing seed capital to startups building such things as waterless laundry machines.

“There was this notion that energy efficiency would never be sexy, never be something people wanted,” said Ben Bixby, director of energy products at Nest, which has attracted employees from Apple, Google and Tesla Motors to its base in Palo Alto, Calif.

“Nest has built this object of desire,” he said.

On hot days, Nest’s technology enables Southern California Edison to precool the homes of customers before the evening rush, helping the utility avoid the need to fire up extra power plants and netting cash rebates for homeowners.

Spending on efficiency technologies and programs soared to $250 billion worldwide last year, according to the International Energy Agency. The agency projects that amount will more than double by 2035.

U.S. power companies have tripled their investment in efficiency programs — funded mainly through ratepayer fees — since 2006, with California spending the most per customer.

Now the Obama administration has made energy efficiency a cornerstone of its plan to slash greenhouse-gas emissions by 2020. The plan, released in May by the Environmental Protection Agency, pushes states to boost efficiency by business and residential power users 1.5 percent each year.

“We are very excited about the EPA proposal,” said Richard Caperton, director of national policy at OPower, a data-mining firm that nudges homeowners to make better energy choices by alerting them when their neighbors are being more efficient. “We think it opens up more opportunities.”

Not long ago, OPower was a small pilot project partnered with the power company in Sacramento, Calif. Now it does business with 90 utilities, including Seattle City Light, and has gone public.

All the mining of data involved in such high-tech efficiency efforts has some privacy advocates concerned.

In California, utilities are required to report when they share consumer data with someone other than the customer and vendors. Records show that last year immigration authorities, drug-enforcement agents and state tax officials issued more than 1,110 subpoenas for records that track energy use of customers in the San Diego area as frequently as every 15 minutes.

Emerging privacy issues will be a focus of a fall conference sponsored by the American Council for an Energy Efficient Economy.

“This is a big deal,” Associate Director Neal Elliott said. “But it is not a big deal unique to energy.”

Those behind the startups said data already collected by retailers and social-media firms create a much bigger potential intrusion. They express confidence that consumers are more likely to be charmed by their innovations than panicked.

So far, most of the efficiency focus has been devoted to what one innovator in the field, Swap Shah, chief executive of FirstFuel in Boston, calls “elephant hunting.”

Utilities seek out their biggest clients, a small group of corporations in energy-intensive industries, audit their operations exhaustively and work with them to cut use. Each audit requires a small army of staff, Shah said.

FirstFuel goes after millions of other commercial customers that don’t get the utilities’ attention. It mines the 36,000 data points of consumption a modern smart meter generates for a building each year and checks it against other data, such as weather histories and images of the building.

The result is a deep energy-use profile that reveals specific areas of waste, including lights left on all night, air conditioning running when workers are not in the building and poorly insulated windows.

The average customer can use the report to cut consumption more than 18 percent, FirstFuel estimates. No auditors need ever set foot on the property.

Entrepreneurs like Shah hope that their software will ultimately be used by big financiers contemplating whether to back retrofits on large commercial buildings. Investors have not always been eager to put money in such projects amid concern that the investments won’t pay for themselves.

A similar innovation includes one recently unveiled by computer engineers at Retroficiency in Boston. Its Building Genome Project gathered all the publicly available data on 30,000 buildings in New York City to show how huge amounts of energy could be saved with slight changes, said CEO Bennett Fisher.

“Millions and millions of dollars have been spent trying to figure out which buildings are inefficient,” Fisher said. “Doing it manually has created a bottleneck. We want to blow open that bottleneck.”

A new push for fusion power here in Burnaby: General Fusion’s Michel Laberge at TED2014

General Fusion is our own UBC startup venture in Burnaby. Founder Michel Laberge was a keynote speaker at today’s TEDTalk in Vancouver.

Vancouver company Energy Aware making Big Waves in Internet of Things

I met today with Ali Kashani and Janice (pronounced “Janeece”) Cheam of Energy Aware in their offices in Chinatown, East Vancouver. Ali is a UBC Vancouver Engineering Ph.D, and Janice is a Sauder “BComm” graduate. Together, they are the brains behind Energy Aware’s novel approach to the “hairball”  of the Internet of Things.  I began our meeting as a skeptic, and came away impressed with their approach, their market savvy, their chemistry as a team, and the big name partners they have already attracted.  The problem that Energy Aware faces is one of scale and money. Major global players like Intel, Cisco Systems, Qualcomm and others have decided to focus here as well. That is both good and bad for Energy Aware.  The big dogs have the ability to crush better ideas with money, or to collaborate with Energy Aware, so its anyone’s guess what may happen here.  The market for the Internet of Things is hideously complex, confused and immature, a perfect opportunity for an innovative entrepreneurial team to win, with Vancouver as their setting.

Read more: The Internet of Things: the promise versus the Tower of Babbling Things

Read more: Zigbee wants to be the bluetooth of the Internet of Things: too bad everyone hates it

Read more: New global mega industry battle developing in the Internet of Everything

Vancouver company providing a novel approach to cracking the IoT “Tower of Babble”

Reblogged from The Vancouver Sun

November 14, 2013. 4:21 pm • Section: Digital Life

Ali Kashani, VP software, and Janice Cheam, founder of Energy Aware Technology, with pie chart showing household energy use.

Gillian Shaw

RECENT POSTS FROM THIS AUTHOR

• Vancouver company helps turn your home into a smart homePosted on Nov 14, 2013

What has its start as Janice Cheam’s student project at UBC’s Sauder School of Business has turned into an innovative new technology for transforming an ordinary home into a smart home of the future.

Dubbed the Neurio, the technology is contained in a WiFi sensor that connects to your home’s breaker panel, tracking energy use by appliances and other electrical devices and integrating with the cloud and apps enabling consumers to manage everything from turning down the thermostat when they leave the house to reminding them that they left the oven on.

Neurio  has just raised more than $267,000 in  a campaign on the online funding site Kickstarter,  more than double its $95,000 goal.

I paid $129 to the Kickstarter campaign to be among the first consumers to get the Neurio Home package that includes a sensor, access to an online site with apps for managing power use.

According to Cheam, who is president and CEO of Energy Aware, the company that created Neurio, using Neurio could save that $129 and more by encouraging more careful energy consumption.

“We’ve found and a lot of studies have shown this, when people start to get real time feedback on the way they use energy it really changes the way people behave and how they interact with their appliances,” said Cheam. “At a very basic level there is just this consciousness that my house is actually costing me money right now.

“If I’m going to leave this house it is still going to cost me money so maybe I should turn something off and save money while I do that. That positive feedback reinforces people’s desire to want to waste less energy.”

It worked for  Ali Kashani, vice-president, software for Energy Aware.

Using a prototype of the Neurio in his Vancouver apartment, he cut his annual power bill from $750 a year to $400, an accomplishment that also earned him a $75 rebate  from BC Hydro’s Power Smart program.

Among the power culprits in his home? A stereo amp that was set to demo mode from the store.

“When I started using the sensor I realized even when I hit the off button it was still consuming energy,” he said. “It was costing me about $10 a month and with a simple configuration change that problem was resolved.”

In the case of another family using the sensor, the software was able to determine that the household’s Saturday laundry was costing them much more than it should.

“One of the things we were able to detect really easily was that their dryer was really inefficient because you could tell how much energy it was consuming every time they ran a load,” said Cheam. “We could not only alert the customer to how much energy his laundry was using but we were also able to compare it to the community and show him how much more his dryer was costing in power.”

Neurio uses algorithms to track power usage and like the Nest Thermostat, learns over time.

CFI Informational Meeting, UBC Vancouver 11/15/13

A brief general overview of the Canada Foundation for Innovation grant review and evaluation process. Recommendations for researchers preparing grant applications for the 2015 CFI Innovation Fund.

 

Google Buys a D-Wave Quantum Computer

D-Wave 512-Qubit Bonded Processor – Recent Generation

Earlier this week, I was advised by a VC friend in Vancouver to expect another blockbuster announcement from D-Wave. And so it has happened. As if to stem any further skepticism and debate about D-Wave’s quantum computing technology, Google today announced that it has bought a D-Wave quantum computing system, in a partnership with NASA and Lockheed Martin Aerospace. This is the second major sale of a D-Wave system, and further evidence that this is not simple tire kicking by a group of ivory tower scientists.

Of particular note to me personally, was the growing significance of Vancouver as a site for a exceedingly advanced startup like D-Wave. In my previous post on this subject, I questioned whether a company in such a rarified area could attract the necessary personnel here.  Twenty years ago, when Mobile Data International started, I was one of four Americans to cast our fates to the wind and move to Canada to join MDI. At that time, we were seen as completely out of our minds. Vancouver had no attraction or other high tech industry companies worthy of note.  Today, Vancouver is seen as an World Class City, and one of the most livable. This may be one of the most important issues in favour of a growing high tech industry in Vancouver.

By way of example, it was also announced in parallel today that two key people from Silicon Graphics, the precursor in some respects to D-Wave, Bo Ewald, former SGI CEO, and Steve Cakebread, former SGI financial officer, have joined D-Wave.  Apparently, Ewald will lead D-Wave’s U.S. subsidiary company, and Cakebread has relocated to Vancouver.  If you have ever seen a bottle of Cakebread Cellars Chardonnay in a BC Liquor store, it is the same Steve Cakebread that is responsible.  More importantly, Vancouver may now be able to attract the kind of talent needed for companies like D-Wave.

Google and NASA are forming a laboratory to study artificial intelligence by means of computers that use the unusual properties of quantum physics. Their quantum computer, which performs complex calculations thousands of times faster than existing supercomputers, is expected to be in active use in the third quarter of this year.

The Quantum Artificial Intelligence Lab, as the entity is called, will focus on machine learning, which is the way computers take note of patterns of information to improve their outputs. Personalized Internet search and predictions of traffic congestion based on GPS data are examples of machine learning. The field is particularly important for things like facial or voice recognition, biological behavior, or the management of very large and complex systems.

“If we want to create effective environmental policies, we need better models of what’s happening to our climate,” Google said in a blog postannouncing the partnership. “Classical computers aren’t well suited to these types of creative problems.”

Google said it had already devised machine-learning algorithms that work inside the quantum computer, which is made by D-Wave Systems of Burnaby, British Columbia. One could quickly recognize information, saving power on mobile devices, while another was successful at sorting out bad or mislabeled data. The most effective methods for using quantum computation, Google said, involved combining the advanced machines with its clouds of traditional computers.

Google and NASA bought in cooperation with the Universities Space Research Association, a nonprofit research corporation that works with NASA and others to advance space science and technology. Outside researchers will be invited to the lab as well.

This year D-Wave sold its first commercial quantum computer to Lockheed Martin. Lockheed officials said the computer would be used for the test and measurement of things like jet aircraft designs, or the reliability of satellite systems.

The D-Wave computer works by framing complex problems in terms of optimal outcomes. The classic example of this type of problem is figuring out the most efficient way a traveling salesman can visit 10 customers, but real-world problems now include hundreds of such variables and contingencies. D-Wave’s machine frames the problem in terms of energy states, and uses quantum physics to rapidly determine an outcome that satisfies the variables with the least use of energy.

In tests last September, an independent researcher found that for some types of problems the quantum computer was 3,600 times faster than traditional supercomputers. According to a D-Wave official, the machine performed even better in Google’s tests, which involved 500 variables with different constraints.

“The tougher, more complex ones had better performance,” said Colin Williams, D-Wave’s director of business development. “For most problems, it was 11,000 times faster, but in the more difficult 50 percent, it was 33,000 times faster. In the top 25 percent, it was 50,000 times faster.” Google declined to comment, aside from the blog post.

The machine Google and NASA will use makes use of the interactions of 512 quantum bits, or qubits, to determine optimization. They plan to upgrade the machine to 2,048 qubits when this becomes available, probably within the next year or two. That machine could be exponentially more powerful.

Google did not say how it might deploy a quantum computer into its existing global network of computer-intensive data centers, which are among the world’s largest. D-Wave, however, intends eventually for its quantum machine to hook into cloud computing systems, doing the exceptionally hard problems that can then be finished off by regular servers.

Potential applications include finance, health care, and national security, said Vern Brownell, D-Wave’s chief executive. “The long-term vision is the quantum cloud, with a few high-end systems in the back end,” he said. “You could use it to train an algorithm that goes into a phone, or do lots of simulations for a financial institution.”

Mr. Brownell, who founded a computer server company, was also the chief technical officer at Goldman Sachs. Goldman is an investor in D-Wave, with Jeff Bezos, the founder of Amazon.com. Amazon Web Services is another global cloud, which rents data storage, computing, and applications to thousands of companies.

This month D-Wave established an American company, considered necessary for certain types of sales of national security technology to the United States government.