The secret to the Uber economy is wealth inequality

uber-inequality

WRITTEN BY  Leo Mirani

Of the many attractions offered by my hometown, a west coast peninsula famed for its deep natural harbor, perhaps the most striking is that you never have to leave the house. With nothing more technologically advanced than a phone, you can arrange to have delivered to your doorstep, often in less than an hour, takeaway food, your weekly groceries, alcohol, cigarettes, drugs (over-the-counter, prescription, proscribed), books, newspapers, a dozen eggs, half a dozen eggs, a single egg. I once had a single bottle of Coke sent to my home at the same price I would have paid had I gone to shop myself.

The same goes for services. When I lived there, a man came around every morning to collect my clothes and bring them back crisply ironed the next day; he would have washed them, too, but I had a washing machine.
These luxuries are not new. I took advantage of them long before Uber became a verb, before the world saw the first iPhone in 2007, even before the first submarine fibre-optic cable landed on our shores in 1997. In my hometown of Mumbai, we have had many of these conveniences for at least as long as we have had landlines—and some even earlier than that.
It did not take technology to spur the on-demand economy. It took masses of poor people.

Silicon Valley catches on

In San Francisco, another peninsular city on another west coast on the other side of the world, a similar revolution of convenience is underway, spurred by the unstoppable rise of Uber, the on-demand taxi service, which went from offering services in 60 cities around the world at the end of last year to more than 200 today.

Uber’s success has sparked a revolution, covered in great detail this summer by Re/code, a tech blog, which ran a special series about “the new instant gratification economy.” As Re/code pointed out, after Uber showed how it’s done, nearly every pitch made by starry-eyed technologists “in Silicon Valley seemed to morph overnight into an ‘Uber for X’ startup.”
Various companies are described now as “Uber for massages,” “Uber for alcohol,” and “Uber for laundry and dry cleaning,” among many, many other things (“Uber for city permits”). So profound has been their cultural influence in 2014, one man wrote a poem about them for Quartz. (Nobody has yet written a poem dedicated to the other big cultural touchstone of 2014 for the business and economics crowd, French economist Thomas Piketty’s smash hit, Capital in the Twenty-First Century.)
The conventional narrative is this: enabled by smartphones, with their GPS chips and internet connections, enterprising young businesses are using technology to connect a vast market willing to pay for convenience with small businesses or people seeking flexible work.
This narrative ignores another vital ingredient, without which this new economy would fall apart: inequality.

The new middlemen

There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins.

Uber was founded in 2009, in the immediate aftermath of the worst financial crisis in a generation. As the ride-sharing app has risen, so too have income disparity and wealth inequality in the United States as a whole and in San Francisco in particular. Recent research by the Brookings Institution found that of any US city, San Francisco had the largest increase in inequality between 2007 and 2012. The disparity in San Francisco as of 2012, as measured (pdf) by a city agency, was in fact more pronounced than inequality in Mumbai (pdf).
Of course, there are huge differences between the two cities. Mumbai is a significantly poorer, dirtier, more miserable place to live and work. Half of its citizens lack access to sanitation or formal housing.
Another distinction, just as telling, lies in the opportunities the local economy affords to the army of on-demand delivery people it supports. In Mumbai, the man who delivers a bottle of rum to my doorstep can learn the ins and outs of the booze business from spending his days in a liquor store. If he scrapes together enough capital, he may one day be able to open his own shop and hire his own delivery boys.
His counterpart in San Francisco has no such access. The person who cleans your home in SoMa has little interaction with the mysterious forces behind the app that sends him or her to your door. The Uber driver who wants an audience with management can’t go to Uber headquarters; he or she must visit a separate “driver center.”

There is no denying the seductive nature of convenience—or the cold logic of businesses that create new jobs, whatever quality they may be. But the notion that brilliant young programmers are forging a newfangled “instant gratification” economy is a falsehood. Instead, it is a rerun of the oldest sort of business: middlemen insinuating themselves between buyers and sellers.

All that modern technology has done is make it easier, through omnipresent smartphones, to amass a fleet of increasingly desperate jobseekers eager to take whatever work they can get.

After being exposed, undercover cop draws gun on protesters in California

By Evan Blake and Gabriel Black
12 December 2014

On Wednesday night, a plainclothes police officer dressed as a protester had his identity revealed before drawing his baton and pistol on a crowd of protesters and reporters in Oakland, California. The officer and his partner have been accused of trying to incite the crowd towards violence before they were exposed as provocateurs.

The two police officers had been wearing bandanas over their faces throughout the march. KTVU news reports that at one point during the march a protester who suspected the two of being officers pulled down one of the officer’s bandanas. The news station reported that, “the two policemen started to walk away, but the protesters persisted, screaming at the two undercover cops.”

Then one officer, “pushed the protester aside. The man responded by pushing back and then the officer tackled him to the ground, handcuffing him. The crowd, incensed, began to gather around them.”

Undercover cop aims his gun at a photographer

The officer who had pushed back the protester took out his baton and began beating the demonstrator after the scuffle started. When a crowd began to surround the officers, the one using his baton drew his pistol and aimed it at the heads of those around him.

Photographs show that the people the policeman was aiming at were all reporters and photographers. Reuter’s photographer Noah Berger, freelance journalist Courtney Harrop, and San Francisco Chronicle photographer Michael Short were all threatened with the officer’s pistol, ostensibly for taking photographs of the scene.

The two officers soon arrested the man who had been beaten with the help of riot police who had been tailing and monitoring the protest march. The two plainclothes police have subsequently been identified as California Highway Patrol officers.

According to the DailyDot, protesters claim that the two undercover officers attempted to “disrupt the peaceful protest and provoke violence.” These witnesses say that the officers banged on windows and encouraged protesters to loot businesses.

Despite widespread coverage of the Monday night freeway occupation, the Wednesday night uncovering of police provocateurs has gone unreported in most major news outlets. As of this writing, the only major newspapers to have covered the story are the New York Daily News and the local San Francisco Chronicle.

The Wednesday evening protest was one of several nightly demonstrations against the police killings of Michael Brown and Eric Garner. Oakland and neighboring Berkeley have seen protests every night since Saturday.

The march on Wednesday night came on the fifth straight night of protests against police brutality centered in Berkeley, which grew to their peak on Monday night, when over 1,500 marched through Berkeley and 200 protesters blocked traffic on Interstate-80, the busiest freeway in the East Bay Area. The protests have gradually dwindled on following nights.

During the weekend protests, two men were also accused of working for the Oakland Police Department. A video was posted online comparing the two accused undercover cops with images of two police officers with the OPD.

Acting Oakland Police Chief Howard Johnson made a remarkable statement about placing undercover police agents in protest organizations in 2003, stating, “You don’t need to have some sort of skill to be able to infiltrate these groups. If you put the people in there from the beginning, I think we’ll be able to gather the information. And maybe direct them to do something we want them to do.”

Oakland police made a total of 170 arrests during the week in November following the exoneration of Darren Wilson (the Ferguson, Missouri police officer who killed Michael Brown), while in San Francisco more than 80 people were arrested during protests on Black Friday alone.

Injuries to protesters over the course of the past five days include broken legs, at least two induced seizures, several head wounds and concussions from baton blows to the head, and deep welts from rubber bullets. Stephen Lam, a photographer and journalist working for Reuters, was pepper sprayed.

On Tuesday night, a crowd of over 500 assembled in downtown Berkeley, which gradually dwindled during a march to Oakland, where the roughly 200 remaining protesters led another freeway occupation on Highway 24. They blocked traffic for half an hour, at which point the California Highway Patrol (CHP), Berkeley Police Department (BPD) and Oakland Police Department (OPD) used tear gas and rubber bullets to disperse the protesters.

Later, when protesters had been herded under the freeway, two officers fired 4 rubber bullet rounds from above, while still on the freeway, reportedly hitting one protester on the ear, one on the ankle and another on the head. The person shot in the ear was sent to the hospital for treatment.

 

http://www.wsws.org/en/articles/2014/12/12/prot-d12.html

Stirring portrait of aging drag queens at the last gay bar in the Tenderloin

12.08.2014


Donna

San Francisco has changed both rapidly and radically over recent years. As it’s become more appealing both for cosmopolitan urbanites and the exploding tech sector, gentrification has blessed The City by the Bay with the most expensive one-bedroom apartment in America, even surpassing New York. Many mourn the loss of an earlier San Francisco and its formerly affordable counterculture and queer subculture, while San Francisco documentary photographer and filmmaker James Hosking manages to actually catch some of the twilight.

For his series, Beautiful by Night, Hosking documents the lives of three senior drag queens Donna Personna, Collette LeGrande and Olivia Hart, performers at aunt Charlie’s Lounge, the very last gay bar in San Francisco’s Tenderloin district. The notoriously seedy Tenderloin has managed to mostly resist gentrification on the merits of its reputation and a concerted effort by inhabitants. Still, without the surrounding culture of a former San Francisco to sustain it, the once vibrant queer scene has faded.

Hosking’s photographs are intimate and unflinching, but the mini-documentary is also an amazing portrait of three drag foremothers. Their reflections and reminiscing are complex but disarmingly at peace, and their performances and beauty rituals are (as expected) hypnotic.


Olivia


Collette LeGrande


Olivia


Collette


Olivia talks to shopkeeper


Gustavo at home


Gustavo/Donna


Gustavo/Donna


Collette performs Ke$ha’s “Tik-Tok”


Donna backstage between sets


Via Feature Shoot

 

http://dangerousminds.net/comments/stirring_portrait_of_aging_drag_queens

Don’t call it gentrification

“Dispatches Against Displacement” author James Tracy on fighting to keep cities from becoming rich-only playgrounds

Don’t call it gentrification
(Credit: AP/Michael Dwyer)

In the early 1990s, a punk rock kid named James Tracy moved from the gritty North Bay city of Vallejo to nearby San Francisco and got a job driving a delivery truck for a thrift store in the predominantly Latino, working-class Mission district. During his pickup runs, he noticed that many landlords were making generous donations — the left-behind belongings of former tenants. This was a few years before the rise of the first dot-com boom, but even then, Tracy said, “It was obvious to me that a storm was coming.”

The storm was more like a hurricane. In the late ’90s and early aughts, a torrent of venture capital poured into Silicon Valley and waves of would-be tech entrepreneurs flooded into San Francisco, displacing tens of thousands of poor folks, artists, musicians, activists and families who were evicted to make room for higher-paying tenants. In order to get around San Francisco’s rent-control laws, many buildings were demolished and sterile live-work lofts and generic-looking condos rose from their ashes.

Just as with a real hurricane, this storm also had a body count. In one notorious case, a landlord overcame housing activists’ attempts to block the eviction of an 82-year-old woman, who died shortly after being forced out of her longtime home. Many more San Francisco seniors have met similar fates since then.

Resistance to this onslaught of displacement was widespread, fraught with internal clashes, sometimes victorious, occasionally militant, and occasionally surreal. In one case, the San Francisco police seized Situationist and Marxist books from the library of an anti-displacement propagandist who had been wheat-pasting posters throughout the Mission encouraging people to burn yuppies’ cars and sabotage hip restaurants. Through it all, James Tracy was on the front lines — sometimes quite literally, as a member of groups that would protest on landlords’ doorsteps or during anti-eviction occupations at the homes of families facing displacement.

In his new book, “Dispatches Against Displacement: Field Notes From San Francisco’s Housing Wars,” Tracy not only looks back with a critical eye on the recent history of anti-displacement organizing but also offers solutions for how these struggles can be more successful moving forward. With rent prices for one-bedroom apartments often surpassing $3,000, the need for a book like this is painfully obvious.



You start the book with this quote from Herbert Marcuse: “The housing crisis doesn’t exist because the system isn’t working. It exists because that’s the way the system works.” How does this permanent state of crisis exemplify a system that’s operating as intended?

In the simplest sense, it works well for those who make exorbitant profits from a crisis. It’s working well for speculators and throwing not only tenants, but first-time homebuyers and even some small landlords under the bus. In a larger sense, the housing crisis achieves ideological goals. It tells a public story that it is natural that the rights of this small group of speculators should outweigh everyone else’s need for a safe and decent place to live. The evidence to the contrary is literally under every overpass in America, yet even those harmed by the crisis often defend it.

One of the most interesting things about the idea of a crisis is the issue of when the media decides to call it one. It wasn’t until after the cascading foreclosure crisis in 2008 that the term “housing crisis” was broadly used. This is because homeowners can still generate a great deal of more sympathy than renters. If you look at the history of housing policy, it is access to homeownership, not the construction of public housing, which was the centerpiece of the New Deal reforms. You can trace the narratives from there, homeownership is part of the American Dream, renting makes you part of a second class. Yet homeowners (and I am one) are subsidized as well through income tax breaks. Who is the system working for? The finance and real estate sectors are doing just fine by it. Everyone else is either on the chopping block or standing nearby it.

You cite an infamous quote by a San Francisco city supervisor saying “a little gentrification is a good thing” in explaining your decision to use the term “displacement” instead of “gentrification.” Do you think “gentrification” has too many positive connotations to be a useful word for people challenging displacement? Would you like to see people stop using the “g-word”?

I prefer to use the word “displacement” because it drives home the end result of gentrification: someone loses their home and their community. You can’t play fast and loose with the word! On one end of political thought, there is this underlying assumption that higher-income people improve a low-income community just by arriving there. It plays into this mythos deeply imbedded in our psyche that  rich people will somehow randomly meet their neighbors and help them up the economic ladder.

During the Great Depression there were thousands of cases of neighbors banding together to militantly protect each other from eviction. We saw scattered examples of this in the wake of the Occupy movement, but it didn’t become a widespread phenomenon in response to the still ongoing foreclosure crisis. Why do you think people are so much less likely to use militant or even confrontational tactics now?

You see echoes of this today, although not nearly at the same levels during the Great Depression. Eviction Free San Francisco has had a lot of success in pushing back evictions, most recently in the case of Benito Santiago using a direct action model. There is a lot of innovative housing organizing going on today. Just a few examples are Picture the Homeless; NYC’s anti-vacancy work; in Chicago, the anti-foreclosure and home occupation movement is cutting edge.

Housing activism tends to do best against the backdrop of larger social and movements. In the 1930s, there were large mass-based movements that elevated the needs of working-class people. Movements influence each other both tactically and morally. The formation of the trade union movement, the campaign to free the Scottsboro Men, built a sense of boldness and political consciousness that could easily be translated into a neighborhood context. Also, today’s neighbors have far less connection with each other thanks to climates of fear and the impacts of the greatest work speedup in U.S. history. The fact that both lower-income and middle-income people are working 50, 60 and 70 hours a week damages our ability to organize on the level of the Unemployed Workers Movement.

As you say in the book, “The Clinton Administration decided that the way to deal with public housing’s problems was with a wrecking ball.” Clinton’s history of enacting steep welfare cuts is much more well-known than his equally destructive housing policies. Why do you think this aspect of his legacy doesn’t get as much attention?

Clinton’s housing policy was part and parcel of welfare reform. Certainly, both federal income assistance and public housing needed changes. But Clinton and Congress adopted a model based in punishment and austerity. He was literally worse than the Republicans at every turn. His version of HOPE VI, the program to demolish and rebuild public housing, removed the very reasonable guarantee of one-to-one replacement of demolished housing. I had the privilege of working alongside residents of public housing in San Francisco.

Most of the demands they made on the Housing Authority and Housing and Urban Development were very fundamental. They wanted the renovation process to result in living-wage jobs for their kids, they wanted to come back to their communities. Yet, this was met with scorn, disdain and, in some cases, criminalization. It was an example of what happens when liberals accept the same worn-out assumptions about poor people as conservatives.

Clinton was able to use progressive critiques of the worst aspects of federal housing such as the warehousing of the poor in substandard conditions to accomplish the conservative goal of privatizing formerly public housing. How are progressive arguments still being used in the service of displacement of urban poor?

The Clinton administration argued that public housing was a form of segregation and that the HOPE VI process was a form of integration, essentially fulfilling the promise of the civil rights movement. He was halfway right. Local governments did in fact use public housing programs to reinforce segregation. However, what we saw in the aftermath of HOPE VI was actually a form of resegregation as the displaced just resettled where they could afford to find homes. Simply a different kind of warehousing.

You see this today under the Obama administration as public housing authorities are attempting to implement drastic rent hikes as a perverse incentive toward self-sufficiency. You want people to move towards self-sufficiency? Create good-paying public works jobs and the social supports like childcare and education to make this happen. You can’t essentially apply a Wal-Mart mentality to public policy and expect to change lives with a cheap strategy like this. The people of North Beach Public Housing taught me that the solutions to poverty start with the input, insight and creativity of people facing poverty. The rest of us can and should lend our levels of expertise and skills when needed. But to think that government is going to design solutions without these voices symbolizes they very worst impulses of liberal and conservative frameworks.

We’re in the midst of a wave of “spatial deconstruction” — basically the opposite of white flight — where poor people are being pushed out of city centers into outlying suburbs. There have been various theories about how this is essentially the fulfillment of a decades-long response to the inner city uprisings and riots of the late 1960s with the ultimate goal being decentralization of potentially revolutionary populations. Regardless of the origins of this shift, we recently got a preview of what suburban uprisings look like in Ferguson — and how effectively militarized police are able to shut them down. As an organizer, how do you think this shift to the suburbs will affect the ability of local housing rights movements to grow, thrive and accomplish their goals?

I was born in Oakland but brought up mostly in Vallejo; I think that it is a mistake most of our organizations have made to not nurture progressive organizing in the blue-collar suburbs. It doesn’t mean that big-city organizers need to run and parachute in to Hayward, Vallejo and Fairfield and Concord. But we do need to create relationships with people already doing the work, mostly through church-based organizing.

The Contra Costa Interfaith Supporting Council has been doing fantastic work in areas far outside of “hip” areas. Last year, I observed the Participatory Budgeting process in Vallejo and I was impressed by what I saw. By giving a portion of the city budget over to a popular decision-making process, a lot of dialogue between citizens was created over the future of their city. Youth and non-citizens were welcomed and encouraged to participate. It wasn’t uncommon to see a resident of a Section 8 housing development work alongside a middle-class homeowner in a spirit of mutual respect.

When schools, parks, streetlights and other aspects of local infrastructure are improved, it makes neighborhoods more desirable — which makes displacement more likely. How can neighborhoods improve themselves without falling prey to this vicious cycle?

This is the million-dollar question, isn’t it? Because of this reality, many well-meaning people romanticize preserving dilapidated conditions as an anti-displacement strategy. This is simply wrong-headed. Disinvestment is simply the first phase of displacement, the time when speculators can scoop up property on the cheap and wait until the time is right to flip. One of the solutions is to engage in long-term community planning so that improvements such as these can be done in tandem with strategies to preserve affordability in a meaningful, not superficial way.

On a bigger scale, look at projects like BART. Clearly the development of a mass transit system played a key role in mass displacement in San Francisco. But for reasons of environmental sustainability as well as convenience, I think it would be hard to argue that the city would be better off without a rail system. As more cities improve their transit systems, what can low-income communities do so that they’re able to enjoy the benefits of improved transit options without succumbing to displacement?

When Portland put in its rail system a few years ago, it funded a Community Land Trust to work on preserving the impacted communities. The funding was never enough to make the desired impact, but the model was a strong one.

One of the possible solutions you mention in the book involves passing laws to curb property speculation by taxing away the profits. None of the ballot initiatives coming up for a vote in San Francisco next month go quite that far, but several do aim to alleviate the city’s displacement crisis. Are you hopeful that any of these will achieve that goal? If so, what solutions embedded within these initiatives give you the most hope?

Yes. Proposition G on San Francisco’s ballot is critical. It curbs displacement by discouraging the practice of swift flipping of buildings for windfall profits. Even though it will help protect renters, first-time homebuyers who actually want to make San Francisco home will be big winners if this passes. In the absence of political will on the state level to address the Ellis Act, this is the only hope to save what’s left of the San Francisco we fell in love with.

Another option for creating “gentrification-proof bubbles” that you mention is the establishment of Community Land Trusts. The interesting thing about this ownership structure is that it does so much more than just prevent evictions — they actually require that neighbors know each other and learn how to work together. This model feels like the polar opposite of the sole homeownership model of the 20th century in America, which promoted individuality and independence at the cost of community-building. Can you really ever see the CLT model taking off in America?

I helped form the San Francisco Community Land Trust and I believe that this model can simultaneously preserve affordability and build community. It’s basically a rebooted version of the old cooperative housing model where affordability and tenure is protected, much in the same way that forests are protected through trusts. Without forms of community ownership, even the most impressive housing organizing victories are temporary. It’s important not to romanticize the cooperative and deal head-on with the problems it presents. For example, the SFCLT has been incorporated since 2004 and we have secured about six dozen homes. Not enough to intervene in the housing crisis yet. Land trusts are part of the solution, not the entire thing. And yes, one of the main obstacles is the accepted notions of what people expect from their housing. It is hard to move beyond the poles of renter vs. homeowner. The CLT model makes asks of both society and the individual. It asks society to move toward housing as a human right. It asks individuals to take personal responsibility as part of a community. It is a heavy lift given the times we live in.

Liam O’Donoghue is Salon’s communications director. He writes about what’s happening at Salon and manages Salon’s social media assets. You can follow him on Twitter @Liam_Odonoghue.

http://www.salon.com/2014/11/02/don%E2%80%99t_call_it_gentrification/?source=newsletter

Leading tech investors warn of bubble risk ‘unprecedented since 1999′

Snapchat CEO Evan Spiegel
Snapchat CEO Evan Spiegel, whose company was valued at $10bn despite having never turned a profit. Photograph: Jae C. Hong/AP

Two of the world’s leading tech investors have warned the new wave of tech companies and their backers are taking on risk and burning through cash at rates unseen since 1999 when the “dotcom bubble” burst.

Bill Gurley, partner at Silicon Valley-based investor Benchmark, sounded the horn of doom on Monday warning that “Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now.”

In an interview with the Wall Street Journal Gurley, whose investments include OpenTable, Uber and Zillow, said startups were taking on risks in a way “unprecedented since ‘99”.

Gurley said that “more humans in Silicon Valley are working for money-losing companies than have been in 15 years”, and they’re burning through huge piles of cash.

“In 01 or 09, you just wouldn’t go take a job at a company that’s burning $4m a month. Today everyone does it without thinking,” he said.

His comments were backed up Tuesday by Fred Wilson, the New York-based co-founder of Union Square Ventures who has backed companies including Twitter, Tumblr and Zynga.

Burn rates – the amount of money a startup is spending – are “sky high all over the US startup sector right now”, he wrote in a blog post.

“We have multiple portfolio companies burning multiple millions of dollars a month. Thankfully its not our entire portfolio. But it is more than I’d like and more than I’m personally comfortable with,” he wrote.

“I’ve been grumpy for months, possibly for longer than that, about this. I’ve pushed back on long term leases that I thought were outrageous, I’ve pushed back on spending plans that I thought were too aggressive and too risky, I’ve made myself a pain in the ass to more than a few CEOs.”’

The comments come after a new generation of tech companies have attracted record levels of investments at levels that give the profitless businesses eye-watering valuations.

In August Snapchat, the social messaging service, was valued at $10bn after a new round of funding. The free service’s fans send 500m self-deleting messages a day, but Snapchat has yet to declare how it intends to make money. Among the other big tech valuations in recent months are Uber, the taxi app service, which was valued at $18bn after its last round of funding in June, and Airbnb, the short term rentals service, which was valued at $10bn in April.

But the valuations are not the immediate issue, according to the sceptical tech investors. “Valuations can be fixed. You can do a down round (investing at a lower valuation), or three or four flat ones, until you get the price right,” writes Wilson. “But burn rates are exactly that. Burning cash. Losing money. Emphasis on the losing.”

Asked if investors, and the people working for the companies, were distracted by the potential for reward, Gurley said: “Yeah, it’s a whole bunch of things. But you just slowly forget, and half of the entrepreneurs today, or maybe more – 60% or 70% – weren’t around in ‘99, so they have no muscle memory whatsoever.”

http://www.theguardian.com/technology/2014/sep/16/tech-bubble-warning-investors-dotcom-losing-money

David Lowery: Here’s how Pandora is destroying musici

 Cracker and Camper van Beethoven’s David Lowery tells Salon how streaming services might end true avant garde music

David Lowery: Here's how Pandora is destroying musicians
David Lowery (Credit: davidlowerymusic.com/Jason Thrasher)

David Lowery has become both beloved and notorious over the last year as one of the musicians most critical of the ways musicians are paid in the digital era. The Camper van Beethoven and Cracker singer brings an artist’s rage and a quant’s detached rigor to his analysis of the music business.

He’s currently fired up about a federal lawsuit filed in New York in which several record labels have sued Pandora (and before that, Sirius FM) for neglecting to pay royalties for songs recorded before Feb. 15, 1972. Here’s how Billboard summarizes the suit: “The labels say both digital music services take advantage of a copyright loophole, since the master recording for copyright wasn’t created federally until 1972. … But the labels claim that their master recordings are protected by individual state copyright laws and therefore deserve royalty payments.”

Lowery thinks the loophole provides a way for Pandora to simply not pay older musicians for their work — while profiting from it themselves. The case could get bigger and change in strange ways, with broad implications.

And he’s similarly frustrated with the rise of streaming services, which are in part owned by the major labels. “For us, it’s the worst-case scenario,” he says. “The old boss and the new boss have joined hands, they’re singing ‘Kumbaya,’ and they’ve changed the words to, ‘Fuck the songwriters! Fuck the performers!’ ”

We spoke to Lowery from a studio in Wisconsin, where he was recording a new Cracker record.

There’s a sort of complicated and technical case in New York right now, involving musicians’ royalties from before 1972: It’s a lawsuit that the general public doesn’t know that much about, but it’s important for musicians, especially for older musicians. Tell us what’s going on.

Back in 1971, there was a series of legislative actions. Before 1972, copyrights for the sound recording weren’t federal, they were [handled at the state level]. So we had some copyright reforms in the ‘70s, which adjusts for technology and things like that. They basically created a federal copyright for sound recordings. And for many, many years people just had assumed — and many of these services had acted as if — the intention of the act was to federalize all sound recordings, not really making a distinction in 1972. But somehow, in the last few years, probably starting in 2009, a few of the digital services have decided that there is no federal copyright for sound recordings created before 1972 — so they’ve just stopped paying these artists.



That includes a lot of legacy artists, like Otis Redding, Aretha Franklin — the writer and main performer of “Respect.” So you have these services that — not all of them, but some of them — just decided that they weren’t going to pay royalties on this. The general public might look at this and go, “This is just companies, and this is how they work, and they try to save money, and so they’re just doing what they can do.”

“They’re just doing what corporations always do.”

They’re just trying to minimize their expenses and stuff like that … But if you really look at this, you’ll see that it’s much, much more complicated than that. They’re making a very weird argument, right? Because ultimately, they lose either way.

The digital services, so Pandora, Sirius, Clear Channel, Digital Operations, whatever they may be. It’s not really clear — it’s definitely Sirius and Pandora — but it’s not really clear which other ones are there. But it’s a strange argument because they lose either way. Because if it’s not covered by federal law then it’s covered by state law. So if they win, and it’s covered by state law and suddenly these very large companies need a license from each individual state, essentially. Which would require them to negotiate with each copyright owner individually. And so there are a lot of people scratching their heads on this one, because why would they pursue a strategy like this? They lose either way. And they could lose really big on this.

So you look at this stuff and like a lot of things that happen with companies that are Wall Street-backed, there’s an incentive to keep the stock price high. And certainly in the case of Pandora — they’re kind of my bête noire, but you know, I feel like they deserve it — but you wonder if a lot of the time these kind of moves, they’re just sort of designed to keep the stock price high in the short-term. And in the long-term they’re creating these enormous liabilities that will just … They’re not only screwing song owners, to me this is one of the most important issues that I’ve come across since I’ve been advocating for artists’ rights. Because it ends up not only screwing songwriters but it could create these huge liabilities that ultimately cost pensions, and little old ladies their savings and stuff like that.

You say it could contribute to these digital-music companies collapsing? Because there’s been a lot of speculation that webcasters don’t have the business model that allows them to earn profits. There’s been speculation that they won’t be around along despite the conventional wisdom that they are saving the music business.

Exactly, and that’s kind of what I’m getting at; in a way, this is much bigger than songwriters’ rights. They don’t really win either way, in my opinion. I mean, yeah, it’s possible that they eke out some kind of financial advantage, but if federal law did not federalize sound recording copyrights, then we revert to state law. And that’s going to be a nightmare for everybody; it’s going to be a nightmare for artists, even your old AM/FM radio station.

Another funny thing: We are one of the only democracies in the modern world that doesn’t pay royalties to performers on terrestrial radio. We’re one of six countries in the world, and the only modern democracy, that doesn’t pay performers royalties for getting played on the radio. I’m a songwriter, too, so I get royalties as a songwriter, but I don’t necessarily get royalties as a performer for terrestrial radio. Anyway, to me, this is just corporate sleaziness. It’s, “We’re going to fight this case that we’re going to lose, to basically save 6 or 10 percent of our expenses, and stick our shareholders, possibly, with these huge liabilities down the road.” Because if they create the situation by which they do not have the copyrights for thousands of songs that they’re streaming, theoretically, they could be charged $150,000 in damages each time it plays one of these songs. So that’s the story that goes all the way down in the weeds of what is going on.

You’re saying this could be a real time bomb.

Yes.

Let’s go back to the artists for a second. I think a lot of consumers might look at this and say, “Well, the Beatles and the Stones don’t need more royalties, and Otis Redding is dead. Why does this matter? Who’s really going to suffer if just songs from before 1972 don’t produce royalties for the artists?”

Well, yeah, that’s what Chris Harrison from Pandora said. I think he said something like that, “These people never expected to get royalties.” I mean, really? Plenty of those artists are not rich, you know? I just saw Wanda Jackson play —she’s almost 80 and she’s out touring. And she made these iconic rock ‘n’ roll recordings.

Some of the first rockabilly records.

I mean, if Pandora is going to stream these things and if Sirius is going to broadcast these things, why shouldn’t they get paid? We’re America, we’re a fair country. We’re not a country like China, where we just go, “Here’s a politically well-connected elite, we’re just going to hand them the rights to something that somebody created.” Just so the politically well-connected can get richer. It’s really funny to me — look, I’m not really a lefty or liberal, I’m basically a little right of center in my politics — and it’s just funny to see consumers sort of rallying around the rights of corporations and against the rights of individuals.

Well, that is what’s happening.

It is! It would have been like the students in the late ‘60s and early ‘70s protesting for the war. Or for the defense contractors … You know what I mean? “We still need that rice from the Mekong Delta. We need cheap rice from the Mekong Delta, let’s protest against these draft dodgers.” On behalf of … I don’t know—

Dow Chemical or something.

That’s literally what the public is doing now. I’ve said this before, and I don’t think people quite get it.

The Internet has become cargo cult. People worship the Internet like a cargo cult. It’s this thing that they have that brings them free stuff, and they think it’s magic. It’s beyond rational thought and reason, right? And they have no sense that behind all that free stuff are the drowned ships and sailors. They don’t want to hear that behind the way you get this free stuff, some really actually fucked-up things have happened to individuals and their individual rights.

And that there are people getting rich off this stuff. Look, people used to go crazy and you’d always hear people talk about how the record labels were so bad to artists back in the ‘50s. They paid them really minimal royalties and stuff like that. But look, these guys are even worse. It’s way, way worse.

Well, let’s extend that a little bit. Since the last time we spoke, it seems like there’s been a dozen new streaming services launched. And streaming is now discussed as the savior of the record industry. We have a new Amazon service, Google has announced one, and Beats service was bought by Apple. There’s surely going to be others by the end of the month. Do these new services seem to be, from an artist’s point of view, an improvement? Or do we just not know?

Well, it’s going to depend on what kind of artist you are. First of all, let’s just take that face-value statement, that streaming will save the music industry. Well, it will if the music business is the kind of music business that’s basically just built around Top 40 songs.

Blockbuster artists.

If you don’t want to ever have Captain Beefheart and Miles Davis and — one of my favorite bands — the gloom-stoner, doom-metal band Sleep. If you don’t ever expect to have those kind of bands anymore. And the reason is because streaming flattens and commoditizes the spin. So you just have one price for every spin of a song across the entire spectrum, whether it’s some kind of avant-garde classical work or whether it’s a Miley Cyrus song. So that will work if you have lots and lots of spins. But it won’t work if you have just a few spins. So what that will do is push out — and you already see that happening — it will push out any sort of niche or, you know …

Any specialty genres.

Specialty genres. Because people might have gone into the stores and gone, “Well, all the albums are between $9.99 and $17.99, they sort of all hover around $12.99, or whatever. It’s always been that way.” Well, yes and no, because something like a Miley Cyrus song might get spun a whole bunch — you might play that record a whole bunch until you’re sick of it whereas an Art Blakey record you might play four times a year. Those, in effect, were more expensive, and when you look at the normal, real, non-magical unicorn part of the economy, niche products cost a lot more than mass-market products.

Maybe we could look at food: Fast food costs less, going to the farmer’s market costs more. But people have decided, increasingly, that it’s worth paying a little more for healthier, fresher, local, whatever food. What you’re saying, I think, that the economic structure of streaming means that everybody’s —

Everything is the same price.

Well, there’s no incentive to make anything besides mass-market —

The most mass-market stuff, exactly. It’s as if all T-shirts — my analogy is like it’s as if the government mandated that all T-shirts were going to cost $3. We would all be wearing semi-ironic, American flag T-shirts from Wal-Mart because nobody would make anything else. Because it has to appeal to the mass market. And yeah, you may not see it right now, but I don’t know what you’ll see 20 years from now. Maybe other systems will come up to fix it but I don’t think it bodes very well for anything other than the most mass-market kind of music.

Anyway, since when does the federal government basically step in and say, “You entire class of people who do this one thing — people who write poetry to music — this one class of Americans who write songs. We’re going to make it so that your songs have to appear on these services. You can’t really get out. You have to sell these songs on your services.” It’s a weird thing we’ve done as a country.

You’re unusual in some ways in your sentiments. A lot of the people fighting for artists’ rights are on the political left. Your argument, I think, is that what we have now is a kind of unpleasant combination of the marketplace and government regulation — kind of a worst of both worlds?

Yeah, it’s like some sort of corporate socialism, yeah. We basically mandate that individuals give their songs to these companies. I really feel like this is a simple problem to fix. There should just be an opt-out. You should just be able to serve notice with the copyright office that six months in advance, as of 2015, I’m the owner of these songs, I am opting out of all of these services.

And why can’t musicians opt out so easily?

There’s no way for songwriters really to opt out. There have been a couple of people who have pulled these really weird tricks where essentially their songs are not really published so therefore, they’re sort of not public and then they forgo performance fees but that’s really complicated, how they did that.

Performers, if you own your own recording, you can opt out of streaming services which are on-demand, but you can’t opt out of webcasting services which are not quite on-demand. You can opt out of Spotify but not Pandora. You can opt out of Spotify on the on-demand side, but you can’t opt out on the — you know how they have a Pandora-like radio service too? Your songs will still be played in there.

As a performer, you have this really narrow place where you can opt out. But as a songwriter that’s not possible anywhere.

Right. And if you have a deal with the label it’s even more complicated …

Yeah, because the label will just put your stuff in there. But I want to tell you this. I know for a fact that one of the heads of one of the major labels is freaking out on streaming and realizing that what his/her underlings told them about what was going to happen with streaming is not in fact true. And they are very pissed off about that. I can’t disclose my source, but they’re one of the major labels. They completely have buyer’s remorse right now. In fact, you could describe them as being in emergency management mode right now over what they’re going to do about streaming because of the streaming revenues. Because streaming is clearly cutting their sales but it’s not making up the difference in revenues. So even for the record labels — I mean, it’s terrible for artists, but even the record labels are realizing they have fucked themselves; at least one of the major labels has realized that they fucked themselves.

Which, actually, I take some delight in. I can’t help it. They got into this.

Because the deals are opaque, we’ve had to speculate, and I guess we still have to speculate on what the deals between the streaming services and the labels were. That isn’t public so we don’t know what kind of sweetheart deals were made between them. We do know that the artists have been largely left out of the process.

Let’s look at it this way. Say we own an apartment together, and we’re going to split whatever money we make off this apartment when we rent it out to somebody. But I go out to this renter and I say, “I tell you what, instead of you giving me $1,500 a month for this little studio apartment, we’ll charge you $750 rent but you basically give me $8,000 per year personally off the book and I’ll give you this cheap rent under the table.”

And then you’re splitting with me just that $750 and keeping the eight grand for myself. That’s what happened when the record labels traded equity for lower royalty rates. And I don’t know how long it’ll take, but there will be a class action eventually over that, but it may be too late.

Is it your sense that the streaming services will survive? There’s some worry that most of them haven’t turned a profit and that they don’t have a working business model.

I think they’ll survive but they’ll be part of Apple, part of Google, part of Amazon. They’ll be part of other services that make money in other ways. I think the same sense for the webcasters too as well. I just don’t see how they can really get the ship righted. They’ll need to charge more for their services.

On the other hand, I’m not necessarily against the streaming services. I think something like Spotify is useful and it’s kind of a good deal under certain circumstances. If I put my sound recording of “Low,” and if it was only behind the paywall, the premium-paying wall, I would get more than a penny and a half per spin. So for that song, I think having it on Spotify makes a lot of sense — if it was behind the paywall. It’s just that I don’t want my entire catalog, the entire album, for free on the service.

And you don’t have a choice right now as to whether you do?

We don’t have a choice. There are technicalities and there are ways certain artists can remove their recordings but you have to not have a record deal and frankly, I was part of the first wave of indie musicians in the 1980s. We had our own label — Pitch Tent Records. We are one of the pioneers of indie rock. And, you know, I’ve had this happen before in my 30-year career of being an independent and being on my own label and a major label. Because sometimes frankly it’s like “I don’t want to do the promotion on my own record.”

There’s an advantage to being on a label sometimes. It’s just really interesting to me. I don’t really see labels totally going away. Some people say, “Well, the labels will figure it out, they’ll figure out when it makes sense for artists.” Some people on the record side of the business are like, “Well, when we aggregate all these rights together we’ll know the best way to exploit these recordings and these copyrights.” I don’t necessarily see that happening and that’s why I just feel like there should be a right for artists to opt out of these services.

We’ve spoken a little about the government. We’ve spoken a little about these big corporations — Google, Amazon — who either own streaming services or webcasters or whatever. Let’s bring it together for a second. Part of what we’re describing is a kind of monopoly capital. We do have part of the federal government that’s supposed to be on the lookout for monopoly behavior — the Department of Justice.

And they are. They’re very vigilant on that. They’ve put the songwriters under monopoly supervision since 1941! They completely have monopoly backwards.

I’m gonna do something that breaks the law right now. I’m a songwriter who has my own publishing company. I think all songwriters should hold out for 10 percent of revenue from Pandora. I urge all songwriters to hold out for 10 percent of revenue from Pandora. I have just violated the consent decree. I am in contempt of court. Someone arrest me!

Because the DOJ doesn’t let songwriters do that. We’re under anti-trust supervision. But look at the companies that we’re [supposedly] colluding against — against Pandora which is 77 percent of the market for streaming. We might collude against Google and YouTube, right? There’s nobody close to them on online video. Let’s see, Spotify is [huge] as far as streaming goes.

Basically, the federal government has monopoly backwards. So you have the monopolies getting together on Capitol Hill and calling for Congress to not only keep the consent decree, but to expand it. It’s pretty crazy. It’d be funny if it wasn’t Kafka-esque. 

Since Reagan, the Department of Justice has focused on what they see as defending consumers, keeping prices low — and they’ve gone pretty easy on big corporations, music and technology corporations included. Do you think the DOJ, for instance, will start paying attention to the effect Amazon and Google are having on the making of culture?

I think they will once somebody sues them and it goes to the Supreme Court. This is a thing I am very seriously considering. I think the consent decree acts as what’s called a writ of attainder. Because essentially, as soon as I write my first song, I’m guilty. There’s no court proceedings. I’m under Department of Justice supervision. There’s no court proceeding. There’s no legislation. My rights are limited by extrajudicial, extra-legislative [rules] … Our Founding Fathers were very, very, very much against this thing. I think the point is that somebody has to sue the Department of Justice for violation of our constitutional rights, and then they’ll stop.

I think it’ll have to go to court. If you look at it, if a judge really looks at it, they’ll go — essentially the way the consent decree works is that it’s a court case that’s been open since 1941. It hasn’t been closed. And as soon as I wrote a song, I’m part of that court case. I demonstrated the limitation of my rights by showing how I’m in contempt of court by saying I think songwriters should hold out for 10 percent for Pandora.

When did I ever get a hearing, right? I never got a hearing on that. When was the law ever passed? The judicial branch can’t make law? They’re making law, by that consent decree they’ve created essentially a statutory right for broadcasters to have our songs.

And really, people are like, “Songwriters, I understand they’re being screwed, but it’s just a small portion of Americans.” If they can do this to our songs, they can do this to your photos that you post on the Web. There’s a law, there are proposed laws that generally fall under the title “orphan works” for photographs that essentially would allow that.

Once people start thinking that, well, if songwriters songs can be collectivized for the good of these for-profit corporations without a trial or legislation or anything like that, they can do the same thing with what you write on your Facebook account or the photo you post on Twitter. You know what I’m saying? It’s eventually going to get to everybody.

 

Scott Timberg, a longtime arts reporter in Los Angeles who has contributed to the New York Times, runs the blog Culture Crash. His book, “Culture Crash: The Killing of the Creative Class” comes out in January. Follow him on Twitter at @TheMisreadCity

http://www.salon.com/2014/08/31/david_lowery_heres_how_pandora_is_destroying_musicians/?source=newsletter

K Street Black Rock: Burning Man’s Billionaires Row

There was a certain point last night — when a six-foot-tall private-party planner in a bustier and feather headdress was clenching my shoulder and threatening me — that I wondered why I ever even wanted to follow along a tour of the fancy camps of Burning Man.

Burning Man is, after all, about building a city, which they call Black Rock. In that city, some people were building walled-off empires on its outer rings. Rich people do as rich people do.

But there is something about the way a new fleet of wealthy have descended on Burning Man that is inducing anxiety among Burners, a community that bans all money and branding (people tape over even small logos). The so-called “turnkey camps” — tight circles of trailers, or sometimes just large black-tarp walls that hide overstaffed luxury playpens — are distinctly different from the rest of Burning Man, a festival with a heavy emphasis on giving and work.

During a five-minute walk this morning, Burners in various camps offered me plums, coffee and homemade pita-and-cheese sandwiches. Campers constantly brag about how much work they put into their decor, erecting full bars or elaborate hammock-atop-hammock arrangements on site. Many of this year’s new camps are both private and prefab, and that is very difficult for some Burners to accept. It has been part of the conversation here all week.

Let it be said: All of Burning Man is a show of wealth. Tickets are $380, sure, but many of the art cars — immensely decorated buses and trucks — cost hundreds of thousands of dollars. Not to mention the neon furs, the metallic leggings, the lights (there were side-of the-road hawkers at the gate who tried to sell me a rainbow stole for $80).

Standing near a party bus one night around midnight, Ryan Parks, a young entrepreneur covered in LEDs, explained the situation: “This is the height of excess,” he said, indicating the neon and fire-spewing art cars around us. “We go to the desert, where people die, to build shit we burn. The Maslow hierarchy of needs has been met by our ancestors — so we can make art cars.”

It’s not about tech money, because that’s nothing new. Annie Harrison — an early Burner and former writer for Wired magazine — told me, “I came out here in ’95 to cover the tech scene. It was tech-reporter catnip! Mostly stories about the lasers from Lawrence Livermore. I took a picture of a guy lighting a cigarette off a laser that my editor loved.”

But something new is happening at Burning Man: There’s now a rich neighborhood.

While some power players, like Bob Pittman, station their camps openly at the center of the fray, others have created a fascinating ring of power: K Street Black Rock.

K Street Black Rock is at the perimeter of the city, which is built in the form of concentric semicircles. A long, obscure stretch far from the center, no one bikes all the way out there unless they have to.

“We’ve put our hand out to the turnkey camps and asked them to live by the principles. We can’t force them. But we asked, and I think they understand,” said Burning Man co-founder Will Rogers, who sat in a folding chair by his RV, a tattered bandana around his head. “After the first dust storm, we’re all the same color.”

In my event calendar, I noticed something called “Turnkey Camp Invasion,” described as a parade to test the hospitality of the fanciest camps. When I arrived at the meeting spot, a funky bar in a quiet neighborhood along E street, the bartenders told me the organizer hadn’t been able to make it to Burning Man because he couldn’t take the time off from work.

But the group — a dentist, a Google employee, a lawyer, some eccentrics — still gathered. They figured that, no matter what, it was a nice night for a bike ride.

“Okay, we want to make sure we don’t get the people who fund the art, though,” said a blonde woman wearing a headscarf and a sash of fake ammo. “How can we tell which is turnkey and which isn’t?”

“Listen, we’re not burning down their RVs, for god’s sake,” said David Grosof, who wore glow sticks fashioned into glasses. “If we’re friendly, they’ll invite us in. It’ll be fun.”

I stood next to a Google employee named Greg: “”The nanosecond I heard about this turnkey tour, there was no way I wouldn’t do it.”

What if it’s Google co-founder Sergey Brin’s camp?

“That’d be awesome! We’d sip a martini and have some caviar, no doubt,” Greg said.

Grosof had a more philosophical take.

“We are so very careful, no one can sell a hot dog for money, but it’s okay to have a staff and bodyguards and cooks?” he said. “What is the difference between commodity product and commodity service?”

When we reached K Street, one of the “invaders” asked a man who was walking by whether he had seen these fancy camps. Oh yes, he had, he said. Many. They set up 20 matching RVs here or there, and there’s one just right up the street.

We got to the escarpment, a daunting wall of RVs. The entry was covered by gauzy drapes. As they billowed in the wind, we could see inside: A crystal chandelier, glass refrigerators full of champagne, a dining-room table to seat maybe 16, and half a dozen very beautiful women in lingerie, serving cocktails. One of them saw the group.

She stormed outside, furious. The invaders responded defensively, saying they had just wanted to see. Some wanted to debate. She wanted everyone to keep walking. The group milled outside, debating whether to try again, or give up and go to a normal camp for a drink.

One of the turnkey residents, red-haired and slightly overweight, came out in a white shirt and cargo shorts. The party planner quickly ran back inside, brought him a red-silk Chinese robe, and helped him put it on. He thought someone’s headlamp was a camera, and started to scream at them. The event planner saw me taking notes and a picture of the scene, and came at me. “I don’t like you,” she said loudly, grabbing my shoulder. Someone next to me told her that she didn’t need to be a bitch. The man in the silk robe started jumping up and down, ready to throw a punch.

A momentary flare-up of culture clash on the dark, wealthy outskirts of Burning Man.

And then, because no one really wanted a fight, and the whole scene was ridiculous, it calmed. The Googler hopped on his bike and sped off. The dentist shook his head and adjusted his EL-wire. And I went off with a friend to a fire-dancing camp run by some Santa Cruz Burners — I gave them the ginseng candies that I carry in my bag. We ordered vodka and orange juice, but they poured us Coke and Fireball.

http://recode.net/2014/08/29/k-street-black-rock-burning-mans-billionaires-row/?utm_source=facebook&utm_medium=social