“Federalism” is the all-purpose word used to describe the complex relationship between the federal government and the states. As the United States enters an election year in which the role of government is a central issue, federalism is showing signs of strain, especially when it comes to security identification and marijuana use.
The greatest tension between the federal government and the states has been caused by the Department of Homeland Security’s renewed determination to enforce the Real ID Act, a 10-year-old law that requires stricter security standards for state driver’s licenses and other identification cards. In the context of concern about terrorism, fraud and identity theft, Homeland Security is insisting that all states comply with Real ID or risk losing driver’s licenses as a valid means of identification. Some states have resisted, citing privacy concerns. More than a dozen states have passed laws barring their motor vehicle departments from complying with the law.
If the federal government enforces Real ID, passengers in non-complying states would no longer be able to use driver’s licenses as identification when boarding commercial aircraft and would have to use passports instead. Only 46 percent of Americans have passports, according to recent data.
“This is a game of intimidation being played out between Congress and the federal government and state governments, with ordinary citizens being squeezed in the middle,” Edward Hasbrouck of the Identity Project, a privacy group, told the New York Times.
A showdown with four non-complying states was averted, or at least postponed, on Jan. 6 when the Department of Homeland Security gave Alaska, California, New Jersey and South Carolina an extension until Oct. 10, 2016. Minnesota, which has yet to receive an extension, could become the first state in which the federal crackdown in Real ID is tested. Minnesota State Sen. Warren Limmer (R), the assistant majority leader, said that the federal government was using a “heavy club” in an effort to force state governments into compliance.
Some civil liberty groups opposed to Real ID see the law as a step toward a national identification card. Opponents also cite the theft of millions of private records from the Office of Personnel Management as a sign that the federal government does not maintain secure databases.
Marijuana laws are another arena in which state and federal interests collide. Presently there are 23 states that permit medical use of marijuana plus four — Alaska, Colorado, Oregon, and Washington — and the District of Columbia that allow so-called recreational use of the drug. As many as eight states may consider initiatives in 2016 that would completely legalize marijuana.
Federal law classifies marijuana in the most dangerous category of narcotics, alongside heroin and LSD, which according to the law have no medical benefits. Congress, however, has twice voted in favor of lifting the federal ban on medical marijuana. The Obama administration has also over time softened its opposition to marijuana use. Veterans who use medical marijuana in states where it is legal have become eligible for veterans benefits. The Drug Enforcement Administration no longer interferes with Native American reservations that choose to grow and sell marijuana.
Supposedly, the Justice Department has stopped targeting medical marijuana businesses as long as they abide by state laws. This policy, however, is enforced inconsistently, according to Americans for Safe Access, a medical marijuana advocacy group. Mike Liszewski, the group’s spokesman, told the Los Angeles Times that “the number of raids has dropped substantially though not completely.”
California, one of the states in which voters this year will decide if marijuana should be fully legalized, has also become pivotal in the complicated legal battle over medical marijuana. Federal prosecutors have continued to pursue marijuana dispensaries in the Golden State, citing flaws in the original medical marijuana law that allowed unscrupulous distributors to dispense the drug to those without a medical need. The flaws were real enough. Last year the Legislature passed and Gov. Jerry Brown (D) signed three measures to correct the defects, but they won’t take effect until 2018.
The long lead time between passage of these measures and the date they become effective has created a legal vacuum that federal prosecutors have attempted to fill by going after major dispensaries. These actions defy a congressional amendment, passed in 2014 and reauthorized in 2015, which bars the Justice Department from spending money to prevent states “from implementing their own laws” on medical marijuana.
Medical marijuana advocates believed they had achieved a breakthrough last October when U.S. District Judge Charles Breyer issued a ruling that permitted the re-opening of California’s first licensed marijuana dispensary, the Marin Alliance for Medical Marijuana. The dispensary opened in 1998 and was closed in 2011 by an injunction sought by the Justice Department. Judge Breyer, the brother of U.S. Supreme Court Justice Stephen Breyer, approved the injunction.
But that was before Congress had acted to protect states that permit medical use of marijuana. In his ruling Judge Breyer implicitly rebuked the Justice Department for ignoring Congress. “It defies language and logic for the government to argue that it does not prevent California from implementing its medical marijuana laws by shutting down these…heavily regulated marijuana dispensaries,” Breyer said.
Medical marijuana advocates hoped this was the end of the matter, but the Justice Department has announced its intention to appeal this ruling.
A principal target of federal prosecutors in California is Harborside Health Center, a $25-million-a-year business that is believed to be the nation’s largest marijuana dispensary. The center has proved a boon for the perennially cash-strapped city of Oakland, which licenses it and takes a cut of the profits. The Justice Department suspects but hasn’t proved that Harborside sells marijuana to those who use it for recreational purposes.
Like the battle over enforcement of Real ID, the controversy over medical marijuana — indeed, over marijuana use in general — cuts across partisan and ideological lines. The principal authors of the congressional amendment that protected states with medical marijuana laws are two California members of the House, liberal Democrat Sam Farr of Monterey County and conservative Republican Dana Rohrabacher of Orange County, who rarely agree otherwise.
Last month this column approvingly cited a famous opinion by Supreme Court Justice Louis Brandeis, who in 1932 opined that states serve as laboratories of democracy and could “if its citizens choose, try novel social and economic experiments without risk to the rest of the country.” But when it comes to enforcement of marijuana laws and to a lesser extent Real ID, it’s the federal government that seems to be doing the experimenting — and not without risk. It’s harmful to federalism, to say the least, for a federal agency to ignore the will of Congress and run roughshod over state laws. Such actions also undermine public trust in the federal government, which the Pew Research Center has found is already at a historic low point.
States are not blameless in the federalism narrative. Too often states seek contradictory goals of greater autonomy and more money from the federal government, which inevitably comes with strings and conditions.
This tendency is illustrated by the division between Republican governors and the Republican-controlled Congress on expanding Medicaid under the Affordable Care Act to cover persons with income up to 138 percent above the poverty level. So far, 10 GOP governors have put aside their opposition to the ACA and accepted the expansion and two others are trying to get their legislatures to go along. This division is often portrayed as one of ideology, with the governors cast as moderates and the congressional wing of the GOP as conservatives. It really has more to do with money. The federal government is currently paying 90 percent of the cost of the expansion, in the process helping governors to balance their state budgets
This dispute is instructive. Some Republicans in Congress have denounced GOP governors who have gone along with their expansion, believing that it undermines their long-term goal of repealing Obamacare. But the controversy demonstrates one of the enduring strengths of federalism, which is that it encourages governors and state legislators to speak for their constituents rather than just going along with Washington.
Federalism, for all its missteps, is embedded in the American political system. It will survive the tensions caused by the confused enforcement of marijuana laws and the uncertainty of Real ID.
As Millennials grow to become the largest living generation, the donor focus of nonprofit organizations will begin to shift away from the reigning population champs, the Baby Boomers. Nonprofits must begin to perceive the significance of the needs and wants of this new population majority in order to achieve future fundraising success. The Millennial Impact Project, established in 2009, was created to understand how the millennial generation connects, involves and supports causes. The project’s 2016 Millennial Impact Report discusses new trends related to millennial engagement during election years. Take a look at our top five picks that nonprofits should take note of:
As you begin hunting for new donors to add to your existing donor database, make sure you’ve conducted thorough research on what motivates Millennials, particularly during election years. Check out Millennial Impact’s 2016 report for more information on trends tied to political years.
3 Ways to Apply This Information
It's not enough to only score Public Relations victories when there is a new product to promote or a major news event to link. Keeping excitement for a brand at a simmering level for a long time keeps companies in touch with news providers and the public at large, and there are plenty of actions PR departments and agencies can take to maintain a presence.
Maintaining a PR presence over time can be tricky as there just isn't a major internal announcement or external event constantly to piggyback with messaging. It's hard to predict how long down times will last, so it's much better to have a sustainable PR strategy in place-- one that will keep evolving over time rather than burning out and having to build up from nothing when it's time to make a splash.
Instead of running an opportunistic PR strategy that only ramps up during new product launches or major media frenzies, it's better to create a strategy that responds to a constant stream of goals provided by the business's leaders. According to Business.com, there should be strong ties in place between overall objectives and PR activity.
When companies are pursuing a certain kind of growth - whether targeting a specific audience, growing a customer base or any other type of expansion - PR can be used as a tactical asset. Business.com added that PR success today can also come from close integration with the marketing team.
With what and how should marketers and PR professionals collaborate? Well, content generated by modern marketers makes great fodder for PR campaigns. Pushing high-quality, fresh content out through media channels can create a reputation for thought leadership, and in a world where consumers are making decisions about what companies to work with, this can be an overall boost to the brand’s reputation.
Marketers may also have a sense of trends within their industry and across complementary industries to tap into some new stories and fresh content. Leveraging marketing department content creation and thought leadership as fuel for PR outreach and releases gives departments the ability to keep up constant contact and strong ties with outlets, even between news cycles.
There are many ways to gradually expand a PR strategy and try out new tactics between major events, and they tend to contribute to better overall results over time. PRWeek recently listed takeaways from industry insiders speaking at the news source's annual conference, and they included exciting new ways to improve a department's performance gradually and over time.
For example, it's always a good time to try out a new communication platform. Experimenting with new ways to spread branded messages means ensuring that no opportunity for engagement slips through the cracks. At the conference, GE communications officers explained that the rewards of discovering a valuable new platform outweigh the danger of ending up at a dead end. If a PR strategy feels stagnant or like it's in a holding pattern, it may be time to add a new channel or technology.
The PRWeek conference also yielded evidence that the model of marketing departments and PR teams working closely in concert is being widely accepted throughout the industry. Organizations are realizing the value proposition of PR at the highest levels and giving departments more responsibility and leeway. This means it's time to step up and provide consistent value with this newfound power.
PR leaders can have a powerful impact on an organization's public image and perception. The actions they take between major campaigns and product launches can be transformative in their own way and are worth extra consideration and support from all levels of the organization. Becoming the creative face of the company is a heavy yet worthwhile responsibility.
Departments that succeed in these objectives will likely have the right tools for the job. If leaders are unable to monitor their own outreach efforts or industry talk in general, they may end up making missteps or unforced errors during their efforts to reach out.
Media monitoring and media intelligence systems should encompass all channels, new and old, due to the fact that the news cycle today has many facets. Just as they should reach out on more platforms, leaders should keep many different outlets under constant observation.
In recent years, Mark Dunn, Segment Leader for Entity Due Diligence & Monitoring at LexisNexis, has organized virtual panels to probe for insights from supply chain gurus around the globe. This year was no exception, and Mark recently provided this recap of the panel members’ thoughts about trends and predictions for 2016 and beyond. Here’s what Mark had to share:
Gene Tyndall of Tompkins International focused on what he sees with be the key supply chain themes for 2016. One of the trends Tyndall sees is a real people and the talent shortage in the supply chain.
“We see several companies struggling with senior level expertise, as so many baby boomers have retired or are in the final stages of their careers,” Tyndall says. “This problem is largely a generational issue, but it is also the fact that demand exceeds supply. As companies have expanded globally, and evolved into multi-channels, the talent needs and requirements have increased.” Tyndal sees efforts to champion women in supply chain and perhaps increase their numbers as one partial solution to this issue.
Tyndall also sees enhanced distribution strategies near the top of the supply chain priority list in 2016, with new requirements for e-fulfillment operations getting most of the attention, but so too will uses of automation generally and robots specifically, especially in container loading and unloading, some also in order picking. However, he notes that the opening of the new Panama Canal in 2016 will also intensify the need for large-scale distribution facilities.
Marc Wulfraat of consulting firm MWPVL International appears to agree. A man of many talents, Marc has developed a niche of being perhaps the industry's foremost observer of Amazon.com. He notes that Amazon quietly rolled out no less than 43 smaller urban distribution facilities (Prime Now hubs and Fresh Delivery stations) in the U.S. last year, with the goal to enable delivery to a customer's doorstep in 60 minutes or less. It also opened up four university bookstores and entered into the world of retail brick and mortar. “Rest assured that this is just the tip of the iceberg, as the company is only getting started on its national quick response assault,” Wulfraat says. “Amazon's main weakness is that it doesn't have any stores for people to shop at but they are quickly working on eliminating this barrier.”
Noting Amazon's investment and activity in building its own freight capabilities, including air shipments and its own parcel delivery fleet, Wulfraat believes that “If you thought that Amazon was a game changer in 2015, hold onto your hat. The company has built an impenetrable moat that cannot be replicated by any other company.”
Our friend Mike Regan of TranZact Technologies is back again to offer some salient observations, but with a bit of a ‘black hat’ view this year—yet one very much worth noting. He warns your job may be at risk. “With the economy likely remaining soft, C-level executives will demand that transportation and supply chain professionals turn over every stone in order to reduce costs. And if the cost cuts are not deep enough, or if your C-level executives conclude that someone else can deliver more savings—you could be replaced or eliminated.” Make cuts or be cut, he warns.
However, here we run into a bit of a rub. “How will you reduce freight costs when the carriers are looking for higher rates to cover increases in their operating costs [notably rapidly rising driver pay and increased costs from regulation]?” Regan says the answer is much more likely to come from process improvement than maintaining, let alone reducing, truck rates. He adds that “I have rarely seen as many senior level transportation and supply chain executives let go as I did in the latter half of 2015.” Yikes!
We asked our expert columnist, Dr. Michael Watson of Northwestern University and OpEx Analytics, for some predictions on supply chain network design and use of analytics. Among his observations were that “Modeling will become more collaborative.” He noted that “Cloud-based technology now makes it easier to have different people in the organization work on the input files and explore the results.”
He also thinks “Machine learning will help you understand your data and automate the modeling building,” enabling companies to gain deeper insights into the data, and find inconsistencies and other problems areas.
These were just a few of the trends and predictions our virtual panel of experts offered up. Do you see the signs in your own supply chains?
Data scientists are playing an increasingly important role in organizations – from introducing new technologies like AI and machine learning to harnessing the power of the large amounts of information that often already exist inside company walls. And as the ability to generate and leverage data grows, leadership is turning to the data scientist to help them reduce costs, improve efficiency and transform how work is done.
As an organizational innovator – helping teams work better, faster and smarter, you need to ensure that the data you’re giving your people is good. According to simplilearn.com, last year, McKinsey estimated that big data initiatives in the US healthcare system “could account for $300 billion to $450 billion in reduced health-care spending, or 12 to 17 percent of the $2.6 trillion baseline in US healthcare costs. However, bad data is estimated to be costing the US roughly $3.1 trillion a year.” Now imagine those numbers applied across every country, globally.
How can you be sure you’re adding value as a data scientist and truly transforming how your teams work through the application of good data?
How often are business decisions made on a hunch or an assumption? More often than we’d like to think. By equipping teams with trusted data that informs better decision-making, you will help them appreciate the power of data and how it can drive the choices that translate into growth and success. If you’re seeking ways to make data more top of mind with your leadership, first consider if you’re using data sources that allow for sharing and customized viewing. By giving teams easy access to data and data findings, you’re removing roadblocks that exist in most business environments. Also look for ways to share only what is critical and relevant to that team or department. For people who don’t regularly work with data, making it as accessible and streamlined as possible is a big step in the right direction.
By getting people only the data they need and in a sharable way, you’ll put insights front and center in the decision-making process.
When the average business person things of AI or machine learning, all sorts of ideas can come to mind – robots, computers that turn into hostile adversaries; the list goes on. As a data scientist, you know the very real and valuable impact of AI in an organization. Work with teams to help demystify these emerging technologies. By removing the fear around them, you can ensure that the output they generate will become everyday information used by teams across the organization. Consider sharing real world examples of AI in action: Watson, Google driverless cars and Tesla’s Autopilot are a few mainstream examples to point to.
By working to integrate trends and insights into the everyday choices of your organization, you will ultimately help them to define better goals. By assessing performance over time, you can suggest alternate paths that better engage customers, improve performance and enhance success in the long run.
Ultimately, the role of data scientist is one of analyzing the data within a company and leveraging the insights and trends you uncover for better business. Be sure to consider how you share, position and educate teams in regard to data and the technology you use to extract it. By bringing everyone along on the data science journey, you’ll become a true agent of meaningful change for your organization now and into the future.
Ready to learn even more? Check out these solutions and resources developed specifically for data scientists:
Federal courts continue to frustrate the Trump administration’s efforts to punish cities and states that oppose its hardline immigration policies.
Earlier this month Sacramento-based U.S. District Judge John A. Mendez rejected most of the administration’s demands to overturn three California laws that seek to counter its immigration policies. But he blocked a portion of one law that would have fined private employers for voluntarily cooperating with immigration authorities or for re-verifying the legal work status of employees.
Employers have a right to cooperate, Mendez ruled, while saying that California had broad authority to limit use of its resources for immigration enforcement.
“Refusing to help is not the same as impeding,” wrote Mendez. “Federal objectives will always be furthered if states offer to assist federal efforts. A state’s decision not to assist in those activities will always make the federal objective more difficult to attain than it would be otherwise. Standing aside does not equate to standing in the way.”
“Sanctuary” is a political term, not a legal one. It refers to jurisdictions that try to shelter unauthorized immigrants, most often by limiting the assistance local police provide to federal immigration agents. This does not prevent the U.S. Immigration and Customs Enforcement agency (ICE) from arresting unauthorized immigrants within these states and cities. Hundreds of cities and counties and five states – California, Oregon, Connecticut, Rhode Island and Vermont – have designated themselves as sanctuaries. Federal judges in Chicago and Philadelphia earlier reached similar conclusions to Judge Mendez, rejecting administration efforts to penalize these cities financially for refusing to cooperate with ICE.
It’s always comforting when judges follow the law and ignore partisanship so it’s worth noting that these rulings were made by judges appointed by four Republican presidents. Mendez and U.S. District Judge Michael Baylson in Philadelphia were appointed by George W. Bush. The Chicago ruling was upheld by a three-member panel that included judges named by Gerald Ford, Ronald Reagan and George H.W. Bush.
Less comforting is the inflated response of the Trump administration to jurists who rule against them. For instance, Justice Department spokesman Devin O’Malley called Judge Baylson’s ruling “a victory for criminal aliens in Philadelphia, who can continue to commit crimes in the city knowing that its leadership will protect them from federal immigration officers whose job it is to hold them accountable and remove them from the country.”
On the other side of the debate, sanctuary activists have been slow to recognize that the policies they advocate can backfire. Lacking cooperation from local law enforcement agencies, ICE has this summer made random sweeps in Southern California, Miami, Cleveland, the New York area and other places.
“To the extent jurisdictions do not cooperate,” ICE officers told the nonpartisan Migration Policy Institute, “their agency has little choice but to carry out enforcement activities in neighborhoods and other community locations, even though it is not as efficient a use of time or resources, nor does such enforcement yield the numbers that can be identified by screening cases in local jails.”
These neighborhood sweeps scoop up fewer criminals and greater numbers of law-abiding immigrants who have lived peacefully in the United States for many years.
Frustration with the sweeps prompted Sen. Kirsten Gillibrand (D-New York) to urge that ICE be abolished. Calling the agency a “deportation force,” Gillibrand said we “should get rid of it, start over, reimagine it and build something that actually works.”
Her call has been taken up by several other Democrats but rebuffed by the Trump administration. Speaking at ICE headquarters on July 6, Vice President Mike Pence called the critics “irresponsible” and promised the administration would never abandon ICE.
The issue of sanctuary cities has been eclipsed in recent weeks by the controversy on the U.S.-Mexican border in which thousands of Central American children were separated from their parents as soon as they set foot within the United States.
The ensuing uproar caused a rare retreat by the administration. It now says these families, mostly from Central America, will be kept intact and released, pending a hearing, with parents wearing ankle bracelets. This is the policy that Trump and Atty. Gen Jeff Sessions denigrated as “catch and release” when it was used by the Obama administration.
“As presidents, Barack Obama and Donald Trump don’t have much in common, but they both failed to manage the migration out of the Northern Triangle of Central America—Guatemala, Honduras, and El Salvador,” wrote Robert Suro, a journalist and professor of public policy at the University of Southern California, in the New York Times. “Both tried to achieve deterrence through enforcement. Both faced political blowback. Both made awkward course corrections.”
Some 50,000 unaccompanied children from Central America and 40,000 parents with children were apprehended at the border during a 2014 surge that bewildered the Obama administration. There have been smaller surges since, and they are likely to continue because these countries are among the most violent in the world. As White House Chief of Staff John Kelly put it, the mass migration of children from Central America to the U.S.-Mexico border primarily consists of “[parents that] are trying to save their children.”
Away from the border, President Trump’s policy of “zero tolerance” for illegal immigrants has increased fears of deportation among the estimated 11 million unauthorized immigrants living in the United States. This has prompted a growing number of American children to drop out of Medicaid and other government programs because their parents are not citizens, according to Kaiser Health News.
Nonetheless, Trump is on track to deport fewer unauthorized immigrants than his predecessor. As president, Obama deported 2.5 million immigrants, most of them Latinos and many for relatively minor offenses, prompting the Economist to call him “deporter in chief.” ICE made more than twice as many arrests (297,898) in Obama’s first year in office as in Trump’s (143,470).
These family-splitting deportations caused anguish in Latino communities, but little outcry outside of them, in part because Obama did not engage in the anti-immigrant rhetoric in which Trump delights. In an April roundtable discussion of California’s sanctuary laws, the president said: “We have people coming into the country, or trying to come in — and we’re stopping a lot of them...You wouldn’t believe how bad these people are. These aren’t people. These are animals.”
Such slurs have galvanized opposition to Trump and polarized the immigration debate along partisan lines. A recent NPR-Ipsos poll found that many of Trump’s immigration policies are unpopular but also showed, said Chris Jackson of Ipsos, that Trump’s base remains “very much behind him.”
Immigration reform is one of the great unresolved issues of American politics and is likely to remain so unless and until Congress passes comprehensive legislation. Congress last acted in 1986, when President Reagan signed a sweeping bipartisan measure that provided a path to citizenship for unauthorized immigrants and tighter border controls.
In the near term, immigration will be an issue in the midterm elections, according to various polls. Afterward, no matter who wins, three issues will probably force Congress to confront the issue yet again.
The first issue is the plight of 690,000 young immigrants brought to the United States as children who had signed up for Deferred Action for Childhood Arrivals (DACA), created by an Obama executive order in 2012. DACA recipients were eligible for work permits and protected from deportation.
Trump rescinded the executive order, and two legislative attempts to protect DACA recipients and similar immigrants failed in Congress. DACA supporters — Republicans as well as Democrats — have promised to try again in 2019.
The second issue is an enormous and growing backlog of immigration cases, now more than 700,000. Democrats and even Atty. Gen. Sessions say more judges are needed. Trump has called this idea “crazy,” but the backlog will create pressure for congressional action.
A third issue, says Ann Morse, director of the Immigration Policy Project for the National Conference of State Legislatures, is a growing shortage of workers, especially in the health care, agricultural and tourism industries.
“They used to say immigrants were taking jobs from Americans,” Morse said. “Now in the employee-short industries they’re asking, ‘Where are the immigrants’?”
Courts will also continue to be engaged with immigration. The administration says it will appeal its unsuccessful attempts to punish sanctuary cities to the Supreme Court. Senators may raise this issue in the confirmation hearings of U.S. District Judge Brett Kavanaugh, nominated by Trump to replace Justice Anthony Kennedy.
With or without Kavanaugh, the Supreme Court’s eventual decision is no slam dunk for President Trump. As lower courts have demonstrated in protecting sanctuary cities, rulings on immigration don’t necessarily follow party lines.
Despite the significant financial risks cyberattacks pose for American businesses, many don’t have cyber insurance protecting them against losses from such incidents. But high-profile attacks like last year’s Equifax data breach and tougher data privacy laws are changing that.
The NotPetya malware attack that crippled parts of FedEx’s European operations last June cost the package delivery giant $300 million, mostly due to lost revenue and response and remediation expenses, according to a report by CSO Australia. That financial hit erased 79 cents per share of the company’s profits, almost 40 times the impact that the service disruptions caused by Hurricane Harvey had on its bottom line, as Insurance Journal reported.
Last year’s massive data breach at Equifax, meanwhile, could end up costing the consumer credit reporting agency more than $600 million, including outlays to resolve government investigations and civil lawsuits stemming from the breach, according to a report by Reuters.
“It looks like this will be the most expensive data breach in history,” Larry Ponemon, chairman of the Ponemon Institute, which tracks cyberattacks, said of the incident.
The Equifax and FedEx attacks may represent worst case scenarios - at least for now - of the financial threat cyberattacks pose for U.S. companies. But the statistics for garden-variety cyberattacks aren’t any more encouraging. Sixty-one percent of the small-to-medium-sized businesses with up to 1,000 employees surveyed by the Ponemon Institute in June of last year had experienced a cyberattack within the prior 12 months. On average, those incidents resulted in losses of $1,027,053 “due to damage or theft of IT assets and infrastructure” and $1,207,965 “due to disruption to normal operations.”
A 2016 RAND Corporation study, based on 12,000 cyber incidents occurring between 2004 and 2015, placed the cost of a “typical cyber incident” much lower, at less than $200,000. But that study also found a nearly four-fold increase in the number of “security incidents” - defined as “malicious attacks directed at a company” - between 2012 and 2014, and a more than six-fold increase in the number of data breaches between 2005 and 2014.
“Cyberattacks are one of the greatest threats to the modern company,” said Mark Berven, president of Property & Casualty for Nationwide Insurance, which also conducted a cybersecurity survey of small businesses last year. “Business owners are telling us that cybercriminals aren’t just attacking large corporations on Wall Street. They’re also targeting smaller companies on Main Street that often have fewer defense mechanisms in place, less available capital to re-invest in new systems and less name recognition to rebuild a damaged reputation.”
Still, half of the U.S. executives surveyed last year by research firm Ovum for the Silicon Valley-based analytics software company FICO said their companies didn’t have cyber insurance, and 27 percent said their companies had no plans to get it. Of the 50 percent whose companies did have cyber insurance, only 16 percent said that insurance covered all risks.
Surprisingly, given its size and data dependence, FedEx didn’t have cyber insurance when it was hit by the malware attack last year, according to a press release issued by the company at the time. And although Equifax did have cyber insurance at the time of its data breach, the policy only covered about $125 million - potentially less than a quarter - of the company’s losses.
There are a variety of reasons why cyber insurance hasn’t been embraced more enthusiastically by businesses in America and other developed countries. (A report last year by global risk management firm Aon indicated that 48 percent of Australian businesses and just 17 percent of European businesses had cyber insurance.)
One reason smaller businesses in particular haven’t been purchasing cyber insurance is that they don’t consider cyberattacks a serious risk.
“From smaller organizations we hear the sentiment, we’re too small; we’re not a target,’” the Aon report stated.
Larger organizations, meanwhile, have tended to devote their resources to what another RAND report described as “ex ante security controls in order to reduce the probability of loss” instead of transferring their risk to an insurer. As Aon’s report stated, “There remains a perception among larger businesses that their systems and protocols are okay, and that their IT people are across all relevant issues.”
The report also pointed out that strategy hasn’t worked for “some of the world’s largest companies” or even for the U.S. National Security Agency (NSA), which, despite having “all the security tools in the toy box,” was breached by Russian hackers in 2015.
The Ovum survey identified mistrust about cyber insurance pricing as another reason companies haven’t been buying policies. Only a quarter of the survey’s respondents said they believed their policy’s premiums accurately reflected the risk profile of their company, while just 23 percent said they believed the cyber insurance industry was clear and transparent about its pricing.
A report from Deloitte said the lack of standardization among cyber policies was also an obstacle to buying. The lack of uniformity among terminology, conditions, and exclusions, the report stated, makes it difficult not only to compare offerings from different providers but even to determine what a particular policy does and doesn’t cover.
“Many buyers...are afraid they won’t realize what isn’t covered until after they file a claim,” the report said.
The Deloitte report and another from specialist insurer Hiscox also noted that there’s a great deal of confusion in the marketplace, with some companies mistakenly believing cyberattacks are covered by their existing insurance policies.
Issues with the cyber insurance market evidently discouraged FedEx from purchasing coverage.
“For a long period of time, it was very thin, didn’t cover a lot of things that a company would look to cover, much more related to personal information and things of that note,” Alan Graf, the company’s executive vice president and CFO, told investors on a September 2017 conference call.
Cyber insurance has actually been around since the dot-com crash of the late 1990s, according to Christian Stanley of Lloyd’s of London, which, he said, “has about a third of the global market share,” as CSO Online reported. He also said that market has “dramatically increased compared to other lines of business.”
The Hiscox report also referenced the rapid growth of the cyber insurance market, which it attributed to increasing “risk awareness in corporate boardrooms,” due in part to major cyberattacks and their attendant media attention. According to another report from CSO Online, demand for the cyber insurance policy of Scandinavian insurer Tryg A/S quadrupled after the worldwide WannaCry ransomware attack last year. And the NotPetya attack apparently sent FedEx shopping for coverage, with Graf also telling investors during that conference call last year that the company was “re-examining where the market is.”
“We think it’s getting deeper,” he said. “And we are going to go out and see if there’s something that we can develop that would add protection for our company at a reasonable price.”
Government regulation has been another major driver of the cyber insurance market’s growth. Thirty-six percent of the U.S. firms surveyed in late 2016 for Hiscox said they’d purchased cyber insurance because of new data regulations.
In 2003 U.S. states began passing legislation requiring businesses or government agencies to notify individuals about breaches of their personal information. All fifty states now have such laws, according to the National Conference of State Legislatures. Businesses face substantial financial penalties - and lawsuits - for failing to comply with those mandates, and compliance itself can involve substantial expenditures, such as for setting up and staffing a call center.
“Part of the challenge is there’s a lot more that goes into notifying than hitting send on an email,” Jason Brewer, vice president of communications and state affairs for the Retail Industry Leaders Association, told Stateline in 2015.
This past May the European Union rolled out its new General Data Protection Regulation (GDPR), significantly increasing the financial exposure not only of businesses operating in the EU but also those in the U.S. and elsewhere that collect personal information from anyone in an EU country. Among other things, the regulation imposes fines of up to 20 million Euros - about $23.4 million - or 4 percent of annual global turnover, whichever is greater, for violations of its provisions and makes companies responsible for the compliance of outside contractors.
In the United States, such tough data privacy regulation is unlikely at the federal level under the current administration. But it could come in some states. Just over a month ago California passed a law (AB 375) with some provisions that are similar to those of the EU regulation, earning it the nickname “California’s GDPR.”
But Joshua Motta, CEO of San Francisco-based Coalition, pointed out to Insurance Journal one key difference between California’s new law and the GDPR related to cyber insurance.
“Under GDPR fines and penalties are not insurable,” he said. “With California, all of the fines and penalties are insurable.”
“It’s a significant tailwind to purchase the insurance,” he added.
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World leaders, CEOs and academics will come together in the Swiss resort of Davos for the annual World Economic Forum (WEF) from 21 to 24 January. The summit’s program and participant list hint at a clear theme of this year’s summit: Environmental, Social and Governance (ESG) issues will likely dominate the conversations.
Looking through the 66-page agenda of panel discussions and briefings, the highlights will include:
Discussions will not only focus on climate. Other social issues are also becoming more important:
ESG also represented on the guest list
The participant list for the World Economic Forum in Davos is as long as ever, stretching to 125 pages of representatives corporate, government, NGO and academic institutions. This year’s list has a different feel to previous years, with so many delegates’ job roles focusing in some way on the environment and climate change. This reflects the pressure being put on companies to commit to making a positive impact on ESG issues. Here are some highlights from the list:
Companies under pressure
This year’s discussions at Davos are expected to put even more pressure on companies and governments to reduce their environmental impact. If CEOs do not heed the warnings, companies face losing investor and customer support. We’ll be reporting on this and other themes and trends emerging from the summit. Stay tuned for more here and on our Twitter and LinkedIn channels.
Check out our recap coverage from last year's forum.
The core skills of the modern PR professional are based on gaining the most important currency for companies today: Trust.
Consumers are more connected than ever, and they have countless options of brands to follow, shop, support and share. Brands must take smart steps to reach these individuals on the platforms they use every day and serve them messages they’ll value and trust.
The following are four of the most critical abilities for modern PR professionals to possess:
Verifying Information
The chaotic media climate today, in which blatantly false and malicious stories can lead to very real consequences, presents a serious challenge for PR professionals. These individuals have to realize the magnitude of the problem and counter with clarifications.
PR pros’ best practices
Reaching Out to Influencers
With so much access to information, consumers are looking beyond brand’s own communications to get information. PR pros today are learning to work with influential figures to reach large audiences with messages that come from people rather than companies.
1 http://www.journalism.org/2016/12/15/many-americans-believe-fake-news-is-sowing-confusion/
2 https://www.prdaily.com/Main/Articles/22035.aspx
3 https://www.launchmetrics.com/resources/blog/state-influencer-engagement
4 http://www.forbes.com/sites/paularmstrongtech/2017/01/27/the-future-of-influencer-relations-is-influencer-marketing/#ca7506a1d1e7
5 http://www.forbes.com/sites/forbesagencycouncil/2017/02/02/the-fastest-way-to-destroy-influencer-marketing-automate-it/#69e73587d91b
With Democrats having suffered presidential election losses despite winning the popular vote in 2000 and 2016, an effort to bypass the Electoral College has been picking up momentum in blue states. Eleven that have consistently voted for the Democratic candidate in recent presidential elections, including California, Massachusetts and New York, have now signed onto the national popular vote interstate compact, which would award all the electoral votes of the signatory states when there are enough of those states to constitute a majority of the Electoral College, currently 270 votes.
But last month lawmakers in the less solidly blue state of Colorado passed a bill, SB 42, adopting the popular vote compact, which Gov. Jared Polis (D) said he would sign.
“I’ve long supported electing the president by who gets the most votes,” he said.
Colorado state Rep. Emily Sirota (D), one of SB 42’s sponsors, said she views the compact as a way to get candidates to campaign nationwide instead of in just a few battleground states that are key to an Electoral College victory.
“If we had presidential candidates campaigning across the country, instead of a handful of swing states, you’d see a lot more participation from across the country and I think that is good and healthy for our electoral process,” she said.
Advocates are hopeful Colorado’s action will spur other states to join the compact. Sixteen others, including Democrat-governed Delaware, Maine, Nevada, New Mexico and Oregon, have introduced legislation this session to do so, according to National Popular Vote, the group that proposed the interstate compact.
But with the compact’s electoral vote tally, including Colorado, standing at 181, it seems unlikely to reach the 270-vote threshold before the 2020 election. Some of the 16 states that have introduced popular vote bills are under split-party control, while others are deep red and likely to resist any effort that might favor candidates able to draw support from large urban areas that tend to vote Democratic over those more reliant on rural areas that generally vote Republican.
Still, John Koza, chairman of the National Popular Vote, said it was “theoretically” possible to get to 270 electoral votes by the end of next year.
“You never know how a bandwagon can get rolling,” he said.
He added that it seemed “perfectly plausible that we should get there by 2024.” (HILL, NATIONAL POPULAR VOTE)
Below is a guest post from LexisNexis's Thomas Stoeckle, who heads up the Small Data Forum podcast -- a podcast that makes big data less intimidating, more actionable and thus more valuable.
Episode 6 of the Small Data Forum podcast continues the discussion from our 2016 year-end edition, which focused on fake news, post-truth, and what John Naughton in the Observer called the 'poisoning of our public sphere'.
At the World Economic Forum in Davos in January, fake news was a main discussion point, with the Forum's Global Future Council on Human Rights addressing governance issues around what is seen as an urgent matter of human rights. In the UK, a parliamentary inquiry into fake news is under way, led by the Culture, Media and Sport Committee. The BBC has set up its own unit to check facts and debunk fake news, technology companies such as Facebook and Google are driving initiatives to combat fake news in Europe, and Apple CEO Tim Cook recently stated that false information is "killing people's minds".
With general elections pending in several European countries – in the Netherlands in March, in France in April and May, in Germany in September – there is an intensifying debate about how to learn from the events of 2016, how to reach, engage and activate audiences (in this case: voters) most effectively.
In the aftermath of Brexit and the US Presidential Elections, there is considerable interest in personality mapping based on the digital footprint of an individual, and how this information can be used for data driven political marketing.
Natural language processing computer systems such as IBM's Watson can help us understand better what resonates with audiences (and why), and what doesn't. Illustrating that point, IBM's Jeremy Waite ran an analysis of both Donald Trump's 2017 acceptance speech, and Barack Obama's 2009 speech. What made that research remarkable was the fact that it was published just hours after Trump gave his speech. He used Watson's four APIs to run analyses in its speech-to-text engine, as well as its sentiment and tone analyzer, and finally, personality insights.
What Watson does exceptionally well is analyse the written word, but since verbal communication only accounts for a small percentage of communication overall, additional types of analysis are required to understand context and impact: how something was said, and why it was said, is just as important as what was said.
Advertising has coined the phrase CPA, or continuous partial attention, for the phenomenon of having to manage a continuous information overflow. Successful communicators and marketers respond to this by applying systematically what is called the 'cocktail party rule': if you want to be boring, talk about yourself; if you want to be interesting, talk about the things that matter to the people around you.
The populism of a Nigel Farage or Donald Trump seems to be more effective at connecting with audiences, than the more fact-based approach of the Remain campaign in the UK's EU Referendum, or Hilary Clinton's decades of experience in US politics and policy-making.
The business journalist and publishing strategist Adam Tinworth calls this the 'asymmetric information warfare' between the fact-based rational journalism of the mainstream media, and the narrative-based emotional approach of political movements and their (mainly) social media proponents. Arron Banks, major donor of the Vote Leave campaign, understood this better than most. The day after the Brexit vote, he told journalists: "The remain campaign featured fact, fact, fact, fact, fact. It just doesn't work. You have got to connect with people emotionally. It's the Trump success." (link)
Neuroscience and psychology provide some context: the older parts of the brain that regulate instinctive behavior ('to survive in the wild') trigger reactions that favor known over unknown, and in-group over out-group. The newer parts of the brain, where cognition and rational thinking and decision-making are regulated, will usually finish second in a straight race between emotions and facts. As neuroscientist Marc Lewis put it in a Guardian article: "Nobody is innocent when it comes to brain wiring".
Facts and statistics still have a central place in public discourse, but they need to be embedded in a compelling narrative. A master of this art, the Swedish scholar Hans Rosling, sadly died last week. To honor his legacy, truth and trust in data and facts need to be re-established. The various initiatives by government bodies, mainstream and social media firms, technology companies – they all have a role to play in addressing the problem.
At the same time, coming back to the neuroscience perspective, truth was always something that our brains perceived in their own ways. Understanding and accepting this will be a step toward de-polarizing the debate. Or as Dr Daniel Glaser puts it: "Our sense of the world is a bunch of guesses that we generate from experience, expectations and beliefs. Reading and watching the news is simply a bit of feedback that supports what we believe is happening anyway".
Listen to Neville, Sam and myself debating the above topics on our Small Data Forum Podcast series.
A new regulation from the Department of Health and Human Services will allow insurers, starting on Oct. 1, to offer bare-bones, short-term health insurance plans as a longer-term, low-cost alternative to the coverage prescribed by the Affordable Care Act. The rule will remove the current three-month limit on short-term plans, extending their length of coverage to 364 days and, with renewals, up to three years. But at least seven states have banned short-term plans or limited them to three months. Connecticut, meanwhile, requires short-term plans of any duration to include essential benefits mandated by the ACA. California lawmakers have also passed a bill (SB 910) banning such plans, which is awaiting Gov. Jerry Brown’s (D) signature, and Washington is considering a rule limiting them to three months.
Only 13 states are currently taking five or all six of the key actions needed to end the opioid crisis, according to a report from the National Safety Council, a nonprofit organization that seeks to eliminate preventable deaths. The six actions are: educating opioid prescribers, establishing opioid prescription guidelines, implementing prescription drug monitoring programs, improving the collection and sharing of data, treating overdoses and improving access to treatment for opioid abuse. The NSC found that eight states are taking only one of two of those actions.
The novel coronavirus, or COVID-19, has already changed society. As governments worldwide struggle to adapt to the new reality, they are introducing measures aimed at preventing the further spread of the virus and increasing the resilience of their public healthcare systems. But with more than 2.5 billion workers and consumers on virtual lock-down, COVID-19 is also having an enormous impact on the global economy, disrupting production and trade worldwide. Companies face unprecedented levels of PESTLE risk as a result of travel restrictions and serious resource and workforce shortages that are disrupting supply chains and business as usual.
With COVID-19 set to dominate the world’s attention in the weeks and months to come, we’re taking a closer look at how PESTLE risks are surfacing in media coverage. The COVID-19 risk tracker, powered by Nexis Newsdesk, features interactive charts that provide insights into how coronavirus pandemic coverage exposes political, economic, societal, technological, legal and environmental risks in near real time. Explore the analysis here.
But first, let's have a look at some of the highlights
In looking at which risk categories receive the most media coverage, societal, technological and economic issues dominate the conversations, with legal issues not far behind. Wages and salaries, public health, manufacturing facilities, supply chain management, and layoffs represent the most talked about buzz words at the moment.
As the chart above shows, the issue of wages and salaries is clearly a top-of-mind issue. In addition to coverage of topics like hazard pay for essential workers, the coverage related to wages and salaries reflects the unprecedented number of people who are currently laid off due to the closure of nearly all public spaces, including restaurants and bars, non-essential retailers, and a host of travel and entertainment venues.
On a related note, layoffs are a trending topic in terms of COVID-19 and economic risk, however the impact on manufacturing facilities is also dominating in the media. Within conversations on manufacturing, we see both risk and opportunity. While some of the coverage focuses on the difficulties manufacturers face due to lack of available raw materials, parts, and workers, media attention is also fixed on efforts by some manufacturers to repurpose their production lines to address critical shortages within healthcare, such as personal protective equipment (PPE) and ventilators.
When all of the PESTLE factors are tracked in relation to company mentions, it’s easy to see that the impact of the coronavirus pandemic leaves no industry untouched—airlines and automakers, banking and finance, even the digital communication platforms that are enabling social interaction despite physical distancing restrictions. Apple and Amazon dominate in mentions, perhaps because these organizations have both suffered supply chain challenges as a result of COVID-19 and have turned their attention to addressing critical needs of healthcare workers and consumers during this time.
Capturing entity-level insights
While Nexis Newsdesk captures the big picture of PESTLE risk related to COVID-19, our solutions for entity due diligence and ongoing risk monitoring empower organizations faced with historic levels of disruption. Nexis Diligence and Nexis Entity Insight are platforms that risk management professionals can use to conduct due diligence or monitor critical suppliers wherever they are. We looked at 50 entities using Nexis Entity Insight and saw similar trends—elevated economic, societal and technological risk—related to those specific companies. For example, the High and Medium risk factors dominating economic media coverage in the past 30 days focus on the impact the shut-downs are having on businesses—with layoffs, business interuption, insolvency and bankruptcy all serious concerns.
In some ways, academics’ methods of teaching and research have hardly changed since Plato and Aristotle were discussing philosophy and mathematics in the Academy in Ancient Greece. Students still learn from a tutor in small discussion groups and lectures, and many scholars still study physical manuscripts in libraries. But in this blog, we will explore a recent change that has revolutionized academia: big data analytics
AI-powered research
The application of big data analytics has generated new and innovative partnerships between universities and companies on research projects. Companies have access to a lot of data on their customers, and universities have data science experts who can interpret and analyze that data. The result is mutually beneficial—companies get better insights about their customers and products, and universities get new research ideas and much-needed funding from partner firms. For example, earlier this year the pharmaceutical firm Novartis announced a partnership with the University of Oxford’s Big Data Institute. The Oxford experts are using machine learning to analyze data from Novartis’ clinical trials to identify patterns in how patients respond to different medicines.
Academics in virtually every academic discipline are exploring how AI and big data analytics could change the way they do their research. A study in the journal Nature found that ‘big data’ and AI were the third and fourth most-searched terms on a scholarly database in 2018. LexisNexis attended Dubai’s Global Education and Skills Forum earlier this year and found many examples of academics who were using AI to do research that would otherwise be have been impossible. Milo Comerford, a senior analyst at the Tony Blair Institute for Global Change, said that AI and machine learning have “changed the game” for academic research. He gave the example of his own research which uses AI to trawl through thousands of extremist propaganda documents and come up with new insights. “I wouldn’t have been able to do [this] manually and through my own study,” he said.
Personalized teaching
Universities’ core purposes to research and to teach, and big data analytics are changing the latter as well as the former. Teachers and lecturers in universities are using big data to gather data on their students and then customize their lesson plans. Lecturers no longer have to wonder whether their lectures are going over students’ heads—now they can use data from e-learning software to work out which parts of the course students struggle with, and give extra support to those who find a particular area difficult. Back in 2015, in a paper in the journal Procedia Economics and Finance, Logica and Magdalena argued that big data offers teachers “a chance to refine the educational process”. “If [teachers] want relevant insights on their real efficiency and the progress of their students, they need to integrate this kind of solutions,” they wrote. In the four years since this paper was published, more and more educators have followed this advice.
The next step could be for some of these lecturers to be replaced by AI—indeed, some universities are already employing AI in their teaching process. In 2016, students on Georgia Tech University’s online master’s in computer science who asked questions on the course’s online forum were often answered by Jill Watson, who was apparently a teaching assistant at the university. When the course finished, it was revealed to them that Jill was in fact an AI bot based on IBM’s Watson platform. Most students had had no idea. AI and big data offers universities a way to save money on teaching, and reach a greater number of students.
Automated admissions
Universities are even using big data to help them decide which students to admit every autumn. Traditionally, universities have employed a large team of admissions officers who weigh up thousands of applications before deciding who to admit, but big data analytics allows them to automatically sort candidates by test scores and other admissions criteria. Universities rely on attracting large numbers of eligible students to enroll, and data analytics expert Eric Spear says big data analytics “holds the key to solving the problem of declining enrolment numbers”. Analytics allow an institution to track which courses are more popular with students from different demographics, and which courses have a problem with drop-outs. Removing the element of human judgement in the admissions process could also benefit universities’ reputations—earlier this year, top U.S. colleges were alleged to have accepted donations from wealthy Americans in exchange for university places. An AI-driven process would likely have prevented that from happening.
What should you do?
Big data analytics can make your life easier, whether you’re an academic, a university president or a corporation considering a research partnership with data scientists. But the insights available from this analysis are only as good as the data being fed into them. LexisNexis’ Data as a Service provider helps universities by integrating data with flexible APIs that deliver normalized big data in a semi-structured XML format. This enables universities to add bespoke tags and other enrichments to meet the unique requirements of the research being undertaken. Additionally, when retrieving data, researchers can take advantage of our own robust topical classifications to identify and retrieve highly-relevant result datasets, ensuring a faster time to insight.
Next Steps:
In the age of social media and instant gratification it is incredibly easy to edit photos to fit a specific ideal. The world is becoming increasingly more visual and consumers want content that tells a big story with a quick glance at a single photo. With so much content circulating so quickly it may not seem potentially problematic to alter photos to meet your goals. However, infamous cases have shown that this is simply not the case. With a constant stream of stories highlighting photo editing faux pas, consumers have developed a keen sense of smell when it comes to sniffing out highly altered or superficial photos.
To put your best foot forward, consider the ethical ramifications of photo editing, even though it may be all the rage. Keep these tips in mind the next time the digital airbrush calls your name.
Rule of Thumb: Don’t Change the Story.
If you are going to edit an image, ask yourself: What does this image portray? Will this edit change the story somehow? If so, don’t do it.
There are bigger issues that could come up as a result of your actions. In most cases photo editing fails are due to core ideas or messages from a photograph being manipulated. As the photo editor, you may think that you are clarifying the image. Others may see it as an attack on individuality and authenticity. It is best to keep the image as natural as possible to tell the complete truth rather than what the organization or individual may wish were the truth.
You’re Better Than That. Seriously.
Whether you are a photojournalist covering a massive story or an entry-level employee posting a picture from your latest staff meeting, there are understood do’s and don’ts when it comes to editing images.
Every professional has an ethical responsibility to the overall industry and their specific organization to tell the truth. Choosing to do otherwise damages the credibility of the individual, the organization and, in some cases, the industry at large. Truly, a single photo editing misjudgment can have an overwhelmingly negative impact.
Don’t be that guy, no one likes that guy.
What Would Others (Your Consumers) Think?
Your ultimate goal is to build trust between your business and your consumers. As story-telling professionals, trust is of your utmost concern. Without such trust, there would be no reason to tell any story—no one will believe it anyway! It’s critical that your consumers believe what you have to say and take it seriously. The photoshop fail will be found and will be the thing that people will remember about your brand. This will make you and your organization less credible and possibly irrelevant—damaging any attempt to form connections with new and existing customers.
Learn from Other People’s Mistakes: Infamous Mishaps
From hilarious mistakes to insulting dishonesty, there are so many cases to take note of and learn from. Check out the following examples:
1. Diversity Is the New Company Buzz Word, But the Tech Industry Completely Missed The Point.
2. Politics are Really Only Fun When Everyone Else Agrees with You … Right? See How Far This Photojournalist Was Willing to Go to Get His Political Agenda Across.
3. Who Approved This Photo of a Three-Legged Beauty?
The storytelling industry is everchanging; it’s understandable that these changes can be hard to follow. Don’t let that be a barrier to quality work that fosters trust. Do your organization (and yourself) a favor and follow your ethical gut. Be proud of the work that you put forth. Keep the trust and integrity in the storytelling industry alive.
Uncertainty.
There is no better way to describe what lawmakers across the nation will face once gavels come down on new statehouse sessions in January and beyond. While in a normal year the kind of broad gains Republicans made at all levels of government in the recent election would give prognosticators a clear view of what to expect, this has been anything but a normal year.
This is of course due almost exclusively to the shocking and highly unexpected election of businessman turned reality TV star Donald Trump to succeed President Barack Obama. The win, however, was hardly convincing. Although Trump handily won the Electoral College – the only measure that matters – Democrat Hillary Clinton just as easily outdistanced him in the popular vote, Clinton garnered well over 2 million more votes than did Trump, historic in a way but nonetheless a toothless moral victory if there ever was one. If anything, the popular vote tallies are merely a graphic illustration of how divided the nation remains after one of the ugliest presidential campaigns in our history. Perhaps even more telling in that regard: 46.9 percent of eligible voters were so unimpressed by either candidate – or turned off by the campaign’s relentlessly negative and hateful tenor – that they declined to cast a ballot at all, making it the worst voter turnout since 1996.
It is that campaign and some of the more controversial elements of Trump’s stated platform that make 2017 so difficult to presage. Will the President-elect act on his vows to do away with the Affordable Care Act? Or move to round up and deport tens of millions of unauthorized immigrants while also building a massive 2,000-mile wall along America’s southern border? How much will he be influenced by close advisors connected to the so-called “alt-right,” a loose affiliation of groups their critics contend are dominated by white nationalists like the Ku Klux Klan and other hate groups? And will he undo years of states’ efforts to combat climate change and build free trade markets by pulling the country out of international agreements on those issues?
On a more traditional note, will the new president follow through on his plans to invest significant public dollars in real infrastructure projects like roads and bridges, something states have been seeking for years? If so, where will the money come from? If he and lawmakers do discard the ACA – something that as of press time seems likely– will they replace it with something better? And will it actually be more affordable than the current system, which is fast becoming anything but for many consumers? And what will any or all of these potential moves mean to states and to the lives and well-being of their citizens?
The questions abound; answers are hopefully en route. And with those concerns duly noted, the SNCJ staff has again considered a wide range of potential policy issues that state lawmakers will consider and possibly act on in 2017. As always, we will present our thoughts to you over the next three issues, beginning today with a look at issues like health care, marijuana regulation and immigration reform and continuing next week with a look at topics like transportation funding and cyber security. Our esteemed editorial advisor Lou Cannon will close the year with his own insights into these issues as well as numerous other challenges and opportunities lawmakers will face next year and beyond.
ACA Reform: It is hard to imagine anything more likely to face substantial change than President Barack Obama’s signature policy accomplishment, the Affordable Care Act. But exactly what and how remains a mystery. Although President-Elect Trump vowed repeatedly to make it a priority to do away with the ACA as soon as possible, he has already waffled a bit on that promise. Within days of the election, Trump indicated he is now open to keeping certain elements of the law, such as allowing children to stay on their parents’ policy until age 26 and the requirement that insurers accept people with pre-existing conditions.
After that, the waters get murky. Ideas floated by House Speaker Paul Ryan (R-Wisconsin) and Trump’s choice to head the Department of Health and Human Services, Rep. Tom Price (R-Georgia), include creating tax credits for people who buy insurance on the open market, allowing people to buy health insurance policies across state lines, giving states money to set up new government-run “high risk pools” (which mostly went away under Obamacare) for people with serious pre-existing conditions that can’t get insurance on the open market and limiting the tax deductions companies can take for the cost of their employees’ health policies. Ryan’s proposal would also essentially privatize Medicare. Little has been said about the possible fate of health benefits exchanges, though Ryan’s Medicare proposal would use a similar mechanism for recipients to find insurance.
As proposed now, tax credits would be significantly less than the current federal subsidies available for people obtaining health insurance through an exchange. Even so, Anthony Wright, Executive Director of Health Access, a California health care policy advocacy group, says the enormous cost will keep states – even deep blue ones like his – from any attempt to replace those subsidies on their own.
“California will always try to lead in a post-Obamacare world, but it is entirely dependent on what the federal framework and financing allows us,” he says.
Immigration: During the campaign the president promised to deport an estimated 11 million unauthorized immigrants currently living in the United States. Afterward, however, he vowed to quickly deport only between two and three million he says have been convicted of a crime. As the New York Times reports, he is likely basing that figure on federal data that estimates there are approximately 1.9 million “removable criminal aliens.” But over a million of those people are actually here legally, either with a temporary visa or by green card. It is thus unclear if Trump could act on his latest pledge without violating due process. Even if so, he would need the help of numerous state and local police departments, some of which have already said they will not cooperate in such a roundup. That would seem to invite legislative battles – particularly in red states with more liberal urban areas – over whether so-called “sanctuary cities” will be allowed to continue sheltering unauthorized immigrants within local boundaries.
Prescription Drug Prices: A recent Kaiser Family Foundation poll showed that 77 percent of Americans think prescription drug prices are “unreasonable.” While Trump regularly railed about high prescription drug prices during his campaign, he has said next to nothing about the issue of late. Vice President-elect Mike Pence (R), House Speaker Paul Ryan and House Majority Leader Kevin McCarthy (R-California) have all been recipients of significant amounts of pharmaceutical industry donations over the years, so it is questionable how much effort Congress will muster to deal with the issue. That leaves it to states. The industry spent $100 million to convince California voters in November to reject a ballot measure (Proposition 61) that would have limited how much some state agencies pay for prescription drugs, but Ohio is considering a similar measure for 2017. Other states are likely to consider their own efforts, pending any action from Washington D.C.
Marijuana Regulations: Proponents of legalizing recreational marijuana use nabbed their white whale on Nov. 8 as California voters handily approved Proposition 64, making the Golden State by far the biggest to endorse legal weed. But their joy might be short-lived. Trump’s nominee for Attorney General, Sen. Jeff session (R-Alabama), is devoutly opposed to legalizing marijuana and could well act to end legal operations in states that have done so. While it is possible the new administration could send armies of DEA agents to shut down pot dispensaries, it is more likely to file litigation seeking to overturn state legalization laws, a case almost surely to ultimately be decided by the U.S. Supreme Court. But University of Denver law professor Sam Kamin recently told Westworld that even if that happens, it wouldn’t actually make pot illegal again in states like Colorado. Rather, it would only mean the state can’t legally regulate it.
Gender Pay Equity: Earlier this year, Massachusetts became the first state to bar employers from asking job applicants about previous salary history. The goal was to prevent women – who still earn approximately 80 percent of what men are paid for similar work – from being locked into a perpetual cycle of being paid less than their male counterparts. New York City Mayor Bill de Blasio recently followed suit by issuing an executive order that models the Bay State law in the Big Apple. Those measure came a year after California adopted new laws giving women more tools to battle gender pay discrimination in the workplace. Massachusetts state Sen. Patricia Jehlen (D) says she has been contacted by state lawmakers from Illinois, North Carolina and Texas interested in sponsoring similar measures in their states, and one has already been introduced in Washington D.C. Although some dispute the 80 percent statistic, gender pay equity bills are likely to see action in a number of statehouses in 2017.
Opioids: States have in recent years been waging a ferocious battle against a scourge of opioid abuse that has led to thousands of deaths across the nation. Combatting opioid abuse has in fact become the rarest of issues – one that has states, the federal government, Republicans and Democrats most often on the same side. In that regard, The U.S. House of Representatives passed legislation last week that will pump another $1 billion over the next two years into fighting the epidemic. Most of that money will go out in the form of grants to programs dedicated to battling the problem. The bill must still pass the Senate and be signed by President Barack Obama. In the meantime, a number of states have opted to limit access to prescription opioids like Oxycontin by making it more difficult for doctors to prescribe them. Expect more of the same in 2017.
Abortion: States have passed hundreds of anti-abortion measures in recent years, and with Republicans now solidly in control of numerous statehouses, governor’s offices and the entire federal government – and with the new president almost assuredly set to choose an anti-abortion justice to fill the empty seat on the US. Supreme Court - more are surely on the way. That could even include another direct challenge to Roe v. Wade, the landmark 1973 SCOTUS decision that legalized the procedure. At the same time, groups including Planned Parenthood filed three federal lawsuits last week seeking to overturn strict anti-abortion laws in North Carolina, Alaska and Missouri. The litigants have vowed additional suits against other states with similar laws, pointing to a majority-opinion SCOTUS ruling last June that struck down a Texas law requiring doctors who perform abortions to have admitting privileges at a local hospital and for clinics which provide the service to meet the same building standards as ambulatory surgical centers.
Gun Rights: Statehouse gains made by Republicans are not likely to quell the annual back and forth between pro- and anti-gun forces. And while gun enthusiasts have a decided edge, gun control advocates have strong allies like former New York City mayor Michael Bloomberg, whose group Everytown For Gun Safety has committed millions of dollars to supporting gun control ballot measures across the states. Three such efforts - in California, Nevada and Washington - were successful on Election Day, while a fourth in Maine failed. But those victories are going to be difficult to replicate in statehouses, where pro-gun advocates are expected to push for ever less restrictive laws, including so-called “constitutional carry,” which would do away with current licensing and training requirements and allow gun owners to openly carry their weapons anywhere they like. Other battles are expected over background checks, campus carry rules and regulations allowing businesses to bar guns from their establishments.
Future of Work: As technology advances to the point where more and more jobs can now be performed by robots or computers – even tasks like driving – so does concern that those innovations will negatively impact the current workforce. And worrying about autonomous cars taking over for current drivers, to name just one concern, is hardly frivolous: 12 percent of the U.S. workforce is employed driving a car or truck. Which puts the onus on lawmakers at all levels to do more to help prepare the current workforce for the changes technology may soon impose on them. That means investment in education and retraining not only for traditional students, but also for older workers and lawmakers alike. It also will require transformative thinking from all parties. Will that happen, or will the two parties continue what has become an ongoing devolution into hyperpartisan gridlock and stagnation? As we said right up front, the answer to that remains to be determined.
Revenue from sports betting has fallen well short of projections in four of the six states that legalized such wagering soon after the Supreme Court authorized it last year. RHODE ISLAND’s 51 percent tax on sports betting, expected to produce over $1 million per month, has only generated about $50,000 per month, although that’s due at least in part to the state’s $2.35 million loss from all the winning bets placed on New England in the Super Bowl. (ASSOCIATED PRESS)
WISCONSIN will face a $1.9 billion general fund shortfall going into the 2021-23 fiscal year, given the state’s current spending commitments, including tax credits for Foxconn Technology Group and funding for K-12 education and public employee raises, according to analysis by the state. The projected deficit is the largest since the $2.5 billion shortfall forecast ahead of the 2011-13 fiscal year. (ASSOCIATED PRESS)
KENTUCKY Gov. Matt Bevin (R) has signed legislation (HB 354) expected to eventually cost the state’s general fund $106.6 million a year. Among other things, the bill provides tax cuts for banks. (LEXINGTON HERALD LEADER, LEXISNEXIS STATE NET)
Denver is planning to start charging residents for trash collection based on the amount of garbage they generate. The aim of the “pay-as-you-throw” program is to improve the city’s recycling rate, currently at 22 percent, which is considerably below the national rate of 35 percent. (DENVER POST)
OHIO Gov. Mike DeWine (R) signed legislation last week that will increase the state tax on motor fuel by 10.5 cents per gallon, to 38.5 cents. The increase is considerably less that the 18 cents-per-gallon hike the governor had initially requested. (CINCINNATI ENQUIRER)
-- Compiled by KOREY CLARK
The COLORADO Supreme Court upholds a lower court’s ruling that employers can fire workers for using medical marijuana even if they do it during off hours. The plaintiff, a quadriplegic medical weed card holder who was fired from his job for failing a drug test, said he will not appeal the ruling to the U.S. Supreme Court (DENVER POST).
The DELAWARE Senate endorses HB 5, legislation that would add electronic cigarettes to the state’s ban on smoking indoors. It heads to Gov. Jack Markell (D), who has said he will sign it into law (NEWS JOURNAL {WILMINGTON]).
The MAINE House approves HB 206, which would allow farmers to sell unpasteurized milk directly to customers. It moves to the Senate (LEXISNEXIS STATE NET, ASSOCIATED PRESS). The MAINE House and Senate each reject HB 328, which would have made the Pine Tree State the 26th so-called “right-to-work” state (BANGOR DAILY NEWS).\
The NEW YORK Assembly and Senate approve SB 4327, which would allow companion dogs to accompany their owners at restaurants as long as the seating is outside and the establishment’s ownership allows it. The measure moves to Gov. Andrew Cuomo (D) for consideration (ALBANY TIMES UNION). Also in NEW YORK, the Assembly approves SB 1757, which would bar the sale of powdered or crystalline alcohol in the Empire State. It also moves to Gov. Cuomo (LEXISNEXIS STATE NET).
The OREGON Senate approves HB 2960, a bill that would require businesses that don’t offer a retirement plan to automatically enroll employees in a state-sponsored retirement savings program and deduct a portion of their wages for it. Employers would not be required to contribute and employees would also have the option to opt out. The measure moves to Gov. Kate Brown (D) for consideration (STATESMAN JOURNAL [SALEM]).
During the 2019 Global Education and Skills Forum in Dubai, we caught up with Andrew Wales, Chief Digital Impact and Sustainability Officer at BT. Our latest Expert Q&A explores employers’ growing need for skills in technologies like AI, and why sustainability should be a core part of a company’s business strategy rather than an add-on. Here’s what he had to say:
What skills do companies require today?
“The UK faces a very big digital skills gap—more than 11 million adults do not even have the basic digital skills of being able to send an email or book insurance online and that is quite a big problem. For UK companies, probably three out of four face a significant digital skills gap and that costs the UK economy about £63 billion—the equivalent of half the budget of the National Health Service each year.”
“It is critical that we improve people’s skills for business now and business in the future and that is why we at BT are investing in the Barefoot program at the primary school levels to shape young people’s thinking as they come into secondary school and consider whether to study computer science. The program works with two million children through training 70,000 teachers across 60 percent of the UK’s primary schools and it’s about really improving their basic tech literacy—not just using technology but understanding how it works, how they can improve and disrupt it, and what it means for their future careers.”
What is the trend here?
“By 2022, the UK will need another half a million computer and digital experts. That’s the number we have trained in the last ten years and we need that amount again in just three years’ time so the training need is very significant.”
How is BT using AI?
“We look at it in different areas around the business. At this stage, it is essentially advanced machine learning. We use it being transparent and visible in something like chatbots on our website; we use it in some of our vehicle planning for BT Fleet; and we are looking at how other tech companies are at different ways to use it in the future.”
How important is data to your operations?
“We have access to different types of data at BT. Obviously we have access to mobile data in terms of how people move around with their mobile phones and there are very clear restrictions about at what point you can identify that data, and so we are looking at how we can use that data in different ways for the good of society and the business.”
“I think data is an increasingly important part of our lives. We have got probably five devices on average internet-connected in our homes at the moment, we are going to have 20 in the next five or ten years, and so we are all going to need to think together about business models for data that gives value to customers and improvements in society.”
How does sustainability fit into the equation?
“Sustainability is a growing area and will become even more important. What we are moving away from is companies treating it as something on the side of the business—a bit detached like a charitable cause like Corporate Social Responsibility, and instead moving to a world where it is actually a more strategic opportunity for the business to tackle big problems in society like the big digital skills gap and also solve problems for business growth. So, BT is hiring a lot of people with tech skills and we need people to be coming through and that’s a good example I think of a company understanding its broad sustainability impact.”
“A different sustainability example would be what we do on climate change. BT buys 1 percent of UK power and we buy already at 100 percent renewable, so we are one of the biggest buyers of renewable power in the world. We have got a target to be net zero carbon by 2045, which is the leader in the Telco sector. So, I think because we are a big energy user, because of the impact of climate change on our business through the risk of flooding and things like that, sustainability is an issue that is strategic to us and that is why we are managing it.”
Sustainability has advantages for firms—are there also risks to ignoring it?
“I think the risk of not tackling sustainability properly is that you can get wrong-footed. If you don’t, for example, understand how climate can impact your business, you don’t understand how the energy market might change, you don’t understand the training needs for your workforce and get ahead of that, then of course that will be a challenge for your growth in the future.”
How important is purpose to a modern business?
“I think for graduates coming in today or apprentices that we are attracting in, the purpose of the business is absolutely fundamental. Obviously the business needs to be successful, it needs to make money, but it needs to do it in a way that is genuinely a win-win, so it’s tackling society’s problems, it’s helping to grow the economy whilst also providing those high-quality jobs and delivering profit for our shareholders.”
“We at BT are thinking about different ways to do that through our digital skills work, through the training of our people internally and through the range of products that we offer to our customers, including vulnerable customers. We launched a product last year with a big NGO called Action on Hearing Loss. Seventeen million people in the UK have some form of hearing disability and we have a product with our EE mobile business that helps those people to get a better quality of service. It requires a lot of innovation and creative thinking and that’s what we need graduates and apprentices to really drive through.”
How important is senior buy-in to making it effective?
“I think buy-in from senior management is absolutely fundamental to purpose and sustainability. Our new CEO at BT is very committed to our activities in this space. We have a board committee called the Digital Impact and Sustainability Committee which looks at our performance on a quarterly basis—some of our challenges we might be facing and then how we can deliver on our significant commitments for the UK like our commitment to reach all five million primary school children with digital skills programs like Barefoot.”
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Nineteen states have considered legislation related to sports betting in 2018, according to information compiled from the National Conference of State Legislatures, the Legal Sports Report and LexisNexis State Net. One state, West Virginia, has passed a bill this year allowing wagering on sporting events, sanctioned by the U.S. Supreme Court last month.
In a normal wave election - which is typical of the first midterm election of a new president - the party out of power picks up six to eight state legislative chambers. A normal wave in November could give Democrats control of both chambers in Arizona and New Hampshire, as well as the senates in Colorado, Connecticut Maine, New York and Wisconsin, according to Tim Storey, a veteran political analyst for the National Conference of State Legislators. A big wave could also give them control of both chambers in Michigan, Minnesota and Pennsylvania, along with the senates in Florida and Iowa, Storey said.
Since 2016 at least 19 states have introduced and 9 have enacted legislation creating a state reinsurance program and/or authorizing the state to apply for a State Innovation Waiver under Section 1332 of the Affordable Care Act to obtain federal funding for that program. In addition, IOWA proposed a reinsurance program and 1332 waiver via executive action. Only six states have actually applied for 1332 waivers specifically for reinsurance programs. Three of those states have received approval, while two others have withdrawn their waiver applications.
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Data visualization allows you to present complex facts, trends, insights and patterns to clients in visual, digestible formats, meaning clients can engage with, understand, and use the data better than ever before. And if data because accessible, you become more valuable by giving it to them.
Consider moving beyond the Excel spreadsheet or PivotTable. Investigate custom reports from best-in-class research solutions or even dive into design tools available from Visme, Snappa, or Canva. There’s no question about the value and efficiency that visualizations can bring to any organization. Decision makers need to quickly and intuitively understand their data so they can make data-driven decisions. Be the one to swoop in with easy-to-comprehend results.
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For-profit ridesharing, offering passengers rides for money, and carsharing, renting cars for short periods of time, have both been around for decades, really catching on only recently in their smartphone app-based iterations. But while the modern variety of ridesharing has riled a longstanding industry and government regulators alike, the equivalent form of carsharing seems to have encountered relatively little resistance. That may not last, however.
Carsharing appears to have originated in the 1940s with a cooperative in Zurich, Switzerland called Setbsffahrergemeinschaft, or Sefage for short. According to an article published in Transportation Quarterly in 1998, that “early effort was mainly motivated by economics. Individuals who could not afford to purchase a car instead shared one.” For-hire ridesharing dates back even further, to the “jitney craze” of 1914-1918, when the U.S. economy fell into recession following the start of WWI, and a few enterprising automobile owners began offering rides to streetcar passengers in exchange for a ‘jitney,’ the going nickel rate for a streetcar ride. The two transportation-sharing models proceeded to develop in fits and starts until the 2000s when a convergence of factors, including increasing traffic congestion in urban areas, shifting generational perspectives about car ownership and the development of social networking technologies, gave impetus to the efforts of ridesharing services like Uber and Lyft, and carsharing operations like Zipcar and Car2Go to take advantage of the underutilized capacity of passenger vehicles.
The rise of ridesharing -- and Uber in particular -- has been very disruptive to the generally more tightly-regulated taxicab industry, spurring strong and occasionally even violent opposition from cab drivers. A number of cities across the country, including Eugene and Portland, Oregon, have also banned ridesharing companies or forced them to suspend operation (see Bird’s eye view). And two different California regulatory authorities recently ruled that Uber drivers were employees rather than independent contractors, posing a significant threat to the company’s business model.
Carsharing services haven’t received as hostile a reception from the businesses they most directly threaten, traditional car rental companies. In fact, those companies have introduced their own short-term, car-rental services, including Hertz 24/7 Hertz (which recently ceased operation due to weak demand) and Enterprise CarShare. After launching its own service in 2011, Avis acquired Zipcar in 2013. And in stark contrast to the city bans on ridesharing, states, including California, Oregon and Washington, have passed laws requiring car owners who rent out their vehicles to be members of carsharing programs to ensure they meet safety, insurance and financial reporting requirements. The city of Indianapolis is even partnering in the development of a carsharing service there called BlueIndy.
The apparent disparity in the development of the two similar industries begs the question why that would be the case. One reason may simply be the size and growth rate of the leading ridesharing company, Uber. Founded just six years ago, the company was valued at $41 billion last year -- making it larger than Delta and American Airlines, which have been around since the 1920s -- and it was just revalued at $51 billion this year. That scale of development seems to have put some local governments on the defensive. As The Wall Street Journal reported in January, when Portland, Oregon filed suit against Uber last year seeking to halt the company’s operations in that city, Mayor Charlie Hales said the city should figure out a way for the company to operate legally there.
“But we’re not willing to be rolled,” he added. “And we don’t accept that someone is exempt from our regulations because they’re cool and new.”
Although the major car rental companies and even some car manufacturers including Daimler AG, BMW and Ford have gotten into the carsharing business -- joining dedicated carsharing services like Zipcar and Car2Go, as well as peer-to-peer services like Getaround and RelayRides, which allow individuals to rent out their own personal vehicles -- Navigant Consulting recently placed the size of the industry worldwide at $1.1 billion and projected it would grow to $6.2 billion by 2024, roughly an eighth of the size of Uber’s current valuation. And as Wilson Wood, who heads the Carsharing Association, put it to The New York Times, the openness of the market means the arrival of companies like Daimler and Avis “isn’t putting anybody out of business.”
Uber’s aggressive expansion tactics, which The Wall Street Journal described in a story earlier this year as charging into new markets, establishing a base of drivers and riders, and then mobilizing that base to counter resistance, don’t appear to have ingratiated ridesharing with regulators either.
“It seems a lot of the time they turn up and say: ‘We dare you to stop us,’” Ryan Heath, the spokesman for former European Commission Vice President Neelie Kroes, said of Uber, which had asked the EU to block a French law restricting its operations last year, according to the Journal story.
That story, headlined “How Sharp-Elbowed Uber Is Trying To Make Nice,” chronicled how Uber has been working harder lately to find compromise with government entities. But the car-sharing service Car2Go -- launched in Germany in 2008 by Daimler, maker of Mercedes-Benz luxury vehicles and the smart car, and now operating in several U.S. cities including New York, Miami, Portland and Seattle -- appears to employ a “play nice” approach from the outset.
“Car2go was very cooperative with the city,” Laura Hammond, a spokesperson for the City of Eugene, told Eugene Weekly late last year, before Car2Go pulled out of the city after eight months of operation due to limited demand. “They actually came to us before they started operating.”
But carsharing is growing. As The New York Times reported in January, about 800,000 people were members of carsharing services in the United States last year, 44 percent more than in 2011, according to Susan Shaheen, codirector of the Transportation Sustainability Research Center (TSRC) at the University of California, Berkeley. And the possibly alcohol-related death of a 22-year-old Car2Go passenger in Miami two years ago suggests that it may only be a matter of time before carsharing comes under the same scrutiny ridesharing did after a series of negative incidents widely reported in the media, including an accident involving an Uber driver in San Francisco on New Year’s Eve, 2013 that left a six-year-old girl dead.
And while there don’t appear to be any large groups of individuals like taxi drivers protesting the operation of carsharing companies, that may also change with time. The Los Angeles Times reported in June that according to TSRC’s Shaheen, each vehicle that goes into full-time service for carsharing obviates the sale of four to six new cars and delays the sale of as many as seven more. Thilo Koslowski, a vice president at the information technology research firm Gartner Inc., estimates that by 2025, 20 percent of all vehicles in urban centers will be used for carsharing.
"Imagine all of a sudden 20 percent of your vehicles sales in the classic sense -- to individuals who will be the only user of that car -- go away," he said.
Automakers like Daimler and Ford have been willing to experiment with ways to tap into the carsharing market, but it remains to be seen how those companies and others will respond to a 20-percent cut in their conventional auto sales.
Another potential stumbling block for carsharing is one-way rentals, also known as “free-floating” or “point-to-point” rentals, which allow users to pick up and drop off vehicles at any legal parking space within a carsharing service’s coverage area. The rental form was pioneered by Car2Go, and market watchers consider it to be a growth area.
“Point-to-point can quickly attract three to four times the number of members of a traditional round-trip service,” said Dave Brook, managing partner of international transportation consulting firm Team Red U.S.
To make their one-way services even more attractive to potential users, carsharing companies have been making arrangements for parking for their vehicles. Car2Go, for example, paid the District of Columbia $2,890 for each car it operates in the city to allow users to park in metered spaces for free, according to The New York Times. And the Indianapolis Star reported that Indianapolis is granting access to metered and unmetered spaces for the vehicles in its BlueIndy service, which was “the most prominent” subject of complaints about that initiative, according to WCPO Cincinnati. It’s not too difficult to imagine parking becoming a heated issue in cities where parking is particularly hard to come by.
And although ridesharing and carsharing services are conceivably different enough to peacefully coexist, with the former facing roadblocks in some places while the latter cruises along, companies like Zipcar and Car2Go could encounter strong opposition from Uber down the road.