Today we’ve got a few short comments on things we have touched on over the past few months.
We have had several posts in recent months on the travails of Apple and its manufacturing partner Foxconn. Now public radio’s Marketplace has a pair of stories on Foxconn’s factories — produced with a little more cooperation on the company’s part than similar stories (The people behind your iPad: The workers, Apr 11, and The people behind your iPad: The bosses, Apr 12). They also have this video of actually making iPads.
One of the more interesting observations from these articles relates to the kind of workers Foxconn is hiring (from “The Bosses” article):
But that hasn’t stopped hundreds of migrant workers from turning up every morning at Foxconn’s doorstep in the coastal city of Shenzhen. On this day, 500 people line up to apply for jobs. …
I ask Louis Woo what Foxconn’s looking for in these applicants.
Woo: To make sure that they can articulate themselves and they can understand instructions
OK. That doesn’t seem too hard. Still, Foxconn’s HR manager tells me that 200 of these 500 people won’t make it through the application process. Louis cuts in and gives some context on the labor pool they’re dealing with here.
Woo: I was told that there are young kids coming over here that have never flushed a toilet before. They’ve never taken an elevator. So if you don’t tell them what to do, they would just wait there until the next elevator comes along. Even going inside, they don’t know which floor to go up to.
Next up a service story.
Back in January we had a post on Uber, a company that matches riders with black car services. That post focused on their use of dynamic pricing and how what differed for Uber was that the capacity that they have available (and not just demand) depended on how they priced. The current issue of The Atlantic has an article on the company in which the founder explains how throwing cash the drivers’ way is key to their success (Why You Can’t Get a Taxi, May 2012).
The drivers are also much better off. For starters, they don’t have to pay kickbacks to dispatchers (seemingly a ubiquitous problem with traditional black-car services). “You need to set it up so that drivers make a lot of money,” Kalanick told me. “Whenever we start in a city, we see mostly traffic from drivers who are using us as a yield-management system—they’re filling up their dead time. Ultimately, that predictable cash flow allows them to expand their business.”
Uber also protects the drivers from passengers. You can’t jump out of the car without paying the fare, as some taxi passengers do, because Uber has your credit-card number—and for the same reason, the drivers are not at risk of being robbed. And while Uber allows you to rate your driver, it also allows the driver to rate you. “So if a customer is yelling racial epithets at a driver,” says Kalanick, “their account would probably be suspended.”
FWIW I read a recent article that evaluated various economies in the context of how many hours a local McDonald’s employee needs to work in order to buy a Big Mac. Behind the obvious USA and Western Europe economies, it was interesting that China was actually ranked #3. I’d really like to see a better framework for evaluating working conditions vs. spending power before judging whether the working relationship in a foreign country is usurious or not.