Category: business and economics

Things about management and business on a smaller scale, and economics on a larger one.

McDonald’s and Regressive Taxation

I finally got around to moving my Clipper Card onto my iPhone Wallet.

I used to have a problem losing my keys, wallet and/or iPhone until I read in a biography that Richard Feynman used to keep his wallet in the same pocket to prevent the same thing. That, and because they say that you should wear through your denim jeans the same way to give it “character,” meant ten years ago I adopted this system, and got rid of the FAIL of tagging all my shit with the then-very-unreliable bluetooth tracking stuff.

This is a circumlocutious way of saying that for the last decade, my cell phone is always conveniently in my right pocket while my wallet (with Clipper Card) is in my left pocket. As I’m right handed and the sensor of the BART is on the right side of the turnstile, I would have to do this weird cross-body yoga anti-pattern in order to get my bicycle onto the commute trains. I resolved to go into the office more often recently, so this was low-key bumming me out.

After jealously admiring how easily regular commuters used their mobile phone to zip through in front of me, I decided to sunset the physical card which apparently I’ve used for the last 12 years.

Also, about half the time, the reader would say that I need to see the operator because of some weird RFID interference shit with all the other crap I have stuffed in my supposedly "minimalist" wallet. WTF? Why should I tolerate this first world problem when we have the technology?

A quick google search and some weird phone-on-card jingo and now I can just put my phone on the sensor and magic shit happens. I can also recharge my card from my Apple Wallet instead of using the machine every so often, depending on how many times I had the patience to hit the “add $1 to your card” button last time I loaded it.

…

But this massive quality-of-life improvement somehow made me think about McDonald’s this morning, maybe because I didn’t have time to eat breakfast…

Continue reading about how your McDonald’s app is a regressive tax after the jump →: McDonald’s and Regressive Taxation

Context to think about contactless payment

I noticed that dishonest people have been complaining about inflation, and some of them are using the price at McDonald’s as an indicator of this. This is probably related to the popularity of the Big Mac Index: a freakonomics-circle-jerk-bullshit idea that the price of a Big Mac is the best way to compute the cost-of-living adjustment between countries.

I’m sure the price of the Big Mac has skyrocketed post-pandemic — I, if anyone, should know this, I’m like an idiot savant of McDonald’s: so much so that a former franchise owner innundated me with McDonald’s T-shirts, sweaters, and stuff which are in my clothing rotation.

But here’s the thing, I’m 100% sure a significant factor in the price of the sandwich is the introduction of the McDonald’s App. According to conventional wisdom, I usually get ~30% "discount" in "savings" by ordering through the app either via some promotion or using points to buy something outright.

In economics, there is a distinction between "nominal" and "actual." Nominally, I’ve "saved" 30%, but I’ve probably got a 5% actual discount.

The reason is that if everyone uses the app to purchase our Big Macs — which we sometimes get for "free" when we accumulate 6000 points — McDonald’s would cover this by raising the nominal price of the Big Mac to compensate by the same amount. Fast food is pretty fucking competitive — as loyal as I’m to McDonald’s, I’m totally cool with swapping it out for a Big King at Burger King or an In-N-Out double-double — depending on my access to those and my mood. So the net price is fixed by the demand curve vs. their costs and profit margin.

Why 5%? Well not everyone is using the App every time. Some people are rushed, or casual walk-in/can’t-be-bothered-to-download it, or simply don’t have access to a smartphone and/or credit card. Those people won’t/can’t use an app. So, I’d guess that McDonald’s has inflated the nominal price of the Big Mac by 25%. Those of us using the app are getting a 5% discount; The non-app people are paying 20% more vs. the null hypothesis.

The null hypothesis is a world where the McDonald’s App either didn’t exist at all, or never got so high an adoption which basically happened because a global pandemic trained everyone to build a habit of contactless ordering and payment.

So, when seen another way, my 5% discount is subsidized by everyone who isn’t using the app paying 25% more than they should. Since most of those people don’t because they don’t have access to credit to use an app or the income to afford a smartphone — either because they are a school kid or poor — then basically the poor are subsiding the rich at McDonald’s. This is known as an effective regressive tax.

Regressive taxation is shit for our social order. But I guess it is okay since it means my burger and fries cost me an average four bits less than it would if they weren’t taxing walk-ins and the poor.

Of course, at a certain point people wise up and stop eating at McDonald’s or they will have to introduce menu items they can discount that only they would order and I wouldn’t (which would be difficult since the only thing I don’t eat on the menu is diet soda). Oh wait, they did that shit! Well now you know why they had to.

…

Why did I order just a burger and fries in the screenshot above? Look at the deal: the discount was free fries with a Big Mac order which netted me a 30% nominal savings. I was at the office and soda was free so this is how I maximized my discount. Oh, and after I picked up that order. I hit 6000 points so my next Big Mac is free.

Posted on by tychay 0

2020-01-20 Australia: bush fires and how civilizations collapse

What is going on right now in Australia is horrible. It will, no doubt, make far future history books (if there is a civilization left) as an example of how we were staring obvious Collapse in the face, and said, “Whatever! I’d like more of that.”

This inspired Jay to mix his love of boardgaming and his bleeding heart to make this video on the game Hotshots and raise money for the bush fire release.

Continue reading about a socio-political irony after the jump

Posted on by tychay 0

13 hundred engineers…

I get a lot of cold-email outreach tech spam. It’s especially insidious because they automate the personalization and do repetitive outreach, so I have to read a little bit before I ignore it.

Without embarrassing anyone, here is one such example I got today…

Good Morning your first name,

I hope this finds you well. I am following up on a note I had written to you last week. I completely understand your busy schedules, wanted to connect with you at your convenient time.

I see great synergies between your company name scraped from LinkedIn and X— and would be glad to explore synergies to work together towards to address your product development /engineering needs.

X— is an engineering team of 1300+ engineers…

After I read the second sentence, I filed it away, but my peripheral vision caught the beginning of the third, and I recalled that message.

1300+ engineers? Holy shit! What sort of business can you build with 1300+ engineers, I wondered. The Mythical Man-Month tells us that “adding manpower to a late software project makes it later” so by this math, you couldn’t even change a lightbulb with so many engineers.

So I had to pull up what this company does, which is my engineering equivalent of slowing down to look at a car wreck. Here is the first bullet point in the previous e-mail.

  • Certify your products through comprehensive Test beds to automate the build and QA cycles

Stop right there. Why the fuck would I want to automate my QA? You have 1300+ engineers, you can make them run all my test suites by hand. It’d probably be better output too because they must be some really shitty engineers.

(If you have 1300+ engineers and you are not one of the FAANGs, you are doing it wrong.)

Posted on by tychay 0

After being constantly bothered by your automated help

Let’s just say when my phone buzzes at 10:30pm and again at 12am. I turn into Statler or Waldorf…

Dear DoorDash support,

I did not do this support request. I’ve never used your service. (I believe many at a previous company I worked at would use you when catered lunch wasn’t ordered that day, but I’m among those that subscribed to the theory of “Learned Laziness.”) In fact, initially I thought this was phishing or spam because we have no previous business relationship or customer interaction.

If the person who whined to you to create this support ticket provided a phone number or other contact information —which I’m sure they did if there was a real order attached — please contact them through that order and tell them to not mistype their email in the future. I can understand how not receiving their hot pockets or whatnot on time can be stressful (in my younger years I’d have probably blown up for less if ordering-shit-from-my-iPhone-because-I’m-too-lazy-to-walk-downstairs were a thing), but that’s no excuse for not double-checking what one is typing in the contact field(s).

If I keep receiving these e-mails , I’ll simply train my mail filters to ignore and and all future e-mails coming from you.

I wish you all the best! Thank you.

terry

P.S. There is an apostrophe in “youve.” I normally wouldn’t mention it, but it’s in e-mail template you have probably sent out more than 10 million times and I’d have think it’d be a little embarrassing that the $970 million in venture capital you took in didn’t pay for a spell-checker.

Begin forwarded message:

From: “support@doordash.com” \<support@doordash.com>
Subject: Thanks for contacting DoorDash Support!
Date: September 17, 2018 at 10:30:31 PM PDT

Hello,

Thanks for contacting DoorDash!

This email is to confirm that we have received your request. Our team will be following up with you shortly.

If you do not receive a response within the next 48 hours, please make sure to check your spam or junk folder to ensure our messages can reach you.

In the meantime, check out our Dasher Help Center! We have curated answers for your most asked questions.

Your reference number is xxxx.

Sincerely,
DoorDash Support
DoorDash Help

Begin forwarded message:

From: “support@doordash.com” \<support@doordash.com>
Subject: DoorDash Inquiry
Date: September 18, 2018 at 12:11:54 AM PDT

Hi ,

Thank you so much for reaching out to us regarding your inquiry. We’re happy to look into this for you; however, we need more information regarding the issue/concern you’ve encountered.

In line with this, can you please provide us details of your inquiry, the name/email on the account so that we can have it checked and verified from our end!

Hoping to hear from you soon,! Thank you for your patience and understanding in dealing with this matter.

Take care and be safe!

Your reference number for this request is xxxx.

Best,
Allan
DoorDash Support
DoorDash Help

ref:_00D1aKEiH._5001ajJUcj:ref

Posted on by tychay 0

What “Store” means

My father often calls Apple Store, “the Apple company”, so it with some amusement that I read MacRumors’s rare case of good reporting where they show a lot of evidence that Apple is in the process of dropping the “store” moniker from their Apple Store locations.

The next day, John Gruber linked to it and added:

The “Store” branding only made sense when the concept was novel. Now that Apple’s stores are well established, it makes sense to drop the “Store”. Think about the brands that are Apple’s peers in retail. No one goes to the Tiffany Store or Gucci Store, they just go to Tiffany or Gucci.

This is a classic example of taking good reporting and diminishing it with thoughtless punditry and fanboyism—it must be a good move because Apple did it. In the end, the reader is left worse off than if the link was provided without comment.

Continue reading some critical thinking about the meaning of “Stores” in stores after the jump

Posted on by tychay 0

My peoples lack a clue

My Facebook feed has lit of with people on both sides of the Peter Theil/Gawker revelation, but that’s because I personally know many of the people involved and have lived and worked in a tech bubble for the last 16 years.

Sadly, Half of them need to venture out of it for a bit to understand why this is an issue to the other 99.9%.

In the meantime, I guess this means I to be posting about how I work in the salt mines with a six figure salary, how the homeless need to get out of MY city, or something… Because here in the bubble, I’m the one that is “out-of-touch.”

(Hint: all the links above are to articles about Silicon Valley that are/were among the most-emailed articles in the New York Times at the time. Half my friends clearly misunderstand why they proved so popular.)

Posted on by tychay 2

The Innovator’s Dilemma and the impossibility of remaking an organization

One year ago today (2014-03-03):

During Tech budget and resourcing meeting for the 2014-2015 Annual Plan, one of the ideas proposed was possibly sourcing an incubator group to (re)“build Wikipedia or other major project in line with the Vision from the ground up, without prior constraints from existing technology, processes”, or communities. The idea was, even if it didn’t succeeded it would cause the organization “to think differently, to create energy around being BOLD,” and catalyze the movement.

This had some currency from many of the participants1, even the C-level2 involved, that was until a director argued that this was infeasible due to the Innovator’s Dilemma. Ignoring the obvious misreading of the book, he argued that because this might destroy the existing order inside the organization, it couldn’t be done by the organization itself, and thus the proposal died despite never going up for consensus consideration.3

Deciding that it is politically stupid to point out their Readers’ Digest understanding of a deeply-flawed business text, I instead argued that an organization built around vision, rather than profits, does not have the same constraints that allow disruptive technologies to spell their undoing.

That argument didn’t carry weight because people with more experience than me were sure that this initiative would be defunded in the next annual plan and that no one would ever get behind a project that is a direct threat to them. Incubation outside the WMF is only possibility.

…

It’s sad that people don’t bother to know the most basic lived history of their own industries (or have a terribly short memory).

I give you the history of Firefox:

The Mozilla Firefox project was created by Dave Hyatt and Blake Ross as an experimental branch of the Mozilla browser.

The Phoenix name was kept until April 14, 2003, when it was changed because of a trademark dispute with the BIOS manufacturer, Phoenix Technologies (which produces a BIOS-based browser called Phoenix FirstWare Connect). The new name, Firebird, met with mixed reactions, particularly as theFirebird database server already carried the name.

The project which became Firefox started as an experimental branch of the Mozilla Suite called m/b (or mozilla/browser). After it had been sufficiently developed, binaries for public testing appeared in September 2002 under the name Phoenix

Hyatt, Ross, Hewitt and Chanial developed their browser to combat the software bloat of the Mozilla Suite (codenamed, internally referred to, and continued by the community as SeaMonkey), which integrated features such as IRC, mail and news, and WYSIWYG HTML editing into one software suite.

Dave Hyatt would leave Netscape4 for Apple in 2002 and go on to architect the number one competitor to Firefox, Safari and WebKit (the core of Safari and Google Chrome). Blake Ross would work at Netscape/Mozilla until 2004 and be nominated the next year for Wired magazine’s top Rave Award, Renegade of the Year as all of Mozilla’s resources had were redirected to Firefox, a project started internally by two employees to combat the poor direction of original Mozilla project.

…

So yeah, Fuck you.

…

One Year later

It really is astounding when you think about the level of incompetence that was on display.

There are only two large-scale consumer-facing Internet non-profits: The Wikimedia Foundation and Mozilla Foundation (which owns Mozilla Corporation). Someone makes a statement that everyone accepts and affects the entire annual budget. Meanwhile, the only other company that shares organizational affinity with yours is a living counterfactual to the statement.

I didn’t say anything as I was sitting on my resignation letter and didn’t want to humiliate my colleagues, but the disappointment I had back then was immense. Now that I’m gone, that disappointment has turned into relief.

  1. In the months since this time whenever I mentioned this to a WMF staff member, often you’d pretty much have to hold him or her back from wanting to switch into this team if it were to exist. ↩
  2. Chief level, as in CEO, CTO, Vice President, etc. ↩
  3. Not that it would have won that given that this would have required a resource sacrifice among all the Directors… Still, it would have been worth it just to see who cared more about the mission and who more about their fiefdom (or their job). :-) ↩
  4. Mozilla Foundation before it was separated in from Netscape in July 2003. ↩
Posted on by tychay 11