Everything Is Bullshit: The Greatest Scams on Earth Revealed (9 page)

If
this post-medallion system is allowed to flourish, the medallion holders and
dispatchers will be out of business.

The value of a medallion drops to almost zero because anyone can
be a community driver without one. The extent to which they retain any value is
the extent to which drunk people continue stumbling out of bars and hailing a
cab without using their phones. So, medallion holders speculated in holding a
government asset and lost. Some of these people are also taxi drivers or
operators of taxi dispatch companies. Like Greek bondholders, they gambled and
lost big.

The middleman in this current system, the taxi dispatch company,
will be eviscerated. The software of
Uber
, Sidecar,
Lyft
, and
InstantCab
dispatches
rides to customers, the ride-sharing companies provide insurance, and the
drivers provide their own car maintenance. We doubt that the dispatchers will
be missed. They have the power to mistreat drivers, and it seems like they
exercise that power freely.

Taxi drivers working for these apps reap a number of benefits.
They no longer get nailed with opaque fees or start the day hundreds of dollars
in debt, so they can start making money the second they start driving. Picking
up customers now that cabbies have their credit cards on file is safer because
they have a record of everyone entering their taxis. Finally, they are so far
making more money per hour than under the medallion system. Most ride-sharing
app companies advertise that you can make $20-$30 per hour, which is much
better than the current $10 an hour taxi drivers make.

So are taxi drivers better off in a liberated, medallion free
system? It depends. They will face more competition because anyone can become a
taxi driver. Despite increased competition, however, taxi drivers might thrive
in a new world where fees are less onerous.
Aarjav
Trivedi
of
InstantCab
points out
another nuance that helps cab drivers:

“Drivers are in two camps. The Opportunist who is doing it for
extra money and the Pro who has been doing it day in day out for years, perhaps
because of their experience as a professional driver.

The Pro always wins: they can pick up and drop off customers
faster, do a lot more runs, and get paid more. Their knowledge and intuition
have evolved to remember how to navigate streets better and where demand is
going to be at a certain time.”

According to
Trivedi
, professional
drivers are slaughtering amateur community drivers in terms of take home pay.
The drivers that know what they’re doing (professionals) and can afford to buy
or lease their owns cars may be able to make a very good living under this
system. The opportunists might not.

What should taxi drivers do to ride out this disruption? The
best bet is probably to try out a few shifts on a ride-sharing app. They can
drive around on
Lyft
or Sidecar with their personal
car or on
Uber
with either their taxi or personal car
and see what happens.

If drivers find they like getting customers from ride-sharing
apps and can make more money, it’s time to leave the sinking ship of the
medallion-based taxi economy. If they find they make less money, it’s probably
in taxi drivers’ best interest to join medallion-holders and taxi companies in
their pursuit to block ride-sharing apps from spreading across America.

What Will
the Government Do?

Ed
Reiskin
, Director of the San Francisco Municipal
Transportation Agency, has made his thoughts on the taxi issue clear.
"These medallions are public assets,” he told
The San Francisco
Chronicle
in 2012. “The value belongs to the people of San Francisco for
the benefit of the transportation system."

It seems like it’s a safe bet that no one who uses mass
transport in San Francisco actually considers medallions to be a public asset.
The people who view medallions as a public asset are the beneficiaries of the
current system: medallion holders, taxi companies insulated from competition,
and, most likely, public officials whose job it is to dole out medallions.

A public asset is safe, efficient transportation, not a scarcity
of taxis. Medallions were created in the 1930s to make sure taxis were safe.
Regulation of the ridesharing industry needs to focus on safety by making it
easy to run background checks on drivers and report driver reviews and
incidents to municipal authorities. Right now, all the startups are very
focused on having safe drivers because they’re under public scrutiny. But ten
years from now, less scrupulous companies may emerge.

The second area where government can help is by protecting
drivers from platform lock-in. Right now drivers can only work for one
ride-sharing app. The company you drive for is responsible for 100% of your
earnings — a level of control that could be abused. If regulators want to
help consumers and drivers, they should mandate that a driver
cannot
be locked into one ride-sharing platform. A driver
should be able to freely get a pickup call from
Uber
,
Lyft
or whomever. More competition between the
ridesharing apps is good for drivers and good for consumers.

It seems as if taxi medallion holders and taxi dispatch
companies will get wiped out. If local governments step in and ban ridesharing
apps, it will be to protect these interests at everyone else’s expense. So far,
it seems like that’s what many local governments are doing: banning ride-sharing
apps.

Those that benefit from the taxi medallion system have been
protected for 80 years. In that time, they abused taxi drivers and produced a
crappy product. Ride-sharing apps should be allowed to take over the market
— until
they too are disrupted by self-driving cars
.
And so it goes.

7.

BEING REALLY, REALLY,

RIDICULOUSLY GOOD LOOKING

“I’m
pretty sure there’s a lot more to life than being really, really, ridiculously
good looking. And I plan on finding out what that is.”

(Derek
Zoolander
,
Zoolander
)

H
umans like
attractive people. Those blessed with the leading man looks of Brad Pitt or the
curves of
Beyonce
can expect to make, on average, 10%
to 15% more money over the course of their career than their more homely
friends. Without being consciously aware that they are doing it, people
consistently assume that good-looking people are friendly, successful, and
trustworthy. They also assume that unattractive people are unfriendly,
unsuccessful, and dishonest. It pays to be good looking.

This insight is not lost on Madison Avenue or Hollywood. This is
why every beer commercial features an attractive woman and Scarlett Johansson
endorses products ranging from perfume to soda makers. This is also why
companies hire beautiful women to stand in tradeshow booths and Abercrombie
& Fitch badgers attractive customers into applying for sales positions.
Consumers associate the perceived positive characteristics of attractive people
with their products and companies.

The good-looking sales associates at Abercrombie & Fitch may
sell more clothes, but is that legal? Surely there must be some controls to
ensure that unattractive people are not excluded from large swaths of the labor
market. So what protections exist for those of us without smooth skin and thin
waists?

The surprising answer is none. America has no law preventing
companies from using attractiveness
as a hiring criteria
,
regardless of whether the job is exotic dancer, salesman, or software engineer.
It’s more or less acceptable from a legal standpoint to discriminate based on
looks in America. Is that a problem?

The
Science of Beauty

Beauty
is often considered subjective and “in the eye of the beholder.”

To some extent this is true. People argue over the
attractiveness of various celebrities precisely because differences of opinion
exist. Tastes also vary by time and place. Victorian England admired pale skin.
During the Colonial Era, men showed off their calves like men display their
biceps today. And skinniness has not always been considered the ideal.

Academic work on beauty, however, finds that much of what we
find attractive is consistent over time and across cultures. In general, people
find symmetry and averageness of facial features attractive.

When images of perfectly symmetrical faces are created in
Photoshop, people prefer them
over
their unsymmetrical
counterparts. The same is true of photos created by merging many faces to get a
composite. Scientists speculate that we prefer symmetry and average features
because they (at least at some point) indicated healthy genes or other
evolutionary advantages.

More evidence of a universal, objective basis for beauty comes
from studies of babies presented with pictures of different faces. The pictures
the babies gazed at the longest were consistently the ones rated as most
attractive by panels of adults.

The Halo
Effect

In
the early 20th century, psychologist Edward Thorndike noticed
that psychologists
’ evaluations of very different traits in
the same individual seemed suspiciously consistent. He suspected that a bias
was to blame.

To test his finding, he asked military officers to rate their
subordinates on characteristics such as neatness, physique, leadership skills,
intellect, and loyalty. He again found that the results were too consistent.
When officers rated a soldier especially high for one quality, they tended to
rate him high in other areas where he did not excel. Soldiers rated especially
poor in one area also received poor marks across the board. The officers’
opinion of their soldiers for one characteristic dominated their overall
impression.

Thorndike called this the “halo effect.” Researchers have
documented its influence in many situations, including the halo effect of
physical attractiveness. As psychologist Robert
Cialdini
writes in his bestselling book Influence, “We automatically assign to
good-looking individuals such favorable traits as talent, kindness, honesty,
and intelligence.” Within the business world, he says, attractive people benefit
from the halo effect in two major ways.

The first is that we tend to “comply with those we like.” This
is why magazine offers from neighborhood children are so irresistible and
“Tupperware parties” (where mothers host parties to sell Tupperware to their
friends) are so successful. It’s also why Joe Girard, one of the most
successful car salesmen of all time, sent all of his
customers
holiday cards with the phrase “I like you” every year. Likeable people have an
easier time selling products, and attractive people are eminently likeable due
to the halo effect.

The second is that we tend to associate people with the products
they sell and companies they represent.
Cialdini
points out that weathermen are blamed (by otherwise rational people) for storms
and that the Persian Empire either killed messengers or treated them as heroes
depending on the nature of the news they brought. (An example of the literal
origins of the phrase “Don’t kill the messenger.”) The use of association in
advertising and sales is so powerful that it works even when people are
perfectly aware of companies’ intent.
Cialdini
writes:

“In one study, men who saw a new-car ad that included a
seductive young woman model rated the car as faster, more appealing, more
expensive-looking, and better designed than did men who viewed the same ad
without the model. Yet when asked later, the men refused to believe that the
presence of the young woman had influenced their judgments.”

In combination, these two principles and the halo effect give
attractive people a huge advantage in any job that involves interaction with
customers, business partners, or the general public. A good-looking
spokesperson is more likely to be trusted and imbue his company with a positive
image. Beautiful saleswomen can more easily close deals. Sources are more
likely to trust beautiful journalists and confide sensitive stories to handsome
reporters.

People recognize, tolerate, and even encourage the practice of
hiring attractive people as actors and models. But the same principle that
allows Jennifer Garner to do a better job selling makeup than the average girl
next door is also at work in a huge number of professions.

The Best
Looking Sales Staff in the Land

Although
it is a clothing store, Abercrombie & Fitch is not necessarily famous for
its clothes. The company brand ties attractive people and pop culture. In its
stores, pop music blares, perfume hangs in the air, and attractive sales staff
use catch phrases like “Hey! What’s up?” Pictures on the wall feature models’ six
pack abs more than actual clothing.

Abercrombie & Fitch unapologetically hires only the most
attractive applicants. Recruiters seek out beautiful people in stores, on the
street, and at fraternities and sororities. Its codified “Look Policy” so
prioritizes appearance that managers reportedly throw applications from
unattractive job seekers into the trash. The company’s rebranding from an
ailing athletics apparel store — purchased for $47 million in 1988
— to a retailer of preppy clothing staffed by “models” helped it earn
$4.5 billion in revenue in 2013.

In 2004, fourteen individuals launched a class action lawsuit
against Abercrombie & Fitch that described its Look Policy as
discriminatory. Their lawyers argued that a certain look was not central to the
essence of A&F’s business and the actual job of answering questions about
polo shirts.

But Abercrombie & Fitch was not in trouble for hiring only
hotties
— the company was charged with racism. The
plaintiffs noted that A&F’s policy of favoring a “natural, classic American
style” translated to a “virtually all white” sales staff and relegating
minority employees to positions in the back room. A&F settled for $50
million and agreed to change their Look Policy.

Even if they had wanted to, the plaintiffs could not have
accused A&F of appearance-based discrimination or “
lookism
.”
There is no federal law against it. Companies can use attractiveness as a basis
for employment decisions in all but several American cities that have passed
legislation against it. This is true regardless of whether attractiveness is
central to the occupation (a stripper or actor), a branding or sales strategy
(Abercrombie & Fitch’s sales staff), or completely irrelevant (personal
assistant or software engineer). When a lawsuit does challenge appearance-based
policies, it draws instead on laws that ban discrimination on the basis of
race, gender, age, or disability.

The most common lawsuits challenge companies that hire only
attractive women on the basis of gender discrimination since this would exclude
men and place obligations (in terms of dressing seductively) on female but not
male employees. Like the A&F case, these lawsuits draw on Title VII of the
Civil Rights Act, which “prohibits employment discrimination based on race,
color, religion, sex and national origin.” The law is strict: Companies must
prove that their employment practices constitute a “bona fide occupational
qualification” that is necessary for the essence of the business.

A strip club can claim that seductive women are the essence of
its business; restaurants and airlines cannot claim the same defense. In the
seventies, Southwest Airlines marketed itself as the “love” airline by hiring
only attractive female stewardesses who dressed in hot pants. (They also called
check-in counters “quickie machines.”) But in 1981, a man denied a job with
Southwest sued the company for sexual discrimination. Southwest began hiring
male employees after the judge ruled that the company’s purpose was not
“forthrightly to titillate and entice male customers.” Even Hooters, the
restaurant chain whose entire premise is for hot, scantily clad women to serve
men
buffalo
wings, fell victim to the law. It has kept
the “Hooter Girls” mainly by settling lawsuits out of court, but it has opened
more staff positions to men and women that do not require good looks.

In more theoretical discussions, lawyers argue that the Age
Discrimination in Employment Act could be used to challenge appearance-based
discrimination in which age plays a role. Even more theoretically, they
speculate that the interpretation of the Americans With Disabilities Act, while
not originally intended to protect people lacking perfect, tanned bodies, could
be extended to include attractiveness.

But in practice, as long as a company is open to hiring
attractive people of every gender, race, creed, and age, it is free to hire and
promote staff the same way fraternity boys play hot or not. Despite the legal
sanction, Abercrombie & Fitch continues to seek out attractive applicants —
whether black, Asian, Indian, or Hispanic — and attract controversy for
doing so.

Do Women
Benefit As Well?

While
the halo effect has been demonstrated to help attractive people in many
personal and professional settings, the bias doesn’t always help women in their
careers.

A 2010 study, for example, examined how attractiveness
benefitted men and women in different jobs. Attractive men had an advantage
over their plain peers across the board. But for jobs considered “masculine,”
such as mechanical engineer, construction supervisor, and even director of
finance, women actually paid a penalty for being attractive.

A separate experiment that sent out identical applications with
and without pictures, however, found that attractive women fared worse than
“plain-looking” women regardless of industry. But it theorized that attractive
women faced a penalty because
human resources offices are
staffed mainly by women
. If a mostly male or evenly balanced staff
reviewed the applications, attractive women may have enjoyed an advantage.

Results like this suggest that women may not benefit from
attractiveness as much as men, or may even suffer reverse appearance-based
discrimination depending on the circumstances.

A Skin
Deep World

While
it’s not the subject of congressional committees and headline news, some debate
exists over whether appearance-based hiring policies should be considered
discrimination, effectively offering unattractive people similar protections to
those that exist for women, minorities, senior citizens, and the disabled.
Without equating the disadvantages faced by plain-looking people to the
injustices minorities face, advocates insist that this would also seek a
society that is merit-based and where people are not limited by physical
appearance.

Many people despise Abercrombie & Fitch for hiring only
good-looking staff, but Harvard economist Robert
Barro
argues that good looks are a legitimate aspect of productive economic activity.
“A worker’s physical appearance, to the extent that it is valued by customers
and co-workers,” he writes in an editorial, “is as legitimate a job
qualification as intelligence, dexterity, job experience, and personality.”
Intelligence is doled out unequally and determines which jobs people can and
cannot get, yet we do not ask the government to intervene.