Data Digest № 009
Hey there and welcome to the ninth edition of the Datawallet Data Digest. HBO is rumored to have commissioned a series on the data world to be the tentpole series to replace Game of Thrones. While it may not have much sex appeal to offer, it certainly makes up for it with drama. And this week had lots of it. Let’s get to it.
Uber’s Data Venture To Combat Operating Loss
Some spiteful souls are credited with saying that an upcoming IPO, a stagnating 2.3% growth rate, and an annual operating loss of $3 billion don’t mix well. While deeply contrarian an assertion, Uber insiders and analysts facing this situation took said wisdom to heart to venture out in search of new revenue opportunities. And what did they find? Let me give you a hint, it coincidentally rhymes with shmersonal shmada. Nice guess, it is in fact personal data.
“There is no evidence the core ride-hailing business is profitable. The question becomes, ‘Where is the next billion dollars coming from?’” — Steve Blank
In the light of Uber’s somewhat questionable relationship with data privacy, which included using geolocation data to spy on customers and journalists, deceiving regulators and recruiting drivers away from competitors, the alleged move seems tone-deaf at best. Nonetheless, Uber employees have openly stated that they are in a comparatively better position to “build a legitimate business from its vast quantity of data”. This ‘vast quantity’ is a blanket term for the unique access that Uber has to some of our most sensitive location information, such as our home addresses, work places, favorite bars, and even the frequency to which we attend to them. Not only have they expanded their data science teams under their CEO Dara Khosrowshahi, but they’ve explicitly named “pursuing targeted investments and acquisitions” in the space as key to their growth strategy.
Considering Uber is still paying retributions after their shady cover-up of the 2016 data breaches, the terms of which included a revamp of Uber’s data security practices, this looks fairly suspect and could spark even more concern amongst its IPO investors. Towards the lower end of the range, the company would hit the markets valued at around $82.4 billion with its shares going for $45 a piece. That’s far below the $120 billion some bankers suggested and also below the $100 billion Uber forecasted to its investors. This tumbling valuation will send alarm bells ringing for concerned investors, and suggests that the company is losing its appeal. Which in turn makes that sweet sweet user data all the more appealing. On the other hand it casts doubts on Uber’s long-term growth prospects. Assuming that the data sold encompasses data used for training machine learning algorithms of self-driving cars, the very ethically questionable prospects of disintermediating the drivers as a means of cutting cost and achieving profitability, are out of the window.
The answer to Uber's profit challenge? It may lie in its trove of data
Privacy Is A Luxury Good For Google
It feels like we’re living at the very height of hypocrisy when two of the leading chief execs of the richest tech companies in the world, who have made their billions by garnering masses of user data and then selling it for targeted advertising, are sanctimoniously singing glorious hymns of privacy from the rooftops. Battling for the latest outcry in privacy politics, Google’s Sundar Pichai called on the US to introduce new legislation to protect users data in his op-ed in the NY Times. Jon Porter for The Verge noted that “in a choice between increased regulation and the threat of being broken up, Pichai is clearly in favor of the former.” Pichai took a swipe at Facebook, claiming that “the present is private” a clever take on Zuckerberg’s aspirational but unsubstantiated claim the “the future is private”. However, while Pichai claims that “privacy cannot be a luxury good”, user privacy — or rather the lack thereof — is, and has been for many years, the source for Google’s entire ad revenues. To say this feels a little rich is a laughable understatement.
Google’s Sundar Pichai snipes at Apple with privacy defense
F.T.C. Hearing For Privacy Law
Lawmakers are considering a national privacy law to regulate the collection and handling of user data. Last Wednesday, commissioners asked Congress to strengthen their ability to police violations, and for more resources and greater authority to impose penalties in testimony before the House Energy and Commerce subcommittee on consumer protection.
This is taking place while the F.T.C. is in settlement talks with Facebook after a 13-month investigation into privacy violations. The agency is expected to levy a $5 billion penalty on Facebook for violating a 2011 privacy settlement with the regulator. “As we have learned from the concerning privacy issues surrounding Cambridge Analytica and Facebook, and from massive data breaches like the one at Equifax, there is little reason to believe that consumers can trust these companies with our personal data,” said Frank Pallone (D-NJ), who heads the Energy and Commerce Committee.
F.T.C. Commissioners Back Privacy Law to Regulate Tech Companies (Published 2019)
Facebook Sues Rankwave For Data Misuse
Following their refusal to comply with a mandatory audit of its data practices, Facebook is suing the South Korean analytics firm Rankwave. Facebook’s lawsuit details that “Rankwave used Facebook data associated with Rankwave’s apps to create and sell advertising and marketing analytics and models — which violated Facebook’s policies and terms”. The last thing Facebook needs right now is a second edition of the Cambridge Analytica scandal, and their delay in policing this violation shows their clumsy mishandling of data breaches in high definition.
Facebook sues analytics firm Rankwave over data misuse – TechCrunch
What I'm Reading:
Amazon Flunks Children’s Privacy, Advocacy Groups Charge (Published 2019)
Opinion | It’s Time to Break Up Facebook (Published 2019)
Europe Is Reining In Tech Giants. But Some Say It’s Going Too Far. (Published 2019)
That is all for this week!
See you next time.
SerafinData DigestIndustry Trends Regulatory Updates Consumer PrivacyData Misuse