Archive for the ‘off topic’Category

The hobby economist – How Taxi Stockholm really works

If you’re anything like me (which you probably are since you got here), you’re constantly interested in how stuff works and why it works the way it does.

Taxi systems interest me, they work very differently in different countries (everyone drives their own car, 100% on provision, big firms with drivers on commission, government run etc) and I think you can tell based on the kind of service you get.

I’m also interested in the general supply and demand problem of planning taxis.

Therefore, the other day, going home from Arlanda airport, I took the chance to get the skinny on how Taxi Stockholm really works, who takes the financial risk, how much they make, how they match supply with demand etc. Pretty intesting I think.

There are three basic parts to Taxi Stockholm:

- Drivers:
Unlike what most people think, the drivers usually do not own the cars they drive, more often, 2-3 drivers, are scheduled on a car that is owned by what in Swedish is called an “åkare”, loosely translated as a “garage owner” or “car owner”

- Car/garage owners:
These guys usually own several cars, they take a fairly small amount of the money that their drivers charge the customer, so this is really a scale business, where the money is in having many cars making money simultaneously (almost no drivers actually own their own cars since the revenue from owning a single car is not worth the hassle according to the drivers I asked). The car/garage owner makes sure his cars are scheduled and rolling 24/7. There is a central digital board system hosted by Taxi Stockholm that handles supply and demand between drivers and car owners, where drivers can click the hours that they want to drive a car. Usually a driver always drives the same car. But the car/garage owner doesn’t have anything to do with supplying actual customers to his drivers, this is the job of the dispatch.

- The dispatch:
Taxi Stockholm dispatch is obviously what supplies the actual customers to the drivers. Interestingly, Taxi Stockholm is not a share holder’s company (an AB in Swedish) but what is called an “ekonomisk förening” losely (and lossy) translated to a financial partnership, a cooperative owned jointly by all car/garage owners (about 950 across about 1600 cars).

The dispatch is obviously the whole value of being a part of Taxi Stockholm vs driving on your own since they connect demand for taxis with supply of taxis and apart from waiting outside night clubs at closing hour or Arlanda airport (more on that below), it is very hard to predict where this demand will be.

However, while many people think that the taxis are centrally controlled by the dispatch and told where to go in order to spread out and follow demand, it is actually much more bottom up and controlled by the drivers. All cars have a computer that shows three columns and a bunch of rows. Each row is a zone (e.g. Östermalm, Södermalm or Kungsholmen) and the three columns shows:
1. The taxis in this zone right now.
2. How many outstanding reservations this zone has right now.
3. How many pre-orders this zone has coming up.

Based on this demand info, drivers try to match supply themselves by going to the zone they think will be the best bet. When they enter a zone, they log in and get a queue number based on how many cars came there before them. There are a lot of different strategies out there (kind of like fishing in the words of the driver himself) based on avoiding drunk people, dangerous areas, getting long rides (to Arlanda) vs short ones, predicting demand ahead of time etc.

So what does the money look like?

While I couldn’t get all the numbers, I got a few. Out of what the customer is charged the division looks roughly like the following:

- VAT 6%
- Driver 35% (about 26% net), i.e. 100% performance based salary, no fixed part.
- Car owner ?% (unknown, but the drivers say it is a pretty tough business, let’s assume maybe 35% as well, which needs to cover the vehicle cost before income tax)
- Taxi Stockholm dispatch staff and orgnaization cost ?% (maybe 24% then)

On a good weekday 12 hour shift, a driver makes about 3000 SEK
On a good weekend 12 hour shift, a driver makes about 6000 SEK
On a good month a driver makes about 30 000 SEK gross/20 000 SEK net (which implies working at least 6 nights a week and probably several full weekends)

Some observations: The incentives to drive illegal cabs are really high as you can charge customers roughly the same per minute/mile but make almost four times as much net per minute/mile. On the other hand, you have no dispatch to feed you business, which means you can really only do this successfully around night clubs at closing time where demand is obvious (most hotels and airports have pretty effectively gotten rid of illegal drivers). The lack of a supply/demand function to make them competitive thus means that illegal cabs aren’t really a big problem for the taxi industry financially.

Actually, Arlanda airport has a bigger impact on the type of car that a car owner buys than the general car economy like repairs cost of fuel etc.

Arlanda airport is obviously a very big supplier of customers and they have a taxi system that very strongly incentivize environmentally friendly cars over others. Basically, when drivers arrive at the airport (or have dropped customers off) they have to queue at a site a bit away from the airport instead of driving up to a gate. There, they get a queue number based on the environmental points their car has. A car can get up to 100 points (the passat is apparently the top scoring car at something like 85 points). If you have a low score you can be sitting at the queue site for many hours and might as well not bother (i.e. drive back to Stockholm empty to find new business).

That’s it, I hope you learned something you didn’t already know…


01 2011

List time – My top 50 TED talks!

Ok, I’ve spent part of Christmas looking through new and old TED talks. It’s a great way for me to unwind and zoom out from the narrow view of the world that most of us have at work, focusing on niche specific near term goals, to a 30 000 feet view of what is going on around you across several disciplines and be inspired to think bigger.

Some people asked me to summarize my favorites. So here they are (in no particular order btw). These are obviously skewed to my interests, so not necessarily the best all time talks, just the best in my fields of interest (Technology, Astronomy, Genetics, Economy/incentives). I really do think that if you watch these, you’ll come out a slightly wiser person on the other end. Some of these talks are old (and even proven slightly wrong) but they are very entertaining and inspiring nonetheless.

Also, I’d love to hear your favorite talks (not just TED, but any source) in the comments. Please!

The list

My comment on Ray Kurzweil:
While Ray Kurzweil is perhaps not a very engaging speaker, I think what he has to say about thinking exponentially rather than linearly when estimating technology, as well as his thoughts about a singularity are very important and interesting.

Ray Kurzweil: A university for the coming singularity | Video on
Ray Kurzweil’s latest graphs show that technology’s breakneck advances will only accelerate — recession or not….

Ray Kurzweil on how technology will transform us | Video on
Inventor, entrepreneur and visionary Ray Kurzweil explains in abundant, grounded detail why, by the 2020s, we will have reverse-engineered the human …

My comment on Blaise Aguera y Arcas:
Simply very fascinating and novel use of augmentation.

Blaise Aguera y Arcas demos augmented-reality maps | Video on
In a demo that drew gasps at TED2010, Blaise Aguera y Arcas demos new augmented-reality mapping technology from Microsoft.

My comment on Brian Cox:
The Large Hadron Collider is awesome and so is Brian Cox, it’s a very good combination.

Brian Cox: Why we need the explorers | Video on
…ur exploratory science programs — from space probes to the LHC — are first to suffer budget cuts. Brian Cox explains how curiosity-driven science pays for itself, powering innovation and a profound appreciat…

Brian Cox on CERN’s supercollider | Video on
“Rock-star physicist” Brian Cox talks about his work on the Large Hadron Collider at CERN. Discussing the biggest of big science in…

Brian Cox: What went wrong at the LHC | Video on
In this short talk from TED U 2009, Brian Cox shares what’s new with the CERN supercollider. He covers the repairs now underway and what the …

My comment on Chris Anderson of Wired:
Even if many people nowadays disagree with the long tail, this is still a classic talk and moment in Internet history.

Chris Anderson of WIRED on tech’s Long Tail | Video on
Chris Anderson, the editor of WIRED, explores the four key stages of any viable technology: setting the right pric…

My comment on Chris Anderson of TED:
TED custodian and curator Chris Anderson has done an awesome job of curating and developing the TED conference. He’s also done some good talks himself.

Chris Anderson shares his vision for TED | Video on
Chris Anderson gave this talk in 2002, prior to taking over leadership of TED. Founder Richard Wurman was leaving …

Chris Anderson of TED: How web video powers global innovation | Video on
TED’s Chris Anderson says the rise of web video is driving a worldwide phenomenon he calls Crowd Accelerated Innovation …

My comment on Clay Shirky:
Simply great ideas that feel like a given now, but weren’t at the time Clay spoke about them. He has a very good way of crystallizing and embodying why things are the way we often feel they are but can’t explain.

Clay Shirky on institutions vs. collaboration | Video on
In this prescient 2005 talk, Clay Shirky shows how closed groups and companies will give way to looser networks where small contributors hav…

Clay Shirky: How cognitive surplus will change the world | Video on
Clay Shirky looks at “cognitive surplus” — the shared, online work we do with our spare brain cycles. While we…

My comment on Clifford Stoll:
This guy is just amazing to watch on stage….

Clifford Stoll on … everything | Video on
Clifford Stoll captivates his audience with a wildly energetic sprinkling of anecdotes, observations, asides — an…

My comment on Craig Venter:
Another piece of history that was first forecasted and then realized on the TED stage. Many newspapers (e.g. the Economist) used the image of god (Craig) touching Adam’s finger to create life for their article spreads on Craig. Unlike most scientists, this guy is also a marketing genius who scares a lot of people and now holds patents on synthetic life. You should know who he is….

Craig Venter is on the verge of creating synthetic life | Video on
“Can we create new life out of our digital universe?” Craig Venter asks. His answer is “yes” — and pretty soon. He walks through his latest research and promises tha…

Craig Venter unveils “synthetic life” | Video on
Craig Venter and team make a historic announcement: they’ve created the first fully functioning, reproducing cel…

My comment on Ed Ulbrich:
This (how Benjaming Buttons was made and that it was the first time people were truly fooled by a fully computer rendered actor) fascinates me because of the implications I think it will have for actors and the movie industry, which I’ve written about earlier. In what I think (partially) proves this previous blog post, many people don’t even realize that both Winklevoss twins (Cameron and Tyler) in the movie The Social Network are actually played by the same actor (Armie Hammer) using a body double with Armies head slapped on the body double in the scenes in which both twins are visible at the same time. I think cheap unknown physical body doubles, with famous licensed (computer rendered) heads smeared on, will be the future of the movie industry.

Ed Ulbrich: How Benjamin Button got his face | Video on
Ed Ulbrich, the digital-effects guru from Digital Domain, explains the Oscar-winning technology that allowed h…

My comment on George Dyson:
This guy is amazing to listen to not only because he knows so much about tech history, but because his dad Freeman Dyson is responsible for a lot of it and George lived through it as a kid. Both of these talk are absolute must sees if you’re the least interested in technology.

George Dyson at the birth of the computer | Video on
Historian George Dyson tells stories from the birth of the modern computer — from its 17th-century origins to the hilario…

George Dyson on Project Orion | Video on
Author George Dyson spins the story of Project Orion, a massive, nuclear-powered spacecraft that could have taken us to…

My comment on Freeman Dyson:
It is testament to how rapidly techology has developed (remember, exponentially, not linearly) that Freeman Dyson is actually still alive to talk and talking about the future and what we should do as a species.

Freeman Dyson says: let’s look for life in the outer solar system | Video on
Physicist Freeman Dyson suggests that we start looking for life on the moons of Jupiter and out past Neptune, in the Kuiper…

My comment on Hans Rosling:
Well, he’s aweosome and a Swede, not too many of those around, so of course I had to put him in here.

Hans Rosling: Asia’s rise — how and when | Video on
Hans Rosling was a young guest student in India when he first realized that Asia had all the capacities to recla…

Hans Rosling: Let my dataset change your mindset | Video on
Talking at the US State Department this summer, Hans Rosling uses his fascinating data-bubble software to burst myths about the developing world. Look for new a…

Hans Rosling on global population growth | Video on
…living standards of the poorest can we check population growth. This is the paradoxical answer that Hans Rosling unveils at TED@Cannes using colorful new data display technology (you’ll see).

Hans Rosling: The good news of the decade? | Video on
Hans Rosling reframes 10 years of UN data with his spectacular visuals, lighting up an astonishing — mostly unr…

Hans Rosling shows the best stats you’ve ever seen | Video on
… never seen data presented like this. With the drama and urgency of a sportscaster, statistics guru Hans Rosling debunks myths about the so-called “developing world.”

Hans Rosling on HIV: New facts and stunning data visuals | Video on
Hans Rosling unveils new data visuals that untangle the complex risk factors of one of the world’s deadliest (an…

Hans Rosling’s new insights on poverty | Video on
Researcher Hans Rosling uses his cool data tools to show how countries are pulling themselves out of poverty. He demos Doll…

My comment on Henry Markram:
The brain simply interests me a lot and it feels like a very concrete step in evolution once we’ve actually reverse engineered (and thus can start to superevolve our own brains at potentially the same exponential speeds as the rest of our technology, rather than at darwinistic speeds (See Ray Kurzweil at the top for more about reverse engineering the brain).

Henry Markram builds a brain in a supercomputer | Video on
Henry Markram says the mysteries of the mind can be solved — soon. Mental illness, memory, perception: they’re m…

My comment on James Cameron:
Just very cool talk from a smart and interesting guy.

James Cameron: Before Avatar … a curious boy | Video on
James Cameron’s big-budget (and even bigger-grossing) films create unreal worlds all their own. In this personal …

My comment on James Watson:
Again, to think that the knowledge of DNA is so young that the guy who discovered it is still alive to talk about it is pretty mind boggling…

James Watson on how he discovered DNA | Video on
Nobel laureate James Watson opens TED2005 with the frank and funny story of how he and his research partner, Francis Crick, dis…

My comment on Jason Fried:
We all knew this instinctively, but still, interesting to see people studying it. I don’t really agree with the speaker on the solution (although I agree with the problem). Getting rid of all forms of synchronization/communication however, is not a scalable solution either, many people argue that discussions are actually when most true innovation happens….

Jason Fried: Why work doesn’t happen at work | Video on

My comment on Jeff Bezos:
I’m just a very big fan of Jeff Bezos because he keeps doing things that are very innovative again and again (Amazon, AWS, Kindle etc etc). After having watched these talks you’ll be a fan too (if you weren’t already). Also, he is a very good motivational speaker!

Jeff Bezos on the next web innovation | Video on
The dot-com boom and bust is often compared to the Gold Rush. But founder Jeff Bezos says it’s more like the early days of the electric industry.

Jeff Bezos: What matters more than your talents | Video on
In this Princeton University graduation address, Amazon founder Jeff Bezos makes the case that our character is reflected not in the gifts we’re endowed with at birth, but by…

My comment on Johnny Lee:
Awesome classic!

Johnny Lee demos Wii Remote hacks | Video on
Building sophisticated educational tools out of cheap parts, Johnny Lee demos his cool Wii Remote hacks, which turn the $40 video game controller into a digital whiteboard…

My comment on Nicholas Negroponte:
Nicholas is currently maybe most talked about because of the one laptop per child (OLPC) project. But he is a very smart guy in general and his 1984 predictions are pretty amazing (it’s very hard to unimagine everything that you now know about what happened, but try).

Nicholas Negroponte, in 1984, makes 5 predictions | Video on
With surprising accuracy, Nicholas Negroponte predicts what will happen with CD-ROMs, web interfaces, service kiosks, the touchscreen interface o…

My comment on Peter Diamandis:
A generally very cool guy involved in the ongoing and very interesting privatized exploration of space that seems to be picking up where government efforts left off. I think it is awesome and will be the fastest possible way of bringing the price of space flight down and making it a common reality for industry, science and tourism. I’m however still concerned about bigger projecta (where no commercial value can be seen in reasonable time) not getting done without state/global support. We actually need to get off this rock at some point!

Peter Diamandis on Stephen Hawking in zero g | Video on
X Prize founder Peter Diamandis talks about how he helped Stephen Hawking fulfill his dream of going to space — by flying together…

Peter Diamandis on our next giant leap | Video on
Peter Diamandis says it’s our moral imperative to keep exploring space — and he talks about how, with the X Prize …

My comment on Peter Donelly:
Humans suck at statistics and we focus so much of our early math education on calculus, even though we seldom use advanced calculus in real life, but are constantly subject to (and thus fooled by) by statistics. It makes most politics dumbed down and simplistic since no advanced discussions can be held (and reality is often fairly advanced). Not understanding statistics can also be very dangerous, as shown in this TED talk.

Peter Donnelly shows how stats fool juries | Video on
Oxford mathematician Peter Donnelly reveals the common mistakes humans make in interpreting statistics — and the devastating impact th…

My comment on Richard Branson:
Swell guy! Whish I was a bit more like him.

Richard Branson’s life at 30,000 feet | Video on
Richard Branson talks to TED’s Chris Anderson about the ups and the downs of his career, from his multibilliona…

My comment on Steve Jobs:
One of the most honest, direct and motivating speeches I’ve ever heard. Goosebumps.

Steve Jobs: How to live before you die | Video on
At his Stanford University commencement speech, Steve Jobs, CEO and co-founder of Apple and Pixar, urges us to pursue our dreams and see the opportunities in …

My comment on Tim Berners-Lee:
Well, he invented stuff, like the Internet, I think that merits a listen..

Tim Berners-Lee on the next Web | Video on
20 years ago, Tim Berners-Lee invented the World Wide Web. For his next project, he’s building a web for open, linked data th…

Tim Berners-Lee: The year open data went worldwide | Video on
At TED2009, Tim Berners-Lee called for “raw data now” — for governments, scientists and institutions to make their data op…

My comment on Ueli Gegenschatz:
Just watch the video of wing flight in this talk. It is absolutely amazing…

Ueli Gegenschatz soars in a wingsuit | Video on
…hilarating feat of almost unbelievable daring, where skydivers soar through canyons at over 100MPH. Ueli Gegenschatz talks about how (and why) he does it, and shows jawdropping film.

My comment on Dan Pink:
Motivation and more specifically, incentives, fascinates me. I think it is what drives humanity, and yet we are really bad at rigging the right incentives for stuff we want to get done.

Dan Pink on the surprising science of motivation | Video on
Career analyst Dan Pink examines the puzzle of motivation, starting with a fact that social scientists know but most manage…

My comment on Aubrey de Grey:
The holy grail, eternal youth. It may actually happen. Then what?

Aubrey de Grey says we can avoid aging | Video on
Cambridge researcher Aubrey de Grey argues that aging is merely a disease — and a curable one at that. Humans age in seven basic ways,…

My comment on Brian Greene:
A primer on superstring theory. Very interesting.

Brian Greene on string theory | Video on
Physicist Brian Greene explains superstring theory, the idea that minscule strands of energy vibrating in 11 dimensions cr…

My comment on Dan Ariely:
More on how us humans actually work, what makes us tick and what incentivises us by a really interesting guy.

Dan Ariely asks, Are we in control of our own decisions? | Video on
Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (…

Dan Ariely on our buggy moral code | Video on
Behavioral economist Dan Ariely studies the bugs in our moral code: the hidden reasons we think it’s OK to cheat or steal (sometime…

My comment on Gero Miesenboeck:
More on reengineering the brain from a slightly scary scientist.

Gero Miesenboeck reengineers a brain | Video on

My comment on Alisa Miller:
Very interesting on how biased our news actually is. This may explain a lot about how things can seem so obvious to us, but not to someone else, and how we think we are very well informed and that everyone sees the same view of the world.

Alisa Miller shares the news about the news | Video on
Alisa Miller, head of Public Radio International, talks about why — though we want to know more about the world…

My comment on Barry Schwartz:
More about how people really work and why giving people more choice (which is inherently good) doesn’t necessarily translate into more people being better off, sometimes the opposite. This also touches on the very interesting question on how much of your life you should take responsibility for yourself (US on one extreme, you make all the choices, Sweden on the other, state makes default choices for most things).

Barry Schwartz on the paradox of choice | Video on
Psychologist Barry Schwartz takes aim at a central tenet of western societies: freedom of choice. In Schwartz’s estimation, cho…

My comment on Chip Conley:
The pursuit of happiness, finally some science.

Chip Conley: Measuring what makes life worthwhile | Video on
When the dotcom bubble burst, hotelier Chip Conley went in search of a business model based on happiness. In an old friendship with an employee and in…

My comment on Malcom Gladwell:
If you’re not an airport litterature junkie like me and haven’t already read Blink, The tipping point, Outliers, What the dog saw etc. You should really watch this and get to know Malcolm!

Malcolm Gladwell on spaghetti sauce | Video on
Tipping Point author Malcolm Gladwell gets inside the food industry’s pursuit of the perfect spaghetti sauce — and makes a larg…

My comment on Steven Levitt:
The perfect marriage of my airport literature problem and human incentive fascination. If you haven’t already read Freakonomics and Superfreakonomics, start with these talks and then do.

Steven Levitt analyzes crack economics | Video on
Freakonomics author Steven Levitt presents new data on the finances of drug dealing. Contrary to popular myth, he says, being a stree…

Steven Levitt on child carseats | Video on
Steven Levitt shares data that shows car seats are no more effective than seatbelts in protecting kids from dying…

Updates from readers:

My comment on Rory Sutherland:
This fantastic talk was on my short list but didn’t quite make it, now adding it by popular request. Thoughts go out to the ad guys and girls at Spotify, this is what your job is really about and what you do all day :)

Rory Sutherland: Life lessons from an ad man | Video on
Advertising adds value to a product by changing our perception, rather than the product itself. Rory Sutherland makes the daring assertion that a change in perceived value can be just as satisfying as what we co…



12 2010

Will Brad Pitt become the first digital actor – and what will it cost to license him for my movie?

I recently saw the TED talk about ” The Curious Case of Benjamin Button”, where I learned that for the first hour of the movie, Benjamin, i.e. Brad Pitt’s, face is completely computer rendered, using short people to play his body. The team from Digital Domain created a complete digital version of Brad Pitts face for this, no masks, no make-up, the face of the short actor was simply replaced by the computer rendered version. Now this is very cool in and by itself, but it got me thinking about what this means for the movie industry and what the consequences might be.

- So, it is a fact that Digital Domain now has a “construct” of Brad Pitt (his face anyway) that can be rendered to play him well enough in a movie to fool any living human.

This raised a few questions in my head:

- What will happen a year from now, when Brad Pitt gets a call from Digital Domain saying that they actually want to use that construct for another movie, in which Brad doesn’t act at all? In fact, they will pay him 20% of what he normally charges to be in a movie, without him even having to get out of bed. Better yet, he can be recording another movie at full price at the same time!

- Will Brad at least allow the contsruct to be used when dubbing movies into foreign languages to fix the lipsync for the German version?

- How should Brad charge for this? How can he keep his integrity as an actor now that he can star in an unlimited amount of movies simultaneously? Liensing his construct to too many movies will obviously dilute his brand and how much he can charge per movie.

- You may think that Brad stays away from this and stars in movies himself instead. I don’t. Maybe he will next year, but what about ten years from now, when Brad the actor, then aged 55, can only play men aged 50+, while his construct can still play a handsome 35 – 45 year old man? Then it is not an alternative to cast Brad himself at all anymore? Why not live off of royalties at old age? – the ABBA model – it’s a nice retirement plan!

- What happens a few years from now, when this technology is dirt cheap and when Brad’s construct leaked and ended up on Pirate Bay? Will we start seeing “pirated” Hong Kong movies starring Brad Pitt speaking perfect Cantonese? Movies that we in the west (including Brad Pitt) have never even heard of?

- Will there be an open source version of Brad Pitt?

- Will Brad Pitt the construct eventually get diluted from overuse, and rather than be the lead character, just be used as a cheap alternative to casting real actors for those small roles where you just need a good looking guy for one or two lines? You know, the guy at the gas station, the shop keeper?

- Finally. I wonder if it is Digital Domain or Brad Pitt who actually own the copyright for Brad’s construct?……………….

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03 2009