02/06/2016 Newsnight

Message from the EU to member states - stop trying to get

What does Uber make of this pronouncement on the collaborative

economy? Obviously something

that is happening not only in transportation but in many other

sectors and great We'll ask whether the concerns

about technology and its power This is not

about scaring anybody. I am genuinely worried

about what would With just three weeks

to go David Cameron faces And serious people are

taking this seriously. You wake up in your bed and believe

whatever you want to You take the red pill, you stay

in Wonderland, and I show you Could we really be living an

advanced civilisation's video game? Technology can boost

competition and help consumers. It's undermined the newspaper,

virtually wiped out travel BHS could be said to be a victim -

we'll be talking about that later. But the revolution is not over -

it's hitting minicabs and hotels through companies

like Uber and Airbnb. And today, the European Commission

took a stand in favour It declared that EU member states

should not be unduly restricting companies in the so-called

collaborative economy, or banning them,

except as a last resort. The verdict was aimed

at cities that have tried But the Commission view will only

exacerbate the arguments over those services,

and the fears of some here, that their uncontrolled explosion

will disrupt businesses, It is Uber that has caused

the biggest arguments. Private hire minicabs on demand

via an app. Convenient, sometimes

cheap, cashless. It operates in cities and towns

across the country, but it is The sheer numbers of drivers signing

onto it in the capital are huge. Since 2013, 25,000 drivers

have hit the streets - that's equal to the

number of black cabs. The drivers are self-employed

and work flexible hours. They just pay a commission to Uber

of 25% of takings for the When a Uber comes along at work soon

industry as Uber house there will be complaints and a lot will be

dismissed. But the company raises an important issue. Is it creating a

Uber competitive society? Because the technology it employs enables a

huge increase in the supply of drivers, of labour in the taxi

industry, which is great for customers but it does imply a change

in the balance of power between Labour and consumer. For the

workers, the fear is it creates a race to the bottom. Minicabs have

begun to invade the streets of London, small cars charging a third

less than ordinary cabs. Taxi drivers thing, blimey, they will be

using scooters next. This is from 1961, when the cabbies

resisted the arrival of But as we see opposition today,

the question arises - is the economy Uber is helping

to shape having effects on a different scale and at

a different speed to anything we've Well, the EU Commission policy

is that the Ubers of the world should not be stopped

or restricted with Earlier today, I spoke to the woman

who runs Uber in the UK and several other European

countries, Jo Bertram. First question - what's her reaction

to the Commission policy? It is great to see the European

Commission is looking forward and embracing the collaborative economy

and starting to issue guidelines in this area. It is something happening

in transportation and many other sectors and great to see the

Commission embrace that. There is a concern there will be too many

people touting for passenger higher on the roads of London. Is it your

position you will limit the number, or will you let the numbers grow and

if the drivers are there to do it, you will let them sign-on and be

drivers? We want to make sure the opportunity to earn money at the

touch of a button continues to be there for drivers. If there were too

many drivers compared to the number of people wanting to use the act,

they would not be able to earn enough money. There was research

done about congestion in London, where they found the numbers of car

vehicles going in and out of the congestion charge but also central

London has not actually changed over recent years, so it suggests if

anything, the growth of companies like Uber is replacing people who

would have otherwise taken their private car into the capital. Do you

know how many of your drivers earn less than minimum wage? It is

probably not a good comparison. All the drivers are free to use the

platform as much or as little as they want and on a nonexclusive

basis. Most work part-time and combine it with starting their own

business, other sources of income or family commitments, and they may use

their car with other operators as well. It is not difficult finding

the drivers who say they are earning less than the minimum wage per hour,

does it surprise you? There are a few who say that and it depends on

when they work. We find on average drivers working in London take home

after the service fee, ?15, ?16 per hour. After the service fee. What

are they taking home after their cut? It depends on their costs. You

must have researched it. We have but for example if you own your car and

use it to work with us and another private hire operator... The average

drivers earn after reasonable costs are deducted, after what they pay

you, do you know the answer? It is probably not a mean. If you have

your own car and work 30-40 hours per week you could be taking home

more than someone renting their car and is only working a fewer hours a

week. Let's take someone who owns the car. You said you know the

answer. What are they roughly getting per hour they are working on

Uber? It is a computer business. It depends on how many hours a week

they work. They pay fixed costs over the month and insurance. Suppose

they do a 40 hour week. They could take home ?9, ?10 per hour. And what

proportion take home less than ?6 per hour? We do not know the details

exactly how many drivers rent and hours they work. Because of the way

the private hire regime works in the UK you probably need to work a

certain number of hours a week. If you get to 60,000 drivers, one would

expect the rates huge driver gets will go down. Only if the demand

does not rise in a similar way. 30,000 riders are downloading and

using the app every week in London and demand for the service has been

huge. We did polling of drivers and the results were amazingly positive.

The biggest thing coming from that was the drivers are valuing the

flexibility. Most drivers coming from other operators tell us they

moved because they do not want set hours and they want to take holiday

and switch off when they can. They can now get work at the touch of a

button. You are a data driven business, do you know how many of

your drivers work more than 60 hours per week? I don't have those numbers

but on average they use the app 28 hours a week. This is one of those

ones where I don't mind if they are working 28 or 40, even 45, I don't

want to get in a car where the driver works 70, 80 hours per week.

Can you tell if they work 70 hours a week and do you stop them working 70

hours? We monitor the hours drivers working and notify them if they work

excessive hours. Do you stop them if they work excessive hours? It is

difficult to know if are taking trips. We can tell when they are

logged on but they might be logged on at home. I think you can tell

when they are driving, can't you? You can see if they are doing trips

but what we find is after every trip, we have the customer rating

the driver. We get real-time feedback no other companies have to

see how they are performing. I don't know whether my driver has driven 80

hours when I take a Uber. I can tell you he has not crashed while I have

been in the car but I would hold it to a higher standard than that. I

would expect you to know the driver has not driven 80 hours because you

know when the driver is driving stop I am surprised you don't know, or

you don't tell the driver, get out of the car because you have driven

80 hours. We monitor the hours the drivers work and notify them and

ensure they are not working excessive hours. You notify them,

instruct them,? We notify them and talk to them and look at driving

behaviours and if there are safety concerns but essentially the drivers

are independent business people who are running their own business and

combining it with many other things as well. Do you think the scale of

the disruption Uber is causing, causing people to say, let's think

about how this is working, this is not a minicab office, a company with

30,000 people at its fingertips, what do you think about it? I

believe the competition is good for consumers. Three or four years ago

you could not have got a car within three minutes anywhere in London and

many other cities in the UK. One thing that worries me is I think

that the drivers' stories are not being heard. Every time I get in a

car I talk to the drivers and the stories of how they have used Uber

to change their lives are inspiring and their appreciate it and we want

to tell those positive stories, not just the handful of drivers who are

unhappy. Thanks. I'm joined now by the economist

Ann Pettifor, director of Policy Research in Macroeconomics

and a member of Labour's And by the venture capitalist

Julie Meyer, who specialises in I can see your face frowning as he

listens to the interview. Do you think Uber is a force for bad in

society? I do and not because of the relationship between driver and

consumer. The consumer benefits and there is demand for this form of

transportation. It is the relationship between Uber and

California, via a smartphone, the remoteness of the smartphone and

these drivers, who invest all the capital in the venture. They buy the

car, they pay for petrol and pay insurance or don't pay insurance, so

they are the capitalists, investing in these assets, and someone in

Santa Monica, California, is diverted the cash flow from that,

25% of that. Nobody forces the driver to give 25% to Uber, they

have to log on to do that. What she said it is these drivers are

probably flipping burgers during the day and earning little and having to

supplement their income. It is what is happening to the economy, the

flattening of incomes and prices which in the end is bad for

business. I want to say one thing stock can you draw the distinction

between workers and consumers you are drawing? These drivers, who are

low paid, maybe going to a low-cost supermarket that has squeezed down

prices, getting on a low-cost airline, they may be beneficiaries

of the squeezed price. They are both being milked, drivers and consumers.

Consumers get a cheap ride but at risk. They take the risk because

they are not sure if they have done 80 hours a day already driving and

whether they have insurance or are covered. There is the risk to

women... Consumers are taking the risk. How is the consumer taking the

risk, they just pay perhaps a cheaper fare for a convenient taxi?

It is cheap and very convenient but the key relationship is between the

remote capitalist milking if you like a cash flow, not just from one

industry but from a whole sector. Is that how you see it? Not at all. The

world has been driven by networks and Uber, Airbnb, these companies

are networks and platforms and that is the future, we cannot stop it

happening. What is interesting is these platforms enable people with

excess capacity, a spare bedroom in the case of Airbnb, to leveraged

their freedom and the excess capacity to make money. If you have

a free bedroom, know how to drive, you cannot say you cannot make money

and get a job. There is an ability to earn money and so what I see

happening is you can choose to optimise. There is an optimisation

model to optimise to the platform in California, to a car in France,

those decisions about who makes more money, it is an optimisation play.

Do you think the Commission that a Uber charges which is not out of

line with other minicab proprietors, from what they've brought to the

party which is a sophisticated piece of software, is the 25%, 20%, is

that it if their return for what they have done? Uber is the

fastest-growing company in the history of the planet. They have

enabled people to become drivers. They have enabled the future

infrastructure of the transportation industry. What is fair? It is that

they determining the economics of this 3-way split between the driver,

the passenger and Uber. So that is why they are winning. So if the

black cap industry could have done that... Other people could have done

that, they did not. They do not differ any bit from the barons in

medieval times that stood through the roads in that land and collected

a toll. This is an idea. What you could do is, if it is so easy and

simple to set up a network like this, you could set one up and it

could be called something else and you could take a smaller Commission.

I give them credit for the network and the technology. I think that the

driver should form their own workers Association and negotiate their own

terms. The terms gets set by Santa Monica in California. They basically

said when I did ask about that, we really prefer to talk to the drivers

one on one rather than the collective and that is a weakening

of the Labour power. There will be certain places where those attempts

to do that will happen. But what is interesting as a social trend is

that we are going to see that the winners in any industry,

transportation, hotels and so one, it will be the organisations who

organise the economics for these ecosystems. So we will see this in

banking, insurance and retail. Just because Uber does its super well.

That is a utopian idea. No, it is a fact. The economics happened to be

in organised -- organised by Uber and Facebook, it could be the banks

of the future and the retailers but they have to understand the problems

and the solutions. It is a delusional utopian idea and it is

working. And what do we see? Trump in the United States. Marine Le Pen

in France. It is nothing to do with that not assist! Nothing to do with

Trump, nothing. It has everything to do with him. It is a fascinating

topic that raises great emotion, thank you very much indeed.

Well, there was a huge piece of separate business news

in this country today - the demise of BHS.

No saviour in sight, it is to be liquidated.

The BBC's Business Editor Simon Jack joins me.

Simon, would you categorise this as a normal business failure, companies

do have bad luck and bad performance and they go out of performance, or

is there more to this? In one way, it is not a unique story, it is, is.

Some companies adapt to changing needs and give customers what they

need and they flourish. Others lose touch with their customers and they

perish and the ecosystem changes. And that is just life. That is, is.

But there will be questions about technical and legal issues -- that

is business. There will also be moral issues because some people

made a lot of money about this and is there -- is it right to take that

much money out leaving a company we cut and 11 million employees to fend

for themselves? Others say that is rubbish and it is business, grow up.

But there are issues, Hartley because of the characters involved,

Sir Philip Green is expecting a delivery of another yacht against

the backdrop of thousands out of work. It is the end of BHS but not

the end of the process because what are the main question is now about

that business? Two committees of MPs looking at it, insolvency services,

the Serious Fraud Office and may take it further. The key question

is, did Philip Green knowingly sell a company to somebody who was

totally qualified and had zero retail experience and may be no

ability and inclination to turn this business around? And so was

knowingly condemning his workforce to the fake that we see today. The

other one is, how was it that somebody who was a former racing

driver, a former bankrupt with a very patchy business history, how

did he take over a concern of this size? Philip Green will say, I know

he will because I have spoken to him, this guy had money in the bank

and a fleet of professional advisers. Blue-chip firms involved

in this transaction. All of whom are supposed to have due diligence

controls, corporate governance controls and what has emerged for me

from the sessions so far is everybody was looking at this tiny

bit of the deal. Rather than anybody taking a long, hard look, does this

make any sense? I suspect that will be the question and the only people

who can respond that is Sir Philip Green himself. Simon, thank you.

Did you see David Cameron on Sky News tonight?

It was one of the series of formal so-called referendum debates,

except it wasn't a debate, it was a one-on-one.

First half with Sky's political editor Faisal Islam,

and then with questions from an audience,

Watching it was our political editor, Nick Watt.

It was a confidence David Cameron who arrived for his first

uncontrolled encounter with voters in what has so far been a highly

choreographed campaign. The way to meet that challenge must not be to

leave the single market and to harm our economy and to hurt jobs and

damage our country. All the preparations in the world can read

even the most accomplished television performer momentarily

phased when voters decided to vent their anger. I have seen nothing but

scaremongering, no valid facts I have seen no pros and cons. I think

there is a very positive case. You said Sadiq Khan was not to be

trusted a couple of weeks ago and a couple of weeks later, you appear on

a platform with him. Is that not an example of your hypocrisy and

scaremongering over the course of this campaign? Obviously, I do not

think so and I will try and convince you why it was the right thing to

do. Do you get the personal damage your scaremongering campaign has

done to your reputation and legacy. With respect, I do not agree.

Attacks about scaremongering go-to the heart of the criticism of the

Remain campaign, accused of being alarmist and exaggerated about the

danger of a British exit from the EU.

What comes first, World War 3 or the global Brexit recsssion?

The words 'World War 3' never entered my lips.

The Prime Minister kept his poise at the brand of Cameron may look

bruised. Before the debate, there were questions about his brand, his

party's strongest asset for more than a decade, is still trusted. If

recent poll suggested the Prime Minister trailed Boris Johnson when

asked who was more likely to tell the truth about the EU. 21% opted

for David Cameron and 45% chose the former London mouth. There is a

difference between trusting telling the truth and credibility or wanting

what is best for Britain. When we looked at who was best for Britain,

David Cameron comes out top. David -- Boris Johnson Haslett on trusting

to tell the truth on the EU perhaps because people did not know much

about his view previously. David Cameron often wins on credibility

more than likeability or popularity. The Remain side have done their own

research into Boris. They find he is held in great affection, he is seen

as Bonnie and distrusted because voters regard him as authentic.

Research also suggests the former London Mayor is something of an

entertainer who cannot be taken seriously. Confident the referendum

will not be won and jokes, the Prime Minister Chandra jokes but he had to

address allegations of scaremongering and to put the debate

on his strongest ground, the economy. To me, this is not about

scaring anybody, I am genuinely worried about what would happen if

we leave. The Prime Minister went home with something of a bloody

nose, but he will be hoping that he can repeat the success of the

Scottish referendum. Voters may be disgruntled but in the end, they

will opt for the status quo. Elaborate on what you took of that

60 minute experience. That was an uncomfortable encounter with the

Prime Minister and voters, raising this scaremongering and exaggerated

claim either Remain campaign, but some of the concerns held within the

Remain campaign. There is concern the Chancellor have been

exaggerating by saying the average household will be worse off by ?4000

by 2030 if we left the EU and the Prime Minister did not mention that

figure. He was asked about it and he did not repeat it, he talked about

that level of figure. I think there is a feeling that what they need to

do is guess one people that there will be a negative effect on the

economy but voters are saying, it is you make these predictions into the

future, they just voters do not believe them. So simple, de clutter

the debate and be much creeper -- and be much clearer. Thank you very

much. Now, each week on Newsnight,

during this referendum campaign, we've been trying to help

you make your decision on how to vote by offering a little space

to some people who are not involved in the campaigns, to tell us

about their decision. Tonight, the Editor

of the Times Literary Supplement, and former Managing Editor

of the Sun, Stig Abell, takes us through his thought

processes for My Decision. I'm not qualified to

make this decision. It's very hard to find people

who are qualified to make the decision, because we are

basically having to juggle all sorts of macro-economic ideas

and futurology to say what's And I don't know what

the best is for Britain. So I think what worries me,

and should worry anyone in this And one of the unattractive

things about this debate The In versus the Out,

it's a very binary fight. I would love both sides

in the campaign to say, Instead, you have lots of people

shouting and tweeting about, you know, Shakespeare would

want to stay in, or whatever else And it becomes a row

in the playground. So the fear is that our playground

row, it becomes the most significant decision the country has made

in the last 30 years. Maybe I'll be gripped

by the paralysis of uncertainty I don't feel sufficiently strongly

at the moment in either direction. You can end up saying,

is Britain strong enough to survive

outside the EU? Are there people who believe that is

the right thing to do? Is Britain

sufficiently strong So actually, I think there

is a certain fatalism that can take over and say nobody has made

a silver bullet, all-encompassing argument that one way

is better than the other. Also, quite a lot of the people

on both sides couldn't convince you to vote yourself out of a paper

bag, because you wouldn't Probably, that is on the Brexit side

of the ball most significantly - if you see the crazed demagogues

of Galloway and Farage sort of sweatily exhorting

you to do something. It's not your immediate instinct

to follow them down the road. Before the Russians reintroduced it

for us in the 1990s, the word "oligarch" had more or less

disappeared as a contemporary label. But suddenly, along came this

new breed of dubious billionaire. Among the oligarchs,

one had an extraordinary story. Mikhail Khodorkovsky became possibly

Russia's richest man but, at age 39, he openly criticised

President Putin, who responded by opening a case against him

in court and getting him locked up. He went from having $15 billion,

to ten years in a Russian jail. Mr Khodorkovsky has lost most

of his money, but he has enough cash to support candidates standing

in the Russian duma elections later this year, aligned

to his Open Russia movement. Earlier today, I sat down

with Mr Khodorkovsky to talk about Putin,

Russia and prison, and asked him whether he expected to get anywhere

in the upcoming elections. How should we think

of President Putin? Is he just a populist like

Donald Trump? What was the worst thing

you did, the most sinful thing you did, in the

accumulation of your wealth Because you've really gone

from Russia's richest man I just wonder what

you think about the Because some say this

is a financial centre that helps corrupt Russians

launder their money. Do you have experience or knowledge

of whether London is Are you saying you think

Western politicians and governments should

do more to regulate the banks, for example,

and the money they take

from Russians, rich Russians? And obviously, the big debate

here right now is about Britain leaving, or not,

the European Union. Many say the only person,

the only international leader who wants

Britain to leave is President Putin. Do you think it's something

that matters to him? Do you think he would

like Britain to leave? Do you think he sees

that as a route to Mikhail Khodorkovsky,

thank you so much for He's the man behind Tesla, SpaceX,

and a co-founder of PayPal. And today, he said something

that is either brilliant or barmy. I incline to the latter,

but you judge. no, that we are almost certainly

computer-generated entities living inside a more advanced

civilization's video game. Well, actually, I won't explain his

point, because it has been made before by Nick Bostrom,

Professor of Philosophy Just explain why this barmy idea

might be plausible. The thought is that if technology continues to

develop them in the future, perhaps the distant future, civilisation

will have the ability to create entirely realistic virtual worlds,

with simulated observers in them. Not just create one or two of these

simulations, but such a mature civilisation could run millions or

billions. A world where everybody has a planet of their own with a few

million people in. Then you have to ask yourself, for every person with

humanlike experiences that live in the original history there are

millions of observers with human life experiences that live in a

similar worlds, which one are you more likely to be, and so that then

is the thought. I can see it is a possibility. Now you have to get to

the bit that makes it an interesting possibility, or a possibility likely

enough that this could really be... Elon Musk said... That parts...

There is an argument for taking this seriously and the simulation

argument tries to show one of three propositions is true, but it does

not tell us which one. The first is that those civilisations in current

development go extinct before maturity. Those who reach

technological maturity, they all lose interest in creating these

answers to simulations, they do different things. There are no

advanced beings, or non-that play advance games or they do. And then

the simulation hypothesis becomes likely, if most people with our

experiences are simulated. One of those three sorters has to be true,

doesn't it? Would advanced civilisations have other forms of

entertainment, or maybe we do not have the imagination to think about

how advanced civilisations will entertain themselves because we have

not reached that level. Certainly it is conceivable, but there might be

other reasons that entertainment, for creating these realities, trying

to figure out how other civilisations bite behave should you

encounter them, there might be other reasons as well. If it is the case

that anyone mature civilisations could create millions, only a small

fraction would have to decide to deploy their resources, even if they

are not interested in the scientific study of the past. Only one in a

million decides to do this and they would still dominate. We would be so

cheap to reproduce. What probability would you put on this scenario that

we are sitting in a video game? I tend to dodge that question. What I

think is that it should be a substantial probability. I believe

in the simulation argument, at least one of the three is true but we do

not have strong evidence to pick one. Does this matter? What is the

difference between the scenario in which we are virtual creatures in a

game and the one where we are not? Is there any way we would ever know,

find out or would it make a difference? We do not know if it

would make a difference, it would depend on the simulation we were in,

the reason for creating the simulation so if you have a theory

about why these decided to be one simulation or not alert is hard to

tell. There are that would exist otherwise. The world could pop out

of existence if somebody switches of the simulation. Was he maybe that

could not happen if we were in physical reality. You can read more

about this on the web. A quick look at the papers. The Times

newspaper... The independent leading on the BHS and so is the Financial

Times. Emily Baldwin back tomorrow. Have a good night.

Good evening. Time to get the weather details for Friday and no

major changes for the eastern half of the UK. It will remain cloudy and