02/06/2016 Newsnight


The EU opens the way for Uber. BHS collapse. Cameron's big TV grilling. Mikhail Khodorkovsky interview. And are we unknowingly living in a simulated reality?

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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