How Uber crossed the line with its threats against Sarah Lacy

You probably know that, at a dinner last Friday, Uber Senior Vice President Emil Michael suggested that his company should hire four top political opposition researchers and four journalists to investigate the personal lives and families of journalists who write negative articles about the company. Michael focused his anger on PandoDaily's founder Sarah Lacy, and said that the Uber "smear team" could, according to BuzzFeed's Ben Smith, "...in particular, prove a particular and very specific claim about (Lacy's) personal life."

Since BuzzFeed broke the story, there's been a firestorm of media attention, which led to apologies from Michael and a tweetstorm from Uber head Travis Kalanick, in which he disavowed Michael's statements and said that they didn't represent Uber, but that he wouldn't fire Michael. Uber's response, or lack thereof, hasn't dampened the firestorm one bit, and the company has managed to alienate much of the press that it needs for future publicity.

One thing to keep in mind is that it's been long-standing policy at some tech firms to retaliate against journalists and publications that report stories negative to the the companies' interests. Apple and Microsoft are most notorious for doing this, but many other companies in Silicon Valley have done the same. However, with one known exception, the method that the companies have used is to withhold information from the targeted journalists. Both Microsoft and Apple have documented cases in which they barred certain journalists and publications/websites from embargoed previews of new products, reviews of unreleased products and announcement events. Without access to new and forthcoming products, those journalists and publications were at a competitive disadvantage, because they couldn't review or cover the products until they were released.

Where Michael's threat crossed the line is that it moved from withholding proprietary information, which any company has the right to do, to digging up and revealing negative information about journalists with the intent of damaging or destroying their reputations. Even in the one case that I mentioned above, which was Hewlett Packard's hiring of private investigators in 2006 to identify the source of leaks by lying to phone companies in order to get journalists' call records, HP's objective was to find out who leaked the information, not to gather information to destroy the reputations of the journalists.

Both Michael and Kalanick have characterized Michael's remarks as, essentially, a revenge fantasy rather than anything that the company would actually do. However, by making the statements in front of Kalanick at the dinner, and with Kalanick not disavowing them immediately, both Michael and Kalanick reinforced the increasingly common view of Uber as an amoral, out-of-control company that will do anything in order to win, up to and including breaking the law and ignoring court rulings. I would remind Kalanick and Uber that Microsoft had the same philosophy, and believed that it was too big to touch by anyone. However, both the U.S. Justice Department and European Union successfully prosecuted Microsoft for antitrust violations. That in turn led to a loss of management focus, disillusionment and loss of morale for employees and damage to Microsoft's reputation, all of which contributed to the company's decline and loss of direction.

In essence, unless Uber starts making fundamental changes in the way that it does business, it's setting itself up for an eventual battle (or battles) that it can't win. There is always someone who can take you down if they really want to.

3D printing and iSTREAM innovate car manufacturing

If you're a long-time reader, you know that I'm a car nut. I don't do much work on my car myself, but I love new cars and new technologies. The car industry is in the middle of two transitions: The first is the transition from exclusive gasoline power to a mix of energy sources--gasoline or diesel with electric, electric stored in batteries, electric dynamically generated with a fuel cell, and even gasoline or electric with pneumatics (Peugeot-Citroen's Hybrid Air.)

The second is the widespread application of intelligence to cars. By that, I mean the infotainment and telematics systems that integrate entertainment, navigation, online information, sensors, safety systems, controls, smartphone integration and even drive-by-wire systems. In the 1990's, automakers began adding these systems to their cars, starting with the German luxury brands. The problem was that the electronics were sourced from multiple vendors and were poorly integrated, which led to reliability problems for BMW, and particularly for Mercedes-Benz, which had long had a reputation for "bulletproof" cars. As carmakers greatly improved their cars' mechanical integrity, they simultaneously introduced a plethora of new points of failure with electronics. Today, these systems have improved but remain a sore spot--Consumer Reports' latest car reliability survey found particular problems with the following brands:

• Fiat Chrysler's Jeep, Ram, and Fiat placed at the very bottom of the rankings, due in part to their electronics. (The Fiat 500L was the worst car in the entire survey, by a significant margin.)
• Ford and Cadillac continue to struggle with their infotainment systems, MyTouch and CUE, respectively. GM does have some very good systems, but CUE is considered to be the worst infotainment system on the road by many car reviewers.
• Nissan's Infiniti reliability ratings fell 14 places in one year, largely due to the Q50, which replaced the popular G37 for 2014. The big problem with the Q50 is that Infiniti switched to a numb "drive by wire" system for steering, which combined with problems with the car's In Touch infotainment to pull the car's ratings down.

Now, we're entering a third transition, this time in how cars are manufactured. The development that's gotten the most press is Local Motors' Strati, which has a 3D-printed body, chassis and seats, and a Renault power train. The Strati looks somewhat like an oversized toy car, and it currently takes 44 hours to build the 3D components, but it's more a harbinger of things to come than a viable product in its own right. Fairly early on in automobile manufacturing, bodies ("coaches",) chassis and engines were built by different companies. For example, Duesenberg, which at one time made the most expensive cars in the world, actually built only the engines and chassis. Local Motors' approach opens up that possibility again.

Start with a high-volume, standardized chassis, with or without an engine and transmission. Enable manufacturers to build interchangeable parts--different chassis, suspensions, engines, motors, transmissions and power sources, all that fit within the same 3D "envelope" and with the same mounting points for the body. Next, print the body, doors, hood and seats, install the glass, lights, instruments, airbags, infotainment system, telematics and other hardware, integrate the components and attach the body to the chassis. Depending on the chassis and powertrain, you could build anything from a two-seat roadster to a mini-CUV on the same chassis and assembly line. You could literally customize not just the colors, but the designs of the cars, by making changes to the cars' CAD files. And, by designing the chassis to include the safety crumple zone, you'd have even more flexibility in how to design the body.

Another approach is being pioneered in the U.K. by legendary car designer Gordon Murray. He claims that his manufacturing process, called  iSTREAM (for iStabilised Tube Reinforced Exo-Frame Automotive Manufacture,) can build cars with 85% less capital investment and 60% less energy than today's auto plants, in plants 20% the size of existing plants with comparable capacity, and with cars that generate 40% lower CO2 emissions over their working lives. iSTREAM eliminates stamping presses, which are extremely expensive, require very expensive tools, use enormous amounts of power and take months to switch from one design to another, Instead, the body panels are made out of honeycombed sandwiched composite materials, which are lighter than steel but stronger. The system uses lasers and CNC machines to cut, bend and weld metal tubes into an integrated chassis and roll cage with front and rear crush zones. That dramatically decreases the load that the body panels have to bear, while still enabling iSTREAM-based cars to exceed European safety standards. Gordon Murray claims that the iSTREAM manufacturing process creates cars that weigh half as much as comparable vehicles, and can scale up to full-size sedans, SUVs and minivans. 

To date iSTREAM has been used for producing prototypes of two electric-powered city cars, the T.25 and T.27, and has been used to build prototypes of a Yamaha electric city car, the Motiv.E. The iSTREAM weight advantage enables electric cars to use batteries with half the capacity, and therefore half the cost and weight, of batteries in conventionally-built cars. For example, Nissan's Leaf uses a 24kWh battery for an EPA range of 75 miles. A comparable iSTREAM car should get the same range with a 12kWh battery, or double the range from the same 24kWh battery.

Both the Local Motors and iSTREAM approaches lend themselves to smaller, more decentralized manufacturing plants, more customization options, and "just-in-time" manufacturing approaches that minimize both parts and finished car inventories. If they're successful, we could see the revival of "bespoke" cars, but instead of the highly-customized super-luxury models of today, they would be priced about the same or even less than comparable conventionally-built models.

CBSN: An experiment worth watching

Last week, CBS launched its own dedicated news channel, called CBSN. Unlike CNN, Fox News or MSNBC, CBSN isn't a cable news channel--it's only available over the Internet. In addition, unlike those cable networks, CBSN isn't (yet) a true 24-hour-a-day service; it has live content from 9 a.m. to midnight U.S. Eastern time on weekdays. I typically watch CBSN on my Roku box, but it's available on basically any device with a fast Internet connection and a web browser. When viewing it on a PC, tablet or smartphone, CBSN has a well-designed user interface that enables the viewer to go back and watch previous stories along with the live feed, and it also gives a preview of upcoming stories.

It's not the user interface or the fact that it's on the Internet that makes CBSN interesting, however; it's the way that the channel presents the news:

• There are plenty of short feature stories, as we've come to expect from cable news, but there's also long, in-depth pieces with details that the 30-minute national news on CBS would never have time to give. These background stories, from reporters such as Pentagon reporter David Martin, provide much more insight than the cable networks usually give.
• So far, CBSN is blissfully free of the spinmeisters and "instant experts" of the cable networks--it's largely hard news, not news and opinion whipped into an indiscriminate souffle.
• With one exception, CBSN has so far stayed away from the "beat it to death" style of continuous coverage of a news story, such as CNN's infamous coverage of the disappearance of Malaysia Airlines Flight 370. On Thursday, CBSN carried WCBS's wall-to-wall coverage of two window washers dangling from the side of World Trade Center 1. It was an obvious decision, but in hindsight, they could have cut away from time to time to at least give headlines.
• There's a refreshing casualness to CBSN's anchors. Instead of the suit-and-tie look for men and power suits for women, there are shirt sleeves and open collars--exactly what reporters and editors wear in a working newsroom.

CBSN is going through teething pains; earlier this week, I saw the same segment start and stop three times, and they're having other "slight technical difficulties." However, that's to be expected. On the plus side, CBSN has access to CBS News's worldwide bureaus, local stations and affiliates, and it doesn't have the political conflicts that keep MSNBC and NBC News operating at arm's lengths from each other. That means that it has the resources to compete with any of the cable networks, but with the ability to operate at a much lower cost, because most of the money is already being spent to run CBS News, its owned & operated stations, and affiliates.

While CBSN is still evolving, it's already a good alternative to the cable networks, and it's likely to get better. My hope is that the service will soon start offering some weekend coverage, which might happen if an important news event breaks, or continues, on a weekend.

Would the big U.S. TV networks sell their stations?

Earlier today, TVNewsCheck ran a story about the positions of the Big 4 U.S. television networks (ABC, CBS, Fox and NBC) on ATSC 3.0. The Advanced Television Systems Committee (ATSC) administers the U.S. standard for digital terrestrial television broadcasting, and ATSC 1.0 is the system currently in use. ATSC 3.0 is intended to implement capabilities that are limited or missing in the current standard, including support for image resolutions beyond HD. Most importantly for many broadcasters, however, is that ATSC is intended to bring mobile TV reception to parity with the fixed HDTVs that we use today, The broadcasting industry realizes that an ever-increasing percentage of its audience is watching television outside the home on smartphones and tablets, but today, access to those devices is mediated by the mobile phone carriers (AT&T, T-Mobile, Sprint, Verizon, etc.). Broadcasters want direct access to those devices and viewers, and are hoping that ATSC 3.0 will give them that access.

The transition to ATSC 3.0 won't be without problems: Broadcasters spent many billions of dollars on new cameras, production equipment and transmitters to move from analog to digital television. Moving from ATSC 1.0 to 3.0 probably won't entail that level of investment, but it will still be expensive for broadcasters. In addition, smartphone manufacturers, mobile phone carriers and consumer electronics companies will have to be convinced (or required by law) to support the new features of ATSC 3.0 in their products. That will take time--potentially as long as ten years.

According to TVNewsCheck, both ABC and CBS have gone on the record as withholding their judgment on ATSC 3.0. Both NBC and Fox support ATSC 3.0 in principle, but both are waiting for more details of the standard to emerge before making a commitment. That led me to wonder whether the network broadcasters actually want or need to make the investments needed to support ATSC 3.0 in the television stations that they own.

All of the top four commercial television networks in the U.S. own and operate several television stations in major cities; in the industry, these are called O&Os (for Owned & Operated.) For example, all four networks own and operate stations in New York, Los Angeles, Chicago and Philadelphia. In Dallas-Fort Worth, all but ABC own and operate their own stations; in San Francisco-Oakland-San Jose, all but Fox own their own stations. The local stations are a big source of revenue and earnings for the networks; for example, in 2013, CBS's network had gross revenues of $8,645 billion and operating income of $1.593 billion, while its local Owned & Operated stations, both television and radio, gross revenues of $2.696 billion and operating income of $807 million. On a percentage basis, the local stations, while not the most profitable unit of CBS, made a much bigger profit than the network (30% vs. 18%.)

On the surface, it seems obvious that CBS, and the other big networks, should keep their stations. However, when you look further, the choice becomes less clear:

• The major networks could easily get $1 billion or more for each of their stations in the top U.S. markets, and those sales would be taxed as long-term capital gains, not ordinary income.
• The networks are already getting a significant amount of their income from retransmission fees charged to cable, satellite and IPTV video operators. They get those fees directly from the video operators in the markets where they own stations, and indirectly in other markets through the fees that they charge their affiliates for carrying their programs. If the networks sell some or all of their stations, they would get affiliate fees from those stations without any of the costs of operating the stations.
• If the networks no longer own over-the-air stations, they would no longer be directly subject to FCC rules. That means no more multi-million dollar fines for "fleeting expletives" or unplanned nipple slips. The networks would still have to abide by FCC content rules to protect their affiliates, however.
• Over 90% of U.S. households already get their television via cable, satellite or IPTV. Over-the-air reception is increasingly an anachronism.

As little as ten years ago, it would have been unthinkable for the Big 4 networks to sell their stations--if anything, they aggressively wanted to buy more. However, since then, we went through the 2008 Great Recession, which hammered local ad revenues. Network television viewership has been declining for several years, and ratings for many of today's successful network series would have guaranteed their cancellation just a few years ago. Now, many industry analysts are forecasting that digital will supplant broadcast television as the biggest recipient of advertising revenue within the next few years. If the Big 4 have the choice between spending billions of dollars to upgrade their stations to comply with ATSC 3.0, or making billions of dollars from the sale of their stations, it's looking increasing likely that sales, at least of their smaller-market stations, will make more sense.

Is Amazon shifting its Core Value Proposition from price to speed?

Two weeks ago, Amazon announced that it intends to build and open its first distribution center in Illinois. Currently, Amazon fulfills many orders to Illinois, including Chicago, from a distribution center in Indiana and others further away. Having a distribution center in Illinois would enable Amazon to provide next-day or even same-day delivery to Chicago customers. However, Amazon also agreed to collect sales tax from Illinois residents as a condition of opening a local distribution center; that effectively represents a 6.25% to 9.75% price increase, depending on the customer, municipality and product category.

Amazon's decision to open a distribution center near Chicago aligns with its recent decisions to open centers near other big cities, including Boston, Charlotte, Los Angeles, Milwaukee and New York Metro (all of which have been announced since September,) and collect sales taxes in those states. In addition, earlier today, Amazon announced an agreement with Hachette to sell its print books and eBooks, after months of public squabbling. The terms of the deal between the two companies are confidential, but both companies have confirmed that Hachette will have the ability to set its own prices for eBooks. That's in line with the agreement that Amazon reached with Simon & Schuster last month, which also gave that publisher the right to set eBook prices.

One other data point, this one anecdotal, is that I recently purchased some food products from Amazon. The company is moving aggressively into grocery sales and delivery with its AmazonFresh service in San Francisco, metro Los Angeles and Seattle. For customers in other areas, Amazon recently launched a service called Amazon Prime Pantry, which enables Amazon Prime members to order a limited selection of non-perishable items for a flat fee of $5.99 with 3-4 business day delivery. That also represents a price increase for Prime customers, who pay nothing for 2-day delivery of other products. I ordered one of the grocery products that didn't require Prime Pantry shipping, but I paid $17.99 for a product that I subsequently purchased for $4.79 from a local supermarket. You can safely assume that much of the price difference went for the "free" shipping.

So, we have multiple points of evidence that Amazon is willing to let its effective consumer prices increase. If that's true, it's a dramatic shift in the company's strategy, which has been to underprice its competition, much like Walmart's now-abandoned "Always the Low Price" strategy. However, if Amazon is willing to no longer be the low-price vendor, what's the tradeoff? Amazon's recent flurry of announcements suggests that it's speed of delivery, and possibly, the ability to provide same-day grocery delivery to the largest metropolitan markets. Amazon is signalling that it intends to offer next-day delivery to perhaps 90% of the continental U.S., and same-day delivery in as many as the 50 largest cities.

I discussed my hypothesis with one of my former clients, and he made a very important point: Anyone can offer the lowest price as long as they're willing to take losses; price is never an effective long-term differentiator. On the other hand, same-day delivery is a powerful differentiator, because it requires massive capital and labor investments that few competitors are willing or able to make. Amazon is making the investments to give it a long-term competitive advantage over not only brick & mortar retailers, but also quasi-competitors like Google that don't have logistics as a core competency. In summary, Amazon is taking some of the money that it's been using to subsidize below-cost sales to consumers and shifting it to capital investments in and labor costs for distribution centers.

Does Android have the advantage in the smartwatch war?

Earlier today, ReadWrite ran an article about two new Android Wear-based smartwatches: LG's G Watch R and Asus's ZenWatch. According to ReadWrite, both watches are significant improvements over previous Android-based smartwatches. The G Watch R has a round face, like the Motorola 360, but unlike the Motorola watch, it uses the entire watch face as the display. In addition, it looks more like a conventional watch, uses conventional watchbands, and has better battery life. The ZenWatch is rectangular like the Apple Watch and has an attractive design, but it uses conventional watchbands, has an AMOLED display and runs Asus's ZenUI user interface on top of Android Wear.

Neither of the new watches has all the features of the Apple Watch, but it's becoming increasingly clear that feature parity really isn't an issue. The watch you buy depends primarily on the smartphone you use--the Apple Watch only works with iPhones, while Android Wear watches only work with Android smartphones. Android smartphones had 84.7% of the worldwide market share (in units shipped) in Q2 2014 according to IDC vs. 11.7% for iOS. That means that about 88% of potential buyers are not in the market for an Apple Watch unless they also want to throw away their current smartphone and switch to an iPhone.

Android smartwatches have another, less-obvious advantage: There are several companies making them, and new smartwatches are being released all the time. Samsung, LG, Motorola/Lenovo and Asus are all making Android Wear-based smartwatches, and each company is on a more aggressive release cycle than Apple. Consider that Apple generally only releases a new version of a product once a year. That makes Apple's upgrades predictable, but it also means that it takes a year for new features to reach the market. In the Android world, on the other hand, smartphone makers are releasing new models all the time, often with features that are intentionally experimental, in order to gauge consumer interest. That enabled Android smartphone makers to get big screens and NFC for financial transactions out before Apple.

The Android smartwatch makers could have the same advantage over Apple. Their watches are evolving continuously, as new features and form factors are introduced, while Apple is a monoculture that will probably only release new watches once a year. That means that if a smartwatch vendor stumbles on a very popular combination of designs and features, Android smartwatch makers can clone the designs and features and get them to market faster than Apple can.

In my opinion, the jury is still out as to whether there really is a mass market for smartwatches. However, the Android ecosystem is in a far better position to take advantage of the market opportunity if and when someone comes up with the "killer app" of smartwatches.

Way off topic: How many calories am I feeding my cat?

You may be asking: Why is Len Feldman writing about cat food? The reason is that I've stumbled onto a problem that a lot of people are likely to have with their cats and dogs, and in finding an answer, it might help others. My cat, KayTee, recently developed Type 2 diabetes because I've been giving her too much food. To be more precise, she sees me as a box that dispenses Mars's Temptations treats whenever she pushes my handle (yells at me). So, in addition to putting her on insulin (Sanofi's Lantus, which seems to be the most effective for cats), her vet had me switch her food to a Purina Veterinary Diet formula, DM (Dietary Management,) from Purina's Fancy Feast Chicken & Turkey dry food. (She only eats dry.) Unfortunately, everything is expensive--Lantus is $200 or more per bottle, depending on where I buy it, her syringes are around $25 per 100, and the DM food is over $30 a bag for 10 lbs.

I'm running out of her DM, and I temporarily can't buy another bag, but I do have a lot of the Fancy Feast left. The question is, can I safely substitute the Fancy Feast for the DM? While in some cases, veterinary foods are prescribed to address urinary, kidney or gastrointestinal problems, in this case the primary issue is regulating caloric intake. So, if I can match the calorie count of Fancy Feast to that of DM, I should be close enough for temporary use. (I'm not suggesting that you do this permanently, only in an emergency.) But, here's the problem: Purina publishes the calorie content of many of its pet foods, but not Fancy Feast--not on the bag, and not online. So, how can I figure out how much Fancy Feast to substitute for the DM?

It turns out that there are two methods:

1. Pet Obesity Prevention has published a list of dry cat foods with their calorie content per cup as a downloadable PDF file. This document lists hundreds of foods and flavors from dozens of different brands, so you may find your cat's food on the list. However, Fancy Feast isn't on the list.
2. All pet food manufacturers are required to publish standards for their foods for protein, fat, fiber, moisture, and (if relevant) ash. These numbers are provided in two forms: A "Guaranteed Analysis," and numbers calculated using Federal standards. The Federal standard numbers are more accurate, but the Guaranteed Analysis numbers can be used if the Federal numbers aren't available. Plug the numbers into an online calculator provided by the Feline Nutrition Awareness Effort, and it will tell you approximately how many calories your cat food has, per 100 grams and per ounce. Purina states the calorie count of its foods in cups, so multiply the per ounce value by 8 to get the calories per cup.

In my case, DM dry has 592 calories per cup. When I plugged the numbers for Fancy Feast into the calculator and multiplied the per ounce value by 8, I came up with 960 calories. (Which might explain why Purina doesn't list the calories on the label.)  Next, I took my vet's instructions to feed KayTee a half-cup of DM a day. 592/960 is about 62%, meaning that I should feed KayTee only 62% as much Fancy Feast per day to give her the same number of calories as DM. That works out to just under 1/3rd of a cup a day. So, instead of feeding her 1/4 cup of DM twice a day, I'll feed her 1/3rd cup of Fancy Feast once a day.

Again, I don't recommend that you do this other than as a temporary measure, and I definitely don't recommend that you do this if your cat has been prescribed food to treat conditions other than overweight or diabetes, because those prescription or veterinary foods have (or don't have) specific ingredients based on your cat's condition. In that situation, calorie counts alone are largely irrelevant. However, this exercise is helpful, even if you've got an overweight cat and you want to find a cat food with fewer calories, or if you need to bulk up an underweight cat.

Contract jobs: The employee takes all the risks

I had a conversation with a recruiter for an East Coast contracting agency last week that was very illuminating, in that it made clear a number of drawbacks to the contract worker model that I hadn't really thought about. Rather than rehash the discussion, let's go right to the key points:

• When a contract recruiter contacts a candidate for a job, the candidate will be working for the recruiter's client, but the employer of record will be the contract recruiter's own agency.
• What's rarely admitted by either clients or agencies prior to giving the worker the final contracts to sign in order to start work is that he or she is initially being hired on a conditional basis--typically a two-week trial period. If the client isn't happy with the worker's performance, or the worker isn't getting along with other people in the client's company, the client can terminate the contract without a penalty (paid to the agency, not the worker.) That's critically important if you have to relocate to take a contract job. You should try to negotiate with the agency for temporary housing and, if needed, car rental in the new city for the trial period, so that you don't uproot yourself until you know that the client wants you to stay on.
• Neither the client nor the agency will provide any relocation benefits. That means that the worker is completely responsible for covering the costs of finding a new place to live, packing, moving, and any hotel or motel costs.
• When an agency recruiter says that a contract is for six months, a year or two years, that really means nothing. All it means is that the client estimates that the project or job will last that long. The worker can be let go of at any time, for any reason. Some clients give two weeks' notice, but others may give just a few days or none at all.
• Eligibility for unemployment benefits varies by state, but in general, the client will argue that it has an independent contractor agreement with the agency, and the agency will argue that the worker is an independent contractor. While there's a possibility that you can get unemployment after a contract ends, it's safer to assume that you won't.

In my opinion, contract jobs only work well for both parties when the worker doesn't have to relocate to take them. A second possibility is when the worker is both single and would be working in an area with much better employment opportunities than where they're currently living. In that case, it may make sense for the worker to bear the moving costs, so long as they can find other work quickly once their contract project ends. However, many of the contract jobs that I've seen lately are in smaller cities and towns, and they're recruiting outside the local area because they can't find qualified candidates locally. Prior to 2008, those companies would have likely hired permanent employees and relocated them, but there was undoubtedly high attrition as many of those workers chose to return to where they came from. Today, they can bring on contract workers, pay them no benefits, aren't responsible for unemployment compensation and don't have to underwrite relocation costs.

That's why I say that the contract worker bears all the risks in the temp economy. The worst risks that clients face are the loss of a couple weeks of work, and possibly, some penalties that they have to pay to agencies if they terminate contracts early and without cause. This is inevitably going to boomerang into the faces of clients, because of high contract employee turnover, less-qualified candidates that make it through the screening process but that would have been weeded out with more extensive interviewing, and a complete lack of loyalty on the part of both clients and workers, all of which will lead to lower productivity. A better term might be the "mercenary economy" rather than the temp economy.