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As consumers, we are accustomed to rating almost all the products and services we pay for. From toilet paper and tacos, to vacation rentals and online courses, a star rating is the status quo for reviewing pretty much any customer experience. But for platform-based gig workers who work to provide all kinds of everyday services, these ratings are nightmare fuel. Taking consumers mere seconds to dole out, anything below the full five out of five stars can completely upend a gig workers income and access to work. Academics from around the world have found that negative reviews often serve as disciplinary tools that can reduce a workers pay, can generate an “inexplicable” shortage of gigs, or prompt a sudden and unjustifiable suspension or deactivation from the platform. Throw in the many subtle and overt racial biases that influence a users approach to ratings, and its no wonder gig workers, who make up somewhere between 10% and 38% of the U.S. workforce, are plagued by paranoia and insecurity. At the will of ever-changing, inequitable user review processes, performance metrics and opaque algorithms, one thing is clear: Workers are grappling with invisible digital overlords, just to make enough to scrape by. A new study published in the scientific journal Nature finally offers proof that these star ratings are trashand suggests that gig workers could get a better shot at fair work with a straightforward design tweak. A small gap with huge consequences Existing research has shown that when customers submit evaluations, individual workers from ethnic minority groups are more likely to be negatively evaluated, even if their performance and quality is the same. Less is known, however, about how to eradicate, or redress these biases, especially in the gig economy landscape. However, Tristan L. Botelho, Katherine DeCelles, Demetrius Humes, and Sora Jun, all academics at North American universities, had a hypothesis that by switching to a binary rating scale (think: thumbs up/thumbs down) these biases could be reduced. An avenue to test this presented itself to the team because the gig economy platform they were collaborating with, which matches North American homeowners with small business entrepreneurs for domestic repairs, decided to simplify its customer ratings from the common five-star system to a straightforward up versus down vote scale. It was a snap decision, with no prior warning to customers or workers. Ratings were conditional on having a job completed, so any customers who held more explicit racist attitudes may have already cancelled. When examining approximately 70,000 customer ratings, collected before and after the sudden change, a distinct pattern emerged. Under the five-star scale, workers of color received slightly lower ratings on average (4.72 stars) than white workers (4.79 stars). But this small gap had huge consequences. Since ratings determined pay, workers of color earned just 91 cents for every dollar white workers madefor the same work. After the switch to a thumbs up versus thumbs down scale, the rating gap and therefore the income gap disappeared.Any deviation from five stars is problematic as platforms rely so heavily on these ratings, but this was the first time I saw it linked to an outcome for workers, and despite the decades Ive spent studying inequality in evaluation processes, it shocked me, says Tristan L. Botelho, coauthor of the paper and Associate Professor of Organizational Behavior at the Yale School of Management. If you leave a four-star book review, you’re not telling someone to read 80% of the book, yet many platforms allow for the evaluator to create their own rubric for what it means, explains Botelho. Your four is different from my four, and with all this noise, switching the focus onto good versus bad offers less room for subtle biases to creep in. Toward a more level playing field The shift isnt about letting customers off the hook. More fairly designed systems could, in theory, mitigate racial, gender, and language biases (among others) and the negative effect they have on workers, leading to more accurate evaluations. Star ratings also make it hard to identify and address bad experiences, creating more barriers than solutions. In contrast, upvote/downvote ratings directly ask if the service met customer standards. If not, platforms could follow up to improve. A redesigned rating system could offer a route to supporting worker security, and making platforms seem more responsive and fair. Many evidence-based solutions require training, investment, and expertise. But implementing a simple binary system would be easy for most firmseven starting with small tests in certain markets. At the end of the day, the many platforms I’ve talked to are interested in making their evaluation processes fair and accurate. And since the papers publication in February, multiple organizations have expressed interest in learning more. We often take for granted how apps are designed, says Botelho. Id encourage platforms and companies to step back and ask: What is the goal of this evaluation process? Is it actually helping us gather useful information? Moving away from star ratings wont solve every problem faced by gig economy workersonly more robust regulation will do thatbut its certainly a step towards taming those cruel digital gods.
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E-Commerce
When Elon Musk first drove a prototype of a Model S out from behind a curtain in 2009telling the crowd they were looking at what would become the first affordable, mass-produced electric carit was actually a hacked-together Mercedes with modified body panels. Behind the curtain, engineers pumped ice water over the battery so the car could keep going. The car wasnt ready to drive, but Tesla started taking customer deposits and using the demo to push for more investment. It’s one in a long series of examples of the company hyping a new product early because it was desperate to raise more money to keep goingand to boost the image of Musk as a visionary leader, able to build something that other car companies couldnt. Musk didnt understand the business he was getting into, says Edward Niedermeyer, author of Ludicrous: The Unvarnished Story of Tesla Motors, a 2019 book that documents the chaos at Tesla. He had to come up with a big new hyped thing to raise the money to pay off the last promise. It got them on something very common for Silicon Valley startups, the fundraising treadmill. That fueled this decade-long, spiraling sort of confidence game. Part of the game is that the stakes have to get raised every time. (Tesla didn’t respond to a request to comment for this story, but also didn’t say that the book was inaccurate when it was published.) Musks role at the so-called Department of Government Efficiency is the latest example of raising the stakes, Niedermeyer says. Elon Musk (in driver’s seat) and Tesla chief designer Franz von Holzhausen (in passenger seat) at the Model S unveiling. March, 2009. [Photo: Robyn Beck/AFP/Getty Images] Musk invested in Tesla in 2004 with money hed earned from selling two internet startups. Teslas founders, two Silicon Valley engineers, didnt have experience in the auto industry either, Niedermeyer writes. But they had the idea that using lithium-ion batteries could make electric cars viable. They also believed that by making a desirable, high-end electric sports car, they could make enough money to fund a more affordable mass-market version (Musk later presented the strategy as his own in a blog post about Tesla’s “secret master plan.”) At a shareholder meeting in 2016, Musk admitted that the startup had had no idea what we were doing. They originally planned to modify an existing sports car, which another company would build. But they kept making more and more changes, driven in part by Musks desire to make the car sexier. No one understood how much the customization would cost, or exactly how much cash the company was bleeding. The prototypes had multiple problems. When Google founders Sergey Brin and Larry Page tested one of the cars, it couldnt go more than 10 miles an hour because of a bug. When the startup was closing its Series D round of funding, in 2007, the team told investors that the Roadster would cost $65,000 to produce; auditors found that it would actually cost $200,000, far more than the price of the cars. More chaos ensued, including Musk pushing out one of the companys original founders, and engineers scrambling to bring down costs and to solve last-minute problems with the design. When the cars finally started getting delivered to customers in 2008, they still had multiple flaws. Musk, who then took over as CEO, operated on the principle that the end justified the means. He used customer deposits, for example, to keep Tesla running. At one point, he announced that the company had closed a $40 million debt round before it had actually happened; later, he said that the company was going to get a massive loan from the DOE before Tesla had successfully applied. The company kept going in part because of luck. In California, for example, the states requirement for other car companies to buy zero-emission vehicle credits gave a Tesla much-needed source of cash. (Now, it offers less revenue, because other car companies have EVs of their own and dont need to buy as many credits.) Larger car companies, including Daimler and Toyota, made deals with Tesla because they saw it as innovative. The DOE loan helped the company start a battery factory with Panasonic, and finish building the Model S, which went to market in 2012. Later, as the pandemic temporarily boosted the auto market, Tesla finally looked like it could be profitablebut that trend has turned around now as sales have dropped. All along, as the company needed more cash from investors or if Musk wanted to inflate its share price, he has hyped up new products, feeding the mythology that he’s more innovative than the rest of a stodgy auto industry. The hype for the Model S started long before the first Roadsters had ever been sold. Later came hype for the Model X, its first SUV, which the company repeatedly delayed; it too was filled with problems when it finally came to market. Musk also oversold Teslas Supercharger network, saying customers would get free charging forever and that the chargers would run on solar power. Musk suggested that if there was ever a zombie apocalypse, Tesla drivers could still keep charging. Despite the fact that running a charger fully off-grid would require a huge number of solar panels for each charger, Musk kept claiming that was the plan for years. (The free charging deal went away after the company couldnt afford it, though Cybertruck users have limited free access now.) Later, as Google made progress on its self-driving tech, Tesla said it was racing to develop autopilot tech. After a driver had a fatal crash using Autopilot, engineers said that theyd wanted to make the system safer, but Musk rejected the ideas because of cost; Musk denied this. Niedermeyer is now writing a second book focused on Teslas pivot to self-driving and AI. Teslas ‘full self-driving’ is the biggest fraud that Silicon Valley has ever seen, he says, adding that he doesnt think its ever going to happen. Now, as car sales falter because of Musks politics, investors are having to decide, OK, how much do I really believe this? Niedermeyer says. Because thats really what the valuation is coming down to as long as the core business continues to erode. (The company has also hyped robots that it initially demoed with humans in robot suits; last week, Musk again laid out his grand vision fr the Optimus robots, as he told employees to “hold onto their stock.”) Working in the Trump administration, where Musk can help control the regulators that might slow down self-driving tech, could be seen as another step in Musks confidence game. So far, it also seems to be helping some of his other businesses. SpaceX, for example, was facing fines, a lawsuit, and a complaint from multiple agencies, and Neurolink and X were facing investigations. All of those challenges could go away. As with Trump, being part of the government could also help keep Musk out of legal trouble. But as DOGE shows its incompetence, there’s also a chance that it could be where the confidence game ends. The surge in public antipathy for Musk has led to Tesla protests and dropping sales, adding to declines that were already happening in Europe and China. Tesla stock has dropped so steeply that Musk convinced Trump to stage a Tesla sales pitch at the White House. (Niedermeyer points out that this stunt was typical of Musk’s modus operandi: rather than long-term strategic marketing, Musk is flying by the seat of his pants.) If the stock price does fall far enough and fast enough, Tesla’s founder might finally lose his image as a visionary in the eyes of investors. And in an empire that was built on Musk’s “genius,” that could be disastrous.
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E-Commerce
Let’s say you were spending tens of thousands of dollars to build yourself a fancy home theater. How would you go about actually watching movies in it? While you could always set up a Roku or Apple TV box to stream on, they’re not going to feel all that theatrical. Most streaming devices are too bogged down with banner ads and obnoxious upsells, and the streaming services themselves compromise on audiovisual quality for the sake of smoother streaming. Maybe what you actually need is a device that explicitly caters to videophiles with obsessively-manicured home theater setups. That’s what Kaleidescape has been trying to accomplish for the past two decades. This small companywith roughly 54 employees across its Mountain View headquarters and engineering offices in Waterloohas made a name for itself among A/V diehards with its eye-poppingly expensive video players, which combine the convenience of digital delivery with Blu-ray quality. Just as notable, though, is its unfussy movie player software, which clears away all the cruft of modern streaming platforms to focus on the films themselves. “What we’re aiming at is trying to get you to an experience that is as close to the director’s intent as you possibly can get,” says Tayloe Stansbury, Kaleidescape’s CEO and chairman. Tayloe Stansbury [Photo: Kaleidescape] The cost of near-cinema quality doesn’t come cheap, at $4,000 for Kaleidescape’s entry-level Strato V Movie Player. But believe it or not, this is the start of Kaleidescape’s attempt to move down-market, having previously charged upwards of $10,000 for its hardware (plus the cost to purchase movies at about $20 apiece). Stansbury, a former Intuit CTO who took the helm at Kaleidescape after getting hooked on the system himself, says he’s on a mission to revitalize the company and reach new audiences after years of stagnant product development. But if that’s the goal, Kaleidescape may eventually need to reckon with the streaming business models it’s spent all these years rejecting. [Photo: Kaleidescape] Hi-fi movies Unlike most TV boxes you can buy today, Kaleidescape does not work with any streaming services or come with a free catalog of ad-supported content. After setting up the Strato V, you are presented with a sparse menu system for downloading movieseither for purchase or rentaland watching them. And “downloading” is the correct term, as Kaleidescape does not believe in the vagaries of streaming. Each film takes about 10 minutes to acquire over a gigabit wired ethernet connectionno Wi-Fi allowedat which point it will play back even if the system’s offline. No other streaming platform supports that unless you’re on a mobile device. “When you play it, it’s perfect every single time,” Stansbury says. But the main differentiator is the quality of the content itself. While Kaleidescape gets the same source files from studios as every other digital movie store, it’s not in the business of seeing how much compression it can get away with. The company encodes video files at an average 65 Mbps, versus 12 Mbps to 30 Mbps for other services according to FlatpanelsHD, and it delivers lossless audio at 6 Mbps, matching or exceeding the quality of 4K Blu-ray discs with Dolby Vision and Dolby Atmos. Kaleidescape is also obsessive about finding issues in its video files through human review, and will either request updates from the studio or apply its own transcoding coding changes to address them. (Stansbury says the company’s record number of revisions for a single film is 92.) “It doesn’t matter if you’re on an inexpensive TV with no soundbar, or you’re in a million dollar theater, it will look and sound better when you feed it with high fidelity content,” he says. The result is sort of like listening to a CD instead of a lossy MP3 file: There are folks who will insist the difference is night and day, others who will never notice, and a third group that feels better on some gut level about having a pristine version either way. I probably fall into the third category. Kaleidescape loaned a Strato V to review for this story, and I made my eyes numb looking for barely-perceptible differences between Kaleidescape’s films and their 4K HDR streaming counterparts. On my Samsung QD-OLED TV, the colors in Mad Max: Fury Road seemed more natural than the on-demand version from Amazon, and maybe the audio was a little clearer, but was I just fooling myself? Hard to say. There was, however, one obvious improvement: Kaleidescape does a better job with subtitles. Its version of Parasite, for instance, used a much nicer font with no black background like Netflix’s version, and certain translated phrases made more sense (like “check WhatsApp” instead of “check the messenger”). Even more noticeable, at least to me as a longtime reviewer of streaming players, was the straightforward nature of Kaleidescape’s interface, which in a way it scratches the same simplistic itch as an iPod for music. There’s a row of recommended movie purchases at the top, a row of downloaded movies underneath, additional rows for movies-in-progress and favorites, and that’s it. The absence of distraction stands in sharp contrast to every modern streaming platform. Sometimes the sparseness can be vexing. There’s no voice searchat least not without dictating into Kaleidescape’s smartphone remote appand the infrared remote requires line-of-sight to the box. But the system has some niceties as well, like the collection of popular scenes you can jump to in each film and the integration with Lutron, which allows for home automation in response to certain video queues, such as raising the lights when the credits start rolling. Those kinds of experiences have made Kaeidescape a favorite among A/V installers, says John Sciacca, who covered Kaleidescape extensively as a contributing editor for Sound & Vision and works as a partner at an installer in South Carolina. “Everybody wants it,” Sciacca says. “You might not want to pay for it, but you would love to own it. And there’s not too many things out there that deliver that kind of an experience.” Cheating death Kaleidescape didn’t start off in the movie download business. Its first product, which launched in 2003, was a $30,000 video server that made digital copies of users’ DVDs and played them all through single menu system. Bloggers mocked the concept. (“If that’s not worth selling a kidney, we don’t know what is,” Engadget‘s Paul Miller wrote in 2006.) But Kaleidescape won over home theater enthusiasts, who marveled at how it made sense of their DVD collections. It even skipped the FBI warnings and other annoyances that DVD viewers had to sit through. “The experience was just better,” says Josh Goldman, a longtime owner who runs the independent Kaleidescape Owners Forum. “You could instantly sort and find other movies you wanted. You could find related movies to the one you just liked. You couldn’t really do that with a rack of DVDs in their cases.” But there was a problem: The DVD Copy Control Association took issue with Kaleidescape’s digital copies, which had no way of ensuring that users still owned their original DVDs and weren’t sharing them. The group sued Kaleidescape in 2005 and eventually prevailed after seven years of court battles. A settlement in 2014 allowed existing customers to keep using their systems, but barred Kaleidescape from selling any new systems with DVD ripping capabilities. The lawsuit took its toll on Kaleidescape, which also ran into manufacturing problems developing a new Blu-ray-based product around the same time. In 2016, the company almost shut down, with then-CEO Cheena Srinivasan blaming the lawsuit for “millions of dollars in legal fees and years of lost focus” before it secured an equity funding round to stay alive. Sciacca says the company’s brush with death helped accelerate its pivot toward digital distribution, which had began several years earlier. With new funding and no more legal clouds, it was able to make more deals with movie studios. “Kaleidescape was founded on disc-based importing,” he says. “The lawsuit paved the way for Kaleidescape 2.0, but also kind of put an end to Kaleidescape 1.0.” [Photo: Kaleidescape] Making moves Stansbury wound up in control of Kaleidescape for somewhat selfish reasons. He acquired his first system in 2011, on the recommendation of an A/V dealer who was overhauling his home theater. Although he fell in love with the product, he wound up getting frustrated with some gaps in the movie catalog and had some ideas on how to revamp the product line. He reached out to Kaleidescape, offering to make introductions with his contacts in Hollywood, which led to him becoming an investor in the company before taking the helm outright in 2020. “I was annoyed with some decisions that were made about product roadmaps, and I called them up to grump about those,” he says. “And eventually that developed into meeting the chairman and being asked to take over leadership of the company.” Stansbury points to a few things Kaleidescape has done since then. Beyond shipping the Strato V, the company has released new server products with higher storage capacities, and it’s made a foray into B2B with a server product for movie theaters. The idea is that exhibitors can use Kaleidescape for quick, flexible access to back-catalog films at high quality instead of arranging for delivery from studios. “What we’ve done is cranked out a whole new bunch of products,” Stansbury says. “We’ve got a whole bunch of new products I won’t talk to you about that are in the pipeline for the future, and we’ve also been steadily growing revenue and improving the financial picture for the company as well.” Sciacca, who was close with former CEO Cheena Srinivasan, says that while Srinivasan was more engineering-focused, Stansbury brings more of a business sensibility. “Tayloe, the new CEO, I think he came in with different business ideas, and infusion of capital, and, you know, ‘Fortune 500-think’ on how to run a company,” he says. (Kaleidescape declined to make its former leadership available for interviews.) Sticking to the past Back in 2016, when Kaleidescape narrowly avoided shutting down, Sciacca wrote a story for Sound & Vision wondering if home media server products could survive in the streaming age. Kaleidescape had outlasted a wave of competitorsXperinet MIRV, Sunfire Theater Grand Media Player, Leviton LEAPS, among othersbut could never truly compete with streaming’s convenience. He’s more optimistic now, but believes the price needs to come down further. “At the end of the day, if you if you want to buy and watch movies, there’s a lot of cheaper ways to do it,” he says. But going further down-market won’t be easy. Kaleidescape’s movie prices$25 for new-release films, $8 for a typical rentalis not much higher than other streaming platforms. Stansbury says Kaleidescape customers are surprisingly sensitive about movie prices, so it builds the cost of its ongoing engineering work into the hardware. He’s unsure whether Kaleidescape could adopt a subscription model that brings in ongoing revenue. “Financially, I’d love that, but that doesn’t seem to be where our customers’ heads are at,” he says. “They tend to be more of an ownership mindset.” Even so, Josh Goldman, who runs the Kaleidescpe Owner’s Forum, believes the company should move to a cloud-based system. The Strato V can only store 10 movies at a time, so customers have to either constantly re-download films or tack on another server, starting at $5,000. While his forum is more active now than it once was, he believes the number of people willing to install expensive server systems in their home is shrinking, and home internet speeds are now fast enough to keep up with Kaleidescape’s bitrates. “That’s got to be the ultimate survival plan for the company to maintain and deliver the best movie shopping, delivery, and playback experience,” he says. “It can’t be about storage in the home. It’s obviously got to go away.” Beyond just chasing lower prices, Kaleidescape faces a more existential challenge: Increasingly the content people want to watch at home can’t be bought on digital video stores. If you want to watch Severance, you need Apple TV+. If you want to watch Squid Game, you need Netflix. Those shows aren’t available on Kaleidescape at all. Stansbury says he’s had conversations with streamers about potentially selling high-fidelity versions of their streaming exclusives. And in some cases, that content is co-developed with a traditional studio, in which case it does eventually become available to purchase a year or two after release. But he also points out that Kaleidescape’s focus on movies is becoming a bigger advantage as the DVD and Blu-ray business dry up. Best Buy, Walmart, and Target have all stopped selling physical media, and fewer movies are coming out on disc in the first place. Major streaming platforms, meanwhile, don’t even offer Blu-ray quality as an option. “The only way to get that is through Kaleidescape, so it does put us in an increasingly unique position,” Stansbury says. So maybe Kaleidescape doesn’t need to adapt to the streaming world, because it’s survived this long playing a different game entirely. Whatever happens next, enthusiasts like Goldman aren’t betting against it. “Our laser disc player is gone, our VCRs are gone, even our TiVo is gone,” he says. “Everything has changed, but Kaleidescape, remarkably, has been a consistent part of our home video watching for 20 years, which really is amazing.”
Category:
E-Commerce
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