College Athletes on Strike

On Wednesday, March 27th, the Chicago district of the National Labor Relations Board (NLRB) ruled that Northwestern players, led by former Northwestern Quarterback Kain Colter, qualify as employees of the university and can unionize. The decision, at first glance, might seem like a big win for collegiate athletes and their battle for compensation. But unionizing collegiate athletics is layered with multiple issues ranging from the differences between private and public institutions, tax issues and vast economic implications.


Jay Bilas, an ESPN College Basketball analyst, former Duke basketball player and lawyer argues that the NLRB’s decision won’t affect anything in the short term, as the decision of whether collegiate athletes can unionize will, ultimately, end up in federal courts if it’s able to pass the national NLRB. But scandal has surrounded the NCAA since its formation more than a century ago, and now, more than ever, athletes, administrators and fans sense a momentum of change.

In 2013, the NCAA March Madness Tournament brought in more than $1.1 billion in television advertising revenue, $55 million more than the NFL Playoffs and $223 million more than the NBA Playoffs, according to ESPN. Student-athletes do not recoup any of that revenue, besides an athletic scholarship that ranges between $5,000-$65,000 per year. In 2008, the athletic programs at Alabama, Texas, Ohio State, Florida and Tennessee each made more than $100 million in total revenue. Alabama’s Head Football Coach, Nick Saban, is the highest paid public employee in the State of Alabama and makes at least $7 million per year, which is more than the salaries of all the head football coaches in the Mid-American Conference combined.


The NCAA argues that amateurism and money are mutually exclusive. But collegiate athletes, especially in sports that turn a profit, such as football and men’s basketball, continue to challenge that notion. However, the NLRB decision could have unexpected tax implications and throttle the momentum. The motion put forth by Northwestern players and their lawyers argued that athletes received compensation in the form of a scholarship making them employees of the university. If the scholarship were deemed as taxable income in federal courts, an athlete would have to pay at least $15,000 in federal taxes on a $61,000 per year scholarship. In addition, this particular ruling only serves private universities, because the NLRB does not govern labor matters at public institutions. A majority of the top performing Division I collegiate athletic programs are public universities, including all five of the universities that exceeded $100 million in total revenue in 2008.

If collegiate athletes were ever able to unionize, the NCAA would deem them ineligible for receiving compensation for play. And the NCAA has always been happy with taking the easy way out and promoting inertia. But the answer to paying collegiate athletes is simple and not as convoluted as the NCAA makes it seem. To pay athletes, universities could utilize a free-market approach, as it’s worked well for the rest of us. Like any other contract, the player and university could negotiate terms, require a player to stay for three or four years, introduce non-compete and behavioral clauses and detail a performance clause that highlights performance goals on the football field or basketball court and in the classroom. Smart minds can dictate how change can be effective and efficient and satisfy the needs of all parties involved, but asking fat cats to stop eating and make room at the dinner table, might be a little harder.



Lululemon, and Trends in the Market

lululemon storeAs a premier sportswear brand, Lululemon is known for its high-end, innovative athletic apparels that are designed specifically for yoga practice. During the recent years, its product types have expanded into a variety of technical athletic apparels for different sports.

In the United States, participation in sports has been constantly increasing slight during the past few years, and is expected to continue such slow growth, at a rate of 0.5 percent, until 2018. Even during the economic recession, sports participation increased as people used sports activities to kill their time. As a healthy alternative exercise method as well as a convenient individualized fitness activity, yoga practice has gained rising interest from sports participants over the years and is one of the major sports activities that were responsible for most of the increase in the overall sports participation within the United States. Additionally, participation in yoga practice will see strong growth in the near future as a result of people’s increasing perception that physical activities like yoga will lead to an overall healthier lifestyle. According to the latest study conducted by Yoga Journal in 2012, approximately 20.4 million Americans practice yoga, while the number was only 15.8 million based on the study in 2008. As a result, yoga practitioners in the United States now spend over $ 10.3 billion every year for yoga products and services. This is a major opportunity for Lululemon, as it is known for its innovative, high-quality yoga apparels, which is on greatly increasing demand due to the trends in the industry and marketplace.

QQ截图20140326212518However, despite the opportunities in the marketplace, Lululemon has faced many challenges, especially in terms of increasing competition, both domestically and overseas. For instance, Nike is the biggest and one of the most famous sportswear brands in the world, offering high-end, high-quality sports apparels to its customers, just like Lululemon does. However, with a dominant place as well as a much wider reach in the market, Nike had earned $6.3 billion in sales in 2012, while Lululemon earned $1 billion during the same year. Unlike Nike, Lululemon enjoys its reputation and popularity mainly in the United States and Canada, and even though it offers a variety of technical athletic apparels for different sports, it still mainly focuses on the niche market for yoga fashion.

Considering Lululemon’s situation and the trends in the sportswear industry, another opportunity for Lululemon is that it may want to expand its business focus more into the global market. With only a few physical stores in countries other than the United States and Canada, Lululemon should consider having more physical locations set up globally, as well as provide easier access to online shopping, like better shipping and payment policies, for customers around the world. Moreover, besides its popular yoga apparels, Lululemon can expand its products lines and provide customers with more innovative, high-quality yoga practice equipment, like yoga mats and balls. As indicated by the IBISWorld Industry Report, even though there is strong competition, including overseas competition, in the market, sales of athletic equipment will continue growing in the following periods, especially for popular sports activities like yoga.


The Miracle

On Valentine’s Day, groups of Chinese young people waited for a Chinese movie, “Beijing Love Story,” at the Monterey Park AMC Theater. The movie was released day-and-date with China. The film made a strong opening weekend in North America, earning $128,000 from a limited release in nine screens over its first three days in the market following a Valentine’s Day premiere. Moreover, the film set a single-day record for a 2D film in China, with16.1 million Yuan.

“It’s a golden age of the China film market now. It is experiencing a prosperous development…China’s local movies beat Hollywood movies and now have begun to lead the market in the past few years…I remembered that 60% revenues are from our local movies, which could not be imagined in the past,” said Long Wan, founder of Fire Rock Global Media. Wan is doing pre-production as the supervisor producer for a US-China co-production film, which is going to be filmed in Las Vegas this summer.

“Beijing Love Story” is only one of the “miracles” made in February, the Chinese New Year month. Another blockbuster, “The Monkey King,” has earned 1.02 billion Yuan since it was released, making it the third movie of One Billion Club in Mainland China. According to box-office records from Huxiu technology blog, China’s February box-office revenues hit 2.96 billion Yuan (about 50 million US dollars). Experts predicted that the number would probably hit 30 billion Yuan at the end of 2014. It is a dramatic change, comparing to 2007, that the market earned about three billion for the annual box-office revenue.

The second largest film market

According to a report from the Motion Picture Association of America in March, China overtook Japan to become the second-largest film market after the United States, with box-office receipts of around 17 billion Yuan (about 2.8 billion dollars) compared to 2.4 billion in Japan.

More than 5,000 new cinema screens were added last year, and a massive 903 new complexes were opened. The State General Administration of Press, Publication, Radio, Film and Television (a national media censorship bureau) reported that China now has 4,582 cinema complexes and 18,195 screens, an increase of 25 percent and 39 percent respectively from 10 year ago, according to Variety.

Screen Shot 2014-02-27 at 4.57.30 PM

In the past five years, more Chinese audience chose to spend time with friends and families in cinemas. Below the chart shows that 48.9 percent of audience who buy film tickets watched two to four films in 2009, but in 2012, the number of films has been diversity showing that 15.6 percent of audience watched more than 20 movies yearly.

The high price of movie tickets hasn’t dampened the public’s enthusiasm for cinema. In Shanghai, an ordinary movie ticket costs 100 Yuan (around 15 dollars) and a 3D movie ticket costs 150 Yuan (around 25 dollars), according to Want China Time. China’s movie ticket prices are reportedly the most expensive in the world. However, the high price helped emerge a lot of ticket groupon websites that were very popular with Chinese young generations.

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The development of film marketing strategy companies also contributed to the prosperous market. “Do you know the average age of our audience is 22….do you understand those young people born in 90s?” Wei Liang said to the Chinese director veterans in an interview. Liang’s film marketing company, Magilm Pictures, is one of the pioneers marketing companies in China. “When I opened the company in 2009, there were only one or two big-budget productions seeking for professional marketing proposals….now tens of movies every year,” As the chart shows that 37.3 percent of audiences are 20-29 years old, according to Entgroup.



China’s cultural market & Propaganda

China has a long history of propaganda in both news media and cultural market. In 1942, Chairman Mao Zedong gave a speech in a cultural panel meeting in Yan’an, which emphasized that literature and art should serve workers, peasants, soldiers and proletariat. And movies are the tools of propaganda for educating people about the “right things,” and also have to express the right political views. At that time, the Chinese film market experienced a downturn.

During the Cultural Revolution, the film industry was severely restricted. Most of older films were banned, only a few new ones were produced. The most notable ballet version of the revolutionary opera was “The Red Detachment of Women” (1971). Film production revived after 1972 under the strict jurisdiction of the Gang of Four until 1976, when they were overthrown. The few films that were produced during this period, such as 1975′s “Breaking with Old Ideas,” were highly regulated in terms of plot and characterization, according to “Uncovering Chinese films”, a book talking about films during China’s Cultural Revolution.

China’s economic reform and opening in 1979 gave a new life to the whole country as well as its movie market. The government film distribution reform project, which was released the same year, said that film distribution companies could keep 80 percent for developing new projects and pay 20 percent of film revenues to central government. The film industry flourished for a short time as a medium of popular entertainment after the reform project. Around 29 billion people went into cinema in 1979, according to historical record.

In 1993, Chinese government released a new reform report to open doors for private film companies to produce movies. The newly formed SARFT, State’s Administration Radio, Film and Television strengthened supervision over production at the same time. DMG Entertainment, a Chinese-based private film production and distribution company was opened in 1993, which produced “The Founding of a Republic” produced, a new style of mainstream Chinese films in 2009.

Foreign films restrictions & Co-production

Since 1994, China set up an import quota system and started to import ten Hollywood movies every year. “China places a strong emphasis on censorship not only to ensure compliance with the political aims, but also because the country lacks a rating system. The SARFT censorship board regulates the content of movies to make them suitable for the entire national audience,” according to a research paper from Duke University. The board consists of 40 members, including government officials, filmmakers, academics, and representatives from interest groups. The Hollywood films, which apply for a quota slot, must submit either a script or a finished film to the board.

Each Hollywood studio expects to get four to six studio films each per year into China through the revenue-sharing quota system that expanded from 20 per year in 2011 to 34 in early 2012. The expanded total includes an additional 14 Imax and special category movies, according to Variety. Because of strict policies of the quota system, a lot of Hollywood moviemakers figured out another way to enter China film market. One of them is co-production.

“Every week, there is at least one Hollywood producer asks me if there is any good co-production projects in China…They are eager to producing co-production films with China,” said Wan.

“It’s actually really hard to tell one movie produced by one specific country…there are co-productions all over the world,” said Bo Guan, international selection committee member of FIRST International Film Festival.

The main point of co-production films is that they have the same right to share revenues with cinemas as local movies, around 43 percent of revenues, but imported quota films only share 25 percent.

“They want Chinese culture to spread around the world so that they are known and have influence. So we look at the problem from the macro level to figure out what we need to do so that all our partners—U.S. and Chinese—feel like their needs are being met,” Dan Mintz said to The Hollywood Reporter, CEO of DMG Entertainment Company.

“The Growing Pains”

Expansion was the key word of China’s economic development in the past years as well as film market. “Hot money”, which represents excessive money from different fields flowing into film industry, played roles in movie production industry. Lots of non-professional enterprises such as coal companies, which hold “hot money”, entered into film market accelerating the high-speed development. Moreover, genre films that became popular in the market, like fast-food movies, fan movies and young idol movies, which lack deep cultural elements attract most young audiences. At the same time, more Chinese audiences are used to watching films in cinemas recent years, which became another advantage for China film market. However, it’s still not a real mature “battlefield” for moviemakers who really appreciate the art of film. The blockbuster “The Man from Macau” earned not only more than 500 millions box-office revenues but also a bunch of bad reviews.

Where is the future?

Economic austerity is the policy that China released for the new planning years in 2013. People might save their money in banks rather than paying for high-price movie tickets. And also there might be fewer businessmen investing in films, which are more risky than other industries. It is hard to predict if there is any influence on Chinese film market in the future.

More Chinese students are choosing study film production or film related majors in US and they might be the main power of China’s new generation filmmakers. According to UCLA School of Theater, Film and Television, there are 65 Asian American students, which comprised of 13% of the TFT population.

“As I know, USC has more than 20 Chinese student in film school…UCLA and AFI both have less than 10,” said Ivy Yang, a recent graduate from film school in Los Angeles.

Yang is pursuing communication management master degree in USC now. She appreciates the mature atmosphere of film production in Hollywood but she also wants to seek more opportunities in China even though normative rules of a mature film industry haven’t been set up yet there.

“ No rule is the best rule. It’s easier for young filmmakers to get chances…I just want to have a try,” said Yang.

Screen shot 2014-03-25 at 5.25.14 PMGraduated from USC film school in 2013, Alan Wang has spent almost one year in Beijing as a music video director. His plan is to become a famous MV director in China and then seek opportunities for long feature films.

“ I enjoy working here in Beijing except the air… it’s not about “rule” issue, I think every new graduate will face the same problem. We had lots of freedom for creating and shooting whatever we like, but here you have boss and clients…most of time you only can contribute 70 percent of your own ideas…I will stay here for longer time and see,” said Wang.





Official Selection Eats Away at Natural Selection – Independent Film Gets Bloated


While Hollywood films have gotten bigger and bigger over the last few decades, the true rags-to-riches story seems to be the independent film market. Inconceivable only a short time ago, independent film became so successful, it became a new kind of studio film. The behemoths started in the nineties, from the cameras of Soderbergh and Tarantino, and raised small time wheelers and dealers like the Weinstein brothers to immortal mogul status. That said, when Reservoir Dogs was released, only 249 other films made it to the theatres that year. This year? There were 1,500. Meanwhile, the money these movies make has actually decreased. Many in the indie business are beginning to sweat. Is this the sign of a possible market bubble?

Filmmaking, with the advent of cheap digital camera technology and the age of Kickstarter, has become a by-the-people, for-some-people medium. With a new level of accessibility, an influx of hopeful artists began producing work and sending it forth into the world. Film festival culture has spawned from this new supply of infinite content. According the Salon, “in the last 15 years, the U.S. alone has seen nearly 7,000 film festivals.” Reaping the rewards of entrance fees and, especially with high-profile events like Sundance and Telluride, market visibility, the festivals themselves have done very well for themselves. Herein lies the problem: “[The industry] is built on supply…film festivals, film schools, crowdfunding sites, film festival submission aggregators, video-on-demand distributors – all apparatuses that have a vested interest in encouraging filmmakers to keep making films, demand for those films be damned.

A modern film production may look something like this: a group of young creatives raise money through crowdfunding in order to qualify for tax incentives, that they then subsidize to cover the likelihood that the film grosses under budget. Such productions produce little economic activity, as crews and cast are underpaid, and the finished product generates very little revenue. A lot of those 1,500 films made last year did not qualify for theatre runs. Instead, their producers rent out the screens for more money, just to grab a few reviews before dying a quick death on the VOD (video-on-demand) market.

The art of filmmaking takes time and skill to perfect. With so much amateur work taking up so much market space, there’s a chance the next Tarantino will simply get lost in the masses of mediocrity. Salon presents a few possible solutions, be it refocusing film festivals to screen work only created through their selection-based filmmaking labs (basically, a class for qualified filmmakers to create a thesis of sorts) or fitting independent productions into the vertical-integration model of the golden Hollywood studio system.

Film is an important part of American culture and art, but is in danger of falling into the same trap to which many American industries have become victims. Independent film is a beautiful thing, and with our digital age, the American Dream of making it in Hollywood seems closer than every before. However, the bloat of supply threatens the holy market competition that fuels both increased creativity and economic success. Young dreamers aren’t going to stop flooding the market with movies, so it may be time to start building a dam – for all our benefit.


Other sources:

The New York Times,,

China’s Boom Is Bringing Its Prodigal Sons Back

For the past few decades, some of the brightest and best of young Chinese left the country to seek educational and entrepreneurial opportunities overseas. Often, they went to the most prestigious universities in United States, Europe and Canada. Then, they took top-tier jobs at multi-national companies and research institutes.

But now they’re coming home

Because there is more money in China. Growth rates are breathtaking. And new businesses find opportunities and capital more easily.

With its 8 percent annual growth rate, the Chinese economy has become the world’s second largest after the United States. After the financial crisis in 2008, while other major world economies were plagued by the dragging recession, China’s economy remained robust, hence spurring the tide of of some Chinese migrants returning.


The beginning of the twenty-first century witnessed soaring numbers of overseas Chinese migrating back home. According to statistics from the China’s Ministry of Education, in 2012 alone, more than 272,900 overseas students came back, up by almost 50 percent from the year prior.

Returning students have increased by an average of 36% per year over the past 5 years, pushing the total number of the five-year period to more than 800,000. That dwarfed the entirety of all returnees back to China for the 30-year period from 1978 to 2008.

The returning trend shows no sign of mitigating, as a poll conducted in this January by a research team from Nankai University shows. The polls indicated that less than 10% (the lowest number in the past decade) of the nearly 2,000 undergraduate students surveyed had plans to immigrate to other nations after they finish their study abroad.

Another survey conducted by the Chinese international education service provider EIC in 2013 echoed the similar shift. It said 22 percent of returned overseas Chinese students thought they would have better prospects finding a good job in their “home country”.

“China’s high-speed economic growth in past years has motivated overseas students to come back and to look for job opportunities,” Liu Yuan, general manager of EIC’s Shanghai branch told People’s Daily. “At the same time, it demonstrates the difficulty overseas Chinese students have in finding jobs in other countries.”

About half of the former overseas Chinese students polled cited the uncertain economic situation as the biggest obstacle to finding employment overseas.

The tremendous rise in returning students since 2008 coincides with the government rolling out a wide-ranging series of initiatives and incentives aimed at appealing to highly educated citizens. Those benefits include better opportunity for career development, favorable tax rates, housing, more research project opportunities, and government awards.

The growth in Chinese students pursuing studies in the US has been exponential during the past decade: China sent 60,000 students to the US in 2000, almost all graduate students sponsored by the government; in 2012, 194,000 Chinese students went to the US, with most of the growth from self-funded undergraduate students.

Overall, China started to lead all nations in sending students to US universities since 2008. Today, it sends five times more students (158,000 last year) to US institutions than the second-largest source India, according to US State Department statistics. The Chinese government thus showed more eagerness to lure those talents back to help spur its economy.

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In 2010, the issue of “trade deficit of talent” was taken over by the Coordination Group on Specialists of the Communist Party of China. The goal of this group is to coordinate the myriad efforts in place to bring back talent to China.

For more than two decades now, China has had programs to encourage talent to move back to the country. Between 1990 and 2010, the Ministry of Education spent close to $98 million in seed funding for about 20,000 returnees.

A program by the Chinese Academy of Science, launched in 1994, offers as much as $328,500 for research to returnees. In almost 20 years, almost 1,600 professionals have taken advantage of the plan.

In 2008, China launched the Thousand Talents plan, through which the government tries to convince overseas Chinese to return. The plan offers top scientists and entrepreneurs as much as $150,000 in cash, office and laboratory space, housing allowances and school entry for children. The aim of the program was to attract 2,000 academics and entrepreneurs during the course of a decade. More than 3,300 came back.

Another program, the Medium- and Long-Term Talent Development Plan (2010-2020) aims to attract another 2,000 specialists in IT, biotechnology, aerospace, environmental protection, agricultural technology and transportation.

Wei Wang, who is now working at Hubei Institute for Food and Drug Control, took part in the Thousand Talents plan back in 2008 immediately after graduating from Michigan State University.

“It was indeed a hard time for me to choose back then. I originally planned to work in a US medicine company for at least a couple of years after graduation. But the US economy at that time was not in a good shape. And by comparison the domestic talent policy in my home country was just way too appealing. Thus I changed my mind,” said Wang.

But it is hard to tell how effective these programs truly are at bringing back top talent. There have been criticisms of poor management, particularly in city level programs. At times, “returnees” who have taken advantage of programs were already back in China but were enrolled to shore up the numbers. At other times, the people offered spots in these programs did not necessarily fit the bill.

Quality can be an issue. The lower end of the talent spectrum tends to swell the ranks of the returnees. Weak students, often supported by their parents after they return to China, return in droves. The best and the brightest are often hired in the US and Europe; luring these candidates back is expensive.

In a 2008 survey, Duke University in the US found that half of 637 returnees polled had five years or less of experience in the US. They were hardly top executives.

As more and more overseas students are returning back to China, there is a major difference from previous generations who have made the same choice to go back. The previous trend was to come back to China to work at universities or research institutes. Nowadays, returnees are joining businesses or starting up their own enterprises off the ground. They might have been working abroad for several years and have seen the limitations of the foreign markets; they feel they can apply their own talent and experience to tap the greatest potential of the vast Chinese market.

Wang Mengqiu, 37, was born in Sichuan province and went to the US a decade ago to obtain a master’s degree in computer’s science at UCLA.

Until 2012, she worked at a Silicon Valley startup producing network routers. Once the bubble burst, she and her husband — a fellow “sea turtle” who used to work at IBM — picked up and flew back to China where they consider opportunities are more promising.

Now, Wang is now the Vice-President of Engineering at Baidu, Chinese version of Google, while her husband is embarking on a startup to create a Chinese equivalent of Pinterest.

“I don’t think I would get the same opportunities in US, frankly,” Wang told Global Post. “Just last month, I went back to Silicon Valley to visit some friends. What I found out is they are doing the same things they were doing ten years ago. Nothing has changed. They are smart people, but they cannot get enough opportunities in the US.”



How China’s “Sea Turtles” Will Crush US Economy.

More Chinese Students Return to Find Work After Studying Abroad.

China’s Return Migration And Its Impact On Home Development.

Why Are Overseas Chinese Students Not Returning To China.

Plight Of The Sea Turtles.

More Chinese Students Want A US Education, But Fewer Stay For A Job.

Chinese Immigration And The Chinese In United States.

Number Of Returning Chinese Students Up 38%.

Returning To Mexico: Why Mexican Immigrants Are Leaving The US.

Chinese Students Studying Abroad Bringing Change To China…But What Kind?

History Of Chinese Immigration To US.

Why The Chinese Are Flocking To US Colleges?

More Students Back From Abroad.

3000 RMB? Returning Overseas Chinese Students Coming Back to Paltry Salaries.








Over the Top: the Emergence of Arctic Ocean Trade

The north polar view of the world is not a common perspective, most of us may know it from the white on blue flag of the United Nations. However this view of the world may become increasingly common as the effects of climate change on the Arctic Ocean have opened new opportunities for Arctic trade routes. The opening of these trade routes is of particular interest to certain actors and nations and has the potential to change the face of global trade.

The Polar Paths for Shipping (The Globe and Mail)

A dream of the seventeenth century explorer Henry Hudson, the fabled Northwest Passage over Canada was first navigated in 1906 by the Norwegian Roald Engelbregt Gravning Amundsen, who was also the first explorer to reach the South Pole. The other Arctic Sea route is the Northeast Passage over Russia’s northern coast, more commonly called the Northern Sea Route (NSR), it is a Russian-legislated shipping lane

Scientists predict ice-free summers by the end of the decade and navigable winters by the mid 21st century. Regardless of how one may feel about environmental politics, the question of the polar caps melting is not one of “if” but “when.”

Commercial traffic over the Arctic would most affect the Suez route. Suddenly ports along the Suez route would see much less traffic from China destined to Europe. Singapore, a commercial hub and one of the busiest ports along the route signaled its awareness of this threat by applying for permanent observer status in the Arctic Council, a regional governance institution. Singapore isn’t the only observer nation that seems out of place in Arctic Council. China, France, Germany, India, South Korea, Italy, Japan, Netherlands, Poland, and the United Kingdom are also permanent observers. Either as observers or members, nine out of the ten largest economies are in the Arctic Council.

As the Arctic’s pristine environment becomes accessible, commercial shipping is not the only encroaching human activity. Reduced sea ice is making accessible an estimated 30% of the world’s natural gas and 15% of the world’s oil. The combined potentials of Arctic shipping and resource extraction may tilt the scale in favor of developing arctic capabilities and infrastructure over environmental preservation. Professor Lassi Heininen, an expert in Arctic Issues at the University of Lapland, describes this problem as a paradox by which less sea ice means better access, which leads to more human activities which leads to less ice. The loss of sea ice is just one part of the environmental catastrophe unfolding in the Arctic and after speaking with Lassi the question he left for consideration is: “Are we willing to lose the Arctic’s beauty, or do we try to keep it for our grandchildren?”

"Are we willing to lose this?"

“Are we willing to lose the Arctic’s beauty, or do we try to keep it for our grandchildren?”  A baby Polar Bear at Ranua wildlife park in Finland, June 2012 (Photo by the author).

The Russian Federation has already started developing infrastructure to service the Northern Sea Route. Between 2009-2013 maritime traffic has improved from a handful of vessels to several hundred. While most are research vessels several trade voyages have been made. So far Norway and Russia have been the primary navigators, but in the past few years Chinese shipping giant COSCO has turned its eyes northward. This past fall COSCO’s Yong Sheng became the first container-transporting vessel to make a journey from Dailan to Rotterdam via the NSR. Huigen Yang, Director General of the Polar Research Institute of China, announced in 2013 that as much as fifteen percent of China’s maritime trade may travel the route by 2020.

A visual comparison of the Northern Sea Route (Blue) to the Suez Route (Red). The Northern Sea Route is 40%, or 12-15 days shorter than the traditional Suez route. (via wikimedia)

The Arctic region is governed by a combination of international agreements such as the UN Convention on the Law of the Seas (UNCLOS) and multilateral governance institution such as the International Maritime Organization (IMO, a UN Agency) and The Arctic Council (AC). The Arctic Council is made up of the eight nations that intersect the Arctic Circle: The United States, Canada, Russia, Norway, Finland, Iceland, Sweden, and Denmark by virtue of Greenland. In the past few years the AC has passed agreements on search and rescue and the IMO is finalizing a shipping ‘polar code‘ that is expected to be in place by 2016.

Most data estimates suggest that roughly 90% of mercantile trade is shipped. For China, the potential of arctic routes could represent savings of hundreds of billions of dollars. “Once the new passage is opened, it will change the market pattern of the global shipping industry because it will shorten the maritime distance significantly among the Chinese, European and North American markets,” said Qi Shaobin, a professor at Dalian Maritime University according to China Daily. Not to mention China’s traditional route to European ports passes through pirate infested waters that the Arctic Route would avoid.

Infrastructure is still the key obstacle to the expansion of trans-Arctic trade. There are very few ports in the Arctic and they are fairly underdeveloped. Missing also are extensive maritime charts as well as search and rescue capabilities. While the Arctic Council passed a search and rescue agreement for cooperation between Arctic States, investment in capabilities is still low. Icebreakers are expensive and the largest fleets number in the tens. Additionally maritime laws and insurance standards in the draft of the IMO’s Polar Code need to be adhered to and implemented before any substantial shipping would occur.

So far Russia has been the only player to make significant commitments to development by reopening research stations and arctic ports. Canada has done little aside from accepting a legal framework on paper. Notwithstanding, there has been an increase in maritime activity through Canada’s Arctic waters:

Northwest Passage Transits 1903-2013 (Globe and Mail)

At a meeting in Stockholm with USC students in the summer of 2012, Gustaf Lind, the Swedish ambassador to the Arctic Council, accepted the possibility of Arctic Ocean Trade, but noted, “I don’t think we will see much shipping for quite some time.” Mike Keenan, an economist at the Port of Los Angeles, explains “You need long stretches that are regularly free of sea-ice and right now you don’t have that.”

There is an undeniable economic advantage to Arctic Trade Routes to connect not just China to Europe but China to the East Coast of the United States. Currently the typical shipping time from Shanghai to Rotterdam is twenty-five days, from Shanghai to Los Angeles is thirteen days and then seven days by rail to reach New York. Rotterdam to New York is another nine day sail. However a Northern Sea Route to Rotterdam from Shanghai would shorten the journey to ten days, making a sail from Shanghai to New York via Rotterdam last nineteen days. This number could be even shorter without a stopover but it already is faster than the current path from Shanghai to New York taking rail from Los Angeles. This means that without any time lost with stopovers and putting cargo on rails, the current route to New York from Shanghai is twenty days, an Arctic route would be nineteen days at most.

The Port of Los Angeles and the Port of Long Beach are, respectively, the top two busiest ports in North America. As entry points they are currently the fastest way for goods from China to reach consumers in most of the United States. It represents a huge economic asset that handles $260 billion of trade throughout the US. According to Keenan, “3.6 million jobs throughout the U.S. are related to the port’s activities.”

Whether Arctic Sea Routes posed a challenge to the port’s position seems an unlikely prospect for the port to consider in the near future. In addition to the infrastructure problem Keenan noted that “there’s simply too many variables to make any predictions for the port.” In terms of adapting to a changing trade environment “there’s a limit to what [the port] can do if you have a serious time advantage.” Keenan further noted that “the priority should be to focus on climate change and sea level rise” and pointed to the Port’s respectable environmental record and investment in clean technology.

Perhaps it is too early to quantify the effect of Arctic Sea Routes on global shipping but even if there is a long term threat to the Port of Los Angeles the sheer volume of trade between Asia and Los Angeles accounts for over ninety percent of the port’s volume. Mike Keenan asserted “cargo will always come here.”

Community Colleges: Benefit or Burden?

Sarkis Ekmekian is a junior at USC majoring in communication. He’s taking four classes, is the show-runner for Speakers’
Committee, public relations chair at Trojan Pride, and is a campus centre consultant at the Ronald Tutor Campus Centre.

He also is a transfer student.

Ekmekian, one of 1,430 transfer students who enrolled in USC in fall 2013, transferred from Santa Monica College, a top feeder school for USC and the University of California. Community college transfer students have a strong presence at USC: 58% of the fall 2013 transfer class were community college students (up from 50% from fall 2012).

The California Community College system is the largest system of not only community colleges but higher education in the nation, with more than 2.1 million students and 112 campuses. According to the California Community Colleges Chancellor’s Office, “70% of state nurses and 80% of firefighters, law enforcement personnel, and emergency medical technicians” are educated at California community colleges.” Furthermore, most California community colleges have agreements with the UC and CSU system in regards to transfer students: 29% of UC and 51% of CSU graduates started at a California community college.

However over the last few years, California Community Colleges, along with the UC and CSU system, have suffered through severe funding cuts due to the Great Recession. Funding for California Community Colleges was “cut $1.5 billion – about 12% of its funding – between the 2007-08 and 2011-12 academic years,” resulting in about 25% of college courses to be cut.

As a result, there has been a significant decline in both the number of transfer applicants to four-year colleges and enrolment at community colleges in California. UCs received 1,653 fewer transfer applications from community colleges in the fall 2013 year, compared with fall 2011. California Community Colleges Chancellor’s Office also reported that “enrolment [in California community colleges] decreased by more than 585,000 students to 2.3 million in four academic years (from 2008-09 to 2012-13) due to severe budget cuts.”

Now that the economy has slowly begun to recover, the California government has been looking to put more money back in state-funded institutions. But do community colleges offer a significant enough economic benefit to the economy to warrant reinvestment from the government?

The state certainly believes that community colleges provide significant economic benefit to the economy. Recently, Gov. Jerry Brown proposed a budget which would increase funding to community colleges by $1 billion. The funding would freeze tuition rates at the current rate of $46 per unit and “allow colleges to increase enrollment by 3 percent. Enrollment [of new students] has been cut by up to 15 percent since 2010.” According to Brown, the additional funding would allow students to transfer faster by increasing the amount of classes, counsellors and academic resources available to students.

According to a report conducted by the American Association of Community Colleges, “in 2012 alone, the net total impact of community colleges on the U.S. economy was $809 billion in added income, equal to 5.4 percent of GDP.” Furthermore, “community-college graduates receive nearly $5 in a return on investment (ROI) for every dollar they spend on their education.” The report also found that associate degree completers earn an average of $10,700 more than someone with a high-school diploma at the midpoint of their career. Furthermore, according to the Pew Research Center, the unemployment rate of those aged 25 to 35 drops from an average of 12.2% for high-school graduates to 8.1% to those with a two-year college degree. The report also found that on average, two-year college graduates will earn on average of $2,000 more than high-school graduates per year.

From an economic point of view, it is evident that it is the state’s best interest to encourage more efficient transferring and graduation rates. According to the American Association of Community Colleges, “U.S. taxpayers paid $44.9 billion to support the operations of America’s community colleges in 2012.” In return society will receive “$1.2 trillion in benefits, the sum of the added income and social savings that the 2012 student population will generate in the U.S. economy.” Furthermore, when students earn more because of their higher education, they also pay more in taxes: “federal, state, and local governments will collect a present value of $285.7 billion in the form of higher tax receipts over the students’ working lives [due to community colleges].”

The proposal for additional funding has been met with approval from community colleges, professors and students who have long suffered from severe underfunding. “We have been underfunded for a really long time compared to K-12 and the UC system,” explained Mary Mazzocco, who is the journalism department chair and advisor for school newspaper “The Inquirer” at Diablo Valley College. “Given how many students we serve, given that we are the gateway for non-traditional college students, and given our role in helping retrain people who lose their jobs… I do feel like that they should at least give us the money to allow us to do the job that they have given us to do. And I feel like they haven’t done that in a really long time.”

Statistically, students who manage to transfer to four-year institutions are successful. According to the University of California’s Accountability Report, “transfer students entering UC since 2004 have a 50 to 53 percent two-year graduation rate and an 85 to 86 percent four-year graduation rate.” By comparison, freshmen from the same cohort who enter the UC system have a four-year graduation rate of 60% and a six-year graduation rate of 84%. According to the Pew Research Center, millennials with a bachelor’s degree or more earn on average $45500 – compared to the average income of $30000 for those with an associate degree.

Rachel Ann Reyes is a student at Diablo Valley College majoring in communication. She has been accepted to UC Davis for fall 2014, and is awaiting responses from UC San Diego and UC Santa Barbara. When she transfers, she will be the first in her family to attend an American university. “I’ve personally really enjoyed being at a community college,” said Reyes. “I think that sometimes community colleges get a bad rep for being almost being a continuation of high school, but I think it’s a great opportunity for people who want to save money. If they are determined enough to go to community college to get their AA degree or transfer, I think it can be a really helpful tool at a great cost.”

However, there are also concerns about the efficiency of community colleges – particularly regarding the students who either take too long or don’t manage to graduate or transfer to a four-year college. In 2009, the average graduation rate from California community colleges was only 25.08%, while the transfer rate was an even lower 14.36%. An op-ed in the LA Times also criticized the inefficiency of community colleges and the burden that it places on the economy: “Community colleges are subsidized through direct state and local government appropriations and through student grant programs. Every student who drops out represents an investment loss by the taxpayers in that student’s uncompleted education.” Through further investigation, they found that “of the full-time, degree-seeking students who entered California community colleges in 2007, more than 35,000 had not earned their degrees three years later, and most of them were no longer enrolled in any postsecondary institution.”

The state has attempted to address the low transfer and graduation rates of community college by pushing “state law requiring guaranteed transfer pathways for graduates of the two-year institutions.” Furthermore, new bills would require the CSU system to accept a wider range of transfer degrees when possible, with the transfer pathways focused on “areas of emphasis rather than majors.”

While Mazzocco realizes the importance that community colleges play in transferring students and awarding qualifications, she also worries that the mission of community colleges has taken a turn for the worse – and that too much emphasis has been placed on just the economic benefits of an education. “Historically community colleges were not just for transfer students, but the state has adjusted our mission – we are now supposed to focus on certificates and transferring,” said Mazzocco.

The campus library at Diablo Valley College in Pleasant Hill is nearly empty at the end of the day as the community college has suffered from budget cuts, its student population down 700 from last fall. Photo: Brant Ward, The Chronicle

The campus library at Diablo Valley College in Pleasant Hill is nearly empty at the end of the day as the community college has suffered from budget cuts, its student population down 700 from last fall. Photo: Brant Ward, The SF Chronicle

“There’s a certain amount of worry that the states push for us to become more efficient and to cut classes that are not high demand, and to focus on certain classes that transfer or go towards a degree,” Mazzocco explained. “For example we’ve added another Mass Communication class because now it’s a part of two or three different majors that transfer. But now I probably have to take feature writing out of the curriculum… because it doesn’t fit into the transfer degree that was agreed upon on the state level… and that’s happening with a lot of classes that are good classes. There’s value to be had to be taking them and offering them, but they don’t fit the pattern that’s being established and are being squeezed out.”

However, there is still a value in attending community colleges that can’t be quantified for some students. “If I had gone to a UC or university straight out of high school, I wouldn’t know what to do,” admitted Reyes. “I think my three years at DVC (Diablo Valley College) have really helped me discover who I am. I got the opportunity to take different classes in different fields and figure out what I liked and didn’t like at an affordable cost. Through that experience I fell into journalism and communication and that is something I really enjoy – I would have never found that straight of high school. Because of community college I am more prepared, and more willing and motivated to succeed at a university because I know what I want and I can apply myself to that.”



The Pixelated Screen: The Sudden Move of Entertainment and the disappearance of Movie Rental Shops

Sam Nguyen wakes up everyday at around 8 AM to drive to work at his movie rental shop, “Video Town,” located in the city of Hawthorne. Throughout the rest of the day, he is met with a string of long-time customers that are either returning a movie or asking him for help on what the best new release is to rent.

“Is this movie good, Sam?” one 5-year-old boy asks, holding up a DVD.

“It’s horrible,” replies Sam, with a little laugh.

Sam has been fortunate enough to be able to keep his shop open for more than 15 years.

Sam, of course, is the exception.

With the sudden business transaction between Time Warner Cable and Comcast that was followed by Netflix paying Comcast for better streaming access, it is safe to assume that a majority of viewership is shifting towards the internet.

And although the majority of the attention is about the relationship between television shows and broadcasting channels, others are also discussing what this new found partnership means for the movie industry and what it has at stake from a financial standpoint.

The movie industry has not exactly been on smooth land. While almost all of the Motion Picture Association of America (MPAA)’s theatrical market annual reports show consistent progress, there are some cautious points to take into account.

Both the numbers at the box office as well as the ticket prices continue to have consistent progress, increasing at a good rate for more than a decade. But what is important to note here is the number of people that are actually taking the time to go to the movie theater.

There has been no consistent increase when it comes to audience. In fact, the graph above shows that the number of audience going to movie theatres appears to have reached a plateau with no signs of progress for the future.

There are a lot of signs that show lack of progress when it comes to the “physical audience” in a physical space.

Even when those movies have left the theaters and begin their way to the land of renting and purchasing movies from specific local businesses, not as many people are racing to get there at midnight.

What caused this very gradual shift?

Back in the mid 1980’s, US citizens would rush to stores in order to access their favorite movies without having to depend on television broadcast schedules telling them when they were going to watch it. In the 90’s, as Blockbuster rose up, making $785 million in profits on $2.4 billion in revenues: a profit margin of over 30 percent in 1995.   However, what is important about Blockbuster’s success was all the profit it made from overdue and late fees from customers who would forget to turn it their rentals as scheduled and the fact that people had no other method of viewing movies, aside from actually buying the movie.

But things have changed.

These “brick and mortar” shops are facing large competition from technological alternatives. Instead of going to a local rental store such as the once-upon-a-time giant Blockbuster, one can now quickly go to the grocery store and pay for their bread and then quickly rent out a movie from a Redbox machine all before leaving the store. It is important to note that a majority of Redbox success comes from the profits they make from late fees they acquire from their customers, allowing it to have a promising future.

redbox market share

Or if that is too much of a burden on people, the existence of Netflix and Amazon provide even more convenience by allowing consumers to access whichever movie they want from the comfort of their home. Netflix started their business model by showing commercials that focused on the fact that DVDs could be mailed to one’s house and one could mail it right back in the same envelope–and with no late fees.

Amazon also provides the same alternative to consumers, allowing them to both rent and buy movies from their website. Blockbuster attempted to compete with these emerging enterprises by creating its own website, but by 2007, it was tanking and going on the verge of bankruptcy (which it declared in 2010).

Even to those that are still seeking a physical space to purchase their product, the opposite is expected. Much like the way that Redbox is offered at grocery stores or outside convenience stores, the interior of the Redbox itself provides lots of options. One has the choice of DVDs, Blu-Ray discs and even video games when searching through the “Box”.

This abundance of product is why locations like Target or Best Buy seem to be struggling a bit when it comes to DVD and Blu-Ray sales. Joanna Cantu, manager at a Best Buy in Lawndale, CA, believes that Best Buy has been able to stay afloat for the moment because of the variety of products they sell when it comes to watching movies.

“Here, one can go into the DVD or Blu-Ray section and see something they like, want to buy it, and then decide they also need a laptop to watch it,” she said.

But the way that both DVD and Blu-ray sales are shifting towards that is hurting the Best Buy stores around the country. In a recent report by, analysts reported that Best Buy’s ESP earnings had dropped for last year and were more than likely to drop for this year as well. Even their Zacks Industry Rating was 257 out of 265 (at the bottom 3% of all the companies that it ranks).

Best Buy might still get a majority of its profit from selling laptops, tablets and smart phones, but it is the movie purchases that are still going to stop it from surviving.

So what allows small exceptions like “Video Town” to survive when even big names like Best Buy are struggling?

For one, Nguyen receives a majority of his revenue from both customers wanting to rent the newest movie that is out but also those that wish to rent movies that are not available on Netflix or at their nearest Redbox. Amazon certainly gives Video Town a competitive run for its money but Sam Nguyen has always had a consistent price in his establishment.

Customers have a choice between renting one movie (regardless if it is a DVD, Blu-Ray or VHS) for $3 or purchasing three of them for $5. He rents out video games (he even has video games for Nintendo 64 available in his store) for $2 each and has a section for movie purchases for $5 each.

The other source of profit that Nguyen makes is from late fees. Video Town charges three dollars for every day that people do not return their rentals and the store owner notes that even though the town is relatively small, people will go days without returning their rentals.

“I always wait exactly one week before I have to call customers and remind them,” Nguyen said, “and you’d be surprised how many people I actually have to call.”

Still, there is no denying that movie rental shops are now talked about once in a blue moon. There are overwhelming different forms of getting a movie once it has stopped being shown in the movie theatres.

What is even more threatening is the emergence of taking out this fine line between movie theatres, movies at home, and access to the internet. Slowly, it is becoming all intertwined into one big thing.

Televisions are now being turned into Smart TVs, where you can access your cable channels and switch onto Netflix with the click of a button.

But if that is not enough for consumers, particularly to the younger demographic, Microsoft’s newly released Xbox One now has an update coming up later in March that will allow players to watch video, play games and chat with friends all on one screen. Video includes movies which players can purchase and save in their Xbox One hard drive to watch whenever they want.

There has not been any speculation about Comcast going into the video game console industry, but considering the way that this lure into the Internet spectrum is flowing, one can only assume that Comcast is patiently waiting for the appropriate opportunity to do this.

What is important to note is that both big and small stores, and even vending machines are relying on one thing: customers going to those place consume their products; products, which is important to note, that have to be made.

The music industry has been fortunate enough to see a rise in vinyl sales, but can the same be said for the movie industry?

What happens when DVDs and Blu-Rays are no longer being made?

There is already evidence of these products being hurt by those that simply pirate movies and shows from websites. An 11-employee Independent U.S. film distributor, Wolfe Video, an independent American film distributor had its profits halved due to piracy and costs to mitigate damages from piracy in 2013, according to The Wall Street Journal.

DVD sales have not been having the great track record these past couple of years and there were not many releases for Blu-Rays.

Even Netflix is showing a gradual shift away from their once marketing strategy of DVD shipments to the home.

It is all about accessibility and convenience when it comes to consuming movies or shows and having one product to do that. Everything is a bundle and DVD players or Blu Ray players being sold as sole products (not combined with anything) has not been consistent.

There is only a matter of time before the streaming becomes the only form of consumption and neither Best Buys or even exceptions like “Video Town” will be able to hold on.

Need a Lyft? Ride-sharing and the Rise of Collaborative Consumption

My girlfriends and I with Lyft's famous pink mustache

My girlfriends and I with Lyft’s famous pink mustache

It is Saturday night. You and your friends are planning to go downtown for a few drinks. Instead of calling a cab, someone takes out her iPhone and books a ride with Patrick. He has a friendly smile, a five-star rating, and a white Toyota—with a pink mustache.

Named as one of TIME’s 10 ideas that will change the world in 2011, the concept of collaborative consumption has proved it is a force to be reckoned with. Service start-ups such as Lyft, Uber, and Airbnb are challenging the traditional models of consumption, giving regular guys like Patrick an opportunity to participate in the supply chain. Before, hopping into a stranger’s car may have been seen as reckless and irresponsible, but Rachel Botsman, co-author of “What’s Mine Is Yours: The Rise of Collaborative Consumption,” writes about how technology is enabling trust between strangers. She says collaborative consumption is a “powerful cultural and economic force reinventing not just what we consume, but how we consume.”

Technology has often times disrupted the economic landscape. Take Lyft as an example. It is a ride-sharing app that markets itself as “a friend with a car.” The economic transaction is more than just an exchange of service; it’s an experience. Lyft is redefining what a ride service is, while normalizing casual interaction during commodity exchange.

Here is how it works. At any point in time, you can open up the app and hail a friendly Lyft driver around the area.

You enter the car, give the driver a fist-pump, and he or she entertains you with a friendly conversation as you are dropped off at your location. The transaction is processed by Lyft so you avoid the awkward paying and tipping process. Using Lyft is vastly different from using a taxi service. Lyft has become popular especially with the tech-savvy and thrifty Millennial generation. The company raised $60 million in its third round funding last May with venture firm Andreessen Horowitz and the company has grown to be available in 22 cities.

According to TechCrunch, Lyft is currently growing at a faster pace than its main competitor, Uber, with a 6% growth rate disclosed by its co-founder, John Zimmer (TechCrunch). Some point out the numbers can be misleading since Lyft currently has a smaller revenue base than Uber. However, when Uber raised $307 million in Series C funding last June, Lyft caught up to having one-third of the weekly ride volume Uber had across all its products. If we dive further into the success of Lyft, we can find there are multiple economic forces at play.

“There’s an app for that” is a now common response to everyday problems. Technology of apps and proliferation of mobile phones have allowed companies like Lyft to reduce transaction costs. People are able to conduct business with private individuals rather than a chain. This process of disruption has reorganized the protocol of commodity exchange. In Lyft’s case, the app redefined the economic structure by asking for “donations” rather than charging “fares” for payment. Since Lyft does not employ a specialized workforce, it came up with a new form of transaction in order to enter the market. The legality of this is as fuzzy as Lyft’s iconic pink mustache, evidenced by the app’s ban in certain cities like Seattle. Major cities like Los Angeles requires Lyft to charge a set fee to continue its service, but the majority of Lyft locations still operate on “donations.”

Perhaps ironically, through innovation, our generation is reverting back to a peer-to-peer localized model. “Collaborative consumption” is often interchanged with “shared economy.” The act of sharing is deeply ingrained in the Millennial culture. Millennials love to share articles, tweets, pictures, location, etc. It seems natural that this behavior trickled down to more tangible things like clothes, cars, and even homes. Economic sluggishness over the last few years has also contributed to this phenomenon, as more people are trying to find ways to make money off of their unused or under-utilized assets.

Think about it. You have a car and a driver’s license. You consider yourself to be a responsible driver, and you give rides to your friends all the time—why not start getting paid for it? Patrick bought into the idea, joining Lyft to make some money on the side.

“I needed a second job to help pay some bills and also to help save up for grad school. I do see myself doing this long term because I can make some extra cash and not have it interfere with my regular work schedule,” he says.

Lyft takes a 20% cut from every transaction. There are also “Prime Time Tips” that escalate rates during high-demand periods (i.e. 11pm on a Saturday night). These tips can go as high as 70%, but the entirety of the increase goes to the drivers. Due to the reduced transaction cost of using a casual workforce and conducting financial transactions online, Lyft fees are also generally cheaper than regular taxi services. Katherine, a college student from California, says she uses Lyft because it is more convenient and affordable.

“I use Lyft because it feels more personal and I feel like I can trust the drivers. Plus it’s convenient to find a car from an app on my phone – I never know which number to call for a taxi or what service is better than another. Plus it’s cheaper. A ride to downtown via taxi can be $14, while using Lyft, I can get a rate as cheap as $8.”

It seems like everyone wins—well, except for the taxi and limo service industry. Formally trained drivers who are screened in a testing and licensing system are now competing with normal civilians. In essence, the barriers to entry to the transportation industry has been compromised. However, this does not mean Lyft does not take safety seriously. In some aspects, Lyft’s screening process is harsher than some taxi companies, with higher age requirements, and stricter standards on criminal records. For instance, Lyft requires no reckless driving or DUI within the last seven years, when the City of Los Angeles only requires three years. In addition, Lyft links your Facebook for verification and provides insurance of up to $1m for the drivers. The car also has to be clean and presentable.

There have also been tensions between governments and the new model. In 2012, the California Public Utilities Commission issued “cease and desist” letters to Lyft along with other similar services. Although the knee-jerk reaction may be the issue of safety, there are many factors contributing to the debate of this new business model. Taxi and limousine companies who once enjoyed monopolies are heavily lobbying against legalizing these services. In addition, many cities rely on the regulation fees these companies pay to operate, fees private ride sharing programs are not obliged to pay.

“To me it’s a really dumb debate,” Patrick says.

“The real concern for the state of California and other states that Lyft operates in is that they see private ride-sharing programs as entities that are taking money from them. They hide under the issue of safety, but their arguments are based off of taxi companies having to pay fees regulated by the state while private ride sharing programs do not. How does that equate to being concerned about passenger safety? It’s really ridiculous.”

The issue of safety is always brought up in these debates. However, it seems like Millennials have more faith in strangers. Katherine says, “the idea of communicating even with a stranger online isn’t quite as daunting anymore.”

“There’s a growing inherent trust between young people in this generation (twenty-somethings), so doing things like calling a cab or organizing a ride share through an app or online service doesn’t seem so out of ordinary, and most don’t think anyone is trying to scam them.”

Patrick says the age of his passengers range from 21-45, which is consistent with the wide belief ride-sharing is embraced mostly by the Millennial generation. Botsman asserts that we now live in a global village, and there is a new importance placed on reputation. In Lyft’s case, transactions are followed by a rating system, from these reviews drivers and users leave a trail. If you average less than 4.5 stars, you are in danger of being dropped. Our ability to collaborate is quantified into a form of “reputation capital,” and it is put in public display, ultimately determining our access to collaborative consumption.

Last September, the State of California became the first state to regulate ride-sharing, or what is now newly dubbed as “transportation network companies.” Depending on how these new rules perform, other cities may follow the California framework in the future.

Ghost Town No More: The Transformation of Downtown Los Angeles

It’s five o’clock on a Friday in Downtown Los Angeles circa 1995. Bankers and businessman check their watches, walk down to their cars, and drive off to their respective homes or apartments throughout Los Angeles. This was the picture of what downtown used to be, a ghost town with vacant offices and a bleak economic outlook for the neighborhood.

Thanks to the emergence of the Staples Center, downtown is no longer the ghost town it used to be. In the past 15 years the neighborhood of downtown Los Angeles has seen a dramatic rise in the number of businesses that have decided to open up shop . But what is driving this dramatic rise?

Many experts believe the growth was buoyed because of AEG’s Staples Center, which is true, but there are several other factors that were just as effective. For example, the creation of Metro Rail, which brought people from Pasadena into this neighborhood, furthering economic activity. Another factor was the completion of the Walt Disney Concert Hall in 2003. There were many roadblocks from 1987 to 2003, but the necessary funds were collected, and it has brought a world-class architecture project to downtown. So we see an amalgamation of investment through private, public, and philanthropic means along with a coincidence of good timing.

The reason why the Staples Center garners much of the praise for this revitalization is because this multi-purpose stadium hosts over 250 events and around 4 million visitors a year, an outstanding number of people to see the revitalized downtown neighborhood. Now, with the construction of LA Live, there are many pull factors like restaurants and bars that see visitors of the Staples Center come early for the event and stay once the event is over. Before the completion of the arena, downtown was best known for the juxtaposition of skid row and financial businesses. In the early 1990’s, banks located in downtown began to consolidate and merge their offices, thus creating empty office buildings and spaces throughout the neighborhood.

Los Angeles is a city that, despite the economic woes of its state, can be seen as a beacon of hope with a global interest that has seen investment from several Chinese firms as well as Korean Airlines. This sentiment has become increasingly more evident with the construction of the Wilshire Grand building that is owned by Korean Airlines. The Wilshire Grand building will become the eighth largest building in the United States, once completed. Generally speaking, the more skyscrapers and construction cranes a city has, the healthier their economy is. That is not always true, but in this case it demonstrates that Los Angeles, and the booming downtown, want to compete on a global scale. Sure, the rebuilding of the downtown neighborhood has been a slow process since the late 1990’s, however, according to Nate Berg, “many in the city are hopeful that the Wilshire Grand is part of a new wave of investment downtown that will help the city compete internationally” (Nate Berg, The Guardian). It seems as though Nate’s sentiments are justified in terms of the investments being brought to the neighborhood, when there are plans for chains like Whole Foods, retailers like Urban Outfitters, and several local restaurants who have decided to expand to the downtown area.

In order to put the rise of downtown in context of, towards the end of 2013, “Six parking lots in downtown Los Angeles recently sold for $82 million” according to Dawn Wotapka of the Wall Street Journal. A staggering amount of money for some parking lots that have plans to be turned into an apartment complex. This is just one deal of many that have transpired over the past 15 years, and the figures seem to keep rising.

However, the other side of this story is the issue with occupancy rates, and whether or not there are too few apartments or too many people. Wotapka reports, “With more people flocking downtown, the vacancy rate for apartments has fallen. In the third quarter, downtown Los Angeles had a vacancy rate of 3%, down from 3.3%” Along with the dropping vacancy rates in downtown, which means in increase in demand, the consequence is that the average price of rent jumped almost 4% in the final quarter of 2013.

To shed more light and data  on the rise of housing in downtown, Wotanka found, “There are about 14,000 apartment units in downtown Los Angeles. About 5,100 units are under construction, and more than 3,400 units were built between 2008 and 2013, according to Polaris Pacific, a real-estate sales, marketing and research firm. More than 3,000 additional rental units have been approved, with another 7,000 proposed. Meanwhile, there are only 17 condo units for sale and 68 under construction.”

Although there are some concerns that there has been such a vast amount of investment for housing downtown that we could see a drop in prices, the consensus among real-estate executives is that the demand will still stay fairly constant and strong. This prediction is justified by a recent report on the diminishing availability of apartment buildings and the relationship with rent prices. Since 2010, rent in the downtown neighborhood has increased by 18.2% and is still predicted to grow because of the strong demand.

There has been a rush of residents flocking downtown, but that does not mean that it was equipped with the necessary provisions of a typical neighborhood.Another major indicator of the downtown area boom, although it may seem trivial at first glance, is the addition of Whole Foods to the flourishing neighborhood. The development of a Whole Foods in downtown serves not only high-priced, fair trade organic groceries, but as a symbol of the seriousness of downtown as a vital area in Los Angeles. As David Pierson of the Los Angeles Times reports, is “a major development in the neighborhood’s gentrification efforts.” He is not the only one praising the development of the high end grocery store. City Councilman Jose Huizar recently stated, “Downtown Los Angeles is like a city within the city that needs a diverse range of services – including grocery stores,” Huizar said in a statement.  “Bringing Whole Foods Market to downtown is long-awaited news that represents a major coup.”

But Whole Foods is not the only successful chain that has chosen to explore the downtown area. The recently remodeled United Artists Building, now called the hip Ace Hotel, provides another example of what downtown has become. With locations in London, New York, and Panama, to name a few, the expansion to the downtown area exemplifies the “hip” and “young” vibe that the area now exudes.

Downtown has made tremendous strides and has overcome many obstacles to get the state that it is in today, and many real estate executives believe that the best has yet to come for this burgeoning neighborhood. With rising rents and diminishing vacancy rates, an interesting few years are expected to come in the housing market, with several apartment complexes to be completed. However, in retrospect, you have to look back to the addition of the Staples Center, the Walt Disney Concert Hall, the completion of LA Metro rail lines into downtown, and the subsequent development of L.A. Live as the genesis of this downtown explosion.