TIME sharing economy

5 Things You Never Knew About the Sharing Economy

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The Sharing Economy Photo-illustration by Chris Buck for TIME

TIME's new cover story takes you on a ride behind the scenes of Uber, Airbnb and more

In TIME’s new cover story, Joel Stein takes readers on a wild ride through the sharing economy—renting out his car, chauffeuring people around late into the night, making dinner for strangers and even toying with the idea of doing other people’s laundry. To read the full post, please subscribe to TIME. Here are five big takeaways about why we trust strangers with our stuff, our lives and our homes.

These companies are more successful than investors ever thought possible
Airbnb was rejected by almost every venture capitalist it pitched itself to. But now an average of 425,000 people use it every night worldwide, and the company is valued at $13 billion, almost half as much as 96-year-old Hilton Worldwide. Uber is valued at $41.2 billion, one of the 150 biggest companies in the world–larger than Delta, FedEx or Viacom.

You can thank eBay (and Apple and Amazon and PayPal and Google) for trusting online strangers
To get here, we needed eBay, PayPal and Amazon, which made it safe to do business online. We needed Apple and Google to provide GPS and Internet-enabled phones that make us always reachable and findable. And we needed Facebook, which made people more likely to actually be who they say they are.

Lyft training is pretty fun
Stein signed up to be a Lyft driver and recalls what happened after he passed a background check: “I went to a training session, where a guy on a yoga ball asked me and 14 other future unprofessional drivers questions like “If You could give a ride to anyone, living or dead, who would it be?” I went with “living” and was tossed a reward of a Dum Dum lollipop.”

Millennials are doing something right (for once)
The homes of rich people and millennials are increasingly stark; only poorer people are still piling up stuff in their guest showers and storage units. Almost all happiness studies show that experience increases contentment far more than purchases do, and young people intrinsically understand that, fueling an experience economy.

It makes people nicer
No matter how well trained service employees might be, everyone is nicer when they’re dealing with customers directly. Even customers. Nearly everyone who stays at an Airbnb rental, for instance, hangs up their bathroom towels after they use them. You do not want to ask a hotel manager what guests do with their towels. When RelayRides, a car-sharing startup, installed a gizmo in renters’ cars that allowed them to unlock it without meeting up to hand over the keys, satisfaction went down nearly 40% and complains shot up fivefold. When they met in person, renters kept their cars cleaner and returned them on time way more often.

 

TIME

In The Latest Issue

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The Sharing Economy Photo-illustration by Chris Buck for TIME

Baby, You Can Drive My Car, and Do My Errands, and Rent My Stuff…
My wild ride through the new on-demand economy

Down and Out in Davos
Why the world’s powerful are worried about 2015

The Talk, Part 2: Advice to My Daughter for Staying Safe on Campus
I want her to be brave, but I want her to be safe

The Next Best Thing to a Cure for Diabetes
Inspired by his son’s condition, a father has invented a bionic pancreas that could transform life with diabetes

Boris Johnson’s Quest for 10 Downing Street
He’s the mayor of London, and the joker of U.K. politics. But he wants to be the next prime minister

The Kingdom at the Crossroads
Can Saudia Arabia find a middle path?

The Culture

Pop Chart

Oscar Isaac’s Big Break
The reluctant gangster of “A Most Violent Year” is a force on the horizon

A Sleaze Is Born in Better Call Saul
Breaking Bad’s motor-mouthed lawyer gets a spinoff

Talkin’ ‘Bout My Generation
Teenagers of the ’60s Remember Their Moment in TIME

Briefing

The Vaccine Crisis
New outbreaks underscore old risks

Microsoft Enters Virtual Reality
How 3-D headsets could innovate in sectors from gaming to education

The Blizzard That Won’t Go Down in History
Behind the botched predictions

When Women Step Up

Europe’s Rough Ride

Milestones

Ernie Banks
Mr. Cub

Vince Camuto
Footwear mogul

TIME Davos

Down and Out in Davos

Why the world’s powerful are worried about 2015

It’s a perennial question: What is the World Economic Forum (WEF) actually good for? The annual confab of the world’s rich and powerful in Davos, Switzerland, has evolved significantly in the past few decades, from a gathering of hardcore economists and financiers to a broader forum for the discussion of ideas ranging from the role of women in the workplace to the future of the Internet. In my opinion, it’s still the best place on earth to get a sense of what global decisionmakers will be thinking about in the year ahead. I made my way around the Magic Mountain listening to bankers, executives, policymakers and world leaders, and here’s what I found.

Tech Brings Bad With Good

Digital Disrupters and Web Pioneers–Google executive Chairman Eric Schmidt, Yahoo CEO Marissa Mayer and Facebook COO Sheryl Sandberg among them–were out in force as always, extolling the virtues of concepts like the “Internet of things,” which could create entirely new markets. But average people don’t necessarily share their enthusiasm for, and abiding faith in, tech. The Edelman Trust Barometer report, a 27-country survey measuring confidence in the public and private sectors that was released during the conference, found that the majority of the world’s consumers think technological change is moving too fast for them. By a margin of 2 to 1, people don’t believe that governments or businesses are thinking enough about the broad societal impact of developments like social media, digital security, genetically modified foods and fracking. Technology for technology’s sake, most people feel, is not a good thing.

That, in part, may be because the gains made possible by technology over the past decade or so have been unevenly shared. A WEF white paper prepared by the Swiss bank UBS found that sectors boosted by new technologies, such as finance and manufacturing, “have delivered a large share of U.S. economic growth without adding significant numbers of new jobs.” Smarter software and the advent of such innovations as 3-D printing are making some people very wealthy. But technological advances have done comparatively little to replace the middle-class jobs lost over the past couple of decades.

How to explain the divide? Technologists like MIT’s Andrew McAfee, who made waves at Davos last year with a book he co-wrote, Race Against the Machine, would argue that the scope of the digital revolution is so massive that it will destroy more jobs before it starts creating them and that the broader growth-enhancing effects of technology will simply take longer to be felt. As the UBS paper notes, it took around 50 years for the benefits of electricity to completely filter through the economy. Still, for a civilization that reflexively looks to technology to deliver us from seemingly unsolvable predicaments, this is a worrisome trend.

Global Growth May Be in Peril

We need that broader tech boom to goose productivity. Globally, productivity grew at a good clip over the past half-century, rising 1.7% a year. But as countries become more developed, productivity growth slows. One of the most sobering presentations, given by the consulting giant McKinsey, made the point that when you combine slower productivity with a dramatic decrease in the global birth rate, you get economic growth that could be much lower over the next 50 years than it has been in the past 50.

Economic growth is basically a function of the number of workers and their productivity. The former is falling sharply as countries get richer and women have fewer children, and the latter is more or less stagnant. “It’s as if we’ve been flying a plane on two engines, and one of them is about to go out,” says James Manyika, head of the McKinsey Global Institute. If current trends continue, McKinsey projects that global growth will slow to about 2.1% a year, even as more people than ever have expectations of a middle-class life. Not a great formula for social stability.

Women and Children First

People can keep praying that technology will produce more middle-class jobs, but there is one proven solution for boosting economic growth: putting more women to work. The picture of gender parity from Davos is never great; this year, the meeting had a record 17% female participation, up from 9% in the early 2000s. One WEF study found that at the current rate of change, it would take women 81 more years to reach economic equality with men.

Ironically, this seems to have created a cottage industry in gender-parity consulting. Employees of both sexes from firms like Mercer and Ernst & Young were at Davos hawking strategies about how to promote women. My advice: think less about leaning in and more about how to help families create support structures that allow more women to work. Warren Buffett once suggested to me that the U.S. government should offer subsidized child care, allowing caregivers (mostly women) to earn a better wage while freeing women who are higher up the educational food chain to take bigger jobs. It remains one of the best policy proposals I’ve ever heard.

Plenty of Band-Aids, Not Many Cures

Of course, that would require action from politicians, something that everyone agrees is in short supply. The divide between the fortunes of global markets (which have remained surprisingly buoyant) and national economies (which are sluggish in many parts of the world) was a big topic yet again. In the middle of the WEF meeting, the European Central Bank (ECB) launched its version of quantitative easing, a $1.3 trillion bond-buying program of the type that the U.S. Federal Reserve–which bought some $4 trillion in assets over the past few years–has only just reined in. It is an effort to help Europe avert another recession, and markets responded instantly, with European stocks rising, bond yields falling and the euro weakening, which should help exports.

While many at Davos were grateful for the uptick in their portfolios, some high-profile financiers fretted that the ECB’s move comes with a downside that will thwart a lasting solution to the European debt crisis. As hedge funder Paul Singer put it to me, “The QE program takes the pressure off European leaders to take the fiscal, tax, regulatory, trade, education and other steps necessary to generate real sustainable growth. [ECB president] Mario Draghi is an enabler, because the money printing enables the Presidents and Prime Ministers to avoid making real structural reforms.”

Polarized politics on both sides of the Atlantic has made it hard for governments to make the sorts of moves that create real growth. (The recent Greek elections won’t change much there.) So central bankers have kept the easy money flowing to give countries more time. But the emerging-market crises of the 1980s and ’90s teach us that printing money isn’t a substitute for fixing structural problems. If you do one without the other, the market will punish you viciously later on.

And all that easy money has exacerbated the growth of inequality globally, since most of it has gone to pumping up stocks, which are mainly held by the top 25% of the population. Wages remain stagnant and middle-class jobs elusive. That divide, which reflects the one between Davos and everywhere else, is what we’ll be grappling with in the year ahead.

MONEY Sports

2015 Super Bowl’s Most Fun, Stupid, and Absurd Prop Bets

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Steven Puetzer—Getty Images

If you've been itching to place a random quirky sports wager that really has nothing to do with sports, wins, or losses, then step right up to the gimmicky world of Super Bowl prop bets.

The Super Bowl is on Sunday. Who are you picking in the coin toss? What’s the likelihood of hearing some variation of the phrase “deflated balls” on air during the game? How about your take on Katy Perry’s choice of outfits during the halftime shows? The odds favor skirt, but you’ll make more money if you bet she wears pants and she does—and you’ll really clean up if you guess right that she dons a whipped cream bikini (18/1 odds).

Known as “prop” bets—short for proposition—these kinds of quirky novelty wagers only tangentially related to the game are increasingly popular during the Super Bowl. For example, the Westgate Las Vegas Sportsbook offers roughly 350 different kinds of bets related to this year’s Super Bowl. The Bovada sportsbook has hundreds more bizarre betting options, many involving events far away from the football world, such as whether the Dow Jones Industrial Average will be up or down the day after the game, and whether or not Punxsutawney Phil will see his shadow on Groundhog Day.

In most cases, gamblers can’t pretend to have genuine insight as to what’s going to really happen in these silly scenarios, so winning a bet is like correctly picking the flip of a coin (which you can wager on too, naturally). You can not only bet on whether the Super Bowl opening coin toss lands on heads or tails, but on which team will win the coin toss, and whether the team that wins the coin toss will ultimately win the game.

The history of Super Bowl prop bets dates back to 1985, when the Chicago Bears gargantuan defensive lineman William “The Refrigerator” Perry was used during the season as a running back in goal line situations, and his popularity led to a quirky bet concerning whether he’d score a touchdown during the Super Bowl. (He did.) Countless absurd bets have followed, such as the proposition in 2013 as to whether any players will be arrested in the lead-up to the game, and whether or not the announcers at last year’s Super Bowl would say the word “marijuana” during the telecast. (The game concerned teams from two states where recreational marijuana sales became legal in 2014.)

By some reckoning, roughly one-third of all Super Bowl wagers aren’t about basics like the over/under or which team will win, but are prop bets like those cited above. Why are people interested in betting on such gimmicky nonsense?

Bruce Svare, a psychology professor at SUNY-Albany who studies sports and addiction, says that there isn’t much research regarding prop bets, at least partially because the phenomenon is so new and, for now at least, largely limited to the Super Bowl. “What I can tell you is that the gambling industry is willing to devise anything to bring more money their way in profits,” Svare said via email. “Proposition betting is probably very popular because gamblers seek frequent and immediate action and gratification.”

In fact, the strangeness and novelty of these gimmicky bets is likely part of the allure. “It is well known that novelty can also drive biochemical events in the brain that may lead to increased interest and ultimately greater vulnerability to addiction for some individuals,” Svare said.

Among the 2015 Super Bowl’s silliest prop bets, the subjects for wagering include:

Bill Belichick’s Fashion and Facial Expressions
In a bet involving the color of hoodie worn during the game by the New England Patriots coach, gray is the favorite, while blue and red are the underdogs. Place a $100 bet on gray, and if you’re right, you win $50. Another bet involves the odds of the surly, ultra-serious coach actually smiling on camera during the game.

Meaningless Game Statistics
You can bet on the total yardage of all made field goals during the game (over/under: 111.5 yards), whether or not the first kickoff results in a touchback, the length of the game’s shortest touchdown (over/under 1.5 yards), and if the game will decided by exactly 3 points, among other options.

The Announcers
You can wager on the number of times halftime performer Katy Perry will be mentioned on air during the first half of the game, as well as how many times the announcers will say “deflated balls” (over/under: 2.5) during the telecast.

Other Sports
For instance, you can bet whether there will be more goals in an NHL that day (perhaps Coyotes-Canadiens or Blues-Capitals) than there are touchdowns scored in the Super Bowl by the Patriots and Seahawks. Other bets involve Barclay’s Premier League Soccer (will Cristiano Ronaldo score more goals than Marshawn Lynch has touchdowns?) and the NBA (Will the Warriors’ Stephen Curry make more 3-pointers than there are made field goals during the Super Bowl?).

Stuff That Has Nothing to Do With Any Sports
In addition to one-air mentions of Katy Perry’s name, gamblers can place bets on what songs she’ll sing, whether she’ll wear pants, shorts, or a skirt, and whether or not singer Idina Menzel will omit at least one word in her rendition of the National Anthem before the game.

Marshawn Lynch’s Crotch
The Seahawks’ running back was fined $20,000 recently for grabbing his crotch to celebrate a touchdown against the Green Bay Packers, and he was fined $100,000 earlier this season for not speaking to reporters. Ironically, the NFL has been selling photos of Lynch’s crotch-grab celebration for $150 a pop. What does any of this have to do with betting on the Super Bowl? Well, gamblers can bet on whether Lynch will grab his crotch in the game after scoring a touchdown—a $100 bet that the crass move will indeed happen will pay $400.

The tacticians out there will notice that Lynch made a rare media appearance this week in order to avoid being hit with a $500,000 fine by the NFL. That may indicate he’s not keen on getting fined again, and therefore would make the case that Lynch wouldn’t make an obscene gesture during the Super Bowl. To break down this proposition further … oh, who are we kidding? This is a wager about a guy grabbing his crotch. If you’re betting on this, you’re not thinking about it too seriously. We hope.

TIME food and drink

McDonald’s CEO Out as Burger Chain Loses Sizzle

Key Speakers At The Year Ahead: 2014 Conference
Don Thompson president and chief executive officer of McDonald's speaks at the Bloomberg Year Ahead: 2014 conference in Chicago, on Nov. 21, 2013. Daniel Acker—Bloomberg/Getty Images

Chief executive Don Thompson will retire, to be replaced by his chief brand manager

McDonald’s CEO Don Thompson finally ran out of time to fix the restaurant chain’s deepening problems.

The company said on Wednesday said Thompson would step down as CEO and board member on March 1, and be replaced by Steve Easterbrook, its chief brand officer who is responsible for fixing the fast-food operator’s marketing and menu. A longtime McDonald’s veteran, Easterbrook earlier in his career held big jobs including president of McDonald’s Europe.

The move comes a week after McDonald’s, the world’s biggest restaurant company, reported fourth-quarter and full-year results that made 2014 the first with a decline in same-store sales in a dozen years. It was also the fifth straight quarter of declining same-store sales in the United States, where it has lost many customers because of an overly complicated menu and changing tastes, and a defections to fast casual chains like Chipotle Mexican Grill.

McDonald’s is trying to quickly turn things around, aiming to simplify its menu and by unveiling a new marketing message centered around the word “love.” But Thompson, who became CEO in 2012, himself acknowledged last week that turning the company around would take time and said that he expected the volatility in McDonald’s results to continue in 2015. While Thompson inherited many problems when he took the helm, he has yet to change the company’s trajectory.

McDonald’s has had trouble weaning customers off of its inexpensive Dollar Menus, creating a chasm between its lower price items and its premium offerings while damaging the chain’s image, the company has acknowledged. As part of its turnaround efforts,McDonald’s is currently testing “Create Your Taste,” which let customers personalize their burger, a key part of fixingMcDonald’s image problem. But the company has its work cut out for it: a reader poll by product testing organization Consumer Reports released in July found McDonalds burgers ranked as the worst in the U.S.

In addition to Thompson’s departure, the company also announced that Chief Financial Officer Pete Bensen will take on the newly-created role of Chief Administrative Officer, overseeing functions that support operations.

In November, Fortune chronicled McDonald’s deep problems.

This article originally was originally published on Fortune.com

TIME Advertising

Mobile Ads Fuel Facebook’s Growth, Again

Views of The Facebook Inc. Logo Ahead of Earnings
The login page for the Facebook Inc. mobile application is displayed on an Apple Inc. iPhone 5. Bloomberg—Getty Images

Mobile ads accounted for 69% of the social networking giant’s fourth-quarter ad revenue

Facebook’s sales jumped nearly 50% in the latest quarter, fueled by growing ad revenue from more users connecting through their mobile phones, the company said Wednesday. Here are the key points from Facebook’s fourth quarter earnings report.

What you need to know: The social networking giant continued to ride a strong mobile ad business to $3.85 billion in quarterly revenue — an increase of 49% from $2.6 billion during the same quarter a year earlier. Facebook’s quarterly profits totaled $701 million, or 25 cents per share, representing a 34% year-over-year increase.

Once again, Facebook got a bulk of its revenue from mobile ads as it surpassed analyst expectations of $3.7 billion in revenue. Facebook’s sales have grown by about 60% in each of the previous two quarters with much of those gains attributed to mobile ads. Despite topping analysts’ forecasts, Facebook’s fourth quarter saw the company’s slowest rate of quarterly sales growth since early-2013 and the company’s shares dipped slightly in after-hours trading.

The company also provided full-year financial results, showing a 58% bump in annual revenue, to $12.5 billion, and $2.9 billion in profits — nearly double 2013’s profits.

“We got a lot done in 2014,” CEO Mark Zuckerberg said in a statement. “Our community continues to grow and we’re making progress towards connecting the world,”

The big number: Facebook ended 2014 with 1.39 billion monthly active users (MAUs), which was up 13% from 2013. Mobile MAUs grew by 26% in 2014, to 1.19 billion.

Facebook’s expanding mobile ad business, which has shown huge gains over the past couple of years, represented nearly 69% of the company’s $3.6 billion in ad revenue. Ad sales were up 53% from last year’s fourth quarter, when mobile ads accounted for only 53% of overall ad revenue.

What you might have missed: In October, Facebook’s tumbled slightly following the company’s third-quarter earnings report after the company announced plans to dramatically increase the company’s spending on hiring and acquisitions in 2015. In the fourth quarter, Facebook said, the company’s capital expenditures rose 7%, to $517 million.

This article originally appeared on Fortune.com.

TIME Food

McDonald’s CEO Don Thompson to Retire

Key Speakers At The Year Ahead: 2014 Conference
Don Thompson, president and chief executive officer of McDonald's Corp., speaks at the Bloomberg Year Ahead: 2014 conference in Chicago on Nov. 21, 2013. Daniel Acker—Bloomberg/Getty Images

"It's tough to say goodbye to the McFamily"

The president and CEO of McDonald’s will retire effective March 1, the company’s board announced Wednesday, after 25 years with the world’s largest restaurant chain.

Don Thompson will be replaced by Senior Executive Vice President and Chief Brand Officer Steve Easterbrook, who was elected by the board to take his place. McDonald’s still sits atop the fast food throne, with more than 36,000 locations worldwide and some 69 million customers in more than 100 countries per day.

“It’s tough to say goodbye to the McFamily, but there is a time and season for everything,” Thompson said in a statement. “I am truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward.”

TIME Music

Taylor Swift Just Trademarked ‘This Sick Beat’

Celebrity Sightings In New York City - January 17, 2015
Taylor Swift in TriBeCa on Jan. 17, 2015 in New York City. Alessio Botticelli—GC Images/Getty Images

She has also applied for several other trademarks on song lyrics

Nothing says Taylor Swift like fun times within tightly defined, strictly patrolled parameters, and the reigning queen of pop music–who rules the realm of modern media with an iron fist decorated with kitty stickers–has a cool new way for you to use some of her catchiest catch phrases: only with her explicit permission, under threat of legal action.

You might want to stay away from riffing on Beyoncé too.

This article originally appeared on EW.com.

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