Apple Sidestepping Taxes and Pursuing Excellence in Tax Avoidance

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 In this story from the New York Times it is reported (or really whined about) how little Apple pays in taxes. The story starts off by talking about how Apple put an office in Reno to side step paying higher California taxes. Technology companies in general can move their headquarters to different states or around the world more easily than manufacturing companies due to the fact that making software, applications, or intellectual property doesn't require billions of dollars of capital investment in property, plant, and equipment.

Apple paid $3.3 billion and had a profit of a little more than $34 billion which makes their effective tax rate less than 10%. One technique that Apple uses to reduce their taxes is what is known as the double Irish arrangement. This is part of a tax avoidance by placing intellectual property outside the United States and without paying U.S. taxes. The money from the intellectual property is licensed from an outside company from Apple that is located in Ireland, and licenses the rights to a second company also owned by Apple that is also located in Ireland. The second company gets income and taxed at a low rate and avoids being taxed at high U.S. rates. It important to know that tax avoidance is perfectly legal and different from tax evasion which is where someone purposely goes out of their way not to report income, defraud the IRS, or essentially never intending to pay their taxes. Apple should be commended on such accounting excellence. Also Apple is not the only company that takes advantage of this. Eli Lilly, Google, Microsoft, and even Pfizer use the same strategy to lower their taxes. I would also point out that hiring the people to find these strategies is not cheap. Tax ninjas are not only expensive, but are not easy to come by. The true cost is adding in what it cost in time and money for the services of the tax ninjas.

I love how the New York Times tries to vilify Apple for not only pay their taxes but to suggest that companies like Apple are the reason why states of California are now facing a financial crisis. California is in crisis because of generous benefits to state employees, overspending, and high tax rates which lead not only companies but people out of the state. If California simply lived within their means and lowered state rates you would see people starting to move back.

The tax system is not only complicated at the personal level but also at the corporate level. GE filed a 57,000 page tax return. This seems ridiculous. How many hours and money was spent simply on the return? The tax code needs to be revamped at both the personal and corporate level. My suggestion would be to have a progressive tax rate at the personal level without any deductions. At the corporate level I would propose a flat 15% level. You might say “This will deprive the government of revenue!” The problem is government spends whatever it can get its hands on. I would argue that lower corporate rates would bring business back into the United States which would increase revenue which actually would be a problem since Congress would spend it. At the same time I would propose a balanced budget act. My balance budget act would be a little different. If Congress was not able to balance the budget everyone in Congress would be fired. This would make for interesting politics and ensure some accountability.  Until any of this happens companies will use all possible deductions, credits, schemes, and sandwiches to keep more of their money. 

Natural Orifice Surgery: Surgery of the Future?

                Something interesting I have learned about in the past week weeks I natural orifice surgery. I saw an article about a woman who had her appendix removed through her vagina. This reminded me of surgeries they use to do in ancient times. The way natural orifice surgery works is the surgeon operates on the body through natural openings such as the mouth, vagina, rectum, and urethra. By doing this the surgeon doesn’t have to cut the skin which can lead to infections and complications. Only around 1,000 patients in Europe, Britain, and America have undergone this surgery. Hopefully more people will undergo this surgery in order to see if it has benefits over traditional surgery.

                Surgeons have already used natural orifice surgery to remove prostates, kidneys, appendices, gallbladders; it can even be used to perform weight loss surgery.  Surgeon Kurt Robert of Yale University performed the first appendectomy (appendix removal) in 2008. The surgery was less than an hour and half and the woman had no visible scars. Dr. Mitchell Humphreys of the Mayo Clinic removed the prostate of one man in 2010 and so far has had no signs of complications. Dr. Vikram Reddy a assistant professor of surgery at Yale University is experimenting with natural orifice surgery for patients with Crohn's disease (gastrointestinal). One other advantage to the surgery is that there is less of a chance of the patient of hernias. There however are risks associated with this procedure like any procedure. Since there is an internal incision usually made it can cause internal leaking from the incision made on the inside of the body.

                There is no doubt natural orifice surgery is in its early stages. Hundreds if not thousands of surgeries will have to be performed in order to determine if this new type of surgery offers any benefits.  What is fascinating is how surgeons use to have to make large and long cuts to perform surgery. Then in the 1980’s and early 1990’s surgeons started doing laparoscopic surgeries. Then in the early 2000’s robotic surgery was introduced. Perhaps natural orifice surgery will take off in the next ten years. Only time will tell.

First Free-Market Hospital: The Surgery Center of Oklahoma

Perhaps the only free market hospital is in Oklahoma City, Oklahoma. The Surgery Center of Oklahoma performs all different types of surgeries ranging from ear, nose, throat, general surgery, urology, ophthalmology, and various orthopedic surgeries. What is different about The Surgery Center is Oklahoma is that they don’t go through insurance companies. Let me repeat this no insurance is involved in these procedures. What is even more interesting is that the prices for all surgeries are included on the website.  By doing this the surgery center is able to not have to deal with the bureaucracy of insurance companies and able to actually charge less because of the bureaucracy. The surgery center also has an infection rate of only .3% in 2006, .04% by 2008, and in 2010 only .001% which is a fraction of the national average of 2.6% per year.

I am always curious why finding outcomes of hospitals is so hard to find. For anyone with insurance they really don’t care what the cost of a procedure is because usually there is a price ceiling on what they pay in any given year. This would be the same thing as going to the grocery store with no prices loading up on whatever you desired an then paying a fixed amount every time you visited the store (think co-pay). In this scenario, there is no incentive to care about what the cost of anything is or its benefits. Health care works the same way. We need a single-payer system of people paying out of their own pockets. A common complaint to this might be that “People can’t pay out of their own pockets because prices are too high!” People fail to realize the reason why prices are high. If the American Medical Association got rid of their cartel and let more people practice medicine, the FDA allowed patients to take drugs after they passed Phase I of clinical trials, and if prescription drugs available without prescriptions the price of health care would drop faster than you could say abracadabra. All of the things I mentioned artificially increase the price of medicine. Also getting rid of the employer deduction for health insurance and allowing individuals to decide would help. Another thing that would help is allowing people to buy health insurance in different states. Why it is illegal to buy health insurance in different state is beyond me.

The United States needs more hospitals like The Surgery Center of Oklahoma. When people have to pay with their own money they pay much closer to attention to the costs and benefits. Setting up a hospital is no easy feat due to the massive amount of regulations required to start one. I would prefer to lower to barriers to entry and allow anyone open a hospital. We want hospitals popping up like McDonalds and Wal-Marts. It would be positive to have more for profit hospitals. People might say “Well for profit hospitals have no incentive to make people better”. Organizations and businesses have reputations. If a hospital was known to make people worse no one would go there putting the hospital out of business. More for-profit hospitals would cure our quasi private/public health system. 

Personal Omics Profile: Future of Medical Testing?

Medical testing may be reaching the next frontier. Recently Michael Synder of Stanford University spent the last two years sequencing his DNA, genome, and metabolites. During the two year period, researchers used iPOP or Personal “Omics” Profile. IPOP looks at not only the genome, proteome, and other vital information. Over the course of two years Synder provided a blood sample every two months to study his body. Over the course of the study Synder got sick and researchers were able to look at the changes in his body in real time. The data showed that Synder was at an increased risk of type 2 diabates. By modifying his diet and exercising he was able to bring his vitals back into range erasing the increased risk for diabetes. In essence he was able to see a few years into the future due to the real time data. The researchers look at different metrics to see what was going on with Synder’s body.

This is the first look at medical testing in real time. The human body is complex and we have many different genes. Genes only tell us whether or not people have an increased risk of decreased risk of getting a getting illness or disease. However, by studying these genes and genome in real time researchers will be able to get a better understanding of how the body transforms over time. For instance, how a normal body gets cancer. Also this can lead to how people improve, get better, and stay healthy. Understanding this process could lead to novel therapies in the future.

I hope more studies that use the IPOP are done in the future. A better study would be to look at certain populations with a particular disease or illness and measure the changes in real time. One drawback however is the amount of testing that is required. I don’t know how many people would be willing to get a blood test every month. Hopefully, in the process researchers can devise ways to get information by less invasive means.

Airplane Safety: Safer Than Ever

Despite what people may believe it seems that airplane travel has become very safe. For 2011, only one life was lost for every 7.1 million passengers. According to the data, between 1991-2001 you were ten times more likely to get in a plane accident than today. I would point out during this period I don’t remember planes falling out of the skies or crashing into one another. People often feel safer driving to the airport. However, the mortality rate of motor vehicles is eight times that of planes (it should be noted the mortality rate of motor vehicles has also dramatically decreased over the same time period).

If we attribute anything to the drop in deaths it would have to be technology, experience, and information. Technology in the cockpit has vastly improved over the last few decades. Electronic displays give pilots much more detailed information than ever before. Pilots can now train in simulators that put them through scenarios that they would never see in the sky. Also the fact that we know what caused previous crashes impacted how future airplanes were designed.

In essence, we are now safer in the friendly skies than ever before. People claim that this is because of government regulations. People forget the impact of the private sector in creating the tools that made everyone safer. The last thing airplane manufactures and suppliers want to see is their company name posted on the evening news or paper because they took shortcuts that created lost lives. Companies in pursing profits can’t help do the socially responsible thing and keep us all safer.

Amazon Price Checker

Amazon.com recently came out with an application for phones that allows individuals to use their phone to scan barcodes of any item and instantly the price of that item. The application will scan the barcode then show the price of item available on Amazon.com.

The other night I was curious about the application so I downloaded it myself. I wasn’t at a store but I started to scan a bunch of books on my shelf and realized how cheap it would be to replace them!

Clearly, Amazon is trying to lure their business their way by showing people that their prices are cheaper. If someone wanted to compete with Amazon they could create an application that could scan every single price online and display the cheapest one. Retailers are upset because they obviously charge higher prices than Amazon. However, although retailers may complain consumers benefit. I doubt you will hear any consumers complain about the application. Would you complain about paying lower prices? In a world filled with millions of prices being able to find a cheaper price is always good. Although, Amazon has low prices they don’t always have the lowest. For instance, I bought some DVD’s from Amazon and then found the exact same DVDs cheaper at Best Buy because they went on sale a day after I bought them. If someone wanted to give Amazon a run for their money they could create an application that could scan the whole internet and all local stores. Also Apple has an application/assistant called Siri that answers questions for people. I am sure in a couple years this application would be able to do similar things by voice recognition. While we’re at it Siri could answer questions like “My car is low on gas where the closest and cheapest place to fill up?” Amazon’s price scanner is turning shopping into a consumer’s paradise.

Black Friday: Waste of Time (Why You Don't Have To Go To Wal-Mart, Best Buy, or Macy's)

The internet has transformed all of our lives. If you ask most people if they could live without it I have a feeling very few could actually say yes. The internet allows people to do wonderful things like send mail across the world, pay bills, and order items. With the holidays approaching I want to focus on that last thing of ordering things. In the United States, we have an event called “Cyber Monday”. Essentially Cyber Monday is a day where people go online to order gifts for themselves, family, friends or loved ones. This of course is after Black Friday where people wait in tents all night in order to secure great deals on gifts. This year stores many retail stores like Wal-Mart, Best Buy, and Macy’s opened at midnight instead of opening the usual 3 or 4 a.m. like they usually do. This year alone over 220 million people participated in Black Friday. To me I never understand why people spend hours waiting in line to save some money. Of course, there will be other great deals (maybe even online) but what is the opportunity cost of waiting in a line

For those that don’t want to wait in line there is always the internet. In 2011, consumers spent $6 billion from November 28 through December 2. Clearly, this is a lot of money and many retailers are involved. What is interesting however is how online shopping makes things much more efficient. Back in the day people would drive from store to store looking for deals (they may had help from ads or coupons). Today people can find what they want and find it at the cheapest price and have it shipped right to their doorstep without going outside. If anything the internet decreased gas consumption because we don’t have people wandering around wasting gas (not to mention people are also saving gas through their navigation systems). The counter argument might be it takes trucks and cars to deliver all these items people order. This may be true however if you notice UPS and FedEx have trucks that carry hundreds of items and know the most fuel efficient way to deliver these items. FedEx expects to deliver 17 million packages on their busiest day. UPS last year exceeded 25 million deliveries.

Data from Price Grabber shows than 37% more percent of people will shop on Cyber Monday than last year. The major reasons people listed for shopping online were finding the best deals and basically not having to go to the mall. If you think about it people have expotentially more options and a better chance of getting a better deal sitting behind a computer than walking around the mall. Truly technology is glorious.

R.I.P. Steve Jobs

Today it was announced that Steve Jobs passed away. Jobs was only 56 years old. If you look at what Jobs accomplished in his lifetime it is pretty amazing. People forget that even Steve Jobs was fired from the company he founded. Jobs left in 1985 and came back in 1996. I would say that the real innovation at Apple came in the new few years with the IPod in 2000, IPhone in 2007, and IPad in 2010. Clearly, these products made everyone better off. Steve Jobs was able to figure out what millions of people would enjoy. The vision Steve Jobs had allowed us to listen to hours of music, video conference with people from a cell phone, and introduced one of the first multiuse phones that allowed for internet access. People describe Jobs has obsessed with details. Steve Jobs obsession for perfection made our lives better.  Not only did Steve Jobs enrich millions of lives by providing employees with jobs, money, and benefits, but made himself wealthy in the process. According to Forbes, in 2011 Steve Jobs had a net worth of $8.3 billion. By pursing his passion and being obsessed with details he made himself better off an in addition thoroughly served his fellow man.

Luis von Ahn = Brillance

Google: Do No Evil

In what seems like one of the worst antitrust suit cases of all time the Department of Justice is going after Google for their search engine. Like nearly all antitrust suits competitors begin to gripe about how “unfair” the market is and try to get the government involved to break up any type of “monopoly”. People are concerned about Google’s dominance. Nextag and Yelp claim that Google was ranking Google products higher than leading competitor’s products. What is really fascinating is that unlike previous monopoly companies (Microsoft, Standard Oil, and IBM) Google doesn’t even really charge to use its service. I find it hard to call Google a monopoly when consumers are not even paying for it! Not only is Google search free, but other Google products like YouTube, Google Maps, Gmail, and other services are free to use. This is interesting because people years ago would have paid a premium for the quality of data on Google. Researchers even in the early 1990’s had to physically go into libraries hunt down books in order to do research. Google has made searching for hard to find facts and data fast, easy, and very inexpensive. Google handles 34,000 searches per second or over 1 trillion searches per year. I have a feeling Google uses these searches to improve searching. One feature I have noticed Google uses is auto-complete where you type something in and Google tries to figure out what you are typing. Also if you misspell something Google will say “Did you mean…” Google was only founded in 1997 so it hasn’t had a long history yet I have a feeling the technology will get better.

With so much data online now the value will be data mining. Data mining is using data to solve problems or recognize patterns that can help researchers find a common thing between data. Google ranks websites or pages based on how relevant they are. In 2009, alone 47 million websites were added. Google has software that can crawl though these websites and pick up information that people might search. Sites that are visited more frequently are ranked higher than sites not used as much. Even when I have researched certain things I find Google doesn’t always give me the best answer. No doubt in the coming years even more information will be put online which will allow Google searches to get even better.

Why the Department of Justice is wasting countless hours bringing top executives from Google to testify is mindboggling. Executives at any Fortune 500 could be doing better things with their time rather than explaining why their search engine is better than everyone else’s. Like history shows consumers never complain about monopolies it is the competitors who complain because they are getting their clocks cleaned.

Driverless Car: Berlin

Researchers at Free University in Berlin have been experimenting with a driverless car. The driverless car is similar to Google’s Toyota Prius and has been driving around without completely by computer. The car can sense the road, people, buildings and trees up to 200 feet. As would be expected the car has a faster reaction time than that of a human being’s. The car costs around $552,000. I doubt this car will be on show room floors any time soon.
 
Experts claim driverless cars should be available in the next 10-40 years. This is probably a good estimate with the better estimate being the 40 years. The problem I see in developing driverless cars is ensuring quality on each one. Google and the researchers at Free University have made one of these cars, but once you start creating a thousand of anything it leads to quality control problems. As long as manufactures can prove the cars are safer than the human alternative I think people will buy them. Although, people will be reluctant at first to buy a machine that they can’t control. However, one could make the argument that air travel is done by auto pilot which essentially is a computer operating at 30,000 feet above the ground. The number of fatalities today is around where it was in the 1950’s. This is incredible given we have exponentially more drivers. A better measure is looking at highway deaths per miles driven which has dramatically decreased since 1921. Driverless cars in time will make us safer. The people most likely to buy the first cars will be people who have money, who don’t like driving, are bad at driving, or are prone to accidents. Taxi cabs would be put out of a business if a driverless car could pick up and drop off people.

The main argument for driverless cars I see as I mentioned in an earlier post is the amount of time that would be freed up to do other things. This alone would increase GDP, allow us to get more sleep, more fuel efficient cars, and give people even more leisure time. Driverless cars if proven safe would drive down the cost of insurance. We could even get to a day where cars do errands for people! Imagine if you could send a car to the store and the car could pick up groceries or go to Best Buy to buy something. I am imagining lines where store employees load cars and the car then drives back home to its owner.

The $550,000 cost of the current car will decrease over time. During the early stages of any new technology the cost is very high because very few people are doing it. However, once other competitors enter into the market the price will drop making everyone better off (once they finally decide to release a commercial version). Something tells me the price would have to be less than $100,000 for anyone to actually buy one. Time will only tell if or when this even happens. The future can’t be predicted no matter what the past shows because there are technologies just waiting to be discovered.

24/7 Culture

Often people talk about how we have a 24/7 lives. This seems to be true in one sense but false in the other. Today people are working fewer hours than ever before and have more time for leisure and enjoyment. Sites like YouTube, Facebook, and Netflix prove our standard of living is higher because people have more time for leisure activities. To think that these days someone could find rare footage for almost nothing is astounding. In today’s society, we have an on demand culture. People can access information 24 hours a day 365 days a year via the internet.

The biggest difference I see is the access to information. Now we can research things that use to take hours looking through books in a matter of seconds. Researchers have can now spend less time trying to find the data and more time creatively thinking about what they want to spend time on. So if we were to take someone that was working 60 hours in 1980 and someone working 60 hours today the person working 60 hours in 1980 would be very unproductive in modern times. Today a typical business person can check messages while waiting or sitting in a car. Years ago someone might call a business and they would get the secretary to take a memo and it would have to wait for the next day. In today’s society, we are more connected and wired than ever in human history. So in essence a worker could be working less hours today and still be more productive than the worker of generations ago because of technology.

One thing I have noticed is that technology has allowed us not to have to plan as much. If two people were dating in the early 1990’s they would have to call each other (assuming the person was home) to make sure they were going to pick up their date at the right time. Today in less than a second we can change plans. I think people take this for granted.

Although, there are some people who wish we could go back to the yesteryears of only having three TV stations, phones without text messaging, and in general simpler times. This of course is foolish and silly. We all benefitted from these technologies that not only made live more enjoyable but easier.

I just did a search for 24 hour restaurants in Houston and found 16 (not including Whataburger, McDonalds, Waffle House, Denny’s, and IHOP) which are also open 24 hours a day. I would be interested to see if there was any type of data on whether or not 24 hour restaurants have increased over the decades.

It looks like 24/7 culture has only benefitted society and has not taken anything away.

Death of Arcades

In my younger days I was much more interested in video games than I am today. Most people who are now in college or just recently graduated from college can remember an era where kids pumped arcade games full of coins, played games like Teenage Mutant Ninja Turtles, X-Men, and Street Fighter. Today, very few arcades exist. My question is why have arcades seemed to have vanished?

To this day I can remember in virtually every mall in Houston there was some form of an arcade. I can even remember Sam Houston Racetrack having a mini arcade. I would imagine it allowed parents to drop their kid off somewhere while parents did their shopping. The main arcade I remember was a place called Exhilarama which was located in Memorial City Mall. Exilarama was not only an arcade but had food, a playground, and go carts. I remember in the 1990s this place on the weekend would be packed full of kids. By 2000 the company was defunct and a new arcade came in called Tilt. Tilt was only around for a few years and then went out of business. Discovery Zone which was a place people usually had their birthdays also went out of business in 1996 due to filing for bankruptcy. The bankrupt stores where bought by Chuck E. Cheese which is still in business today. The only other large chain arcade I can think of is Dave and Buster’s which is targeted to adults. According to Play Meter a magazine that covers the arcade industry in 2010 there were only 2,700 arcades which decreased from 4,000 in 2006. As of 2004, Konami stopped making arcade games however Sega and Namco still do. In the 1980’s the amount of video game arcades peaked at 13,000. I remember arcades in places like Cici’s Pizza and Mr. Gatti’s.

So the question is what caused the decline of arcades? The main reason is that video games that consumers could play at home over time became more powerful and allowed people to play some of the exact same games as they were in the arcade. Street Fighter 2 was one of these games. Mortal Kombat was another game that many people played on arcade in the 1990s then became widely available on video consoles. Also the internet had a large effect on how people played games. Today, people can play games online with others from around the world. Back in the day you could only usually play against whoever showed up to the arcade. During the 1990’s we had the introduction of Playstation 1 and 2, NES, SNES, Sega Genesis, Sega Dreamcast there was little reason to go the arcades. Instead of spending an afternoon pushing quarters into a machine people could have unlimited play at home. Also computers also became much cheaper during the 1990s. There was always demand for playing games on the PC however, during the 1990s the graphics, computing power, and hard drive space for computers increased dramatically.

Technology over time improves and becomes cheaper for the masses. The arcade/video game industry is one example of this. Creative destruction is the process of letting bad ideas fail and only the best ideas stick around in the market place. I would argue that today more people have access to video games than ever before at a cheaper than any other time in history.

Myriad Owns Your Genes

Yesterday a federal appeals court ruled that companies could patent genes. The U.S. Court of Appeals agreed with Myriad Genetics in the case. Myriad has a patent that tests for the gene BRCA1 and 2 which tests for breast and ovarian cancer. If a woman has the BRCA1 they are 60% more likely to develop breast cancer before they hit 90.

The court claimed that if the DNA is isolated from the body it can be patented. So in essence, our DNA once it becomes isolated can become patented. Blood tests are like this except I don’t know anyone that has a blood test patent per se. The important question however is will this genetic test inhibit growth within the genetic testing industry. Myriad has somewhat of a monopoly since if women get tested for this one gene they have to get a specific test done. The test costs around $300-$3,000 which in the grand scheme of things doesn’t seem a lot if it can accurately tell you whether or not you have cancer. I say Myriad has somewhat of a monopoly because there are other companies out there that can sequence the genome, analyze the genome, and predict what diseases you may or may not have. This is an alternative and perhaps in time will be a better one as genome sequencing will become cheaper and more companies will be created to figure out how to interpret the results of the genome.

Technology seems to always improve while coming down in price. I have a feeling genetics and biotech will be the next wave, however I have no idea when the wave will flood the market or crash. Sequencing the genome has become relatively cheap in recent years. As more people get their genome encoded the need to interpret and predict what the genome means becomes very valuable. This process could take a decade or longer but once it happens we will have more data than ever before.

Borders, Amazon, & E-Books

this week Borders announced it was going out of business. Borders was a bookstore that was popular in the 1990s and now is going to vanish. Most people forget Borders use to sell movies and music along with books. Borders from what I remember had a pretty good café that was somewhat of a Waldenbooks which was a bookstore that usually was located in malls was a subsidiary of Borders will also be going out of business. Borders had 399 stores and close to 11,000 employees. The store should finally be out of business in September.

Some people are saddened that Borders is going out of business, however I view Borders going out of business as an overall positive. The marketplace lets people know when they are doing the right or wrong thing. Even though people are claiming e-books are what caused Borders to go out of business I would argue Borders has been in trouble ever since Amazon. E-books as of 2010 made up 9% of all consumer book sales. The Kindle has been attracting attention for readers. The first Kindle sold in 2007 for 2007 for $399. Right now someone can buy a Kindle for $139. Not only has the Kindle become cheaper but the quality has improved. The Kindle is smaller, has built in Wi-Fi, and can be read in sunlight. The number of books that can be read on the Kindle has also dramatically increased from when it debuted. When the Kindle first launched people could only download 88,000 books. In July of 2011 people could download more than 950,000 books (including free books). Over time the number of books will no doubt increase. I have a feeling out of print books could be republished since anyone with a Kindle and could download it. Another benefit is e-books allow people to download books in a minute which is much faster than getting in the car and driving to the bookstore. The downloadable books also seem to be cheaper than the physical copy of the book. Profit margins should be going up for e-books since the cost of the marginal cost of an e-book is nothing (just the file). The only major costs I could see would be the rights to the ownership of the work.

At any rate, book stores maybe extinct in the next 10 years. However, I think we will have more books than ever available. The Kindle 2 can hold around 1,500 books which could save a lot of book shelves. Since the data is electronic it would also be easier to store notes and information instead of highlighting like people usually do.

If anything the e-book would put more book stores out of business in the long term. The benefit though will be more reading done by everyone which is a positive thing. Knowledge is power.

Future of Fast Food: Self Service Using a Kiosk

One night before finals I was thinking of certain inventions that are great ideas but not implemented. One thing that isn’t out is a fast food kiosk. If you think about it self service kiosks for fast food would save not only time but money as well.
The basic idea of the kiosk is to allow a customer to basically see the menu usually and order whatever they wanted. The machine prints out a receipt and a server brings customers their food. So in essence the customer becomes an employee inputting what they want into a computer. People can customize their items with the options on the screen. One thing I have also noticed is that fast food kiosks have is pictures of all the items on the menu. Usually when you go to a fast food restaurant you can only see pictures of certain items. I would think this would lead to higher sales since people are better able to see an item.

Younger people would be more inclined to use this service. In fact according to the Restaurant Industry Forecast in 2007 said that 71% of people between the ages of 18-24 would rather used kiosks than cashiers. In a survey done by EMN8 (a company that sells kiosks to fast food businesses) 84% of people who used the kiosks said they would return to the same fast food place which was higher than the percentage of people who would return that used a cashier. No doubt kiosks would make it easy for fast food places to balance their registers at the end of every night. Also fewer servers might be needed since a computer can be run 24/7 and never get tired. Not only would self service increase sales but also increase profitability because fewer workers would be needed. I doubt that self service kiosks would put all fast food servers out of business because someone would always have to deliver the food.

Self service kiosks would take people time to get use to. Over time customers would get better at being able to order food which would save even more time and allow more customers to get their food. For some odd reason I get the impression people would rather type what they want into a computer than telling someone. Even though it is subconscious some people may not want to be judged when ordering with a human cashier. Also with so many people texting things these days instead of calling people I wonder if people would feel more comfortable with this technology then others. Maybe fast food places could set up an ordering system so if someone was driving around town they could order from a smart phone, pay for the food over the phone, and pick up their food. Although, drive through is pretty quick already.

The future will tell us if this technology heats up or fads like so many other technologies. We live in a world filled with ideas. The question is can the ideas be executed in a way that creates value and makes everyone better off.