The network effect and why Foodora pulled the plug in the Netherlands

20

October

2018

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During my studies for the upcoming exams, I decided to write another blog on a concept that is important for the exam but somewhat difficult to grasp. This blog will focus on network effects and how Foodora had to pull the plug on their operations in the Netherlands.

On the 16th of October 2018, Foodora delivered their last order. Foodora was active, in the Netherlands, since July 2015. Their focus was on delivering food for restaurants that did not have a delivery service before. They also tried to connect restaurants to customers that offered something else than fast food. In 2015, there were little options for ‘healthy’ delivery alternatives. So that meant they focussed on a different segment of customers, that weren’t served by other delivery platforms, like thuisbezorgd.nl.

How did the platform of Foodora work? I would argue that it is a cross-sided positive network effect. When there are customers joining the platform, more restaurants want to join the platform since the market is becoming bigger. If there are more restaurants in the platform, more customers can be satisfied, so because of the bigger supply, more customers can be satisfied in their demand (Eisenmann, 2006).

Foodora were providing a different platform service compared to, for example, Uber. Uber connects drivers with customers in need of transportation through their platform. However, Foodora developed a platform and employed deliverers to connect the restaurants with the customers on the platform.

Foodora had to quit their delivery business in the Netherlands because of the fierce competition among the market of delivery platforms in the Netherlands. Other delivery platform firms recognized the market for healthier delivery alternatives and thus began competing with Foodora. Foodora tried to sell their business platform, however did not find a willing buyer. Therefore, the decision was made to stop all activities in the Netherlands (Boogert, 2018; Misset Horeca, 2018).

Boogert, E. (2018). Licht uit bij Foodora in Nederland. [Online] Accessed through [https://www.emerce.nl/nieuws/licht-uit-foodora-nederland] on 20 October 2018.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2006). Strategies for two-sided markets. Harvard Business Review, 84(10), 92-101.

Misset Horeca (2018). Foodora Stopt met maaltijdbezorging in Nederland. [Online] Accessed through [https://www.missethoreca.nl/restaurant/nieuws/2018/08/foodora-stopt-in-nederland-101308245?vakmedianet-approve-cookies=1&_ga=2.96017880.539420528.1540035017-16774532.1540035017] on 20 October 2018.

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Artificial Intelligence and my personal take on the accountability debate

8

October

2018

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In my previous blog, I wrote about a practical implication on how Artificial Intelligence (AI) could be a substitute for personal trainers in the personal health industry. In this blog, I want to talk about AI again, but now on the debate concerning accountability.

Uber started testing self-driving cars in March 2018 (The Guardian, 2018). Uber promised that the future of transportation would be self-driving cars, but then the car did not recognize a pedestrian crossing the street and the car killed her (The Guardian, 2018). That lit up the debate on accountability, because who was responsible for the death of the woman? Is it the engineer of the algorithm on which the car operates? Is it the company who decided to produce and retail the cars? Is it the person in the driving seat, even though this person is not driving (Bogart, 2017)?

I would like to share my thoughts on the matter. In politics there is a concept called ‘ministerial responsibility’. This concept holds that even if politicians do not work on a project for example, they are responsible and accountable for the performance of their civil servants (Hague & Harrop, 2013).

A same principle could be used self-driving cars. If a person decides to travel with a self-driving car, they accept the full responsibility for what the car does. The car should not be viewed as an autonomous vehicle, but rather as a tool that can help you in your transportation. This is comparable to the ministerial responsibility, because even if you don’t fully know the probabilities of something happening, the decision of using the self-driving car is the moment a person takes on the responsibility. A minister could also do all the things in his portfolio himself. By giving it to his apparatus, he trusts others with the production of the project, but he remains responsible and accountable himself (Hague & Harrop, 2013).

I am curious to hear what you think on the matter and if I need to elaborate a bit more on anything in the comments.

Sources:

Bogart, N. (2017). Who is responsible when a self-driving car crashes? Insurance companies aren’t sure yet. [Online] Accessed through: [https://globalnews.ca/news/3270429/self-driving-cars-insurance-liability/] on 8 October 2018.

Hague, R. and Harrop, M. (2013). Comparative Government and politics: an introduction. Palgrave: Macmillan.

Levin, S. & Wong, J.C. (2018). Self-driving Uber kills Arizona woman in first fatal crash involving pedestrian. [Online] Accessed through: [https://www.theguardian.com/technology/2018/mar/19/uber-self-driving-car-kills-woman-arizona-tempe] On 7 October 2018.

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How Artificial Intelligence could be implemented in personal training

4

October

2018

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After yesterday’s Artificial Intelligence (AI) summit by Microsoft, I felt like writing about implications on AI in a field that was of personal interest to me. I like fitness, so I decided to think about, and looking into, what implications AI can hold for the fitness or personal health industry. I will put the emphasis on the coaching industry.

Fitness, as in personal health, consists of three elements, being; exercise, food consumption and rest, being non-training time and sleep. The question I asked myself was, can AI take over the job of a personal trainer? Personal trainers mainly make schema’s for, provide consultancy and motivate their clients to help them achieve their personal fitness goals. All of these mentioned tasks can be fulfilled by a chat bot in some way (Sebold, 2018).

AI can enable customers to take fitness out of the gym and into their homes through applications. Imagine having a personal trainer bot. This service could be subscription based and would always be available for advice on food, exercise information and reminders when to take rest (Wexer, 2017). When talking to the trainer bot, users feed it with experiences, preferences and goals. The trainer bot, being fed with all the additional information, will therefore become more personalized over time and will be able to provide the user with recommendations on which decisions to make in either of the three elements (Sebold, 2018).

Concluding, a bot with lots of information, fed by personal information from the user, can in the long run, make personal trainers obsolete in a way. However, the fact that setting an appointment with a personal trainer is in a sense a way for people that are not too motivated to still go to the gym, is something the bot can’t replace. Therefore, I am not sure if the profession will completely disappear. I would like to hear your opinions about this topic as well!

Sources

Sebold ,T. (2018). Artificial Intelligence has invaded the Fitness Business. [online] Accessed on [https://www.clubindustry.com/resourcebeat/artificial-intelligence-has-invaded-fitness-business] on 04-10-2018.

Wexer (2017). Understanding AI: How the Fitness Industry Needs to React. [online] Accessed on [https://www.wexer.com/understanding-ai-fitness-industry-needs-react/] on 4-10-2018.

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Recruitment through connectivity on social media

1

October

2018

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In this blog, I want to talk about the role of influence through social media. Nowadays a lot of people are on social media platforms. From vloggers on Youtube till recruiters on LinkedIn, basically everyone is connected in some way. On one side, it provides a way for people to connect through contacts they would not make in the real world. One the other side, this is not always as great as it sounds. One of the main threats for the west recognized the potential of attracting young foreigners for their case. The dangerous thoughts of Islamic State (IS) that were being spread through online platforms to insecure teenagers that felt left out in their personal lives and therefore started to radicalize in their beliefs towards their religion and adopted the beliefs of IS (Van Loon & Nieber, 2015; Meleagrou-Hitchens, 2018).

IS was specialized in propaganda that was tailored specifically for different audiences. Many of the young westerners that were recruited, became ideologized by the promise of a caliphate where the rules of god stand above the rules made by men (Melegrou-Hitchens, 2018). The violence displayed in the decapitation movies IS produced, in combination with promising youngsters a sense of belonging, made IS’s recruitment process extremely successful compared to other recruitment initiatives by similar jihadist groups. Youngsters were given the greatest honour on earth, being a soldier of the caliphate.

It was mainly men that joined the cause of IS (Melegrou-Hitchens, 2018). This can be led back to the difference in how men and women use social media. Men use it mainly for information purposes, while women use it to maintain contacts with their friends (Van Loon & Nieber, 2015). I tried to put out the potential dangours of the connected society whit the example of IS. I would like to hear your comments on the blog!

Sources:

Van Loon, M. & Nieber, L. (2015). Helft jongeren ervaart negatieve invloed social media. [online] Availabe at: [https://www.nrc.nl/nieuws/2015/11/20/helft-jongeren-ervaart-negatieve-invloed-sociale-media-a1405590] Accessed on 29-09-2018.

Meleagrou-Hitchens, A. (2018). Recruitment by the Islamic State

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Why Blockchain is not the promised land

1

October

2018

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Over the recent year, the blockchain stepped out of the unknown and has revealed itself to everyone. Most people you ask about blockchain, have heard about blockchain and mainly associate it with bitcoin. Fewer people know what the implications of the blockchain are and even fewer people really understand how it works. In this blog I am not going explain how the blockchain works, since there are plenty of blog to find on that topic. What I want to discuss is the critical, or lack of, stance towards the blockchain and what it can really do for the world, a year after the big worldwide ‘discovery’ of the blockchain. Based on the articles of Veldwijk (2018a; 2018b; 2018c), Blockchain Debunked, where Veldwijk is critically assessing blockchain solutions. I will point out three interesting statements he makes. If you are interested to read the complete articles, I put the sources below.

Functionality for end-users

Blockchain is very innovative, but as a user of an application you don’t get to see what is lying beneath the system. Therefore, a lot of blockchain solutions could be done in a less complex, easier way.

Blockchain systems are not manipulative and thus contains the truth.

This claim is not correct. It is however so, that the ledger cannot be changed, but can be overwritten. The new information can still be wrong, so that the system would always contain the truth is not applicable for the blockchain system.

Blockchain and trust are to be combined.

Blockchain is based on a system where there is always a party involved that someone does not trust. Based on this fact complete openness of the system is something none of the involved parties would want. Therefore, the assumption that users of the blockchain should trust each other is a myth.

I am not saying I am displaying the truth in this post, I merely want to point out some critique I read online. I would like to hear your thoughts on the matter!

Sources:
Veldwijk, R. (2018a). Blockchain debunked, met Satoshi zelf als leidraad. [online] Available at: [https://www.computable.nl/artikel/opinie/development/6348989/1509029/blockchain-debunked-met-satoshi-zelf-als-leidraad.html] Accessed on 1-10-2018.

Veldwijk, R. (2018b). Blockchain Debunked 2: Blockchain wurgt bitcoin. [online] Available at: [https://www.computable.nl/artikel/blogs/security/6361484/5260614/blockchain-wurgt-bitcoin.html] Accessed on 1-10-2018.

Veldwijk, R. (2018c). Blockchain debunked 3: Balletje-Balletje
Blockchain. [online] Available at: [https://www.computable.nl/artikel/opinie/fintech/6447048/1509029/blockchain-debunked-3-balletje-balletje-blockchain.html] Accessed on 29-09-2018.

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Versioning and the gambling debate in the video game industry

21

September

2018

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During the lecture of Monday, I thought of an example of versioning (Shapiro & Varian, 1998). It is often used in Pre-ordering of video games nowadays. In this blog I will use the example of the new Fifa 19, which will be available, if you haven’t pre-ordered it, next week on September 28th.
If you look at the possibilities for pre-ordering the game, you can see the following offered by bol.com:
– A regular version sold for 59,99.
– A ‘champions’ version, where you get extra features in the form of ‘Fifa Ultimate Team’ boosts sold for 89,99.
– An ‘Ultimate’ version, which gives you even more ‘Fifa Ultimate Team’ boosts as well as 3 days of earlier access, sold for 99,99.
(Bol.com, 2018)
This is a wide spread trend in the video game industry. If you pre-order a game you, usually get a small extra bonus feature, which usually consist of cosmetic, in game, products. It is however possible to spend more on a game and therefore get more features. This is seen in games like Call of Duty, Fifa and Star Wars Battlefront. It shows that video game sellers became aware of their different segments of customers in order to maximize profit. However, there is a debate going on if this is not illegal when looking at the law on under aged gambling (Maessen, 2018; Vegelien, 2017)
It is debatable whether the element of betting is present in games, when paying for certain ‘loot boxes’. Lately, a trend in the game industry is to generate rewards through an algorithm that assigns rewards. Even if you decide to spend more on a game, you still do not know what you actually pay for, since what you buy is randomly assigned through an algorithm. This, in combination with the lightning effects and sounds game producers put into these features should be to addictive towards the segment of young players that play the video games (NOS, 2017).
Sources:
Bol.com (2018). Fifa 19 offers. Accessed through [https://www.bol.com/nl/s/algemeen/zoekresultaten/Ntt/fifa%2B19/N/0/Nty/1/search/true/searchType/qck/defaultSearchContext/media_all/sc/media_all/index.html] on 19 August 2018.
Maessen, L. (2018). Kansspelautoriteit dreigt met miljoenenboetes om loot boxes. Accessed through [https://www.nrc.nl/nieuws/2018/06/19/kansspelautoriteit-dreigt-met-miljoenenboetes-om-loot-boxes-a1607140] on 19 August 2018.
Vegelien, S. (2017). Zijn loot crates in de nieuwe Star Wars-game een vorm van gokken? Accessed through [https://nos.nl/op3/artikel/2203135-zijn-loot-crates-in-de-nieuwe-star-wars-game-een-vorm-van-gokken.html] on 21 August 2018.
Shapiro, C., and Varian, H. (1998). Pricing Information. In Information Rules: A Strategic Guide to the Network Economy. Cambridge, MA: Harvard Business School Press.

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