Economist 8/8/14

  1. TripAdvisor can make or break hotels. Around 260m people visit the site each month to read some of the 125m reviews. Last year its reported revenue of $944.7m. Because users post reviews free of charge, in 2012, Jeffrey Bussgang, an HBS lecturer, calculated that its gross margin was an astounding 98%. For these reasons, some think TripAdvisor may be able to take on the “big two” OTAs, Expedia (from which TripAdvisor was spun off in 2011) and Priceline, which on August 6th bought up to 10% of Ctrip, a large travel website in China. These firms sell flights and hotel rooms directly, rather than pass booking requests on to others, as TripAdvisor does.
  2. The relationship between streetcars and development is not clear, say researchers funded by the Federal Transit Administration (FTA). Operating expenses are more than twice those for buses, according to data from the FTA, and capital costs are hefty.Unlike European trams, which often cover long stretches in independent lanes, American streetcars tend to span walkable distances and share the road with other vehicles. This means they inch along with traffic, often at less than 12 miles per hour, on tracks that make it impossible to navigate busy streets or ride around obstacles.If streetcars are so slow and costly, why are there suddenly so many? Because federal subsidies have encouraged them. Under Barack Obama the Department of Transportation has made grants of up to $75m available to “small” projects that promise to revitalise urban areas and cut greenhouse-gas emissions.
  3. THE Uighurs have never been particularly comfortable in China. Xinjiang, the region where these Turkic Muslims once formed the vast majority, came unwillingly into the Chinese empire.Discontent is spilling into the open, nonetheless. The past few days have been the bloodiest in Xinjiang since clashes in the provincial capital, Urumqi, left around 200 dead in 2009. It appears that nearly 100 people died in the violence. Over the past few decades the party has used several tactics to assert control. First it encouraged massive migration of Han Chinese into Xinjiang from other parts of China. Later it poured money into infrastructure and beefing up industryWhenever violence flares up, the government’s rhetoric is uncompromising and usually focused on the dangers of jihadism.The tragedy is that the government could end up proving itself right—by making jihadism the core of the Uighurs’ militancy. For now the violence is fuelled principally by a welter of home-grown grievances and is strikingly amateurish: rarely are the perpetrators armed with anything more than knives.
  4. Like Lever, Polman chief executive of Unilever insists that running the firm with close attention to its environmental and social impact is not an act of charity but of self-interest, properly conceived. The Sustainable Living Plan aims not only to reduce Unilever’s environmental footprint and increase its “positive social impact”, but also to double sales and increase long-term profitability.Since the plan was unveiled in November 2010, Unilever’s shares have risen by more than 40%. And this was during a period when its biggest rival, Procter & Gamble of America, lost its way and ultimately its boss. A recent survey of “sustainability experts” by GlobeScan, a consultant, ranked Unilever first by a wide margin.Unilever defines sustainability broadly. It includes not just environmental factors but improving the lot of customers and workers—its own and those in its supply chain.In 2010, 14% of its agricultural supplies were sourced sustainably by its own definition. Now the share is 48%. Unilever has achieved this partly by backing its suppliers’ innovations
  5. Unilever has signed up to certification schemes run by the Rainforest Alliance, a non-governmental organisation, to improve farming practices in cocoa (used in its ice-cream brands, such as Wall’s and Ben & Jerry’s) and tea (used by Lipton’s). Rainforest Alliance schemes also have an educational component and Unilever has trained more than half the small farmers of Kenya who grow tea, the country’s largest export crop. It has budgeted €4m to expand the scheme to other parts of Africa and to Vietnam. Training small farmers is all the rage with other consumer-goods firms, such as Coca-Cola, SABMiller and Walmart.There is a bigger challenge for the Sustainable Living Plan: it will not be possible to meet its goals without changing customers’ behaviour. Three years ago the company measured the carbon footprint of 2,000 products and found that on average 68% of greenhouse-gas emissions in their life cycles occurred only after they got into the hands of consumers, mostly through the energy-intensive process of heating water (eg, for tea bags or washing powder).
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