tv [untitled] December 20, 2012 12:30pm-1:00pm EST
way more straightforward than what we get from this station rate manipulator the fed now despite ben bernanke in the past suggesting the central bank could do a better job of communicating with the public we still hear a prevalence of fed speak in need of translation here's some well that's circumstance the committee would no longer be increasing policy accommodation its policy stance would remain highly supportive of growth finally the committee today also modified its guidance about future rate policy to provide more information to the public about how it is just a pace to react to evolving economic conditions. not exactly common language and translating fed changes in language gives rise to questions like this here's a tweet from a reporter what does the beige book change from moderate to modest growth mean now i spoke to james savage earlier he was v.p. of public affairs at the cleveland fed from two thousand and eight to two thousand and eleven i now he runs a company building and managing corporate reputations which is why lately he's been
thinking a lot about the fed missteps. so the whole reputation angle of the fed and the efforts the fed has undertaken to better communicate really have been resonating with me lately and we've seen a few struggles and misfires out there and i think that's why we're here today yeah so before we get into some of those let's just talk about the importance of communication for the fed we know that it is extremely important for the fed is it as important as the fed actual monetary policy because the fed can print but attitude and expectations about the economy and the fed abilities are what can cause people to actually lever up and affect some of those behavioral decisions. right exactly and within the federal reserve there's a tremendous sensitivity to how policy is communicated i think it would be fair to say that for the for the fed communication is considered as important as the policy
itself it's what determines whether or not policy will be effective i think that's where we start to see some of the struggles in that these you know these are ph d. economists and professional bankers and people whose natural tendencies may not be to communicate in the most transparent mode no that's that the fed is actually very aware of that and it's very sensitive and has a tremendous effort underway to try to be more transparent but as you and i have discussed separately sometimes it takes interesting forms and doesn't always achieve what they're seeking to achieve absolutely and in terms of said speak and its value what is it because i have to imagine that there is a perceived value to this odd use of language that presents information in such a way that is really unclear like what the substance is it obscures the meaning you
can't really tell what they're saying what is the perceived value of that well ironically i think the effort to be incredibly precise and clear and not move markets. in. by accident it leads in and of itself to a certain complexity of language a certain academic use of language ironically i think it sometimes achieves the opposite of the intent you think ben bernanke thinks he is doing a better job communicating and if other people are telling him the same thing and that's kind of the culture in the fed what does that say about the fed culture about the fed kind of isolation from everybody else. well again if you go back historically there was a time when you know f o m c decisions were not communicated at all that they just sort of were drip fed into the markets and as you said you know chairman
greenspan was was notoriously unclear i think you know ben bernanke has made tremendous progress this way. but it is it goes a bit against the legacy culture within within the fed and every organization has its culture and its means of communicating there is a formality to the the the fed culture the fed style it is a bit self serious and and. not compared to some other central banks but certainly compared to if you look at mark carney who's now moving to the bank of england where you know the media environment around the central bank is is fairly it's not adversarial certainly in gauged and so it's you know as we move towards these less and less formal environments it's going to be incumbent on the fed to really fight against that legacy culture and get out
there and get the message across clearly and just one more because i do want to be able to pick your brain for just one more minute is there an ivory tower type of culture at the fed where there is really kind of one sort of thought not a lot of dissension or differing views i mean we hear about the richard fisher they seem to be few and far between is not that culture at the fed you've worked on anything yeah i think there is a little bit of that i certainly think you know whenever you've got. hundreds of ph d. economists there will be a natural tendency to behave in an academic manner that's not a it's not a criticism but what it does end up doing i think is is. leading towards a certain group think. i do think it is varies from bank to bank from reserve bank to reserve bank but there can be a certain conformity of opinion you're not likely to get as many austrian
economists who are opposed to the idea of central banking if you are working for the central bloc clearly it was clearly well everybody but there they are out there but few and by as you say few and far between right so then the one question if you want to end on that is if there is kind of this groupthink within the federal reserve what kind of relevant conversations about central banking or federal reserve policies or disagreements as federal reserve policies are not being heard are not getting through that maybe are in other countries that you and i was thinking about before the show you say canada these conversations are going on well if there is i think an active discussion in canada even to a certain extent in the u.k. and i think you know here in the us i think part of the issue is. for many years we those who might be looking to who have legitimate criticisms of existing policy who start talking about commodity based currency.
buckets or you know any kind of anything that scene is is going back to the way things were or something that's highly unconventional there's an element that. we don't even want to engage in a legitimate debate on these kinds of topics that kind of gets thrown out with the less credible critics of the fed the conspiracy theorists and all that and i think it's a shame really because i think there is scope we have a we have probably a better policy with sharper discussions and debates but to say there was a difference between the way that conversation is is addressed in the u.s. versus in canada you said in canada there were these dialogues going on whereas in the latter there really there are you know i think within within the. within the canadian political environment the there are certain politicians maxine bernie other members of the conservative government who are you know raising the issues and and. and i think that's leading to a
a legitimate debate say that look we've been through some pretty wild times here you know there there the role of monetary policy the role of fiscal policy and how you know how we manage these things you know if if the fed itself and if other central banks are engaging in unconventional policies as we've seen then it's we're certainly and now at a point where probably there's a lot of scope to put a lot of issues on the table and i think now based in canada which is why we made that comparison there were out savidge there with that interview and also still ahead as the taxicabs system is modeled with regulation we check out a market antidote involving innovation in transportation will speak to car to go as c.e.o. after the break the first your closing market numbers. you
know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you thought you knew you don't i'm tom part was a big. speech or language was i mean some of the well or not at the end. were. news programs and documentaries and spanish what matters to you breaking news a little turn a tip angles kittens stories. you hear.
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i. and any given city whether you're sitting in new york or london where many of our viewers are there is a cab industry and very likely regulations that govern it in new york the medallion system has become a speculative investment with corporate taxi medallions increasing as thousand per cent from their average price of fifty thousand dollars in one thousand nine hundred eighty according to the new york post in stockholm reportedly their system is a little freer market where taxis are allowed to charge whatever price they like and in d.c. where after countless nights waiting in long lines after arriving to the train station with a dearth of cabs and some that couldn't even drive to my address because of the limits of their permits and rules governing them i hopped into a couple cabs to explore our own cities silly regulations and one market antidote we possibly found them. down to the in washington
d.c. like many other cities you can't always get a cab when and where you need one but when you do catch a taxi and meet its driver and my name is not. always right you know it's almost too for you. like nasser he or she can offer up a reason when and why cabs become scarce of them you know. when you're driving cabs so bad at this. and say. too dangerous unsafe and on top of that the business is controlled by a commission that decides everything from how many cabs are on the road to where they can pick up to what they can charge them it into the fair. because the price is going to go out but if it is the same thing and making it difficult to rack up those fares and serve customers are the cabs and city limits. so we just arrived at reagan airport which is just right outside of washington d.c.
and not our cab driver was nice enough to drop us off here only he can't get a return fare back he has to leave and go all the way back to d.c. without anybody in his cab simply because of the regulations. that requires another permit that a driver may or may not be able to get and on this day at this time maybe that makes sense there aren't the lines i've waited in countless times for a cab here when there just don't seem to be enough in lieu of customers there actually seems to be a glut of taxis that are. moving on we need another driver with more complaints about the rules one is what he says is a recent change a prohibition on ride sharing. if. he's in the heart of any of the cab or something and i have another passenger drove all my way i cannot think of why because there is no sure right. perhaps that's one reason why we've started to see more. are cars like this appear on streets a business opportunity for
a company looking for new revenue asking this question what else can we do what are the other streams out there such as ride sharing car sharing working with taxi mysteries the result looks like this what we see here are all the cars available right now it's called car to go when a member can find in reserve a car in this city and in many others in real time through an app and go now we're at the vehicle so what you still vehicle that you take your your member card that was sent to you you just put it up against there the car opens it once you get in you answer a couple of questions. and start your engines now you're off driving to work school do errands whatever for thirty eight cents a minute and a one time membership fee of thirty five bucks park it anywhere in the city that's legal. and you're on your way to go don so first some of the cities travelers and drivers and cabs looking to get around regulations hoping for this oh
i won't buy presents to be given like a book does your meter does your fear thank you very much you haven't is that we may have found a solution just minus the driver. and joining me now is nicholas calling he's president and c.e.o. of car to go north america and we get to pick his brain about this very interesting business model so first of all thank you so much for being on the show good afternoon or nice to be here great so you know let's start because actually anecdotally i mean my producer discovered card ago when we were talking to a colleague who spends a lot of time in georgetown which is an area of d.c. that really doesn't have great access to public transportation and she said oh i just use this thing called car to go so we looked more into it and you know there really is something that feels outdated sometimes about taxi cabs when you're sitting in a taxi cab line and there aren't any for example car to go is actually less expensive by our calculation and then hopping in a cab in some cases and some ways it might be easier more convenient so how exactly
did dialer which from what i understand is who created this company where did this come from getting into this car sharing business absolutely it was actually the idea was born in a group a dime or has in europe called business innovation and they're really charged with looking you know beyond the horizon the transportation of what the future of transportation looks like and quite frankly one of the things that is a common trend across the globe is more and more people are moving in the city centers and with that you can't just keep bringing more and more cars and we're already faced with congestion issues parking issues and cities are very concerned about emissions going forward and the thought of car to go which really it's not the final solution but it sure complements existing public transit whether it's bus or train light rail in some cities and in to some extent taxi cab and other types of car sherie right now what i think is interesting too is when i was talking to one of your marketing directors here when he was in d.c. was he was talking about some of the changes and business which was causing them to look for new revenue so in many ways was this an answer to say
a decline in people wanting as many mercedes because the boom times were over and looking for other streams of revenue no i don't think that's the case at all i think that dion miller is. enough to as a company again to look into the future and where you know it is obviously a revenue stream for the company but it also it's a new business for us in that it's truly a service business the demand for vehicles in especially with the economy starting to pick up we're seeing a resurgence in that obviously but car to go fits i think a little bit different niche than just alleviating any pressure on the manufacturing side with passenger vehicles fair enough so then how does the business model work is it profitable is it subsidized by the parent company currently well currently there is obviously a lot of investment going into it we're confident based on our learnings where we've we've launched our ninth city as of today in seattle and we've been charting our growth pretty well actually right to play and we're very pleased with the
growth that we're experience experiencing we see many more markets that are suitable for cargo and we're in discussions with a number of cities in north america u.s. and canada and my colleagues in europe are in discussions with cities all across the different countries in europe as well as either a lot of opportunity well it's interesting it is international i can see where the opportunity would arise let's talk about logistics because one of the first things that we were you know wondering was about how that kind of is managed how do you manage these cars and the fuel and how to get the cars where they're in demand kind of some of these unique aspects of it and then is there any proprietary or special software that you use in order to manage some of these things you know absolutely our technology we consider it is car sharing two point zero because our technology allows a truly on demand experience for our members they can simply locate a vehicle on their smartphone walk up to it and use their membership card to unlock the doors and as you mentioned in the previous piece put in your pin code answer
a couple questions and you're free to drive and you're not you're not locked into a period of time that you need to return the car nor do you have to lock in to tell us where you're going to return it to so our technology really gives our members that flexibility. that they would otherwise only have with their own vehicle but may choose not to own another vehicle or in a lot of cases we're seeing families that have two vehicles downsizing to one but still having that need for another vehicle and car to go suits that need for them as well what about on the backend i mean just the logistics of getting the cars where they're in demand that maybe they aren't or are managing the insurance and the fueling and keeping them clean and all of that while we do have a service third party service team that we use in the different cities that we have in north america you would be surprised as far as having to actually touch the cars we don't have to relocate a lot of cars simply because there's a natural gravity of these vehicles we see vehicles going from the outlying residential areas in the city in the morning moving downtown to the financial or
shopping and restaurant districts and then in the night they go back to where our members live again back in the residential areas so there's really a nice gravity of how the vehicles flow through the city during the course of the day now if we do run into a case where a vehicle may be sitting for twenty four hours our service team it gives them an opportunity number one to make sure it's clean like you mentioned fueled and then put into what we would consider a hot spot we also give our members the option to fuel the car that there is a fuel card in the car with the pin number we give them a credit for their time and they're free to fill it up that's interesting and are there any additional service says that you either are offering or can see yourself offering auxilary service and based on the backend that you guys have developed you know right now that's a big discussion with my group in north america and of course our colleagues in europe we are looking at some potential other offerings to bring to the north america that would compliment even our car to go and again existing public transit in washington it's a great example we have
a partnership with my taxi that's working very well and that's an app based excuse me taxi to to hail a taxi cab where you can do the same thing if there's not a car to go you push that cabs in your area you can hail it that way through the app it's interesting. and you said that this is not the endgame for cargo there's more to go what does that look like ten years from now i don't want to sound too back to the future but do you see a day where there would be these you know maybe driverless taxis or something transporting people around you know well we're asked to quite a bit especially with some of the developments we've heard on the west coast but sure what the future holds i do see one of the great things about car to go in. their. cars and from our.
don't account for this type of business model whether it's traditional car sharing or car to go car sharing and we do work closely with city and city council to amend the current existing rules to allow our business model operate but quite frankly with we launched six cities in two thousand and twelve and we went through this process and cities are very open to working with us and it seems to be working across the board and we've got a lot of interest out there going into two thousand and thirteen and beyond well thanks for being here and telling us about your business on our show it's interesting thanks so much nicholas called president c.e.o. of car to go north america thank you very much.
medication may resign. or something well they should take why don't we have a thing of the order of pusing that should be a prozac commercial i wouldn't bird flying through the thing. i don't have to buy it you know we've had a very good men are attracted i am loathe to discover that that interview and will not be using our images all right now because i know many privacy folks were all up in arms but you know i would be thrilled so i wanted to make sure we got there they didn't force me to go trapesing last night i said i want to make that segment for you are going to serve america that's right but you're going to get it about in your head about it but what i read the c.e.o. statement and the way i interpreted it is nothing i didn't get an element yeah to get it from and i got basically what i got was all ok crap let's let's weather the storm a second let's see we're going to let's back up a little bit because that happened that happened at netflix and had to happen to facebook in the exact same way and of course one ironic facebook owns that owns
right graham i mean i think one of the one of the incursions it's scary obviously the fact that we're so hooked on the social network so we do well much of our stuff going on we are not also all right it's why i am not only facebook going to the media to present all the things one of the going to do later that's it these guys are so a neat they can lose their customer base so quickly and there are so many opportunities for other can competitors to come in the only thing in network networks now that would give them value so they could lose those users and i think the fear of that could make them be preventative in their approach and and try to just they don't they really cater customers more.
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