The extortionists at Yelp

When I told a friend about East Coast Aero Club’s experience with Yelp, he pointed me to “Yelp Accused of Extortion” in WIRED magazine. Our story: We asked our customers to register with Yelp and post reviews of our airplane and helicopter flight school. About 15 of them did so and the Yelp page was filled with positive reviews. A few days later, however, we looked and 11 of them had been removed. Now it is down to just 2 reviews. Another friend said “Just wait; they are going to call you up soon and ask you to pay them a monthly fee. Then they will restore the positive reviews. Companies with a lot of negative reviews get the same call; if they pay a fee the negative reviews are removed.”

[At first I thought that, because the reviews were entered over just a few days, Yelp might have legitimately thought that they were spam. But then I reflected that they were all from legitimate and diverse email address, from diverse IP addresses (though probably nearly all in the Boston area), and pretty clearly from different pens. A human reviewer would not have concluded that these were spam.]

[Update: I got an email from a reader, who happens also to be a Yelp employee. He says that the allegations are unfounded and that whether or not reviews appear is purely algorithmic, with the main goal of the algorithm being to fight spam. He is not allowed to say much more than what’s published at http://www.yelp.com/business/common_questions on the subject, but obliquely confirmed my suspicion that the algorithm might suppress reviews from people who register, post one review, and leave. The goal of Yelp is to have a genuine community in which people return to the site regularly, so burying the contributions of people who aren’t regulars might not be unreasonable. It is kind of tough on a business like East Coast Aero Club. Apparently our young customers are too poor to eat in restaurants and our older customers are boring, married, and suburban. So none of them were regular Yelp users to begin with.]

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Deval Patrick keeps aviation businesses nervous

One of the things that kept America poor during the Great Depression was the constant fear of new laws and taxes. According to The Forgotten Man it was Adolf Hitler, not FDR, who finally put Americans back to work after about 10 years of unemployment and despair. Our governor here in Massachusetts, Deval Patrick, is apparently trying to channel the spirit of FDR. Every year he proposes to install a new sales tax on aircraft and aircraft maintenance (see this story about his attempt in 2010). Every year businesses draw up plans to move operations and employees to the adjacent tax-free state of New Hampshire (10 minutes away by jet; savings on a Gulfstream would be $3 million, which pays for a lot of 10-minute hops) or develop a more exotic legal structure that will avoid the tax. Every year, so far, the legislature fails to enact the new tax.

The Aircraft Owners and Pilot’s Association calculates that when the tax was repealed eight years ago the result was a 40 percent increase in the number of aircraft based in Massachusetts, which meant that the state was able to collect payroll, income, and property tax from the pilots and mechanics associated with those aircraft as well as fuel taxes and property taxes on new hangars that were constructed.

No doubt it would be delightful if a company bought a $50 million Gulfstream and happily wrote a $3 million check to the Commonwealth, but that is not what happened historically. Companies instead set up flight departments and built hangars in tax-free states and brought the Gulfstream down to Massachusetts when necessary. Companies would lease airplanes from owners based in tax-free states. Companies would charter planes from air carriers based on tax-free states.

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U.S. debt, including pension obligations, is 500 percent of GDP

Buried in this New York Times article is the calculation that U.S. federal government debt, including pension and health care obligations, is about 500 percent of GDP. This may explain why political debates have become acrimonious. Investors and some politically-minded folks have at least a gut feeling that we’re ridiculously overextended. Others rely on the stated fraction of GDP and think the debt is not a big deal. So each side is behaving rationally and rationally believes opponents to be insane.

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The nine-year-old air traffic controllers

The nine-year-old children who came into work with their father at the JFK Tower (story, with audio recording) seem to have captured the public imagination. I’ve been asked my opinion on this subject at least 25 times. A lot of why people are excited seems to stem from a misunderstanding of how the air traffic control (ATC) system works. Folks seem to think that controllers make split-second decisions and pilots react instantly to commands heard on the radio. The reality is that a plane can take off from JFK, lose contact with the controllers due to radio failure, and fly all the way to Los Angeles and land, without ever talking to another controller. The route of flight clearance issued prior to departure should be sufficient to get all the way to LAX.

How about the takeoff clearances issued by the 9-year-olds? A light simple plane might start rolling immediately after receiving such a clearance. A heavy complex plane could be delayed for 15 seconds or longer as the pilots ran final checklists and waited for the engines to “spool up” (going from idle to full thrust takes about 8 seconds on the biggest planes). A controller would have several seconds after issuing the takeoff clearance to cancel it, which would cause the pilot to pull the power back and stop on the runway, possibly after rolling forward a few feet. The opportunities for miscommunication here were very few. The planes had already been told to “position and hold” on a particular runway by the father. At this point a jet is parked on an active runway. The pilots know that they can’t hang out there for very long. The only possible things that could be said to them are “continue to hold” (unnecessary but possibly something ATC would say), “cleared for takeoff”, or “exit the runway and contact Ground”. They already have their assigned departure heading, altitude, and the frequency for the next controller.

The 9-year-olds also told some of the pilots to “contact Departure”. What would have happened if they never received the instruction and stayed with the Tower? Eventually they would have realized that they shouldn’t be talking to Tower at 5,000′ above the ground and called to request a frequency change and/or simply switched to their already-assigned Departure control frequency.

Because ATC needs to train new controllers, each workstation is equipped so that both the trainee and trainer can talk on the same frequency. The trainer can break in and override the trainee. This happens all the time at Hanscom Field, our home airport. The 9-year-olds did their job perfectly, so there was never a need for their father to correct or step in over them, but he could have done so at any time.

There are several aspects to working as a tower controller. One is to figure out an overall flow and sequence that will work for a dozen or so airplanes at a time; this is pretty challenging and involves thinking in four dimensions (3D space plus time). A much simpler task is issuing instructions to make that flow and sequence happen. It seems doubtful that the 9-year-olds were involved in the puzzle solving challenge. They took on part of the instruction-issuing task. As a pilot I am much more nervous when a 25-year-old is being trained at Hanscom than I would have been at JFK talking to these 9-year-olds.

For those who thought that the 9-year-olds were truly doing the job, I was surprised that they did not also question why more than $200,000 per year of their tax dollars were going to pay salary/benefits/pension for each controller. As far as the FAA bureaucracy is concerned, this is the organization that spent $9 billion in the 1980s and 1990s on some new software that had to be thrown out, the most expensive civilian software project failure in history. By making America $9 billion poorer, surely some Americans died as a consequence (being poor is generally less safe than being rich). Yet no FAA employees were disciplined. In fact, all concerned got pay raises, promotions, etc. The same organization is now disciplining the father of the 9-year-olds and his supervisor.

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The Recession in Memphis

Waiting for a new Cirrus alternator, I’ve had plenty of time to roam around downtown Memphis, Tennessee. There are buildings or stores available to rent on every block. Approximately one third of the retail space seems vacant. Not too many folks are out on the streets, with the exception of Beale Street and its tourist blues joints. Overall it would appear that the city has about four times as much land as necessary and perhaps twice as much built space. Rehabbed townhouses a mile or so from downtown seem depressingly isolated; there is just not enough density to form a neighborhood and not enough green space to qualify as a suburb.

If there is an economic recovery happening, it is difficult to see the effect on Memphis.

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Airport security, those little plastic bags for liquids, and legacy airlines versus startups

I flew from Boston to San Antonio, Texas yesterday on American Airlines. I dutifully segregated my liquids (sunscreen and toothpaste) into a quart-sized Ziploc bag and put it in the front pocket of my carry-on. Then I forgot to take it out when going through the Logan Airport security line at 5:00 am. The 25 TSA employees present at the checkpoint failed to notice this infraction (liquids remaining in bag). It occurred to me that this has happened many times before. I have left liquids in my bag and the TSA folks have not harassed me as expected. Are they in fact enforcing this rule?

The second odd thing about the flight was that I arrived early in Dallas. Right next to the gate where I arrived was an American Airlines flight departing for San Antonio. As I was holding a valid ticket from Dallas to San Antonio, I asked if I could get on the earlier flight. The gate agent explained that they had changed their policy and would no longer allow anyone to do this except super double triple platinum award club members. So I walked to another terminal, watched a second AA flight depart for San Antonio (did not try to get on that one), and went over to the gate for my scheduled flight. They’d boarded the first class passengers already and then shut down the ramp due to a lightning storm. We waited for another hour or so and then got on the plane. I got to San Antonio about 2.5 hours later than I could have, at exactly the same cost to the airline.

I’m sure that this policy has a rational business basis, but I’m wondering what it is. The main advantage of a legacy airline, from a consumer’s point of view, is that they are bigger. I may not like the ancient MD-80 planes that American flies compared to JetBlue’s shining new Airbus fleet, but American might be able to get me there faster due to their larger fleet and more frequent schedule. Except because of this policy I know that I won’t derive any benefit from American’s larger size. I will have to wait for my scheduled connection, just as I would with JetBlue, Southwest, or Virgin. How is American benefiting from denying consumers the benefits of their airline’s size? I would naively expect this to hasten their decline in the face of competition from JetBlue and the other startups.

[The purpose of the trip was to help a friend pick up a 2005 Cirrus SR20 that he purchased with 780 hours on the meter. We flew for about 3 hours, just shy of Memphis, Tennessee, just ahead of a line of thunderstorms, before the main alternator failed. The Cirrus electrical system design worked pretty well, with the non-essential systems failing gradually. Thanks to the small backup alternator, we still had the primary flight display, a GPS, a communications radio, and a transponder for a landing on 18R at Memphis International. We shut down at Wilson Air Center where a mechanic came in from home to begin troubleshooting.]

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