Mar 2, 2019

Axios Future

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1 big thing: The battle against cashless stores

Illustration: Sarah Grillo/Axios

Led by big chains like Amazon Go, Sweetgreen, and Shake Shack, U.S. retailers are fast eliminating cash sales. But cities and states across the country are fighting back.

  • They're moving to outlaw cashless stores because, they say, they discriminate against millions of Americans — mostly the poor, elderly and immigrants — who don't use credit cards, Erica writes.

Driving the news: In recent weeks, New Jersey and Philadelphia have passed laws prohibiting cashless stores, and four more cities — Chicago, New York City, San Francisco and Washington, D.C. — are contemplating doing so.

The backdrop: As we've reported, the world is racing to speed up checkout — with China far ahead. Over the last two or so years, Chinese tech giants Alibaba and have wholly eliminated checkout in hundreds of stores. American counterparts Amazon and Walmart, meanwhile, are only starting to debut such technology in a few flagship locations.

  • But unlike in China, local U.S. movements are working to keep cash alive. The trend was first reported by Tim Carmody's Amazon Chronicles.

The big picture: The U.S. still leans on cash. Around 30% of all U.S. business is still done in cash, and not credit cards — some 14 million Americans have no bank account.

And the move to cashless stores — among them, Dos Toros, Bluestone Lane, and Milk Bar — has miffed officials in places like Philadelphia, where city councilman Bill Greenlee says it's fundamentally undemocratic.

"[Killing cash] creates 'us and them' places. I could walk into a coffee shop and pay with my credit card. Someone standing behind me in line with the same amount of money in their pocket, but in cash, cannot buy that product. That seems wrong."
— Philadelphia Councilman Bill Greenlee

What's happening: The anti-cashless laws require all retailers and restaurants to accept cash — with some loopholes (see Bonus, next post).

New York City is watching Philadelphia and New Jersey. There, Councilman Ritchie Torres in December proposed a similar ban, and its supporters believe it will pass within the next six months.

Sweetgreen declined to comment. Amazon and Shake Shack did not respond to emails.

What to watch: "We're not going to see the end of cash anytime soon," says Natalie Bruss of Fifth Wall Ventures.

  • Instead, Bruss sees a workaround — an open lane in which shoppers can avail of reverse ATMs that accept cash and spit out pre-paid cards. Therefore, such stores won't be cashless.
  • A startup, Zivelo, led by a former eBay executive, is already adding such lanes at fast food chains and pharmacies around the country.
Bonus: The ones that got away

Banned? Photo: Smith Collection/Gado/Getty

In an example of the power of Big Tech, as Philadelphia moved to ban cashless stores, Amazon lobbyists went to work and won a carveout that makes an exception for its Go stores — but still outlaws the competition, Erica writes.

  • The loophole permits stores based on membership, like Costco, to go ahead with cashless.
  • Amazon managed to slip in with Prime, which allowed it to take advantage of the membership loophole, Councilman Bill Greenlee's office confirmed to Axios.
  • Sweetgreen is still barred.

That it wriggled out of the law is emblematic of Amazon's outsized market power, says Stacy Mitchell, a critic of the company and a researcher at the Institute for Local Self-Reliance. "Amazon can walk into virtually any city in this country and tell people what to do."

  • Amazon did not respond to emails.

New Jersey's law has loopholes, too. There, car rentals and parking booths are exempt.

What to watch: The current version of New York's bill to ban cashless does not have carve-outs, so it would impact Amazon Go.

2. AI will change or eliminate 130,000 federal jobs
Expand chart
Data: The Partnership for Public Service; Chart: Axios Visuals

In the next decade, AI is likely to eliminate work — and in some cases entire jobs — currently being done by more than 130,000 federal agency employees in more than 80 occupations.

Retraining hundreds of thousands of other federal government employees will take time and resources that haven't yet been allocated on a large scale, writes Max Stier, president and CEO of the Partnership for Public Service.

By the numbers: A new report from the Partnership for Public Service and the IBM Center for the Business of Government found that this shift is likely to impact agencies with financial responsibilities — including the Department of the Treasury, the IRS, the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation — where technology could be used for data analysis.

Only about 3% of the 130,000 jobs are blue collar.

What we're watching: President Trump recently issued an executive order urging agencies to promote AI research and development in addition to making government data widely available to industry and reducing regulatory barriers to innovation.

  • The Pentagon has taken an early lead on this, and already has an AI strategy to transform functions and maintain U.S. preeminence on the battlefield.
  • Yes, but: Understanding and working with AI will require technical, digital and data literacy that much of the workforce currently lacks. There is currently no cross-agency plan in place to retrain the federal workforce.

Go deeper: Reskilling workers due to automation will cost $34 billion

3. What you may have missed

Branicki Palace in Poland. Photo: Getty

Got lost this week? No problem. Catch up on the best of Future.

  1. Special report on debt: The glib new gospel
  2. Bowling and belonging: Assuaging public anger
  3. Battling the online mob: How to weed out disinformation
  4. The great American robot push: U.S. in the global tech race
4. Worthy of your time

Illustration: Rebecca Zisser/Axios

Amazon's "everything store" gamble (Jason Del Rey — Recode)

The video game subscription wars (Sara Fischer — Axios)

The food threat of warming oceans (Kendra Pierre-Louis — NYT)

Burning digital books (Nick Robinson — Digital Future)

Yeasty marijuana is the future of weed (Angela Chen — The Verge)

5. 1 freezing thing: Winter in Siberia

Photo: Alexey Vasilyev

In the winter, highs in one corner of Siberia hover around -40º Fahrenheit.

Kaveh writes: Around 200,000 people make their lives in this brutal cold in the city of Yakutsk. One resident, the photographer Alexey Vasilyev, chronicles life in his frigid hometown. He shot the photo above, and several more you can see on Wired.

  • The city is known to Russians as the "city on legs," Wired reports, because many houses are on stilts, and sewage, water, and utility lines run above ground.
  • "Six months of snow and ice — not everyone wants that kind of life for themselves," Vasilyev tells Wired. "But for many people, including me, Yakutsk is a comfort zone."