Tag Archives: logistics

The Art-World Insider Who Went Too Far – The New Yorker

Yves Bouvier made hundreds of millions of dollars selling paintings. Was it fraud?

Source: The Art-World Insider Who Went Too Far – The New Yorker

The Geneva Freeport, which may be the world’s most valuable storage facility, consists of seven beige warehouses and a large grain silo in La Praille, an industrial zone a short tram ride from the city’s lakeside panorama of banks and expensive hotels. One recent morning, rain was falling on the chain-link fence that runs through the property, and snow was visible on the mountains to the south. Iris scanners, magnetic locks, and a security system known as Cerberus guard the freeport’s storerooms, whose contents are said to be insured for a hundred billion dollars, but the facility retains a blue-collar feel. There were signs to the showers. Men stood around in aprons and smoked. Everything about the place tells you to look the other way.

The freeport began, in 1888, as a group of sheds near the waterfront. It was one of countless similar spaces around the world, where customs authorities allow duties and taxes to be suspended until goods reach their final destination. In time, however, the Geneva Freeport became legendary. It grew very large, and its official status—the freeport is eighty-six per cent owned by the local government—and kinship with the opaque traditions of Swiss banking made it a storage facility for the international élite. Under the freeport’s rules, objects could remain in untaxed limbo, in theory, forever. Treasures came and they did not leave. A generation ago, these goods were cars, wine, and gold. More recently, they have been works of art.

Yves Bouvier was among the first to see the potential of the freeport as an adjunct to the art market. A blond, compact man of fifty-two, Bouvier is the owner of Natural Le Coultre, a moving and storage company and the largest tenant in the complex. For more than a hundred years, the firm shipped everything from citrus fruit to industrial machinery; during the First World War, Natural Le Coultre supplied prisoners of war with Red Cross food parcels. Since 1997, however, when Bouvier took over the firm from his father, it has handled only paintings and sculpture. Bouvier refurbished the company’s premises at the freeport, which include two showrooms, and encouraged a framer to open a workshop in the building. Since 2013, Natural Le Coultre has rented more than twenty thousand square metres in storage space and has had well over a million objects in its care.

Every item passes through a single packing room, where it is unwrapped, photographed, and studied for damage. On the morning I visited, a Bob Dylan painting had arrived, along with a Picasso bronze from Greece. There were hammers hanging in order of size, and a stack of crates containing works by Léon Pourtau, a minor Impressionist. Ramon Casais, who has worked in the freeport for the past thirty years, agreed to show me a corridor of locked storeroom doors only after he had gone ahead to make sure there was absolutely nothing to see.

Specialist logistics companies, like Natural Le Coultre, are the quiet butlers of the art world. They operate deep inside it but are not quite of it. When an artist has made a sculpture out of butter, or scalpels, or half a passenger jet, it is up to a shipper to get it from Hong Kong to Miami in the same condition as when it left, and to make no fuss. To do their work, shippers must know many things. They are given records of private sales and the names of collectors, in order to navigate customs. In the course of a typical day, stopping by the homes of dealers and the back rooms of galleries, they learn who answers the door and the phone number of the assistant, and see the other pictures on the walls. The shippers’ professional indifference means that they are often in the room at moments of extreme commercial sensitivity. “Imagine that I am in Basel and I need to show a client a painting,” Thomas Seydoux, a dealer and a former chairman of Impressionist and modern art at Christie’s, told me. “Ninety-nine per cent of the time, you are going to show it with a transit agent.”

This intimacy means that, once you find your shipper, you tend to stick with him. Relationships last for decades, built on trust and a sense, usually unspoken, of absolute limits. In sixteenth-century Venice, diplomats were instructed to employ illiterate valets, who would be unable to read any secret documents they were asked to carry. A transit agent “should by default be a blind man,” Seydoux told me. “That is the very nature of his job.” Everything works fine, as long as people stay within their allotted roles. Seydoux said, “You can’t win somebody’s trust by saying you are blind and then open your eyes.”

[…]

Bouvier speaks an imperfect, gestural English, but he explained that becoming a shipper allowed him to immerse himself in “the feeling and the difficulty of art.” He had no formal training, just what passed through his hands. “It started with the touch,” he said. “You have all the panoply: small, huge, it’s with value, with no value. You have everything, so you learn.”

Shipping also introduced Bouvier to the complicated lives of the rich—their taxes and their divorces—and the other ancillary trades that help the art world go around: restorers, framers, hired experts, operators of tiny galleries in Paris clinging on from sale to sale. He realized they all had needs of their own.

[…]

Bouvier financed purchases that dealers couldn’t afford on their own. He sorted out cash flow and bills. He became adept at setting up offshore companies—Diva, Blancaflor, Eagle Overseas—to enable galleries to buy specific works and mask the identity of other investors in a transaction.

[…]

“When you buy, it is always to sell,” he said. “You always have the buyer before you have the seller.” On August 16, 2000, he bought a Paul Gauguin landscape, “Paysage aux Trois Arbres,” from Peintures Hermès, a Swiss gallery associated with the Wildenstein family of art dealers, for $9.5 million. Two weeks later, he sold the picture to Mandarin Trading, a Bahamas-based art fund, for $11.3 million, making a profit of sixteen per cent. Mandarin Trading later sued the Wildensteins for fraud, alleging that it was the victim of a scam to inflate the value of the painting. The case was dismissed in 2011. I once asked Bouvier what drew him to particular propositions. “In the mountains, it was the same,” he replied. “I go in the place which is the most complicated, the most risky place.”

[…]

Building a collection involves a thousand small, complex tasks: storage, shipping, condition reports, restoration, making copies, framing, due diligence, insurance. For these services, Bouvier would charge an extra two per cent of the purchase price of any painting he sold them.

[…]

Major buyers typically build collections through several dealers and auction houses, knowing that they will be charged the maximum the market can bear. To protect their interests, many also employ an art adviser or consultant, who works for them and is paid a retainer or a commission—in the region of five per cent—on the works that they acquire. Very rarely are all these roles performed by one person.

[…]

The relationship between art dealer and collector is particular and charged. The dealer is mentor and salesman. He informs his client’s desires while subjecting himself to them at the same time. The collector has money, but he is also vulnerable. Relationships start, prosper, and fail for any number of reasons. It is not always obvious where power lies. Over time, each one can convince himself that he has created the other.

[…]

Access to the oligarch was strictly controlled. “Besides his lawyer and his hairdresser, I don’t think he sees normal people at all,” Rappo once told me.

[…]

Hidden behind company names and, often, dealers working on his behalf, he tended to disguise his role in transactions. “To be invisible is the best way to make business,” he said.

[…]

The income from his dealing enabled Bouvier to expand his storage facilities. For several years, he had been looking to build a freeport outside Europe similar to the one in Geneva. In 2005, he settled on Singapore. In 2008, Bouvier decided to base himself in the country as well. The Singapore Freeport, which required new legislation to be passed by the national parliament, opened in 2010. Bouvier put Tony Reynard, his childhood friend, in charge. The freeport, which abuts the city’s international airport, is an over-engineered hybrid of vault and temple. It cost Bouvier a hundred million dollars to build. At first, no bank would finance it. “They thought we were loonies,” Reynard said.

A freeport offers few tax advantages and scarcely any security features that a standard bonded warehouse cannot provide. But Bouvier’s development in Singapore carried within it two ideas. The first is that freeports will become hubs in the sixty-billion-dollar international art market, destinations in themselves—places for scholars, restorers, insurers, art-finance specialists, consultants, and dealers. The second idea is that the ultra-rich don’t want just another warehouse. “If you buy a painting for a hundred million, what do you want? You want to feel well,” Bouvier said. “Why else do people travel in first class?”

In Singapore, Bouvier specified each component, from the fire-resistant walls, coiled through with steel, to the height of the doors: three metres, to admit the largest contemporary installations. “I chose everything,” he said. “The door handles. I’m obsessive about that.” He used a lighting artist named Johanna Grawunder, whose work he collects, and commissioned an enormous sculpture, “La Cage sans Frontières,” by the Israeli artist and designer Ron Arad, to stand in the atrium.

The opening of the Singapore Freeport, and its immediate success—Christie’s took a space—brought Bouvier international attention. The facilities tapped into a fascination with the tastes and financial shenanigans of the one per cent. Bouvier opened a second, slightly smaller freeport in Luxembourg, in September, 2014, and The Economist noted his role in the development of “Über warehouses for the ultra-rich.” He made plans to replicate the model in Dubai and to act as a consultant for a vast new project in Beijing.

[…]

He bought a Gauguin that had not been sold since the Second World War and a lost Leonardo da Vinci, “Salvator Mundi,” that had been sensationally rediscovered. On its display at the National Gallery in London, the da Vinci became one of the most talked-about pictures in the world. According to Rappo, Rybolovlev wanted it for the wall of his study. Bouvier brought the painting to the Russian’s apartment in New York, where, Rybolovlev told me, he experienced a profound emotional reaction—“a vibration”—in its presence. He bought the picture for $127.5 million.

[…]

ery transaction at the top end of the private art market involves a chain, a cast of characters that stretches from the buyer to the seller: finders, agents, lawyers, lenders. It is rare for the principals to know everyone involved, and it can be improper to ask. Bouvier was a master at making chains—short, long, simple, or twisted, depending on the deal. If he knew that a seller would prefer an approach from an auction house, he would send someone, usually from Sotheby’s. Otherwise, Bouvier would send an intermediary. Often this was a Corsican named Jean-Marc Peretti, who was investigated for running an illegal gambling circle in Paris in 2009. Bouvier is attracted to outsiders in the art world. “The best people are just good businesspeople—they are butchers,” he said.

[…]

Bouvier told me that such blurring of who exactly owns what, and when a transaction occurred, is commonplace in the art market. When you walk into a gallery, you never know what the dealer is selling on consignment, what he owns outright, or how prices have been arrived at. “It is not lying,” he said. “There is always a part of the story which is true.” But Bouvier was ruthless in exploiting what was left unsaid. “Joueur de Flûte et Femme Nue,” which Bouvier sold to Rybolovlev for twenty-five million euros, he had bought the day before for just three and a half million. He made a sixty-million-dollar profit on the Klimt.

[…]

In the early nineteen-fifties, Rothko began experimenting with powdered pigments, solvents, and egg to lend extra force to the colors in his canvases. He wanted viewers of his pictures to feel as if they were inside them. When Bouvier drew back the curtains, the painting seemed to explode in front of his eyes.

[…]

Around this time, I spent a day at the Luxembourg Freeport. The building is made of sixty-five hundred tons of concrete. Heavy doors are locked with six-digit codes.

[…]

As he spoke, Bouvier kept four Nokias and a BlackBerry within reach at all times. When one of them rang, he would turn it over, to see which realm of his dealings the inquiry was coming from. He reminded me, in a not entirely unlikable way, of an animal busy in carrion, like a jackal.

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I Want It, and I Want It Now — It’s Time for Instant Gratification | Re/code

I Want It, and I Want It Now — It’s Time for Instant Gratification | Re/code (part 1)

It Takes a New Kind of Worker to Make “Instant” Happen | Re/code (part 2)

Can “Instant” Become a Viable Business? | Re/code part 3)

Instant Gratification Pioneers Kozmo, Webvan, Pets.com Still Believe | Re/code (part 4)

Living in an Instant World: What’s Next After Now? | Re/code (part 5)

Carrying two iPhones that beep out assignments throughout the day, Lyons works for four different app-enabled bike-courier services: WunWun, UberRush, Zipments and Petal by Pedal. He does about 25 to 30 deliveries per day, which adds up to about 50 miles, including the commute.

When he first got started last year, Lyons tried working for traditional bike-courier services where he would make $3 per delivery. “It was outrageous,” he says. “They treat you like an animal.”

Some of the newer services Lyons works for are subsidized. When it first started, Uber was giving away free courier service for its UberRush local delivery trial. Lyons says that demand has dropped a bit since the initial promos wore out.

WunWun — which has the insane premise of deliveries from any store or restaurant in Manhattan within an hour, for free — keeps Lyons the busiest.

Lyons claims WunWun’s system of working for tips, which are suggested within the app at 30 percent, somehow actually works. “You never really get snubbed out on a tip,” he says.

By literally working his butt off, Lyons thinks he will make between $45,000 and $60,000 this year.

[…]

“If people wanted it so badly, why did it not exist?” he says. “It was too darned expensive, and it was not sustainable. Even in 2010, a business like ours would be incredibly difficult to start because not enough sections of the population had smartphones.”

Still, Xu will admit that Palo Alto might not be the most representative test market in the world. As we drive to pick up the delivery, we pass three Teslas parked in a row in the shopping-center parking lot. “Only in Palo Alto,” he says.

But it’s bigger than Palo Alto. It’s bigger than San Francisco or New York. Take all these stories together and the larger point is: The business of bringing people what they want, when they want it, is booming.

A decade ago, we got iTunes, and the ability to buy a song bought and delivered with the push of a button. Then Facebook helped us stay in touch with our spread-out friends and family from the comfort of our couch. Then Netflix DVDs started coming over the air instead of to our mailboxes. Now it’s not just Web pages that we can load up instantly, it’s the physical world.

Not to neglect the important historical contributions of pizza joints and Chinese restaurants, but the groundwork for what you might call the instant gratification economy was laid by Amazon, which spent years building up its inventory, fulfillment infrastructure and, most importantly, customer expectations for getting whatever they want delivered to their doors two days later.

Then Uber came along and established the precedent of a large-scale marketplace powered by independent workers and smartphones. After that started to work, every pitch deck in Silicon Valley seemed to morph overnight into an “Uber for X” startup.

On the one hand, this is a positive development. As startups merge online expectations with offline reality, the Internet is becoming more than a glowing screen drawing us away from the real world. On the other hand, instant gratification tempts us to be profoundly lazy and perhaps unreasonably impatient.

[…]

As for whether there’s demand, forces are converging to fulfill the notion of what some pundits label “IWWIWWIWI.” That is, “I want what I want when I want it.” It’s not the easiest acronym to get your tongue around — but it’s pretty to look at, and it’s right on the money.

[…]

Yarrow thinks we’ve become conditioned for impatience by technology like Internet search and smartphones. “Today, we have almost no tolerance for boredom,” she told me. “Our brains are malleable, and I think they have shifted to accommodate much more stimulation. We’re fascinated by newness, and we desire to get the new thing right away. We want what we want when we want it.”

[…]

Someone had told me the day before that one way to think about all this instant gratification stuff is that it basically brings rich-people benefits to the average person.

In his view, the magic of Uber and services modeled on Uber is that they help you value your time the way a rich person would, without spending your money the way a rich person would.

[…]

For decades, books and TV shows planted seeds of desire for instant gratification in impressionable minds. But across many of these stories about suburban genies and witches, magic wands and technology of the future, there’s a shadow side to getting what you want when you want it. The princesses always seem to run out of wishes before they get what they really need. Their greed is their doom.

“Don’t care how, I want it nooow,” sings greedy little Veruca Salt, right up until she falls into Willy Wonka’s garbage chute, never to be seen again.

[…]

In Pixar’s wistful animated sci-fi story “Wall-E,” the people of the future zoom around in hovering chairs in a climate-controlled dome, with robots refilling their sodas. Their bodies are so flabby they can’t even stand. It’s the ultimate incarnation of the couch potato.

[…]

The most important reason that this is happening now is that workers have smartphones. After a briefer-than-brief application process, companies like Uber hand out phones to workers — or just give them an app to download onto their personal devices — and suddenly, for better or worse, they’ve got a branded on-demand service.

Over and over again, startups in the instant gratification space tell me that the most crucial part of their arsenal is an app to help remote workers receive assignments, schedule jobs and map where they are going.

In large part because they are powered by a mobile workforce, instant gratification startups avoid much of the hassle and expense of building physical infrastructure.

“Remote controls for real life” is how venture capitalist Matt Cohler described mobile apps like Uber and the food-delivery service GrubHub two years ago — because their simple interfaces summon things to happen in the physical world.

Today, that real-life remote control feels even more like a magic wand. At a lunch meeting, investor Shervin Pishevar pulls out his phone, opens the Uber app and sets his location to Japan. “If I push this button right now,” he marvels, “I’m going to move metal in Tokyo.”

[…]

He describes this as a boomerang back to a village economy. After years of trends toward suburbs, big-box stores and car ownership, smartphones could be helping us get back to where we came from. The combined forces of urbanization, online commerce and trust mean that people can efficiently share goods and services on a local level, more than ever before.

[…]

Caviar, which was founded on the premise that “no good restaurants in San Francisco deliver,” became profitable within three months of launching. It has a much snazzier list of restaurants than GrubHub, including Momofuku in New York and Delfina in San Francisco.

Caviar CEO Jason Wang says his startup plans to soon drop delivery fees to $4.99 from $9.99. It pays drivers $15 per delivery and takes a cut of up to 25 percent of each order, depending on the restaurant. Even after the price cut, “We’ll still make money, because our margins are very good,” Wang says.

[…]

Uber is a company that owns nothing. It connects available drivers and their cars to people who want to be their passengers. By juicing supply with surge pricing and demand with discounts, Uber is able to create — out of thin air — a reliable service that exists in 140 cities around the world.

Without fail, instant gratification startups say they will win because they are smart at logistics.

Describing his business, Instacart founder and CEO Apoorva Mehta says, “It really is a data-science problem masked into a consumer product.”

[…]

DoorDash’s Xu describes his purpose as a machine-learning problem: Discovering “the variance of the variance” so his algorithm can reliably estimate prep and delivery time based on factors like how long a type of food stays warm, what a restaurant’s error rate is (the norm is 25 percent) and how fast a particular driver has been in the past.

Uber aims to match up a driver and passenger as quickly as possible. Food delivery is more complicated, according to Xu.

“It’s almost never the driver that’s closest to the restaurant when the order is placed,” Xu says.

[…]

a mobile medical-marijuana delivery startup called Eaze launched in San Francisco. Not only was Eaze open for business, it was open for business 24 hours a day.

It Takes a New Kind of Worker to Make “Instant” Happen | Re/code (part 2)

it can be too easy to forget that people make “instant” happen. And, generally, these people are not a traditionally stable workforce. They are instead a flexible and scalable network of workers — “fractional employees” — that tap in and tap out as needed, and as suits them.

[…]

The smartphone is at the center of the sharing economy. Every company mentioned in this series on the instant gratification economy runs on worker smartphones. GPS, texting and mobile-app notifications are the ways to make flexible work actually work.

[…]

It’s very common for people to pick up gigs from multiple services — in the morning, grab some grocery orders on Instacart; then when you get tired of lifting large bags, run a shift during Sprig’s prime lunch hours; then when you get lonely from ferrying around inanimate objects, sign into Lyft to interact with an actual person.

NYU business school professor Arun Sundararajan’s summer research project is counting the number of jobs created by the sharing economy. He doesn’t have an estimate yet, but he points out that the U.S. workforce is already 20 percent to 25 percent freelance.

Sundararajan says he sees a lot of good in the sharing economy. “It will lead people to entrepreneurship without the extreme risks.” He thinks of platforms like Uber as gateways. “It’s even easier than finding a full-time job, which is easier than freelance.”

Can “Instant” Become a Viable Business? | Re/code part 3).

Redefining delivery for a new era of customers who want everything right away requires rethinking operations. By focusing attention on creating a powerful logistical system, and tying into the “sharing economy,” many of the new crop of startups in the on-demand space are trying to offer faster service at a much lower operational cost.

And so the young players in the instant gratification economy are ferrying cargo across town via crowdsourced workers.

Usually, these are independent contractors, who decide when they want to work, drive their own vehicles, receive directions about where they need to be via smartphone — and cover the cost of their own parking tickets. The new buzzword for this is “fractional employment.”

[…]

Deliv is trying to do deliveries of almost anything and everything later that day, for as little as $5.

[…]

Crowdsourced drivers pick up batches of orders, and then take them out to people’s homes.

“I don’t own trucks, I don’t pay for drivers I don’t use, I don’t pay for hubs,” Carmeli says. “The malls are my hubs.”

[…]

Amazon said last year that more than 20 million members signed up for its two-day delivery service, Prime, which now costs $99 per year. While that’s a small number in the grand scheme of things, the high-spending habits of the group — estimated to be more than twice as much as regular Amazon customers — are having a magnetic effect on the rest of the industry.

A skunkworks team at Google developed what became Google Shopping Express last year, by putting the Amazon Prime model under a microscope. According to a source familiar with the project, the biggest lesson was that it’s worth investing ahead of where the market might be today.

Which is to say, many people still don’t know they want same-day delivery, because today they think same-day delivery means fuss, friction and expense. But if you make something fast and easy, consumers will come to appreciate it — and maybe even pay for it. So the upfront investment is worth it.

“It’s better to build volume first, than to launch with a ‘gotcha,’” the source says.

That’s the hypothesis, anyway.

And Google isn’t testing the last part of that hypothesis — charging people money — yet.

It is currently subsidizing six-month trials of unlimited free delivery. In fact, the company is throwing something like $500 million at Google Shopping Express.

Competing with that kind of budget is a scary prospect for startups.

[…]

The scrum now includes two Ubers for home cleaning, a few Ubers for handypeople, at least three Ubers for massages, five Ubers for valet parking, a couple of Ubers for laundries, an emerging group of Ubers for hair and makeup, and so very many Ubers for food.

[…]

Could you actually make a business out of offering same-day delivery — for free? Permanently, not as a promotion.

[…]

WunWun, promises to buy anything from any store or any food from any restaurant in Manhattan, parts of Brooklyn and the Hamptons, and deliver it to any place in that same zone. It’s free.

[…]

Hnetinka was inspired by an April 2013 investment memo from Jefferies called “Same-Day: The Next Killer App,” which made two big points: 1) Free shipping has become a “must-have” in e-commerce. Half of consumers abandon online shopping carts without it; and 2) there’s the opportunity to improve on that service by making it same-day.

[…]

For today, WunWun is making money by taking a slice of tips, and by getting discounts from retailers it spends a lot of money with that it doesn’t pass along to customers.

Tomorrow, WunWun will try to create the offline equivalent of search advertising, Hnetinka says.

Stores will be able to bid to be the supplier for WunWun orders, whether tennis balls, ChapStick or Yankees hats.

“That’s when WunWun really starts to make a lot of money,” Hnetinka says. “We have created the largest demand funnel. We’ve brought together convenience of ordering online with immediacy of offline. So we’re not talking about profitability margins, we’re talking about marketing budgets.”

Instant Gratification Pioneers Kozmo, Webvan, Pets.com Still Believe | Re/code (part 4)

at that moment in time, it seemed like all you had to do was pick a noun, add “.com,” and you were in business.

As a sign of the times, one company called Computer.com spent half its $5.8 million in venture capital airing Super Bowl ads on the day it launched a site purporting to teach people about using computers.

And there were parties, legendary parties, where the likes of Elvis Costello and Beck and the B-52s played, sponsor banners bedecked the walls, and many of the revelers collected their mountains of swag while having no idea which company was even throwing that night’s bash.

Even if Kozmo and its cohort had a chance at a business model that worked, they were all spending more money than they could possibly earn on advertising and parties and weird promotional tie-ups to return movies at Starbucks.

As we all know, that boom went bust in 2000. The period’s most famous flameouts — Pets.com, Urbanfetch, Kozmo, Webvan, even Computer.com, somehow — were all gone by 2001. What’s left — a cautionary tale and some mascot dolls for sale on eBay.

[…]

Same-day service is the single-biggest wave in e-commerce, Wainwright says. The single best experience she had shopping online was when she forgot to pack a certain special black cashmere sweater before flying to New York for a business trip.

Wainwright says she realized the sweater was missing at 11 pm, when she unpacked her bag at the hotel. But it was still posted on the online retailer Net-A-Porter, where she originally bought it, so she placed another order and it was delivered to her office at 10:30 the next morning by a deliveryman in a bellboy suit bearing an iPad for her signature.

“It was absolutely the most amazing thing,” Wainwright says. “It was like $25, it was nothing. Now, the sweater wasn’t cheap — but it was the exact same sweater I had left on my bed.”

Living in an Instant World: What’s Next After Now? | Re/code (part 5)

Jennings has set up a virtual Google Voice number attached to his doorbell so he can let people into his entryway from his phone when he’s not home.

“Say you run out of toothpaste in the morning, you can order it, and then it’s ready for when you brush your teeth at night,” he says.

“The majority of the time, there’s no interaction,” Jennings says, meaning he doesn’t have to say hello to a delivery person or sign for a package.

And in the future, people may be taken out of the delivery equation altogether.

That future is coming sooner than you think. Two years ago, the geek world went wild for an idea called Tacocopter. “Flying robots deliver tacos to your location,” said its website. “Easy ordering on your smartphone.”

[…]

“It wouldn’t surprise me to see that the regulations that now limit such uses of drone technology will almost certainly remain in effect much longer than the technological limitations remain a hurdle,” wrote Mike Masnick.

Eight months ago, Amazon upped the Tacocopter stakes with a promo video for Amazon Prime Air, showing a hovering robotic aircraft depositing a package on a suburban patio. It was a marketing stunt designed to jumpstart the holiday shopping season.

Or was it?

In July, Amazon wrote to the FAA asking for permission to test flying commercial drones outside at speeds of up to 50 miles per hour. The company said it hopes to deliver packages weighing five pounds within 30 minutes of orders being placed.

[…]

“A lot of things fundamentally change,” he says. “Does the architecture of homes change because there’s more space when you don’t need garages and kitchens? Do you really need a grocery store? You shouldn’t use all that real estate in a city for giant parking lots, you should push a button and be able to get what you want delivered, like Instacart.”

He continues. “And then you argue, is there a world where you have Munchery [another San Francisco food creation and distribution service] delivered to a restaurant that’s not really a restaurant, but it’s a … it’s a front-end. It’s a beautiful spot with a beautiful view, and it doesn’t need a kitchen, just have a few tables for a sit-down dinner.”

This train of thought has taken him to a new place. “You know, I hadn’t thought about that,” Pishevar says. “It’s just a … a distributed table. And then someone would come serve you.”

[…]

A popular justification for all this food-startup fundraising is frequency: Most people eat three times a day, at least.

No, really, that’s what every venture capitalist will remind you. This market is an opportunity because it ties into existing daily habits. People eat more often than they need to Uber across town. And so, the biggest opportunity in “instant” is food.

[…]

Sure, making food is not novel. The innovation here is making food that ties into smart logistics systems that match supply and demand, and coordinating crowdsourced workers so that meals arrive so fast it seems like magic.

“We’re mass-producing the same meal for all these people. We get economies of scale that no restaurant will ever have because of the physical location. Whereas, we can serve the whole Bay Area with the same supply.”

This is not just a restaurant, says Tsui. Combining the core mobile functions of location and real-time makes for a fundamental shift beyond what other mobile apps — besides Uber — are doing.

[…]

Especially for those who live in the cities well served by these services, it’s probably time to start thinking about what deserves to be slowed down, and what things we’d prefer to wait for and savor. Either that, or the inexorable march toward convenience will bring us ever closer to fulfilling the prophecy of those shapeless “Wall-E” couch potatoes, who have trouble standing up after sitting on the couch for so long.

But beyond instant — what comes next?

It’s probably making those brilliant on-demand logistics systems even more brilliant, anticipating our wants and needs before we even have them, and starting to send things our way before we push the button.

Both Amazon and Google are already working in this direction. Or maybe instead of tacos and drones, we’ll all just get 3-D printers, so we can replicate our meals at the table, just like Jane Jetson.

And maybe then Veruca Salt would just calm down.

What Do Chinese Dumplings Have to Do With Global Warming? – NYTimes.com

What Do Chinese Dumplings Have to Do With Global Warming? – NYTimes.com.

The Sanquan factory in Zhengzhou, China, which produces frozen dumplings and frozen glutinous rice balls. Massimo Vitali for The New York Times

‘In Sichuan, we’re eaters,” said Chen Zemin, the world’s first and only frozen-dumpling billionaire. “We have an expression that goes, ‘Even if you have a very poor life, you still have your teeth to please.’ ” He smiled and patted his not insubstantial belly. “I like to eat.”

[…]

Chinese pot stickers and rice balls are traditionally made in enormous batches, in order to justify the effort it takes to knead the dough, roll it out, mix the filling and wrap by hand a morsel that stays fresh for only one day. Because of his medical background, Chen had an idea for how to extend the life span of his spicy-pork won tons and sweet-sesame-paste-filled balls. “As a surgeon, you have to preserve things like organs or blood in a cold environment,” Chen said. “A surgeon’s career cannot be separate from refrigeration. I already knew that cold was the best physical way to preserve.”

[…]

Using mechanical parts harvested from the hospital junk pile, Chen built a two-stage freezer that chilled his glutinous rice balls one by one, quickly enough that large ice crystals didn’t form inside the filling and ruin the texture. His first patent covered a production process for the balls themselves; a second was for the packaging that would protect them from freezer burn. Soon enough, Chen realized that both innovations could be applied to pot stickers, too. And so in 1992, against the advice of his entire family, Chen, then 50, quit his hospital job, rented a small former print shop and started China’s first frozen-food business. He named his fledgling dumpling company Sanquan, which is short for the “Third Plenary Session of the 11th Central Committee of the Communist Party of China” — the 1978 gathering that marked the country’s first steps toward the open market.

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Today, Sanquan has seven factories nationwide. The largest, in which Chen and I were chatting, employs 5,000 workers and produces an astonishing 400 tons of dumplings a day. He showed me the factory floor from a glass-walled skywalk; below us, dozens of workers — in hooded white jumpsuits, white face masks and white galoshes — tended to nearly 100 dumpling machines lined up in rows inside a vast, white-tiled refrigerator. Every few minutes, someone in a pink jumpsuit would wheel a fresh vat of ground pork through the stainless-steel double doors in the corner and use a shovel to top off the giant conical funnel on each dumpling maker. In the far corner, a quality-control inspector in a yellow jumpsuit was dealing with a recalcitrant machine, scooping defective dumplings off the conveyor belt with both hands. At the end of the line, more than 100,000 dumplings an hour rained like beige pebbles into an endless succession of open-mouthed bags.

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An artificial winter has begun to stretch across the country, through its fields and its ports, its logistics hubs and freeways. China had 250 million cubic feet of refrigerated storage capacity in 2007; by 2017, the country is on track to have 20 times that. At five billion cubic feet, China will surpass even the United States, which has led the world in cold storage ever since artificial refrigeration was invented. And even that translates to only 3.7 cubic feet of cold storage per capita, or roughly a third of what Americans currently have — meaning that the Chinese refrigeration boom is only just beginning.

This is not simply transforming how Chinese people grow, distribute and consume food. It also stands to become a formidable new factor in climate change; cooling is already responsible for 15 percent of all electricity consumption worldwide, and leaks of chemical refrigerants are a major source of greenhouse-gas pollution. Of all the shifts in lifestyle that threaten the planet right now, perhaps not one is as important as the changing way that Chinese people eat.

In the United States, the first mechanically cooled warehouses opened in Boston in 1881. America’s Chen Zemin was a Brooklyn-born entrepreneur named Clarence Birdseye, who invented a fast-freezing machine in 1924 to replicate the taste of the delicious frozen fish he enjoyed while traveling in Labrador. (Birds Eye brand frozen vegetables still bear his name.) In the 1930s, the African-American refrigeration pioneer Frederick McKinley Jones designed a portable cooling unit for trucks; by the 1950s, pretty much everyone in America had a refrigerator, and Swanson was delighting working wives with a frozen “sumptuous turkey dinner” that “tastes home-cooked.”

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Americans have become so used to associating refrigeration with freshness that soy-milk manufacturers have actually paid extra to have their product displayed in a refrigerated case, despite the fact that it is perfectly shelf-stable. By contrast, the Chinese didn’t build their first refrigerated warehouse until 1955. And even as skyscrapers, shopping malls and high-speed trains have transformed life in China, the refrigerator represents, on an individual level, a significant step forward. Every Chinese person over age 30 whom I spoke to could remember wistfully the moment he got his first home refrigerator, with the exception of those who still don’t have one.

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Leading up to the 2008 Olympics, the Beijing municipal authorities embarked on an ambitious program of “supermarketization,” designed to get meat and vegetables out of the open-air “wet” markets — where food is cooled by standing fans and the occasional hose down from the cold tap — and safely behind sneeze-guards in modern, climate-controlled grocery stores.

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In practical terms, tax breaks, subsidies and preferential access to land has been made available to anyone aspiring to build a refrigerated warehouse. In 2010, the government’s powerful National Development and Reform Commission made expanding the country’s refrigerated and frozen capacity one of the central priorities in its 12th Five-Year National Plan.

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Encouraged by the government’s Five-Year Plan, Chen’s fellow entrepreneurs are building their own cold-storage facilities to gain “face” — similar to the way a wealthy businessman in the United States might buy a football team. “If an independent private guy builds a cold-storage warehouse, the central government notices,” said Tim McLellan, a director at Preferred Freezer Services, an American company that is about to open its third cold-storage facility in China. “Now he has a picture with Premier Li Keqiang or President Xi.” That is true, he said, even if “the design and technology are 30 years old and they have no idea how to run it.”

Despite the expansion in frozen foods and refrigerators, the critical growth area is what’s known in the logistics business as the “cold chain” — the seamless network of temperature-controlled space through which perishable food is supposed to travel on its way from farm to refrigerator. In the United States, at least 70 percent of all the food we eat each year passes through a cold chain. By contrast, in China, less than a quarter of the country’s meat supply is slaughtered, transported, stored or sold under refrigeration. The equivalent number for fruit and vegetables is just 5 percent.

These statistics translate into scenes that would concern most American food-safety inspectors. In Shanghai, for example, one large pork processor has no refrigeration system; instead, it does all its slaughtering at night, when the temperature is slightly cooler, in a massive shed with open sides to allow for a cross breeze. The freshly disemboweled pigs hang for hours in the smoggy air. In Beijing, at the wholesale market that supplies 70 percent of the city’s vegetables, vendors carefully excavate individual, naked stalks of broccoli from trucks packed solid with ice and hay. A middle-aged farmer, bundled up against the cold, told me that he expects to have to throw away a quarter of the truckload — more when the weather is warm — as the ice melts and the vegetables rot faster than they can be sold. And just 20 minutes down the road from Sanquan’s gleaming, automated dumpling freezer, the central Zhengzhou market has mountains of unrefrigerated chicken carcasses, flopping out of plastic crates onto the concrete floor.

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Death rates from dysentery and diarrhea — serious illness is an all-too-common result of consuming bacteria or parasite-laden food — decreased by more than 90 percent from 1900 to 1950. It stands to reason, then, that a similarly seamless, well-regulated cold chain could stop spoiled food from reaching and sickening Chinese eaters. Food safety comes up in the Five-Year Plan as an issue that is “becoming protruding,” to use the distinctive prose of the Communist Party. In the past few years, all the major frozen-food companies — Sanquan, Synear and the General Mills-owned Wanchai Ferry — have been hit with staph-contamination scandals, despite their own modern facilities.

Mike Moriarty, a lead author on the A.T. Kearney report, said food safety was what initially prompted him to research the Chinese cold chain. The multinationals he works with kept complaining that poor handling was threatening their brand reputation in China. His investigations found that, on average, a Chinese person experiences some kind of digestive upset twice a week — a kind of low-level recurring food poisoning, much of which is probably caused by the kind of bacterial growth that could have been prevented by keeping food cold. “Bad bowels,” Moriarty said, “is just part of the drill for being a food consumer in China.”

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In its Development Plan for Cold-Chain Logistics of Agricultural Products, China set itself the five-year goal of reducing the loss rate for vegetables, meat and aquatic products to less than 15 percent, 8 percent and 10 percent by 2015. If the nation hits those targets next year, the effort could save a large part of the more than $32 billion in food now wasted, but at this point, there is quite a way to go. Nearly half of everything that is grown in China rots before it even reaches the retail market.

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For all the food waste that refrigeration might forestall, the uncomfortable fact is that a fully developed cold chain (field precooling stations, slaughterhouses, distribution centers, trucks, grocery stores and domestic refrigerators) requires a lot of energy.

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Calculating the climate-change impact of an expanded Chinese cold chain is extremely complicated. Artificial refrigeration contributes to global greenhouse-gas emissions in two main ways. First, generating the power (whether it be electricity for warehouses or diesel fuel for trucks) that fuels the heat-exchange process, which is at the heart of any cooling system, accounts for about 80 percent of refrigeration’s global-warming impact (measured in tons of CO2) and currently consumes nearly a sixth of global electricity usage.

But the other problem is the refrigerants themselves: the chemicals that are evaporated and condensed by the compressors in order to remove heat and thus produce cold. Some of that refrigerant leaks into the atmosphere as a gas — either a little (roughly 2 percent a year from the most up-to-date domestic refrigerators) or a lot (on average, 15 percent from commercial refrigerated warehouses). In addition, different refrigeration systems use different refrigerants, some of which, like ammonia, have a negligible global-warming impact. But others, like the hydrofluorocarbons that are popular in China, are known as “supergreenhouse gases,” because they are thousands of times more warming than CO2. If current trends in refrigerant usage were to continue, experts project that hydrofluorocarbons would be responsible for nearly half of all global greenhouse-gas emissions by 2050.

To make matters worse, it’s not even clear that refrigeration reduces food waste over the long term. Logically, it would seem that a refrigerator should result in less food waste at home, slowing down the rate at which vegetables rot and milk sours, as well as allowing families to save leftovers. But Susanne Freidberg, a geography professor at Dartmouth College and author of “Fresh: A Perishable History,” says that refrigeration in the United States has tended to merely change when the waste occurs. Americans, too, throw away 40 percent of their food, but nearly half of that waste occurs at the consumer level, meaning in retail locations and at home. “Food waste is a justification for refrigeration,” Freidberg said. “But at the same time, there are studies that show that, over the longer time frame, the cold chain encourages consumers to buy more than they’re going to eat.”

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In U.S. homes, the size of the average domestic refrigerator has increased by almost 20 percent since 1975, leading the food-waste expert Jonathan Bloom to identify what he calls the “full-cupboard effect,” over and above Garnett’s safety-net syndrome. “So many people these days have these massive refrigerators, and there is this sense that we need to keep them well stocked,” he said. “But there’s no way you can eat all that food before it goes bad.” A four-year observational study of Los Angeles-area families carried out by U.C.L.A. social scientists confirmed this tendency to stockpile food in not just one but in multiple refrigerators.

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For most of these families, as for most Americans, Bloom says, home refrigerators simply “serve as cleaner, colder trash bins.”

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By artificially extending the life span of otherwise perishable fruits, vegetables and animal products, refrigeration changes almost everything about how we know and interact with food: how we shop, what we eat and even the definition of the word “fresh.”

Fuchsia Dunlop, a British cook and author who writes about Chinese cuisine, described how she saw traditional food-preservation skills die out over the past two decades, as refrigeration gained ground. “When I first lived in China, in 1994,” she said, “everything was dried, pickled or salted. On sunny days, people would be laying all kinds of vegetables out to dry in the sun, and some of them afterward would be rubbed with salt and put in jars to ferment. Other vegetables would be pickled in brine and preserved neat. In Chengdu, they would hang sausages and pork under the eaves of the old houses to dry, and there were these great clay pickle jars in people’s homes.”

Now, though, most of those old houses have been demolished. In the new, high-rise apartment buildings that have been built in their place, Dunlop told me, “you do have balconies that are enclosed with bars, so sometimes you can see salt meat and salt fish on coat hangers out on them.” But, she said, it’s rare. At the moment that America’s long-lost pickling, salting and smoking traditions are being revived, China’s much richer and more ancient preservation techniques are dying out.

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By removing constraints of proximity and seasonality, refrigeration can change what Chinese farmers produce. I met with plant scientists at the Beijing Vegetable Research Center who are selecting and optimizing the varieties of popular Chinese greens that stand up best to cold storage. If they are successful, the incredible regional variety and specificity of Chinese fruits and vegetables may soon resemble the homogeneous American produce aisle, which is often limited to three tomato varieties and five types of apple for sale, all hardy (and flavorless) enough to endure lengthy journeys and storage under refrigeration.

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Dai Jianjun is the 45-year-old chain-smoking chef of Longjing Caotang, a restaurant on the outskirts of Hangzhou, the scenic capital of Zhejiang province, which serves an entirely locally sourced, anti-industrial cuisine.

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Over the course of two epic meals, separated only by a short paddle on a local lake to catch fish for dinner, Dai fed me dried vegetables and mushrooms, vinegar-pickled radishes, fermented “stinky” tofu and peanuts that six months earlier had been packed into earthenware jars. I visited his on-site bamboo-walled drying shed, where salted silvery fish halves and hunks of pork hung in orderly rows. Between courses, Dai pulled out his iPad to show me a series of videos that demonstrated how radish preservation varies by topography, with hill people drying the vegetable in the sun before salting it and flatlanders working in reverse order. After our boat ride, as the rest of the fishermen beheaded and gutted the catch on a wooden block, the fish boss, who went by the name Mr. Wang, prepared a particularly delicious yellow-mud-preserved duck egg, which, he told me, keeps at room temperature for 30 days.

The rest of the ingredients were harvested or foraged that day. Dai keeps leatherbound purchase diaries documenting the provenance of every chicken, tea leaf, mustard green and black fungus. Several entries are accompanied by photos of a farmer picking or slaughtering the item in question. Not a single thing I was served that day had been refrigerated.

Silicon Valley’s Laundry-App Race — New York Magazine

Silicon Valley’s Laundry-App Race — New York Magazine.

Inspired by Silicon Valley guru Paul Graham’s seminal essay to “do things that don’t scale,” they sourced cookies from bakeries in their three markets—snickerdoodles in San Francisco, frosted red velvet in L.A., classic chocolate chip in Washington, D.C.—which the ninja delivered, wrapped, along with the freshly laundered clothing. The gesture added another logistical wrinkle to an already complicated business, but it was worth it. “In the beginning, people loved it,” says Metzner. “Our social media went crazy, like, ‘Oh my God, Washio is the best!’ ”

[…]

Remember the scrub board? One imagines people were thrilled when that came along and they could stop beating garments on rocks, but then someone went ahead and invented the washing machine, and everyone had to have that, followed by the electric washing machine, and then the services came along where, if you had enough money, you could pay someone to wash your clothes for you, and eventually even this started to seem like a burden—all that picking up and dropping off—and the places offering delivery, well, you had to call them, and sometimes they had accents, and are we not living in the modern world? “We had this crazy idea,” says Metzner, “that someone should press a button on their phone and someone will come and pick up their laundry.”

We are living in a time of Great Change, and also a time of Not-So-Great Change. The tidal wave of innovation that has swept out from Silicon Valley, transforming the way we communicate, read, shop, and travel, has carried along with it an epic shit-ton of digital flotsam. Looking around at the newly minted billionaires behind the enjoyable but wholly unnecessary Facebook and WhatsApp, Uber and Nest, the brightest minds of a generation, the high test-scorers and mathematically inclined, have taken the knowledge acquired at our most august institutions and applied themselves to solving increasingly minor First World problems. The marketplace of ideas has become one long late-night infomercial. Want a blazer embedded with GPS technology? A Bluetooth-controlled necklace? A hair dryer big enough for your entire body? They can be yours! In the rush to disrupt everything we have ever known, not even the humble crostini has been spared.

[…]

“This thing, it’s alive,” he says now, holding up his phone. “It knows the weather, it knows what you like to eat, it knows your location, it knows what you like to buy.” He was particularly fascinated with the on-demand car service Uber, which was quickly building an empire on the back of smartphones. “We’re just going to see more and more businesses that we never would have seen before that exist on the premise that everyone has one of these in their pocket,” he says. “It’s like [Marc] Andreessen said. Software is eating the world.”

[…]

That was one thing Argentina had over the U.S., he told Dulanto, who had sold his juice bars and was crashing on Metzner’s couch. The lavanderias. “These women would just stay there all day and do laundry, and your clothes smell incredible, they fold them perfectly, they package them perfectly.”

What if, Metzner proposed to Dulanto, they started a service where people could order their laundry picked up and delivered on their smartphones? Kind of like, he said, “the Uber of laundry?”

Of course, they wouldn’t have to actually do the washing. That they would outsource: to wholesalers, maybe, the types of cleaners used by hotels. They’d charge $1.60 a pound, and though they’d lose part of the margin, they could avoid the costs of rent and expensive machinery. And if they hired drivers on the Uber model—people who used their own cars and their own phones—there would be no need to buy and maintain vehicles. They’d just be the middleman, organizing the transaction and taking a slice of the ­profit—which, admittedly, was not huge with wash-and-fold. But once they had the laundry, the dry-cleaning would follow. Profits are higher on dry-cleaning, because who knows what dark alchemy is required to remove stains? No one, and everyone is willing to pay a premium to stay ­uninformed. The trick was to think big: “That’s where the numbers become exciting,” Metzner says. “Let’s do it in 50, 60 cities,” he told Dulanto. “Let’s literally go into every market.”

[…]

“The laundry and dry-­cleaning industry, it’s all, like, old people,” says Dulanto in the nose-wrinkling manner of someone for whom aging is still an abstract concept. “They’re not tech savvy, and they still put up those really ugly stickers with that ’90s clip art.”

[…]

As an undergrad at the University of Pennsylvania, he’d started his own company, Insomnia Cookies, to fulfill the theretofore-unrealized desires of college students to have warm cookies delivered at two in the morning. It now has 50 outposts.

[…]

…when people in a privileged society look deep within themselves to find what is missing, a streamlined clothes-cleaning experience comes up a lot. More often than not, the people who come up with ways of lessening this burden on mankind are dudes, or duos of dudes, who have only recently experienced the crushing realization that their laundry is now their own responsibility, forever. Paradoxically, many of these dudes start companies that make laundry the central focus of their lives.

[…]

“I’m positive that we could go on Craigslist and post an ad for a delivery driver, and find plenty of people with crappy cars who would work for minimum wage,” he says, grabbing his laptop and flopping onto a couch in the Washio break room. “But I mean, you are going to get crappy people who don’t want to put their best effort forward and have a shitty vehicle that looks not nice. We decided to go a different route, where we can have premium people doing ­premium work.” He presses play on a promotional video of a pretty brunette in a Washio T-shirt, leaning against her black Mercedes. In Los Angeles, a lot of the drivers are actors, and their headshots are tacked on a bulletin board at the office. “That guy,” he says of one hunky blond we see picking up a bag of laundry to take out, “he could be in Twilight or something.” They chose the name ninjas in part to signify the company’s relationship to Silicon Valley, where the title is handed out freely. “It stems from Disney, which called everyone a cast member,” explains Metzner, in his stonery-didactic way. “All of these ­nameifications, or whatever, is basically to get everyone to think they’re not doing what they are actually doing, right? No one wants to be the trash guy at Disneyland. ‘No, I’m a cast member.’ At Trader Joe’s, they’re all associates. What does that mean? It means nothing, but I would rather be an associate than a cashier. It helps people elevate themselves and think they are doing something for a greater good.”

[…]

In New York, hiring drivers on Washio’s Uber-inspired model wasn’t an option. FlyCleaners had to use trucks, and because of the traffic and narrow streets, the trucks had to be efficient. They built racks for laundry bags, and Tiemann, whose hobby is pimping out cars for the Bullrun, the annual race in which billionaires in souped-up vehicles race each other cross-country, outfitted each one with a tablet that provides drivers with order details, alternate traffic routes, selective streaming from accident-mapping services, and direct communication with headquarters.

[…]

“People with money are going to figure out ways to invest their money to make more money,” he says. “If you look at finance, like when credit-default swaps were huge, right, everyone was investing in that. And when subprime was huge, people were investing in that. Now, it’s Silicon Valley.” He looks up at the television above the bar, which is showing the Lakers game across town. A shot of Ashton and Mila, sitting courtside, appears onscreen. The chyron informs us they are engaged. Metzner tips his beer toward them in congratulations. He’s not worried. “It’s like Vegas,” he says. “The excitement of winning far exceeds the downside of losing.”