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--:-- Aisha Roscoe: I'm Aisha Roscoe and you're listening to The Sunday Story, where we go beyond the news of the day to bring you one big story.
--:-- Aisha Roscoe: It's Labor Day weekend and if you're lucky, you might be hanging out at the beach and napping or cooking out, but maybe you aren't so lucky. Maybe like so many on this peak travel weekend, you're standing in a security line at the airport and you're feeling like some other line is moving faster than yours.
--:-- Aisha Roscoe: It always feels like that. But you might be right because all is not equal in airport security. That fact got us to thinking about what happens when private companies offer services in what we perceive as a public space.
--:-- Aisha Roscoe: So we asked producer Kim Naderfein-Petersa to tell us a story of how one company got a stake in airport security.
--:-- Kim Naderfein-Petersa: Hi, Aisha. Hey, Aisha. Nice to be here. Glad to have you here.
--:-- Aisha Roscoe: So we are going to start today at the airport security line with this guy. My name is David Zipper. I am a senior fellow at the MIT Mobility Initiative. I focus on ways in which our transportation systems affect our lives.
--:-- David Zipper: And Zipper, he shared this story with me. It starts in mid-December 2022. He was flying out of Washington, D.C., and he had been standing in the TSA line for like 20 minutes, long enough to get a little annoyed and to notice that at the front of the line, these employees from this company, Clear, they were causing a little bit of a holdup.
--:-- David Zipper: This person wearing a clear shirt would say, please wait. And then they would usher somebody from the clear line ahead of them. So it was annoying, to be honest.
--:-- Aisha Roscoe: And Zipper, he thought that he was in the fast lane. He had paid this small fee to the government, gone through the trouble of a background check, all to get into the TSA pre-check line. And yet, here were these people who were still cutting in front of him.
--:-- David Zipper: If you think of like those old cartoons from 30 years ago, I had like, like angry clouds darkening over my head. I was just sort of like starting to fume.
--:-- Aisha Roscoe: And Ayesha, I'm sure that you have seen Clear employees at the airport.
--:-- Ayesha: Yeah, I've seen them, but I never really understood how it all worked.
--:-- David Zipper: So Clear is basically a biometrics technology company for about $200. Instead of stopping by a TSA employee who looks at their photo ID, their customers stop by this pod to scan their face or fingers or eyes to verify their identity.
--:-- Aisha Roscoe: And then they get escorted to the front of the TSA line by a Clear employee.
--:-- David Zipper: And when Zipper sees all of this, it makes him think this is really what people are paying for. It's not that they want biometrics. It's a line-cutting privilege. That's all it's doing.
--:-- Aisha Roscoe: So he starts ruminating about a little one-man revolt.
--:-- David Zipper: I was thinking, I am not a customer of Clear, so why are their employees telling me what to do here?
--:-- Aisha Roscoe: And a few minutes later, he's right at the front, and sure enough, this Clear employee asks him to wait. And ushers a couple in front of me.
--:-- David Zipper: And I say, no, actually, that's not okay. I don't have a relationship with you and you can't tell me what to do.
--:-- Aisha Roscoe: Oh. What was interesting was the clear employee was used to this and said, hey, I'm just doing my job.
--:-- David Zipper: And I think the TSA person was also kind of used to this and was just like, you got to wait a minute.
--:-- Aisha Roscoe: So I just sort of swallowed it and I waited. And I'm fuming.
--:-- Aisha Roscoe: No, I mean, I totally get that. I mean, it sucks when you're waiting in a line and you're seeing other people jumping you.
--:-- David Zipper: That's going to make you eat it.
--:-- Aisha Roscoe: Yeah. I mean, I think that what we're talking about here are these like deep elementary school morals.
--:-- David Zipper: They are baked very, very, very deep inside of us.
--:-- Aisha Roscoe: And then this clear customer who had just cut in front of him, she turns around and she says to Zipper.
--:-- David Zipper: I'm really sorry. I only joined clear because I freaking hate waiting in those lines.
--:-- Aisha Roscoe: And I thought to myself, I need to just write about this. I've had it.
--:-- David Zipper: A few days later, he publishes this article for Slate magazine called Annoyed with Clear, the company that fast tracks its customers through airports, get in line.
--:-- Aisha Roscoe: And the article, it just takes off. Sparked a ton of conversation online, got a ton of attention from readers, because it seems to have tapped into something that a lot of people were feeling viscerally, but hadn't seen articulated.
--:-- Aisha Roscoe: Because in a way, this company embedded into America's airport security, it's this very literal, physical representation of something that's actually happening across the country right now.
--:-- Aisha Roscoe: As private companies are inching their way into more and more public services.
--:-- Aisha Roscoe: Today on The Sunday Story, a look at the tempting promises of privatization and what actually happens when public and private interests try to coexist.
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--:-- Aisha Roscoe: Doctors Without Borders is meeting this moment of overwhelming need with action.
--:-- Aisha Roscoe: But they can't do it alone.
--:-- Aisha Roscoe: Help provide life-saving care around the world.
--:-- Aisha Roscoe: Learn how to donate today at doctorswithoutborders.org slash NPR.
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--:-- Aisha Roscoe: It only human to ask others for advice like turning to your barista, hairdresser, or a taxi driver for life advice.
--:-- Aisha Roscoe: But when you're looking for help about relationships, anxiety, depression, or other clinical issues, they may not have all the right answers.
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--:-- Aisha Roscoe: You're listening to The Sunday Story, and today we're talking privatization.
--:-- Aisha Roscoe: I'm joined by Sunday Story producer Kim Naderfein-Petersa.
--:-- Kim Naderfein-Petersa: So, Kim, under this Trump administration, the idea that businesses are more capable than government seems to run really deep.
--:-- Kim Naderfein-Petersa: Yes, this is a conservative talking point, but they're really trying to put it into practice.
--:-- Kim Naderfein-Petersa: You know, I'm thinking about Doge and its attempts to shrink the federal government.
--:-- Kim Naderfein-Petersa: And some officials have floated this idea of bringing some form of privatization to public entities, including the U.S. Postal Service.
--:-- Aisha Roscoe: Yes, that's right.
--:-- Kim Naderfein-Petersa: But this whole trend towards privatizing, I mean, you mentioned it.
--:-- Kim Naderfein-Petersa: It really took hold in the 1970s.
--:-- Kim Naderfein-Petersa: And since then, we've seen more and more public services from water systems to electric utilities, prisons and schools fall into private hands.
--:-- Kim Naderfein-Petersa: And the Trump administration, it's really just hitting the accelerator.
--:-- Aisha Roscoe: So tell me about Clear.
--:-- Kim Naderfein-Petersa: Like, how did it end up in what is otherwise a government-run security process?
--:-- Kim Naderfein-Petersa: So it all starts in this moment after 9-11, when the federal government started to tighten basically the entire airport security system.
--:-- Kim Naderfein-Petersa: The government created a whole new agency, the Transportation Security Administration, and introduced this standard security process that all travelers now had to go through.
--:-- Kim Naderfein-Petersa: But of course, actually pulling off a system like that is really hard.
--:-- Kim Naderfein-Petersa: And for a while, it was chaos.
--:-- Kim Naderfein-Petersa: Lent along, travelers were annoyed.
--:-- Aisha Roscoe: So in 2004, the TSA invited private companies to test out a new approach to security in a series of nationwide pilots.
--:-- Kim Naderfein-Petersa: The question that it was trying to understand was, could it improve security overall by identifying low-risk flyers ahead of time, through things like background checks, and then move those people through security more quickly?
--:-- Kim Naderfein-Petersa: The TSA launched it as the Registered Traveler Program.
--:-- Kim Naderfein-Petersa: And in 2005, Clear launched and became the biggest company in the program.
--:-- Kim Naderfein-Petersa: Soon, things for the company were kind of chugging along.
--:-- Kim Naderfein-Petersa: They were getting customers, raising money, and were in airports around the country.
--:-- Aisha Roscoe: I mean, it sounds like this could be like an ideal version of a public-private partnership because Clear is supposed to be innovating and is supposed to be helping more people like move efficiently through security, right?
--:-- Kim Naderfein-Petersa: Yeah, that's right.
--:-- Aisha Roscoe: I shared the story of Clear with Donald Cohen, the author of The Privatization of Everything.
--:-- Kim Naderfein-Petersa: And he told me, It's totally fine to hire a private company to help figure something out.
--:-- Kim Naderfein-Petersa: So during COVID, 9-11, these moments where there are huge needs, companies can be useful to develop new technologies quickly, especially under government oversight.
--:-- Kim Naderfein-Petersa: That's different from letting them be permanent parts of the system.
--:-- Aisha Roscoe: So, I mean, what you're saying is, like, it was a trade-off.
--:-- Kim Naderfein-Petersa: Yes.
--:-- Aisha Roscoe: But, I mean, since we talking here, it's probably not the end of the story.
--:-- Kim Naderfein-Petersa: Yeah. No, there's a lot more to the story.
--:-- Aisha Roscoe: And next, things take kind of a wild turn.
--:-- Kim Naderfein-Petersa: In 2008, the laptop of a Clear employee goes missing at San Francisco International Airport.
--:-- Kim Naderfein-Petersa: And it has on it the unencrypted personal information of about 33,000 Clear users.
--:-- Kim Naderfein-Petersa: This is kind of a nightmare situation for a biometric company responsible for a lot of personal data.
--:-- Aisha Roscoe: And what follows is really a media firestorm.
--:-- Kim Naderfein-Petersa: Now, around the same time, the government ends the Trusted Traveler program and removes Clear's ability to do background checks on flyers.
--:-- Aisha Roscoe: So at this point, the value that Clear can offer, it really shifts away from identifying low-risk buyers and more towards skip to the front of the line with biometrics.
--:-- Kim Naderfein-Petersa: All of this works together to contribute to a loss of trust from investors.
--:-- Kim Naderfein-Petersa: And in 2009, the company goes bankrupt.
--:-- Aisha Roscoe: Clear lanes disappear from airports.
--:-- Kim Naderfein-Petersa: But obviously it is, as you're saying, it's back because, you know, I saw Clear booths at the airport just the other day.
--:-- Aisha Roscoe: So how did they make this comeback?
--:-- Kim Naderfein-Petersa: So in 2010, two Wall Street investors buy the company out of bankruptcy and relaunch it with a very different vision.
--:-- Kim Naderfein-Petersa: This time with biometrics at its heart.
--:-- Kim Naderfein-Petersa: This new version of Clear, it wants to use biometric technology for all kinds of things.
--:-- Aisha Roscoe: So just imagine, go to the doctor's office, scan your finger and get your health records pulled up.
--:-- Kim Naderfein-Petersa: Or maybe you go to a baseball game and then you scan your face on an app and get a beer because they know you're 21.
--:-- Aisha Roscoe: Oh, my goodness.
--:-- Kim Naderfein-Petersa: The whole idea is like we want to show up 12 times in your day, not just at the airport, but like really be embedded in your life.
--:-- Aisha Roscoe: I asked Kyle McLaughlin about this.
--:-- Kim Naderfein-Petersa: He's the executive vice president of Aviation and Clear.
--:-- Aisha Roscoe: And I wanted to understand through his eyes the promise of Clear 2.0.
--:-- Kim Naderfein-Petersa: In a world where cybersecurity and fraud and identity theft are becoming more and more rampant, our vision has long been to be able to take what we do in the airports and scale that to something that you're using multiple times a day.
--:-- Kim Naderfein-Petersa: To be able to confirm that you are you in a privacy-centric way that's always opt-in.
--:-- Kim Naderfein-Petersa: And in a world where you only sharing the core elements of your identity that you absolutely need to to unlock a more frictionless experience.
--:-- Aisha Roscoe: Well you know I mean the frictionless experience that definitely you know some corporate speak.
--:-- Kim Naderfein-Petersa: But I get it.
--:-- Aisha Roscoe: Like you want to move very fast.
--:-- Kim Naderfein-Petersa: Yes, that is the company's pitch.
--:-- Aisha Roscoe: So after my call with McLaughlin, I stayed in touch with the communications people at Clear because I wanted to run his critique by them.
--:-- Kim Naderfein-Petersa: That Clear is actually just a fancy line cutting service.
--:-- Aisha Roscoe: And they told me that really doesn't capture the full picture of what Clear offers.
--:-- Kim Naderfein-Petersa: As they see it, Clear creates just like a faster moving line.
--:-- Kim Naderfein-Petersa: Their biometric verification is faster, they argue, than a person manually checking an ID.
--:-- Kim Naderfein-Petersa: And because we're dealing with machines here, they can have lots of pods going at the same time.
--:-- Aisha Roscoe: So it's like speeding through the self-checkout lane at the grocery store.
--:-- Kim Naderfein-Petersa: But obviously, you know, the concern with all of this is always, are there security issues, right?
--:-- Kim Naderfein-Petersa: Is your data, which is now linked to your body, is it safe?
--:-- Aisha Roscoe: Yeah, people have expressed concerns about this.
--:-- Kim Naderfein-Petersa: A private company having all of this personal data.
--:-- Aisha Roscoe: The DNA company 23andMe recently went bankrupt.
--:-- Kim Naderfein-Petersa: And in that process, a lot of people were worried about what would happen to their personal data.
--:-- Aisha Roscoe: That's also a question that people have about Clear.
--:-- Kim Naderfein-Petersa: Kyle McLaughlin, the VP of Clear, he said that the company has strict policies to keep people's data safe and that it never sells or rents customer data to anybody.
--:-- Kim Naderfein-Petersa: You are in control of your data.
--:-- Kim Naderfein-Petersa: You are in control of what is stored, what is shared, and ultimately have the ability to modify or delete that at any point in time.
--:-- Aisha Roscoe: And he says the company is financially healthy.
--:-- Kim Naderfein-Petersa: So I think that the chances of us going bankrupt are relatively slim.
--:-- Aisha Roscoe: OK, so then let's talk about security.
--:-- Kim Naderfein-Petersa: Like, what's been the track record there since the company relaunched?
--:-- Aisha Roscoe: So Clear has had two other security incidents that were pretty widely covered.
--:-- Kim Naderfein-Petersa: In 2022, someone made it through Clear, who was flying under a false identity, and later turned out to have ammunition in his luggage.
--:-- Aisha Roscoe: According to reporting from Bloomberg, this was able to happen because Clear used to have this process that when users first registered with the company, if there was some mismatch between somebody's appearance and their ID, that then the computer would flag it, and an employee could override that flag.
--:-- Aisha Roscoe: Basically say, like, it's fine, this person is who they say they are, which introduced some vulnerability for human error.
--:-- Aisha Roscoe: And then in 2023, somebody grabbed a boarding pass out of the trash and was able to make it through Clear's screening.
--:-- Aisha Roscoe: In this case, reporting shows that a Clear employee escorted them to the TSA desk without verifying their identity at all.
--:-- Kim Naderfein-Petersa: Well, I mean, that sounds pretty bad.
--:-- Aisha Roscoe: Yeah, it raises a lot of questions.
--:-- Aisha Roscoe: So I asked Kyle McLaughlin about this.
--:-- Kim Naderfein-Petersa: He told me that these incidents were the results of human errors.
--:-- Aisha Roscoe: And so they addressed those people individually and then retrained their entire staff nationally.
--:-- Aisha Roscoe: And most importantly, we overhauled all of our processes and developed a brand new technology product in partnership with TSA.
--:-- Aisha Roscoe: And I think that really highlights the benefit of public-private partnership.
--:-- Aisha Roscoe: We were nimble enough that we were able to pivot and upgrade our entire platform to address these concerns inside of a year.
--:-- Aisha Roscoe: But these security incidents, they had a ripple effect.
--:-- Aisha Roscoe: In 2023, the TSA introduced new rules and said that when some clear customers get to the front of the TSA line, they will now have to show their ID to the TSA agents.
--:-- Aisha Roscoe: Doesn't that kind of defeat the whole purpose of the clear screening?
--:-- Aisha Roscoe: I mean, yeah, like the company's whole promise is that they are going to speed you through security by doing biometric identity verification instead of somebody looking at your ID.
--:-- Aisha Roscoe: But I will say this TSA requirement, it only applies to a certain percent of people who are going through Clear, not everybody.
--:-- Aisha Roscoe: So some people could still sail through.
--:-- Aisha Roscoe: So why would airports want to keep Clear if it does seem to add all of this frustration and complication to the security process for TSA, the government, and for regular flyers?
--:-- Aisha Roscoe: Well, they make money off of it.
--:-- Aisha Roscoe: Airports take a cut of the revenue that Clear earns.
--:-- Aisha Roscoe: To learn more about the details of this, I talked to Brody Ford.
--:-- Aisha Roscoe: He's a journalist at Bloomberg, and he did an investigation into Clear last year.
--:-- Aisha Roscoe: Ford found that LAX, for example, makes about 12.5% of what Clear earns at LAX.
--:-- Aisha Roscoe: So in 2023, that was about $5 million.
--:-- Aisha Roscoe: That's a lot of money.
--:-- Aisha Roscoe: Yeah, these airports and the company, they're making a lot servicing just this tiny little slice of airport inconvenience.
--:-- Aisha Roscoe: The company is now worth more than $4 billion, which is bigger than some airlines like JetBlue.
--:-- Aisha Roscoe: But if you remember Claire's ambitions for its relaunch, that it was going to become this big biometrics platform that you would interact with throughout your day.
--:-- Aisha Roscoe: Ford's reporting showed that its other partnerships like doctor's offices and stadiums, they are not significant sources of revenue for the company.
--:-- Aisha Roscoe: So at this point, it really is this company focused on the airport security line.
--:-- Aisha Roscoe: So Kim, where does all of this leave us?
--:-- Aisha Roscoe: So one thing that I think is really relevant to the future of Clear is that in the last few years, the government TSA has really upped its game.
--:-- Aisha Roscoe: These days, TSA pre-check, I have to say, it looks a lot like early Clear.
--:-- Aisha Roscoe: Background checks, expedited screening, even biometric verification.
--:-- Aisha Roscoe: But it only costs about $80 every five years.
--:-- Aisha Roscoe: So one question is, do we still need a company like Clear to speed people through airport security?
--:-- Aisha Roscoe: Now, with the expedited government line and the expedited private line, these days, lots of airports have three security lines.
--:-- Aisha Roscoe: And some Clear customers have been complaining that Clear lines aren't the fastest.
--:-- Aisha Roscoe: At some airports, Ford's reporting shows that the usage of Clear has gone down.
--:-- Aisha Roscoe: But under the new Trump administration, things could really turn around for the company.
--:-- Aisha Roscoe: In May it proposed a budget cut of million to TSA staff which could mean that the TSA will need a hand from a private partner
--:-- Aisha Roscoe: So in that case Clear might be kind of perfectly positioned
--:-- Aisha Roscoe: Yeah, this could all bode really well for the company.
--:-- Aisha Roscoe: Clear also just made a big announcement that it's implementing e-gates at several airports.
--:-- Aisha Roscoe: Which means that instead of stopping at their usual pod, some Clear customers can now walk right up to this gate, scan their face and their boarding pass, and then sail right into the zone where travelers in their bags get physically scanned.
--:-- Aisha Roscoe: No more stopping by a TSA agent.
--:-- Aisha Roscoe: Which looks like another sign that under the Trump administration, the TSA might be friendlier towards Clear.
--:-- Aisha Roscoe: But of course, this innovation, it's just for Clear customers.
--:-- Aisha Roscoe: So there's still this underlying issue of if you have the money, you can speed through this like mandated government security process.
--:-- Aisha Roscoe: Yeah, exactly.
--:-- Aisha Roscoe: I mean, I do think that that inequity is really what's at the heart of this story.
--:-- Aisha Roscoe: It's not some terrible example of privatization gone wrong.
--:-- Aisha Roscoe: People have stayed safe, and that is really what's at stake here.
--:-- Aisha Roscoe: The TSA has clearly done a good job of regulating.
--:-- Aisha Roscoe: But still, there's this feeling that Clear evokes for people, that Zipper experienced when he got caught in line, that nerve that his article seemed to touch.
--:-- Aisha Roscoe: And I wanted to understand what that feeling was getting at.
--:-- Aisha Roscoe: So I reached out to Michael Sandel.
--:-- Aisha Roscoe: He is kind of a big brain in this space.
--:-- Aisha Roscoe: He's a professor of political philosophy at Harvard and the author of The Moral Limits of Markets.
--:-- Aisha Roscoe: And when I asked him to help me understand what that nerve might be, he put on his philosopher hat.
--:-- Michael Sandel: Well, let me address it by posing the larger question I think that this raises.
--:-- Michael Sandel: The question is, when should you be able to pay to jump the queue?
--:-- Michael Sandel: And the answer to that question, I think for most of us depends what people are lining up for.
--:-- Michael Sandel: Think of an emergency room in a hospital.
--:-- Michael Sandel: And they generally operate by triage.
--:-- Michael Sandel: If there's a person there with a sore throat, and there's a person there with bullet wounds, even if the person with the sore throat is willing to pay extra, they don't get to cut in line ahead of the person with bullet wounds.
--:-- Michael Sandel: And in the case of airport security, we're talking about a public good.
--:-- Michael Sandel: And that's, I think, fundamentally why we bridle at the idea that a private company is allocating access to the security line.
--:-- Michael Sandel: As he sees it, this kind of cue is meant to be a public experience, not to be bought.
--:-- Michael Sandel: But when people do pay to jump it, he says something kind of big shifts.
--:-- Michael Sandel: Instead of citizens, they become customers.
--:-- Michael Sandel: And what separates a customer from a citizen is that the customer can spend however much they want to buy the good or to buy faster service.
--:-- Michael Sandel: Whereas to be a citizen is to accept certain inconveniences for the sake of the public good.
--:-- Michael Sandel: It's to accept that for certain aspects of life, we stand together.
--:-- Michael Sandel: We have equal status.
--:-- Michael Sandel: And Sandell added that when money enters the picture, that equal status, it's no longer there.
--:-- Michael Sandel: Which means that the distance between people, between the haves and the have-nots, in more and more places, it grows.
--:-- Aisha Roscoe: And I think that's the kind of thing that we all feel.
--:-- Aisha Roscoe: Kim, thank you so much for giving us all of this information and taking us on this journey.
--:-- Aisha Roscoe: Yeah, a journey without having to fly.
--:-- Aisha Roscoe: And, you know, just telling us about these private companies and public services.
--:-- Aisha Roscoe: Yeah. Thank you, Kim, for having me.
--:-- Aisha Roscoe: This episode was produced by Kim Naderfein-Petersa and edited by Jenny Schmidt.
--:-- Aisha Roscoe: Fact-checking by Greta Pittinger.
--:-- Aisha Roscoe: Sound design consulting by Brendan Baker.
--:-- Aisha Roscoe: Mastering by Robert Rodriguez.
--:-- Aisha Roscoe: The Sunday Story team includes Andrew Mambo, Justine Yan, and our senior supervising producer, Liana Simstrom.
--:-- Aisha Roscoe: Irene Noguchi is our executive producer.
--:-- Aisha Roscoe: I'm Ayesha Roscoe.
--:-- Aisha Roscoe: Up First is back tomorrow with all the news you need to start your week.
--:-- Aisha Roscoe: Until then, have a great rest of your weekend.
--:-- Aisha Roscoe: This message comes from NetSuite.
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--:-- Aisha Roscoe: Can someone invent a crystal ball?
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--:-- Aisha Roscoe: Download the CFO's Guide to AI and Machine Learning for free at netsuite.com slash story.
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