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Empire state of mind.
Everyone is coming to New York. Amazon picked Long Island City as one of its two sites for its new headquarters (the other is Crystal City in Northern Virginia), a commitment that comes with about 25,000 new jobs. Google plans to buy or lease a 1.3 million-square-foot office building near the entrance to the Holland Tunnel, creating space for 12,000 new workers. The techpocalypse is here, time to take cover.
Gothamist has a good roundup of key questions for Amazon’s LIC invasion, such as, Where are all those Amazon workers going to live? (The unsurprising answer: “it’s likely they’d end up pricing existing residents out of LIC and neighborhoods easily accessible from there, which could mean jump-starting gentrification in places like Jackson Heights, Corona, or even Maspeth and Middle Village.) Alexandria Ocasio-Cortez and other local politicians are against it, while New York Mag’s Josh Barro has bar recommendations for reporters heading to LIC.
More on HQ2:
Desperately Seeking Cities: “It turned out that the unifying power of hating Trump was nothing compared to the overwhelming national ardor for Amazon.” (n+1)
Alexandria Ocasio-Cortez Is Right about Amazon’s Corporate Welfare: “Ocasio-Cortez is mostly correct on this matter, and her conservative critics are wrong. Handouts like this to Amazon and other prominent companies are appalling in their cronyism, pure and simple.” (National Review)
Cities Should Never, Ever Agree to an HQ2 Contest Again: “The people who run Amazon are not like those of us who shop there, searching for the greatest discount among 10 identical staplers. They never really imagined they might move 50,000 employees to, say, Tucson, Arizona, and may have even known all along that they would go to Arlington, Virginia, and Long Island City, New York.” (Slate)
Before a Deal, Amazon Had to Know: Could Cuomo and De Blasio Get Along? (New York Times)
Meanwhile, Travis Kalanick is also joining the New York party. The Uber co-founder and former CEO bought a glitzy penthouse in Manhattan’s Soho neighborhood, the Wall Street Journal reported. The property was on the market for $40.5 million, but Kalanick got it for a steal at $36.4 million. (Paper fortune notwithstanding, Kalanick sold about 30% of his Uber stake to SoftBank earlier this year for around $1.4 billion.) The building was designed by renowned Italian architect Renzo Piano. It remains under construction and is supposed to be finished by the end of this year.
The four-bedroom apartment is 6,655 square feet, or roughly the size of 1.4 NBA basketball courts. It will have a private elevator, floor-to-ceiling windows, a library, a wet bar, three terraces, and a private rooftop with a 20-foot heated outdoor pool. The rooftop also includes an outdoor kitchen “ideal for alfresco dining while admiring the views,” according to the property listing. The building includes a garage with a private covered porte cochere and automated parking system, but I assume Travis won’t need to use that, because obviously he will take Uber everywhere.
A good thing to do ahead of an initial public offering is to gin up customer loyalty. One way to do this is with a subscription offering, as both Lyft and Uber recently introduced. We talked last week about Ride Pass, a $14.99-a-month membership program from Uber that eliminates surge pricing (unless you live in Los Angeles, in which case it costs $24.99 a month). A couple weeks earlier we reviewed All Access, the $299-a-month (!!!) plan from Lyft that includes 30 rides of up to $15 each.
Of course, another way to garner loyal consumers is with an actual loyalty program, which is what Lyft announced Nov. 12, and which seems like a no-brainer for any rides company that hopes users will frequent the service enough to give up their personal vehicle. Lyft Rewards will begin rolling out in December 2018 to “select riders in various cities,” Lyft said in a release. The announcement was otherwise impressively short on details, though Lyft assures us that “getting rewarded will be easy.” Riders will earn points for every dollar spent, the company said, and “enough points” will be good for rewards like “an upgrade to Lyft Lux or savings on future rides.”
Lyft is beating Uber to the punch on establishing some sort of loyalty program. If all goes according to schedule, Lyft Rewards will also debut before the rewards program Airbnb hinted at in January and formally announced in February ever becomes a reality. The so-called Superguest membership program was supposed to launch sometime this year—again, ahead of a rumored 2019 Airbnb IPO—but never came to fruition. In late September, Airbnb exec Greg Greeley told Skift the company had researched a rewards program, but was “back to the drawing board” after deciding the initial concept “wasn’t differentiated enough.”
On-demand startups love dishing out promotions (“50% off weekday Lyft rides!” “$100 delivery credit on Postmates”), but they’ve done little to establish true loyalty programs, in which customers earn rewards for using the service. Uber and Lyft have come close with rewards-generating partnerships—Uber with Visa and Lyft with JetBlue—and Uber experimented with something approximating a rewards program in 2016, but until Lyft’s recent announcement, that was sort of it.
Why wouldn’t Uber, Lyft, Postmates, DoorDash, and the rest of them have loyalty programs? One possibility is that the unit economics of the services weren’t good enough to justify an evergreen setup that allowed customers to earn freebies anytime, anywhere by using the service more. Another is that the companies simply didn’t think they needed them. It’s not hard to imagine Travis Kalanick thinking a loyalty program unnecessary if Uber were offering the best service at the lowest prices. It’s a bit more surprising that his successor, a hospitality veteran, has yet to introduce one.
On the one hand, an Uber might seem like a good place to have a private conversation with a friend. On the other, never forget your driver might be filming you:
Seven Senators players were riding in an Uber in Phoenix when they began panning the team’s penalty kill and Raymond’s coaching techniques. The Uber was equipped with a dashboard camera that recorded the Oct. 29 conversation, which was later published online. The original video was removed, but it has been copied and reposted.
The players — Chris Wideman, Matt Duchene, Thomas Chabot, Dylan DeMelo, Alex Formenton, Chris Tierney and Colin White — are seen and heard in the video complaining about the team’s penalty kill, which Raymond oversees, when the driver asks what team they play for.
You know what they say, hello out there, we’re on the air—and this time they really were, because the video of the conversation was published online. The original was later taken down, but by that time it had been copied and reposted. Ottawa’s players issued a public apology to Raymond and called the incident “an important learning experience.”
Dash-cams have been popular among ride-hailing drivers for some time now. In addition to providing valuable footage in the event of an accident, they provide drivers with a degree of insurance against passengers who might misbehave, damage their vehicle, or even assault them, and then later try to claim otherwise. But drivers have also used their dash-cams to mock passengers online and in public forums, largely without the knowledge or consent of those riders.
Uber reportedly added a guideline in late September that permits dash-cams for security purposes, but cautions that broadcasting a person’s image, audio, or video “is a violation of these terms and may result in loss of account access.” That is probably a good step, but it will only be of so much use if your driver has already taken a video of you and set it free online. The moral of the story is that as far as venues for sharing secrets go, Uber is less good than your home but still preferable to the Acela.
Is it possible to get bored of raising money?
WeWork Cos. said Tuesday that its largest investor, Japanese conglomerate SoftBank Group Corp., has committed an additional $3 billion to the shared-office company, valuing it at about $45 billion.
If completed, the deal would make New York-based WeWork—which was last valued in a 2017 fundraising at $20 billion—the second-most valuable U.S. startup behind Uber Technologies Inc., and ahead of Airbnb Inc., according to Dow Jones VentureSource.
The latest commitment came from SoftBank’s balance sheet, rather than that of its $92 billion Vision Fund, which is backed largely by Saudi Arabia. The Vision Fund has backed Silicon Valley startups with tens of billions of dollars, which no one seemed to mind until the brutal murder of Washington Post columnist Jamal Khashoggi at a Saudi consulate in Turkey last month. You might think this would concern WeWork, a company so obsessed with ethical posturing that it characterized a decision to ban meat from corporate functions as an altruistic measure to conserve water, curb emissions, and save the lives of tens of thousands of animals. You would be wrong:
Asked about calls for companies to reject Saudi money amid the controversy over the murder of journalist Jamal Khashoggi, Mr. Minson said the question was “irrelevant,” because the deal was struck with SoftBank at the corporate level.
Also, did we mention all those animals WeWork is saving?
Ford buys Spin. BlaBlaCar acquires Ouibus. Grab gets $250 million from Hyundai and Kia, and $50 million from Thailand’s Kasikornbank. Taxify vies with Uber in Europe. Uber takes wait-and-see approach to Saudi money. UK plans new rights for gig workers. Ford would work with rivals on driverless cars. GM will let non-GM vehicles on its car-sharing platform. Airbnb ends forced arbitration for sexual misconduct. Uber defines 21 categories of sexual misconduct. Uber tripling Eats headcount in EMEA to battle local rivals. Prague tightens rules on Airbnb. Zero-emissions pizza delivery truck cooks your pie on the road. On-demand delivery is the next congestion challenge. Walmart passes Amazon as most popular online grocer. Chinese WeWork raises $200 million. Jump Bikes could hit 1 million rides without Citi Bike, report claims. Uber and Lyft provide more rides in Seattle than Sound Transit light rail. New York City raids condo building in crackdown on Airbnb. Roomi lays off most staff. People will sell sex in driverless cars. Uber driver accused of kidnapping 15-year-old girl. Self-driving boats. Scooter recall. Uber for snow blowing. “The modern B&B doesn’t look like grandma’s house.”
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