Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you! (Over)share the love and tell your friends to sign up here.

Last week I asked that if you like this newsletter you kindly consider hitting the like button, and then the like button broke, which was honestly pretty funny, this time the joke was on me. So let’s try that again! If you like Oversharing, please click the small gray heart at the top or bottom of the email. Teamwork makes the dream work.

Driving profits.

Madrid-based Cabify may be the true unicorn of the ride-hail space. Cabify says it made a small profit of $3 million in earnings before interest, tax, depreciation, and amortization in the fourth quarter of 2019, the Financial Times reported.

Yes, we’re talking a real, if small, EBITDA profit. This isn’t community-adjusted, “profitable profitable,” “on the precipice of being profitable,” or EEG (that would be earnings excluding gluten, a Quartz-exclusive accounting term). Good old-fashioned EBITDA! Who knew any startup still used it.

Here is more from the FT:

Cabify reported net sales of $29m for the quarter and $104m for 2019 as a whole, from a total of $708m in rides. It added that its turn towards profitability was largely because of technology that allowed it to use discounts and subsidies more effectively.

It said that operating free cash flow, which factors in some payments to engineers, was also positive or about break even.

“The business as it is now can sustain itself and survive,” Juan de Antonio, the founder and chief executive of the group, said in an interview. “What is happening in the rest of our industry is very different . . . is a unique achievement.”

You hear all sorts of theories about how ride-hail companies might one day reach profitability—ditching labor costs with driverless cars, locking in revenue with subscriptions, diversifying into food delivery—but the real answer always seems to be quitting the subsidies these companies are so addicted to.

One company definitely not slowing down on incentives is India’s Ola, which launched yesterday in London. Ola has SoftBank money—honestly, who doesn’t—and is spending it in style for its London debut. When I downloaded the app yesterday, Ola gave me £5 for signing up, £5 for adding a debit/credit card, and promised two more £5 ride vouchers when I take my first ride. I could get another £5 by setting up a second payment method (Apple Pay, prepaid card). All told, Ola was prepared to throw £25 at me just for setting up the app, not to mention £10 per friend I referred.

Anyway, it turns out you can also save a lot of money when you stop giving away so much of it. Cabify seems to have figured this out. Longtime-discount-king Uber is realizing it too. “We’re making proactive changes to achieve significant cost leverage for both Ride and Eats,” Uber CEO Dara Khosrowshahi said on the company’s fourth-quarter earnings call last week, citing better targeting of incentives and online marketing as one example. “In the past month or so, we’ve seen Lyft, our competitor, probably be on balance more aggressive in terms of discounting and incentives,” he added later. “We’ll see where that leads.”

Unlike Cabify, Uber had no profit to show for the fourth quarter. It booked a $1.1 billion loss for the period, and an $8.5 billion loss for the full year thanks to hefty stock-based compensation expenses. For context, that means Uber lost more than WeWork is now worth in 2019. Despite that, Uber also pushed up its profitability target from full year 2021 to the fourth quarter of 2020. That’s right: Uber is, dare I say, on the precipice of being profitable.

Brandless™️.

Once there was a company called Brandless whose whole thing was to have a distinctly brand-free brand. “We’re not anti-brand, we’re not not a brand, we’re just reimagining what it means to be a brand,” co-founder and CEO Tina Sharkey said. Brandless launched selling stuff like hand soap and apple cider vinegar and organic taco seasoning mix for the flat price of $3 each. It was consumer-packaged goods for the “conscious urban millennial.” Everything came with a minimalist label in pastel colors and sans-serif font. You could have peeled them off and stuck them on the walls of the subway to blend in with all the other startup ads.

You know who was into the vision of reimagining what it means to be a brand? Yep, it was the SoftBank Vision Fund. Brandless’s $3 price point reportedly flabbergasted SoftBank chief Masayoshi Son, and in July 2018 SoftBank led a $240 million round in the company that was said to value it at $500 million.

The Information later reported that SoftBank had put in $200 million of the round, to be paid in installments. As of last summer, cracks were beginning to show. Brandless laid off employees and Sharkey stepped down. The Information also reported that SoftBank had given Brandless only the first half of its investment, and was threatening to withhold the other $100 million unless Brandless started to hit financial targets.

Long story short, the vision did not pan out:

Today direct-to-consumer retailer Brandless becomes the first SoftBank Vision Fund-backed startup to close down, as it stops taking orders and halts all business operations. The company will be laying off 70 people, or nearly 90% of its staff, according to a company spokesperson. The last 10 employees will stay to finish the remaining customer orders and evaluate any acquisition offers.

Brandless' closure marks the end of a turbulent, short run that began 2.5 years ago and was beset with a challenging business model from the start. In a statement, the company blamed a "fiercely competitive" retail market that was "unsustainable" for its business.

The additional 70 layoffs at Brandless, combined with around 360 job cuts last month at Indian hotel chain Oyo in the US, bring the total layoffs at SoftBank portfolio companies to over 3,000 this year, and over 7,300 since June 2019.

Scooters!

Scooter operators have fled Atlanta, Georgia, since the city implemented a nighttime ban on electric-scooter and -bike rides last summer. Gotcha, Lyft, Lime, and Bolt have all pulled operations from Atlanta in the months since the ban took effect, while Bird, Uber-owned Jump (scooters, not e-bikes), Wheels, and Boaz are still operating, the city said.

Atlanta banned riding e-scooters and e-bikes from 9pm to 4am on Aug. 8, 2019, after four scooter riders died in motor vehicle collisions over the summer. At least 29 people have died in scooter crashes since companies like Bird and Lime popularized them in 2018, according to reports I tracked in the global media. (A separate count shared by Twitter user @Asher after my story puts that number closer to 60.)

The four deaths in Atlanta are the most in any single city, by my tally. Atlanta says it hasn’t had a death since the nighttime ban took effect. That should be good news, but the curfew itself has been controversial and unpopular among scooter firms. When Lime pulled out of Atlanta, a spokesperson told Curbed that new laws on e-bike and e-scooters weren’t conducive to a profitable environment.

The effect of the rules is most obvious in 2019 trip data Atlanta released recently, which shows the number of monthly e-bike and e-scooter trips peaking in July 2019 and plummeting sharply after that. Some of the drop is probably seasonality—scooters are less popular in the winter—but weather alone seems unlikely to explain the depth of the decline, with trips in December down more than 60% from trips in February. Limited hours and fewer scooter operators are more likely culprits.

Wake-up call.

Casper Sleep Inc., a self-described “pioneer of the Sleep Economy,” was a unicorn to private investors. To the public markets, it is only about a third of one. After pricing shares at $12, the low end of a range it had already cut, Casper gained 12.5% on its first day of trading, then fell 18% on its second.

Selling mattresses is not a technology business, but Casper was clever. It wrapped itself in the trappings of tech startupdom—data, an app, subway codes, podcast ads!—and used that to raise tech-startup money at tech-startup valuations. Casper raised more than $300 million at a valuation of over $1 billion, a bona fide startup unicorn.

What is Casper, if not a tech firm? It’s a sleek, direct-to-consumer company that realized buying a mattress is an awful experience that could be made a little less awful with online purchases, free delivery, and free trials. It’s a middleman that sources its mattresses from a small number of manufacturers, at least one of whom also makes mattresses for Casper’s many competitors.

Casper did resemble a tech startup in one crucial way: its losses. Casper lost money in every quarter it disclosed results for in its IPO prospectus. In the first three quarters of 2019, Casper lost $67 million on $312 million in revenue.

Selling private investors on big dreams and bigger losses was the model du jour for much of the past decade, boosting companies like Uber, Lyft, Postmates, DoorDash, and WeWork. Any of these companies could arguably be better classified as something other than tech: transportation, logistics, real estate. But venture firms had capital to deploy, and they wanted to put it in tech companies, not a logistics firm with an app.

What became clear last year, as Uber and Lyft went public, and WeWork aborted, was that public markets largely weren’t buying the stories these companies and their private investors told. In retrospect, it’s worth asking whether private investors believed them, or simply thought someone else would.

This time last year.

DoorDash is the dark horse in the food delivery race

Other stuff.

Inside the SoftBank Vision Fund’s Civil War. Brazilian higher court rules Uber drivers not employees. The Local Regulations That Can Kill E-Scooters. Spanish mobility startup Cooltra asked to pull 1,200 e-mopeds from Barcelona. How Finland cycles through the winter. Schick owner ditches Harry’s takeover after FTC sues to block deal. Judge denies Uber’s, Postmates’ request to block AB5 from taking effect. Morgan Stanley marketing 6.3 million-share stake in Uber. Cities are using micromobility data to solve transit problems. “We were all happy about this idea of not losing our jobs in two years.” Justice Department ramps up Google probe. FTC to examine past acquisitions by big tech companies. Russia’s Google Will Bring You Groceries in Just 15 Minutes. $100 billion Mormon church fund was the best-kept secret in the investment world.

Thanks again for subscribing to Oversharing! If you, in the spirit of the sharing economy, would like to share this newsletter with a friend, you can forward it or suggest they sign up here.

Send tips, comments, and Brandless labels to @alisongriswold, or oversharingstuff@gmail.com.

Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you! (Over)share the love and tell your friends to sign up here.

If you like this newsletter, please consider hitting the like button! It’s the small gray heart at the top and bottom of the email. Oversharing runs on the generous spirit of readers like you, at least until it stumbles into $1 billion of SoftBank money.

WEO.

We hired a new CEO, and would you believe, he’s a real estate guy:

The decision to choose [Sandeep] Mathrani—who at Brookfield ran one of the nation’s largest mall owners—is a clear signal that WeWork is a real-estate-focused company. Under Mr. Neumann, it positioned itself more like a technology startup, with a sprawling array of businesses that included office space, an entrepreneurship-focused elementary school and event-planning website Meetup.com.

Mathrani succeeds Artie Minson and Sebastian Gunningham, the WeWork execs who took over as co-CEOs after Adam Neumann drifted away on his golden parachute in September, in search of better energy. Mathrani previously guided General Growth Properties, the second largest retail landlord in the US, back from bankruptcy. He helped sell GGP to Brookfield for $15 billion (roughly two WeWorks, at current valuations) in 2018 and became Brookfield’s head of global retail. “All of us were laughing about the fact that WeWork has accepted the fact it’s a real estate company,” a former WeWorker told The Real Deal.

Another way to look at this is that Neumann was the right CEO for WeWork in the beginning, when WeWork was primarily in the business of raising money, something Neumann was undoubtedly very good at. Neumann raised money by telling all the right people that WeWork was a tech company while building something that looked an awful lot like a real estate company. After a failed IPO and a $9.5 billion bailout from SoftBank, We more or less exhausted its ability to raise money and Neumann burned up his reputation, making him a lot less useful and someone who knows how to run a real estate company a much better choice for CEO.

Elsewhere in the WeWorld, WeWork has vacated its West Coast headquarters in Salesforce Tower, San Francisco’s tallest building, and listed all three floors for other tenants. WeWork laid off 169 people in San Francisco last year as part of a global cut of 2,400. The Salesforce office was supposed to be “a hub for the company’s tech team, which was working on cutting-edge systems for buildings’ infrastructure,” per the San Francisco Chronicle, but maybe We doesn’t need that anymore now that it’s embracing the whole real estate thing.

Frenemies.

Uber and DoorDash discussed a merger last year at the urging of SoftBank, a major shareholder in both companies, the Financial Times reported:

DoorDash was reluctant to entertain merger talks with Uber but ultimately agreed to sit across the table from its rival at SoftBank’s urging, these people said.

The talks came in the wake of Uber’s $8.1bn initial public offering in May and around the time WeWork, another SoftBank investment, was planning a public listing it ultimately withdrew. SoftBank’s Vision Fund was Uber’s largest investor at the time of its listing, owning 15 per cent of the company.

“We have great confidence in Uber Eats’ business,” a Softbank Vision Fund spokesperson told the Financial Times.

DoorDash overtook Uber Eats in US online food delivery almost exactly a year ago. That made Uber the no. 3 player in the US, behind DoorDash and Grubhub. Several months later, DoorDash unseated Grubhub as well, per sales data from research firm Second Measure. DoorDash, which as a private company isn’t accountable to investors in the same way publicly traded Grubhub and now Uber are, knocked off these competitors with the help of $2 billion in funding from investors including SoftBank.

Uber reported a $316 million adjusted EBITDA loss for its Eats segment in the quarter ended Sept. 30. (Fourth quarter and full year results are due tomorrow.) As far as we know, DoorDash isn’t making a profit. You can see why SoftBank might prefer the companies to reach a truce than to keep battling and bleeding out SoftBank money.

Uber Eats and DoorDash aren’t the first competing investments SoftBank has made. SoftBank enthusiastically funded many of the biggest ride-hail companies as far back as 2015. It had money in Ola, Grab, Didi Chuxing, and Brazil’s 99 before it ever backed Uber. And look what happened: Didi bought 99, Uber sold its Southeast Asia business to Grab. With each deal, SoftBank won.

Maybe that’s also what SoftBank thought would happen with food delivery, that it would spread its bets among a couple different players, and in the unlikely scenario that a couple of them got big and started fighting each other it would step in and be like, okay guys, let’s try to all get along here. Except so far it hasn’t worked out that way (also that would potentially be an antitrust problem). Uber Eats and DoorDash are still competing in the US, and per the Wall Street Journal the situation is even worse in Latin America:

Uber is under siege in Latin America amid a bruising price war where its ostensible rivals are Rappi and China’s Didi Chuxing Technology Co. But here’s the twist. All the combatants have as their biggest owner the same tech investor, Japan’s SoftBank Group Corp., which has injected a total of $20 billion into the three.

Startup investors typically don’t back competing companies. SoftBank, which runs the world’s largest venture-capital fund, has poured so much money into popular tech categories that it created a sort of circular firing squad in which SoftBank-backed companies use SoftBank cash to attack one another.

It is more than a bit awkward:

Uber executives were shocked at how quickly Didi gained market share, former employees said. Head of rides Andrew Macdonald and other executives moved to stem the market-share losses. Uber eventually agreed to increase incentives for drivers and lower some prices.

Uber executives were mystified by SoftBank’s decision to fund a rival, the former employees said, especially because that was hurting Uber’s attempts to reduce losses in preparation for its initial public offering.

You know what they say, all’s fair in love and VC-subsidized food-delivery wars.

6%.

We have talked a lot about Postmates and how it uses fees to pad its revenues and make pricey deliveries seem more affordable, at least to customers who aren’t looking too closely. So I had to laugh when I saw this story in the Philadelphia Inquirer:

As of Tuesday, the four biggest food-delivery apps were charging sales tax on food, but industry leader DoorDash (which also owns Caviar) and Postmates were not collecting the tax on service and delivery fees. Even on the food, Postmates was charging just a 6% sales tax in Philadelphia, not the required 8%.

Maybe there is a legitimate question around whether these companies should be required to collect sales tax on service and delivery fees and not just the food they sell, I’m not an expert here. But it is kind of hilarious that sales tax in Philadelphia is 8%—the state’s 6% tax plus an extra 2 percentage points in the city—and Postmates was just like nah, we’re doing 6%. This doesn’t increase Postmates’ revenue on an order but does make its prices slightly cheaper, since the tax calculated on the order is lower.

Postmates reportedly didn’t explain to the Philadelphia Inquirer why it only charges 6% sales in Philadelphia, but did send a statement saying it is “actively in touch with the Pennsylvania Department of Revenue about the distinct products available to merchants and customers on the platform and how tax laws apply to each vertical.” Postmates filed confidentially to go public in February 2019, planned to make the papers public in September, said it would delay the IPO in October, and has faded into the background of the food-delivery wars ever since.

Safety first.

How is coronavirus affecting the sharing economy, you ask? Well:

Uber Technologies Inc. has suspended 240 user accounts in Mexico to contain the potential spread of coronavirus.

The users suspended had ridden with two drivers who came into contact with a possible coronavirus case, according to a statement posted to the company’s Mexican Twitter account. To date, there have been no confirmed cases of the virus in the country.

And:

Airbnb Inc. asked hosts in parts of China affected by the coronavirus to help guests rearrange accommodation, while stopping short of warning customers about the disease.

The advice comes as hundreds of properties remain available via the room-booking platform in the city of Wuhan in central China’s Hubei province, where the deadly virus that’s killed more than 200 is believed to have originated.

I suppose this all makes sense. Airbnb hosts can decide whether they are going to accept guests and Airbnb guests can decide whether they’d still like to book a reservation in Wuhan; the risks are fairly obvious to everyone. Uber users in Mexico don’t have any particular reason to worry about being exposed to the virus from a cab ride, so I guess it’s prudent to temporarily suspend riders and drivers who might have been affected. The sharing economy certainly doesn’t want to be known for sharing novel new viruses.

This time last year.

Lyft sues to avoid paying drivers a living wage

Other stuff.

Waymo partners with UPS to deliver packages. Alto Pharmacy valued at over $1 billion in SoftBank-led funding round. Oyo lays off one-third of US staff, tweaks business model. SoftBank loses top Vision Fund manager. UPS orders 20,000 vans from electric-vehicle maker Arrival. Ola launching in London in February. Bond raises $15 million for last-mile deliveries. Instacart shoppers in Illinois vote to unionize. Independent contractors find workarounds for AB5. Uber could take Colombia dispute to international arbitration. Lyft lays off 90 people. Airbnb backs creation of EU digital regulator. Amsterdam court rules Airbnb hosts must be licensed. Fed proposes loosening limits on banks and venture capital. UK competition regulator wants more power after Brexit. Citymapper puts itself up for sale. Chicago restaurateurs want tighter rules on food delivery. Amazon doubled grocery deliveries in Q4. E-scooter sales jumped over Christmas. Chattanooga extends ban on dockless e-bikes and scooters. Short-term rentals are keeping hotel rates down in peak seasons. Cards Against Humanity Buys Clickhole. The Iowa Writers’ Workshop Takes on the Iowa Caucus.

Thanks again for subscribing to Oversharing! If you, in the spirit of the sharing economy, would like to share this newsletter with a friend, you can forward it or suggest they sign up here.

Send tips, comments, and WEOs to @alisongriswold, or oversharingstuff@gmail.com.

Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you! (Over)share the love and tell your friends to sign up here.

Scooters!

Bird acquired Berlin-based e-scooter company Circ, it said yesterday without disclosing the price. Bird said the deal would add some 300 employees to its Europe operations. It also announced that it added $75 million to its series D funding from last August, bringing the round to $350 million total.

Circ was founded by Lukasz Gadowski, who also co-founded food delivery company Delivery Hero. Circ officially launched in January 2019 under the name Flash and with €55 million (about $61 million) in financing. It rebranded as Circ in June. Flash evoked speed and superheroes, whereas Circ was “all about circles, connections,” a company spokesperson told TechCrunch at the time. Gadowski is also an investor in Latin American scooter startup Grow.

Of course, a lot of other European scooter companies also launched around the same time Circ did. They included Voi, Tier, Wind Mobility, and Dott. It wasn’t all that clear how Circ differed from its competitors, which brings me to my favorite anecdote about Circ.

At the Micromobility Europe conference in Berlin last October, Financial Times reporter Tim Bradshaw asked the six scooter reps on his panel to say in one sentence what made their company different from everyone else on stage. (This was a great question and I will absolutely be stealing it in the future.)

“We have a great team, that’s one, and the other one is that we’re orange,” said Gadowski, who was sporting a bright-orange windbreaker.

The mic passed to Wind co-founder Eric Wang, then Voi CMO Caroline Hjelm. “First of all,” she said, scowling at Gadowski, “we were orange first!”

I like this story because it gets at how absurdly commoditized micromobility is. There is so little to differentiate one scooter service from another that they semi-seriously boast about their color schemes, except even those aren’t unique. It’s like Circ went to the prom only to realize Voi was already wearing the same dress.

The true differentiator with commoditized services tends to be how much cash each company has access to, and can use to outgrow and outlast its competitors. Circ didn’t have as much as most of its European rivals. In late November, Circ laid off around 50 people, which it attributed to an expected decline in ridership over the winter. The FT reported last week that Circ was in talks with Bird and had been seeking a buyer after struggling to raise money for expansion.

Bird is likely hoping the Circ deal will bolster its presence in Europe, where it is widely thought to lag Silicon Valley rival Lime. Bird’s head of the UK and Ireland left last week, expressing frustration with how the political climate had thwarted efforts to make progress on scooter regulations. “There’s nothing more I think I can do personally to make things move quicker,” he told Bloomberg. Fast-forward a few days, and the UK is now reportedly preparing to legalize e-scooters on roads and in cycle lanes.

Bird was the fastest startup to reach a $1 billion valuation when it did so in June 2018, but last year said it was refocusing on unit economics and profitability after, you know, that became trendy. To underscore the point, Bird crammed so much profitability-specific jargon into co-founder and CEO Travis VanderZanden’s prepared quotes on the Circ deal (“profitability over growth,” “financially disciplined companies,” “clear path to profitability,” “shifted our focus from growth to profitability,” “deliver the strongest unit economics”) that they read like a particularly obsessive Mad Libs entry.

Vancouber.

Vancouver, the last major city in North America without Uber, just got Uber.

The service rolled out the morning of Jan. 24, a day after the Passenger Transportation Board, British Columbia’s transport regulator, said it had approved both Uber and Lyft to operate their ride-hail services in parts of the province.

Uber launched quietly in Vancouver in the summer of 2012. But that November, the Passenger Transportation Board informed the company it needed to follow the same rules as limousine services and charge a minimum of $75 per trip, effectively shutting Uber down.

The request didn’t fly with Uber co-founder and then-CEO Travis Kalanick—“almost no one was abiding by that rule,” he told a local news outlet at the time—but unlike in most other North American cities, Uber’s usual lobbying tactics (Twitter campaigns, emails to users, heckling politicians) didn’t work on Vancouver.

In late 2014, with Uber rumored to be eyeing a return to Vancouver, the city placed a six-month moratorium on issuing new taxi licenses and British Columbia deployed plainclothes transit agents to monitor for any illegal taxi operators. Over the next few years, the city council repeatedly extended the moratorium.

Last year, Slate.com, my former employer, did a good story on how Vancouver managed without Uber for all those years (spoiler, just fine):

So how have Vancouverites handled the lack of ride-hailing? Well, their city has hardly ground to a halt. The percentage of Vancouverites who commute to work by walking, cycling, or transit rose from 57 percent in 2013 to 59 percent in 2017. During that time, the share of commute trips by bicycle jumped by about 50 percent as Vancouver rolled out investments like a network of protected downtown bike lanes. TransLink, the regional transit authority, grew ridership by 5.7 percent in 2017, easily the fastest rate in North America. Andrew McCurran, TransLink’s director of strategic planning and policy, says ridership rose even faster in 2018, by 6.7 percent. Remarkably, a major driver was TransLink’s bus ridership, which rose by 7.3 percent last year.

Also popular, per Slate, was Car2Go, the rental-car company with a network of cars you could reserve and borrow for a few hours from regular street parking spots. Car2Go said last year it was shutting down operations in North America as of Feb. 29. That’s bad for Vancouver but probably good for Uber and Lyft, which can soak up all the unmet rental car demand.

Kicking the keg.

It’s the end of an era at WeWork:

WeWork is phasing out free beer and wine at it North American locations, a spokesperson confirmed to Bisnow Monday. The company doesn't have kegs at all of its 600-plus locations, but they were staples of WeWork's earliest outposts, which were also its most successful, according to WeWork's financial disclosures last year.

All taps will be turned off by the end of February. A WeWork spokesperson told Bisnow that data from an “expanded member satisfaction survey we conducted last year indicated many of our members wanted a greater variety of beverage options,” and that the company is rolling out options including cold brew, kombucha, seltzer, and cold teas. Unless Adam Neumann stages a tequila-shot-fueled comeback, WeWork may be as a dry town for the foreseeable future.

Elsewhere in We, SoftBank-backed Gympass inked a big deal for WeWork office space in New York that SoftBank surely had no hand in. And WeWork competitors want investors to know that while they could be the next WeWork, they are most definitely not the Next WeWork.

Bad dreams.

Quite the burn from the New York Post:

Casper — whose clever cartoon ads have long been ubiquitous on New York subways — has billed itself the “Nike of sleep.” But unlike Nike, which for years has tightly controlled its manufacturing costs, Casper is beholden to a small coterie of powerful US manufacturers.

The Post reports that Casper’s original mattress supplier, Elite Foam, was last year sold to Leggett & Platt, a manufacturer that also makes bed parts for several Casper competitors such as Leesa and Tuft & Needle. Yes that’s right, via M&A, Casper has accidentally gotten in bed with some of its competitors. (Mattresses, the most terribly pun-prone of all industries! Thanks, Mattress Firm.)

Casper, the direct-to-consumer, Warby-Parker-of-mattresses, our-business-is-more-than-mattresses-it-is-the-SLEEP-ECONOMY startup, is expected to list soon on the New York Stock Exchange under the trading symbol CSPR. Casper dreamed big and achieved a $1.1 billion valuation from private investors. But in a securities filing yesterday, the company set an IPO price range of $17-$19, which at the top end of the range would value it closer to $750 million. You might say, a rude awakening.

This time last year.

The breakup letter Uber investors wrote to Travis Kalanick

Other stuff.

WeWork’s Valuation Was for WeWork. Uber pits drivers against each other in California. Restauranteur plans to sue Grubhub for advertising menu she doesn’t serve. Stasher raises $2.5 million for luggage storage. Hourly hotel-rental startup ByHours raises €8 million. Berlin-based Home gets €11 million for flat rental software. Zoomcar adds to series D. SoftBank leads $32 million round in robot waiters company Bear Robotics. Uber signs deal with Nissan to offer UK drivers discounted electric cars. Uber bringing driverless cars to DC. Competition watchdog probing Just Eat takeover. US Consumer Product Safety Commission probing Lime scooters. Lagos bans bike-hailing startups. Skip scooters combust in Golden Gate Park. DC installs parking corrals for scooters. Atlanta to renew scooter permits on month-by-month basis. Uber braces for clash with European cities on scooter data. Waymo brings long-haul trucks to Texas and New Mexico. WeWork sells stake in The Wing. Indian e-bike startup Bounce raises $105 million.

Thanks again for subscribing to Oversharing! If you, in the spirit of the sharing economy, would like to share this newsletter with a friend, you can forward it or suggest they sign up here.

Send tips, comments, and WeWork kegs to @alisongriswold, or oversharingstuff@gmail.com.

Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you! (Over)share the love and tell your friends to sign up here.

Fare play.

Well this is pretty wild:

SAN FRANCISCO—Uber Technologies Inc. is testing a new feature that gives some drivers in California the ability to set their fares, the latest in a series of moves to give them more autonomy in response to the state’s new gig-economy law.

Starting Tuesday morning, drivers who ferry passengers from airports in Santa Barbara, Palm Springs and Sacramento can charge up to five times the fare Uber sets on a ride, according to a person involved in developing the feature. Uber confirmed in an emailed statement that it is doing an “initial test” that “would give drivers more control over the rates they charge riders.”

That is from the Wall Street Journal. Uber is deeply concerned about the impact of Assembly Bill 5, the law passed by California last September that makes it harder to classify workers as independent contractors rather than employees. We talked last week about some of the changes that Uber has made to how it does business in California to strengthen the claim that its drivers are contractors: ditching upfront pricing, capping its own commission, and restoring surge multipliers for drivers. But letting drivers set fares isn’t something I ever thought Uber would put on the table.

Here is more from the Journal:

Uber’s latest changes will set up a bidding system that allows drivers the ability to increase fares in 10% increments, up to a maximum of five times Uber’s price, the person involved in developing the feature said. Once a rider pings the Uber app at the locations in the pilot program, Uber will match the rider with the driver who has set the lowest price, the person said. Drivers who have set higher fares are gradually dispatched as more riders request rides.

One ride-hail app that tried letting riders and drivers set prices was Arcade City, a Facebook-group-based platform that popped up after Uber and Lyft lost a regulatory battle and pulled out of Austin, Texas, in 2016. People who needed a ride in the Arcade City Facebook group would post their pickup information and exchange messages with drivers, who would sometimes set prices when responding to a request. It was all very internet 1.0, despite Arcade City’s attempt to pivot to blockchain. (Uber and Lyft returned to Austin in mid-2017 after Texas overrode the city’s stricter ride-hail regulations.)

Uber isn’t letting drivers set prices from scratch, but seems instead to be giving them the option to increase a base fare it provides. The experiment is particularly interesting in light of a 2015 lawsuit against Uber, Meyer v. Kalanick, that argued the company and then-CEO Travis Kalanick were engaged in a broad price-fixing conspiracy by getting a bunch of contractors together and making them adhere to prices set by the Uber algorithm. Uber folks at the time thought the complaint was wacky, and were floored when a judge didn’t immediately dismiss it. In 2017, Uber got the case sent to arbitration, which was scheduled for late last year.

The bottom line is that in the new AB5 era, Uber is obviously worried about its pricing methods in California. The most substantive changes Uber has made since the bill passed have all focused on pricing. You could argue that to let driver set their own prices is the best way Uber could hand them control of the platform, and control of course is the key to all of this. Even so, simply to dabble in letting drivers adjust their fares is unprecedented for a company that once released a research paper arguing it was pointless to raise fares, because economics. But here we are in 2020 and Uber is letting some drivers do the unthinkable. Because California.

Taken out.

After a month of speculation, Uber sold its India food delivery business to local rival Zomato in exchange for a 9.99% stake in its competitor.

By now we should be used to seeing Uber consolidate. Uber sold its China business to Didi Chuxing and merged its Russia operations with Yandex.Taxi during the Travis Kalanick era. Under CEO Dara Khosrowshahi, who has a mandate to stem losses and make Uber profitable, the company has sold its Southeast Asia operations to regional competitor Grab, pulled Eats from South Korea, and now sold off Eats in India.

Uber’s global retreat isn’t necessarily a bad thing. In the majority of these deals, Uber has walked away with a sizable stake in either its competitor or the merged entity. It’s arguably better for Uber and its investors to own these stakes than to overextend the business and bleed cash in markets where it often operates at a disadvantage to local competitors. It’s certainly preferable for investors who’ve backed several ride-hail firms to have them forge a truce than to watch each one hemorrhage money in a turf war (SoftBank, for example, has invested in Uber, Grab, and Didi).

Khosrowshahi said in November that Uber’s strategy for Eats was to “invest aggressively into markets where we’re confident we can establish or defend no. 1 or no. 2 position over the next 18 months.” India wasn’t one of those markets. Uber was a distant third to homegrown firms Swiggy and Zomato.

As you’d expect, all these companies are burning lots of money. Analysts had estimated Uber was burning $400-$500 million a year on Eats India. Uber said in a securities filing today that Eats India had 2 million monthly active users in the 2019 third quarter—down from 3 million in the previous two quarters—and lost $61 million on $20 million in revenue that quarter. Its loss from operations for the first nine months of 2019 was $244 million on $28 million in revenue. The Times of India reported Zomato late last year was burning $20 million a month and Swiggy $47 million.

Both Swiggy and Zomato are now battling for the title of [pick your impressive-sounding adjective] market leader. Swiggy in December claimed to be the “clear market leader” with “close to 60% revenue share.” Zomato said today, following its Uber Eats acquisition, that it is the “undisputed market leaders in the food delivery category in India.”

Scooters!

LimePass, e-scooter company Lime’s first subscription product, is coming to the UK. The pass costs £4.99 a week, in exchange for which Lime waives the £1 fee to unlock an e-bike for each ride. Riders still pay the per-minute cost associated with their trip, or £0.15 per minute in London and Milton Keynes. (In the US, LimePass costs $4.99 a week and waives a $1 e-scooter unlock fee, but not the per-minute travel cost.) The program is designed to appeal to frequent Lime users, such as the roughly 50% of riders Lime says use its service to commute to school and work or run errands.

“Depending on how often a rider uses Lime, the subscription can pay for itself in as little as 2-3 days,” Lime said in a rider email. Is this a good deal? I’m not so sure. You need to ride Lime at least five times a week to pay off the cost of the subscription, and at that point maybe you should just get your own bike or scooter?

One problem I imagine all the micromobility companies will run up against is the line between what people are willing to spend on a service before they decide to invest in their own device. Take Oakland, California. Lime said last year that the median ride time on its first 1 million e-scooter trips there was 7 minutes. Currently, a 7-minute Lime ride in Oakland costs $3.24 ($1 to unlock plus $0.32 a minute). Alternatively, you could buy this scooter on Amazon for $450. At a median cost of $3.24 a ride, it would take about 139 rides before it became cheaper to have bought your own device instead of continuing to rent—and that’s if Lime doesn’t raise prices. Certainly if you were a regular commuter, it would make sense to get your own scooter.

LimePass seems like an attempt to make Lime more like public transit, but what if those things just don’t mesh? Public transit systems are famously unprofitable. (So are scooter companies, but that is perhaps not the long-term goal.) Here is an interesting essay from Alex Nesic, co-founder of Clevr Mobility, arguing that for shared micromobility to be truly public-transit-like, profit can’t be its main objective. Nesic suggests cities should run and subsidize these services directly, rather than go through startups and take indirect subsidies from venture capitalists:

Some might say that investing in such a ‘new’ technology is not the right move for cities, but I would argue that the required investment is rather insignificant in comparison with more traditional transportation project costs. Consider that the global average cost of building (operations and maintenance aside) a subway line is reportedly $500 Million per mile (often much more in the US) and takes decades to complete, or that new buses cost anywhere between $500K — $800K each with up to $215/loaded labor hour to operate. In contrast, a high quality ‘fleet grade’ scooter costs approximately $500 — $650 and around $12 — $15 per day to support. Roughly speaking, a fleet of 1000 scooters could be acquired and deployed for one year at a cost of $5.5 Million.

You could also take this one step further and argue that instead of taking on deployment and management of scooter fleets, cities could just subsidize private purchases of e-scooters and e-bikes. That would encourage alternative transport modes, involve a lot less work for the city, and be a no-brainer purchase for the frequent e-scooter user.

WeStillWorkin’.

Or at least so says SoftBank:

“We are still in it, we are involved, we are helping the company because we believe the idea at its core is very, very good,” said Deep Nishar, senior managing partner at SoftBank’s Vision Fund. “We will help solve WeWork’s problems with corporate governance with the next set of management,” he said at Munich’s Digital Life and Design conference Saturday.

Honestly, can you imagine spending $9.5 billion to bail out a company that you didn’t still believe had a good idea at its core?

Elsewhere: WeWork’s leasing activity plunged 93% in the fourth quarter after failed IPO attempt

This time last year.

Federal workers are ‘making ends meet’ on Uber

Other stuff.

SoftBank secretly invested $750 million in on-demand startup GoPuff. WeWork co-CEO warns of corporate culture misfit. Uber’s Jump launches adaptive scooter pilot in San Francisco. Lime introduces adaptive scooters in Oakland. Skip reveals scooter upkeep metrics. European Investment Bank backs Uber rival Bolt with €50 million ($56 million) loan. Arrival raises $100 million for electric delivery vans. Turkish grocery delivery startup Getir raises $38 million. Quanergy CEO leaves after lidar stumbles. Spanish delivery startup Glovo exits the Middle East. Goldman dumped entire Uber stake late last year. Investors eye increasing stake in WeWork China. Adam Neumann in talks to boost investment in mortgage startup Peach Street. Uber ending ride-hail service in Colombia. Uber driver banned after carrying passengers holding ladder out of car window. Uber and London in talks over licensing dispute. New York governor expected to propose legalizing e-bikes and e-scooters. France loosens employee stock option rules to help French startups compete for talent. Airbnb writes long memo. “As I type, they are busy turning our street into a low-traffic, communal woonerf.”

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20 (+2,580) for 2020.

Happy new year from SoftBank, you’ve been laid off!

• Oyo Hotels is firing thousands of staff across China and India, people familiar with the matter said, adding to growing signs of trouble at one of the largest startups in SoftBank Group Corp.’s portfolio. –Bloomberg

• Latin American delivery startup Rappi said on Thursday it has laid off 6% of its workforce, less than a year after Japan’s SoftBank Group invested nearly $1 billion in the company. –Reuters

• Zume Pizza Inc. said it was cutting about half of its staff and shuttering its pizza business, making the former robotic pizza maker the latest in a long line of SoftBank Group Corp.-backed companies forced to slash spending. –Bloomberg

• Car-rental startup Getaround plans to lay off roughly 150 employees, or about a quarter of its staff, in a bid to reduce rising costs, people familiar with the matter said. –The Information

Forget 20 for 2020, SoftBank portfolio companies layoffs are already at 2,600, with another 1,200 reportedly planned at Oyo in India over the next three to four months. Add in major cuts made by Uber, WeWork, and a handful of other companies last year and you get that SoftBank-backed firms have logged about 6,700 job cuts in the past six months. SoftBank is also walking away from some big startup investments.

Any of these companies could be a case study in a management textbook, but the one currently attracting the most gleeful schadenfreude is that of Zume Pizza Inc. In case you aren’t familiar, Zume is a five-year-old startup based in Mountain View that dreamed of building a robot pizzeria. Zume set up a robot kitchen and patented “Baked on the Way” delivery trucks with ovens that could bake up to 120 pizzas per hour. Pizza was a starting point but, like all good startups, Zume had grander ambitions: “We are going to be the Amazon of food,” Zume co-founder and former Zynga Studios president Alex Garden told Bloomberg in 2016.

In November 2018, SoftBank pumped $375 million into Zume, boosting its valuation to over $2 billion, with a tentative promise of another $375 million down the line. And hey, look what happened next:

Employees describe a culture at Zume where the emphasis moved quickly from one project to the next, with priorities driven by engineering ambition rather than market research. For example, last year a team of engineers spent months working on a project, codenamed “Penrose,” to equip food deliveries with sensors that would record data such as the temperature of the food once dropped off with the customer, according to two people familiar with the situation who asked not to be identified discussing private information. At the end of the year, with no customers committed to the sensors, the project was dropped and its manager left the company.

At a staff meeting in the Bay Area last June dubbed “Day Z,” Garden told employees cash burn had hit $10 million a month, according to people familiar with the matter, all of whom asked not to be identified. One of the people said that figure was at least 50% higher by year end.

Also:

Many of the now-struggling Vision Fund companies are run by charismatic men without experience running large businesses.

Zume has now announced plans to close the pizza delivery business and pivot to sustainable packaging, if you can even call that a pivot instead of just throwing out one idea and picking up another. Packaging! “We have a clear path to provide what the market wants and what the world needs—a more sustainable food future,” says Garden, in a memo to employees. Only a little awkward that it took five years and $375 million of SoftBank money for robot pizza to figure that out. So much for the Amazon of food. But, you know, whatever. It’s sorted now. Even Amazon needs boxes.

Gigs.

Uber made some major changes in California last week to strengthen the case that its roughly 150,000 drivers in the state are in fact independent contractors, not employees, even under California’s stricter employment classification test.

The two biggest changes are:

1. Goodbye upfront pricing. Passengers will see an estimated price range rather than a set dollar figure before requesting any non-Pool ride. The final price will be calculated at the end based on time and distance. Drivers earn the fare minus Uber’s commission, which is capped on UberX trips at 25%. (UberXL, Comfort, SUV, and Lux trips will carry a 28% service fee.)

2. Hello surge multipliers. Uber at some point replaced the surge multipliers drivers could earn on fares during busy periods with a “flat surge” system that added a fixed amount to the driver’s earnings price. Uber is now reverting to its original system of calculating surge earnings for drivers as a multiple of the fare.

Other changes in California include tweaks to rider rewards (Uber is nixing price protection on routes and flexible cancellations) and to driver incentives (“Quests” will earn discounts on Uber’s commission rather than a bonus). “Due to a new state law, we are making some changes to help ensure that Uber remains a dependable source of flexible work for California drivers,” Uber told California riders in an email. “Our goal is to keep Uber available to as many qualified drivers as possible, without restricting the number of drivers who can work at a given time.”

These changes on the whole feel less like a step toward a new Uber than a reversion to an older one. Price estimates were the norm on Uber until the company quietly introduced upfront pricing in 2016. Upfront pricing allowed Uber to decouple what the rider paid from what the driver earned, in a way drivers suspected was favorable to Uber. That’s because drivers continued to be paid based on time and distance, but riders paid whatever number Uber quoted them. That meant Uber took a hit if the quote was too low and pocketed the difference if it was high. Uber maintained that upfront pricing was designed to break even for the company and its drivers over many trips.

Surge multipliers, similarly, are early Uber. Before the sexual harassment allegations and the federal probes and all of Travis Kalanick’s antics, the biggest Uber scandal was that it jacked up prices—some would say gouged consumers—during high-demand periods (remember that snowstorm?). Drivers had mixed feelings about replacing surge multipliers with the flat system, but seemed to feel multipliers were generally preferable except for on short trips, when adding a flat rate to the fare could go further than putting a multiplier on an already small number.

AB5, the California state law that precipitated these changes from Uber, is ultimately about control. The law is concerned that workers classified as independent contractors are genuinely independent in their jobs, and not simply controlled at arm’s length by a hiring entity that is an employer in all but name.

Control has long been a touchy subject at Uber, which has been dogged by employment misclassification lawsuits and accused of using algorithms and incentive schemes to indirectly manage workers. These algorithmic management techniques became more sophisticated over time as Uber learned more about rider and driver behavior, paving the way for systems like upfront pricing. For Uber now to reverse course under legislative pressure seems like a tacit admission that it may have had too tight a grip on the wheel all along.

King transport.

Here are a couple theories about how to get people to drive cars less and take public transit more:

1. Create fees or taxes, typically known as congestion pricing, that make driving cars more expensive. London and Stockholm both do this. New York last year became the first US city to adopt a congestion pricing policy.

2. Make public transit free. This approach is gaining popularity in Europe and also being tested a few places in the US. Olympia, Washington, is the latest transit system to go fare-free. Kansas City voted in December to make bus rides free starting this year. Boston mayor Marty Walsh is at least theoretically interested in eliminating fares on city buses.

3. Ban cars. This is the boldest and, I think, most interesting option. For instance, take Birmingham, England:

Private cars will be banned from taking "through trips" across Birmingham city centre under plans to cut pollution.

Vehicles will be able to drive into the city, but would have to go back out to the ring road to access other areas.

A draft proposal from Birmingham City Council floats “transforming the city centre” with “a network of pedestrian streets and public spaces integrated with public transport services and cycling infrastructure” and “no through trips” for private cars. Birmingham says 25% of all car journeys taken by residents are less than a mile long. “Cars will no longer be king in the city, public transport systems will become king,” Waseem Zaffar, the cabinet member for transport and environment, told the BBC.

Or how about San Francisco?

In a sweeping attempt to curb pedestrian injuries and deaths on Market Street, SFMTA announced that private vehicles won’t be allowed on the road starting January 29th.

Honestly, I think option three sounds great. We accept that cars litter our streets but what if they didn’t? What if public roads belonged to other types of travelers? I have long said Manhattan should pick one street and one avenue to close to cars and convert into a dedicated bike-and-scooter superhighway. Biking to work would be so easy if you could take 11th Avenue the length of Manhattan! The beauty of New York City is that it’s gridded, so why not take advantage of that? People would be upset for a day and then never look back.

Casper.

Online mattress company Casper Sleep Inc. filed for an IPO. Thank you Casper for the early entry to Bad Charts, 2020:

Casper describes itself as part of the “Sleep Economy,” a market it estimates at $432 billion globally. It is not profitable, having lost $92 million in 2018 and $67 million over the first three quarters of 2019. The market wasn’t kind last year to companies that went public with big losses.

As always, the good stuff is in the risk factors, and one unusual risk in Casper’s filing is influencers. “Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties,” the company warns. “While we ask influencers to comply with the FTC regulations and our guidelines, we do not regularly monitor what our influencers post, and if we were held responsible for the content of their posts, we could be forced to alter our practices, which could have material adverse effect on our business, financial condition, and results of operations.”

Casper is the first of the many mattress startups to take the plunge into the public markets. I would like to name all the others for you here but really there are just too many of them: Emma, Leesa, Tuft & Needle, Eve Sleep, Bear, Purple, Helix, something called Pangeabed. They all look remarkably similar and offer big discounts with code words that more often than not are advertised on the subway. It makes sense why Casper wants to be in the sleep economy. Mattresses are a commodity, but sleep is an experience.

This time last year.

Make congestion pricing great again

Other stuff.

Grubhub denies being up for sale. Lime exits 12 markets, lays off 100. Longtime Uber exec Rachel Holt leaving to launch a VC fund. Egypt competition authority approves $3.1 billion Uber acquisition of Careem. Yandex to expand car-sharing service to Europe. Fiat Chrysler may join Daimler, BMW driverless car venture. One-third of e-scooter injuries involve the head. Takeaway wins bid to buy Just Eat for £6.2 billion in stock. Amazon offers loan to Deliveroo while UK probes investment. Instacart holds firm on tipping policy as shoppers call for national boycott. Uber rolls out PIN safety system in the US. Men give young women the best tips on Uber. China Tech Startups Go Bust in 2019 ‘Capital Winter.’ Airbnb has patented software that predicts if guests are psychpaths. Airbnb partners with powerful North American union. ClassPass becomes a unicorn. Yamaha Warns Musicians Not to Climb in Instrument Cases After Ghosn Escape.

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Send tips, comments, and other mattress startups to @alisongriswold, or oversharingstuff@gmail.com.