Bird begs to differ

CLXXI

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Information.

If there is one thing I really do hate in this world it’s a badly made chart. I’m talking charts with disproportionate axes, pie charts, this thing. Charts that make you nauseous just to look at.

One Bad Chart that is particularly pervasive in the startup community is the unlabeled-axes chart. Think the chart Travis Kalanick shared in 2015 on Uber’s growth in China or this one from Ev Williams on Medium’s membership model (unlabeled double-axis chart!). “What matters is the curve,” people say, which sure, but you can make a curve look a lot more banal or impressive depending on the scale you choose for it, and if you can’t, I don’t know, maybe you shouldn’t be making charts. Obviously I am not a venture capitalist, but if I were and if you showed up with a chart with unlabeled axes in your pitch deck I would kick you out on the spot.

Anyway here is a chart Bird CEO Travis VanderZanden tweeted the other day:

VanderZanden shared this chart during a five-part unthreaded Twitter response to a July 11 story in The Information, “Hit by big loss, Bird seeks $300m in new funds.” The story said Bird lost nearly $100 million in the first quarter of 2019 while revenue shrank to about $15 million, and that as of the spring Bird had only about $100 million in cash remaining despite having raised $700 million over the last 18 months. The company is reportedly looking to raise another $200 million to $300 million at a price higher than its most recent $2.3 billion valuation.

Bird’s rapid-fire fundraising last summer and the hype surrounding shared electric scooters made it the fastest startup ever to reach a $1 billion valuation at the time, so it is sort of fitting that Bird has also proved expedient at burning through most of its money. The Information’s story implies that Bird lost this $100 million in the first quarter for two reasons: 1) its scooters weren’t very sustainable (surprise!), meaning depreciation costs were quite high, and 2) the winter months were slow, maybe because people aren’t as excited about riding scooters when it’s cold, snowy, and icy outside (which, you know, may also make scooters wear out faster).

In response to The Information, VanderZanden shared a table of Bird unit economics using data from June 10 through July 7. The numbers look much better for Bird, which makes sense if you assume that the scooter business is better in the summer. VanderZanden didn’t contest the $100 million loss, but described it as a “one-time accounting write-off from old retail scooters because our original depreciation window was too long.” In other words, Bird thought its scooters would last longer, and then they didn’t and Bird lost money. Now Bird thinks it has a better, more durable scooter and so it would like to write that $100 million loss off as a one-time thing.

Whether this turns out to be the case will depend largely on the durability of the new Bird One and Bird Zero models the company has debuted. VanderZanden said in a reply on Twitter that the Bird Zero scooter now makes up 75% of the company’s fleet and has an “average lifetime of 13 months.” That sounds promising but is a bit hard to square with the fact that Bird only announced Bird Zero and introduced it to US riders in October 2018, at least according to this official Bird press release, which means the Bird Zero has been on the market for at most 10 months.

VanderZanden kicked off this whole unthreaded Twitter thread by calling The Information’s reporting “some (fake) news about Bird’s financials.” And, referring to the more positive summer numbers he shared: “We sent this data to the reporter (DisInformation) that triggered this ‘news’ cycle, but he chose to use old data from last winter.”

Look, here’s the thing. People who cry fake news often seem not to care a whole lot about facts. I cannot even begin to describe the difference in standards required for a journalist to imply—much less state outright—that a company or person has said something untrue, versus for a non-journalist to dismiss something as “fake news.” Old data is not fake news; it is old data. Information you don’t like isn’t necessarily disinformation; it is information you don’t like. To falsely equate them degrades the discourse for everyone.

Deliveries.

New York City council member Mark Gjonaj wants to investigate Grubhub after a report found the food delivery company bought up web domains for restaurants doing business on its platform. “I do believe that Grubhub’s outsized market share and heavy-handed tactics could lead to artificially reduced competition which in turn may drive up the commissions paid by struggling locally owned restaurants,” Gjonaj wrote in a July 2 letter to New York attorney general Letitia James. Gjonaj would like to revisit the May 2013 merger of Grubhub and Seamless, which gave Grubhub control of the New York City market. Chuck Schumer, the senior US senator from New York, is separately asking Grubhub to return any wrongful fees it collected from restaurants.

Grubhub told the New York Post that it operates in a “dynamic, hyper-competitive sector that has changed dramatically in the past few years and will continue to do so” and faces “intense competition in New York City and throughout the country.” Grubhub had 69% of sales in the New York City metro area as of May, according to credit and debit transaction data from Second Measure, the strongest position held by any food delivery company in the 12 top US metro areas. Yet that position is much weakened from just a few years ago, when Grubhub had an effective monopoly in greater New York City, with more than 90% of sales, according to Second Measure.

Elsewhere in food delivery, Postmates has explored a sale to DoorDash or Uber Eats instead of going public, per Recode. Postmates filed confidential draft paperwork for an IPO with the SEC in February, but has yet to make its filings public or take other visible steps toward completing an offering. Recode reports the talks with potential acquirers are happening “amid signs that Postmates could have trouble on Wall Street. Some analysts who met with Postmates in recent months told others in the industry that they had concerns over the company’s financial footing, according to people familiar with the matter.” And: “One of Postmates’ IPO meetings with Wall Street, its modeling day, was also pushed back at least once this spring, a delay that made some investors and analysts ‘queasy,’ according to one of those sources.”

A sale could very well be the best outcome for Postmates, whose US market share of food delivery sales has flatlined at around 10%, falling behind one-time close competitors Uber Eats and DoorDash. Postmates has never achieved profitability, despite promising to do so in 2016, 2017, and then 2018, and it’s unclear how the company could in such a competitive market and with such deep-pocketed competitors, including two—Uber and DoorDash—backed by cash cannon SoftBank. Postmates is heavily concentrated in California, which made up 41% of its sales as of May, a stronghold that could turn into a liability should the state pass AB5, the bill that makes it harder for companies to classify their workers as independent contractors. I like to joke that Postmates is being kept afloat by all the celebrities who order ridiculous amounts of food from it—Kylie Jenner, John Legend and Chrissy Teigen, Post Malone, Rob Kardashian—but honestly who knows, maybe it actually is.

Watch it!

Instacart is making workers job offers they almost can’t refuse. The company alerts shoppers to new grocery orders by pushing a bright green “ACCEPT” button to their phones along with a pinging sound. Per Bloomberg, shoppers who don’t actually want to take certain jobs must go to great lengths to turn them down:

Workers are forced to entirely mute their phone, close the app, or sit through about four minutes of that strange pinging, which many say sounds like a submarine’s sonar and some compare to a time bomb. Those who wait it out sometimes wind up having to do it all over again when the same job pops back up in their queue. To avoid that, people often take jobs they didn’t want, says Buffalo, N.Y., Instacart worker Eric Vallett, who has tapped ACCEPT more than once to avoid another series of pings. “You just want to get away from that sound,” he says.

The four-minute sonic barrage is among a slew of tactics Instacart uses to push workers to handle low-paying tasks they otherwise might reject, according to interviews with dozens of shoppers. They say the company has hounded them with phone calls, text messages, and threatening in-app messages, and that it quietly but explicitly punishes them for rejecting undesirable tasks by limiting their gig options and income.

Instacart’s spin on this is that the four-minute alert period gives workers the time they need to decide whether to accept the task. A spokesperson suggested to Bloomberg that to mute the notifications, shoppers could just mute their phones.

The question as always is whether Instacart is exerting an inappropriate degree of control over workers it classifies as independent contractors. Instacart lets workers sign up for shifts and grants early access to signups to workers who put in a certain number of hours in the preceding weeks. It manages them through push notifications and in-app messaging. Workers can get dinged for what Instacart calls “reliability incidents,” such as not acknowledging a job in time. “Watch it!” Instacart will say, “Your reliability decreased.” Some shoppers get calls from the company’s “Shopper Happiness” team pushing them to take orders.

Gig companies like to say they don’t manage workers, they simply provide a platform that connects two sides of a marketplace—in this case, grocery customers and shoppers. If your real innovation is convincing people that algorithmic management doesn’t count as management for employment purposes, then I guess that is a valuable corporate discovery all the same.

Collective action.

Uber and Lyft paid drivers to protest AB5, the California bill that would make it harder for companies to classify workers as independent contractors, in Sacramento last week, the Los Angeles Times reports:

Drivers who attended the rally were offered and are expected to receive $25 to $100 within five days of gathering in Sacramento to cover “travel, parking, and time,” according to an email The Times obtained. The email was sent to drivers from the I’m Independent Coalition, a group funded by the California Chamber of Commerce, along with a long list of professional associations, trade groups and on-demand companies. The coalition has been working closely alongside Uber and Lyft to call for changes to AB 5 and helped organize the Tuesday rally.

The coalition confirmed to the Los Angeles Times that it paid gig workers including Uber and Lyft drivers up to $100 for travel and expenses to appear at the rally. Separate from the coalition’s payments, Uber offered drivers a $15 lunch voucher via an in-app notification and Lyft offered $25 toward parking costs.

Gig companies have warned that workers would lose the flexibility they are used to if California were to pass AB5 and likely render many of them employees. On the other hand, were gig workers found to be employees, they would be eligible for job protections like a minimum wage and unemployment insurance. They would also be able to form a union, a right not granted to contractors, although for some reason companies seem able to organize collective action by gig workers on their behalf.

This time last year.

WeWork took meat off the menu

Other stuff.

VC firm Maniv Mobility raises $100 million fund. Softbank Vision Fund eyes Spanish delivery startup Glovo. Online groceries are causing a cold storage shortage. Luminar raises $100 million for compact lidar hardware. Waymo reaches 10 billion miles in simulation. Via tests BusBot in Australia. VW invests $2.6 billion in Argo AI. Lime loses another top exec. Hospitality management startup Life House raises $100 million. Greycroft VC explains grocery investment strategy. 23% of US smartphone users will use a food delivery app by 2023. H-E-B to test driverless grocery deliveries. Just Eat buys corporate catering service City Pantry for £16 million. Norwegian startups head to New York for lower taxes. VCs cash out. Nomad merchants stock Amazon’s shelves. Rights for domestic workers. The subway is literally ruining our friendships. The Rideshare Guy reviews Stuber. Why I cancelled Amazon Prime.


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Send tips, comments, and terrible charts to @alisongriswold on Twitter, or oversharingstuff@gmail.com.

Where would WeWork be without Softbank?

CLXX

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WeDebt.

You could be forgiven for thinking WeWork Cos. is in the business of financial engineering rather than property leasing. WeWork rents out buildings it leases but overwhelmingly doesn’t own. It’s developing an investment fund, Ark, to raise money to buy stakes in those buildings. WeWork CEO Adam Neumann will also transfer some personal real estate holdings into Ark, after it got out that he was leasing buildings he partly owned to his own company, which, you know, wasn’t a good look.

Then there is the debt. WeWork is looking to raise $3 billion to $4 billion in debt ahead of an initial public offering, with the potential for that debt facility to grow to $10 billion over the next few years, the Wall Street Journal reported July 7. WeWork already secured an additional $2 billion in financing this year from its chief investor, Softbank, but had hoped to land $16 billion in a deal that would have had Softbank buy out other outside WeWork investors. Some believe WeWork rushed to file for an IPO after Softbank reined in that deal. WeWork previously raised $702 million in debt in April 2018. Those junk bonds have rarely traded above par, or 100 cents on the dollar, ever since.

As Matt Levine points out in Money Stuff, there’s nothing unusual about a real-estate company raising money through debt: “debt secured by prime office buildings with reliable rental income sounds good, sounds like good attractive debt, whereas equity in the owner of some midtown office buildings doesn’t sound as exciting as equity in a hot tech startup.” WeWork can be a tech company or a real estate company depending on what suits its needs at the time, which, to quote Levine again, “is an impressive business innovation entirely separate from whatever innovative things you are doing with your actual buildings and technology.”

The one constant need at WeWork is cash, because it burns through it so quickly. “Cash” and “space,” as Neumann told Bloomberg, are the only two things holding the company back. In 2018, WeWork lost $1.9 billion, more than the $1.8 billion it generated in revenue that year. Much of the company’s cash has gone into breakneck growth: more buildings, more employees, investments in technology to optimize how tenants use WeWork’s space. WeWork was never going to be the first-mover in office space, which is an old business, but it has become one of the most powerful, thanks to a seemingly limitless financial arsenal.

Any startup depends to some extent on its ability to raise capital, but it’s hard to fathom where WeWork would be if Softbank hadn’t come along, given it billions of dollars, and urged Neumann to make the company “ten times bigger than your original plan,” as the story goes. WeWork is the second largest US startup by private valuation since Uber exited the private markets, behind only e-cigarette company Juul. It is the largest tenant in Manhattan, and the second biggest in Central London. “You can brute force your way to a winning position with capital,” Jeffrey Rayport, a professor at Harvard Business School, told the Financial Times. Can you maintain the lead without it?

Opinions.

Here is an op-ed in the Los Angeles Times from David Weil, a former wage and hour administrator at the US Department of Labor in the Obama administration, that says Uber and Lyft drivers are unambiguously employees under the employment classification test established by the California Supreme Court and currently being considered by state lawmakers:

As the former head of the federal agency that enforces some of those laws (which are nowhere near a century old), I understand the complexity of this issue. There are certainly companies whose workers operate in the gray area between employees and contractors. In those cases, workers in some ways act like employees (e.g. because their activities are supervised in part by the company and they are closely integrated into the company’s operations), but in other ways they act like contractors (e.g. because they determine the way they deliver that service, set their prices and face entrepreneurial risk).

Uber and Lyft are not among those close, gray area cases. Their status as employers is really quite clear. And though that designation would reduce their profits, it wouldn’t be a threat to their existence.

Weil, who once told Bloomberg’s Josh Eidelson he personally didn’t use Uber, argues that Uber and Lyft are managing their workers, they’re just doing it with software rather than humans. “These companies have created a sophisticated management system to achieve core strategic ends,” Weil writes. “It just happens to be a management system based on software rather than human beings to send, evaluate, act upon and record those decisions, millions of times a day.”

The LA Times editorial board, meanwhile, has split the difference by calling for on-demand workers to get more protections, while also arguing that the notion that gig workers could be reclassified as employees and still enjoy the same flexibility they do now is a “risky fantasy” that “just won’t happen.” (A labor law professor contests on Twitter that the piece is “not a very well-informed editorial.”)

How much flexibility workers like Uber drivers and Postmates couriers would be able to retain as employees is worth asking. While there is no legal requirement that employees work fixed schedules, there are certainly financial realities companies have to deal with. It seems possible that having workers classified as employees would make it impractical for many gig companies to continue letting their workers do business with competing platforms, or signing on and off as they pleased. Then again, maybe health insurance, a minimum wage, and other protections that come with traditional employment are worth the trade.

Scooters!

How are scooters handling European cobblestones?

"Mine just broke," a middle-aged man says as he unlocks one of the seven scooters parked at random around the square. "It hit a raised cobblestone and stopped working."

Scooter companies are working to design better, more durable scooters for mass sharing after burning through early Xiaomi models intended for personal use. In European cities, one particular challenge is designing wheels and suspensions that can handle cobbled streets, which make for a bumpier ride than the paved roads of US cities. A word often associated with these newer models is rugged, as in, “a thick, rugged white and green thing” (Lime) and “The Bird Zero is more rugged.” These redesigns are crucial to the longevity of shared scooters, which will determine whether scooter companies can ever become profitable. They’re also important given reports that the wheels of some scooter models were prone to snagging in potholes and other small bumps, causing riders to pitch off suddenly.

Another solution to this problem is to just remove the cobblestones, as Rome plans to:

Hundreds of thousands of cobblestones that line some of the city's busiest roads are to be ripped up and replaced with asphalt.

The city’s authorities say that the blue-grey, basalt cobblestones are lovely to look at but cannot withstand the battering of so many cars, trucks and buses.

Hammered day and night by heavy traffic, the cobblestones get dislodged, turning some of Rome's busiest roads into perilous obstacle courses, particularly for cyclists and scooter riders.

These “sanpietrini” cobblestones date back to the 16th century, and were quarried from volcanic rock, according to the Telegraph. Rome plans to remove them from nearly 70 busy avenues and re-lay them across 110 quieter streets and alleys. I feel like there is a good metaphor in Rome tearing up ancient cobblestones to make way for electric scooters—if you think of one, do email it to me.

Elsewhere in scooters, German cities are the latest testing ground after the government green-lighted the shared fleets in May. The rollout has thrilled riders, worried health officials, and kept police busy:

Munich police have reported a number of accidents, including one where an 85-year-old woman was knocked off her electric scooter after a car cut her off, and another case where a 23-year-old crashed into a police car. Authorities said they'd also stopped 38 drunk people and six people under the influence of drugs who were driving the scooters.

A 28-year-old man in the western German town of Erkelenz made headlines across Germany after he followed his phone's GPS and rode his scooter onto the highway. The man rode for around 7 kilometers (4.3 miles) until he was escorted off the highway by two cars, to waiting police.

Money is still pouring into Europe’s scooter market, with Berlin- and Barcelona-based Wind Mobility raising $50 million and Amsterdam-based Dott announcing a €30 million investment. Both companies are putting the financing toward their next generation of scooters, which will have swappable batteries and improved durability. You might call them rugged.

Eating in.

Imagine if when you ordered on Uber Eats you had the option to pick up your food at the restaurant you were ordering from and eat it there. It wouldn’t be delivery or takeaway, but rather a normal restaurant dining experience, except instead of interacting directly with the restaurant you’d handle everything through Uber. Uber would take your order, sort your bill, and collect your tip at the the end.

That would be weird, right? Uber Eats is for getting something brought to you. The convenience proposition is that you, from the comfort of your home, can tap a button on your phone and have food show up at your door in a matter of minutes. If you wanted to eat at the restaurant you would just show up and eat at the restaurant. Why would you need Uber to intermediate that experience?

Uber Eats will now deliver food to customers in the most unexpected of places -- restaurants. The food delivery and pick-up app's "Dine-in" feature is now being pilot-tested in Dallas, Austin, Phoenix and San Diego, according to an Uber spokesperson.

Okay, never mind.

One reason the delivery business is tough is that delivery companies are fundamentally middlemen between you, the consumer, and the restaurant. Groceries and restaurants have famously thin margins, and so handing over a commission on orders to a delivery company often isn’t an attractive proposition, but the pitch is that delivery helps bring in new customers and wring more use out of fixed costs like a kitchen and restaurant staffing, and with enough volume that should be good for business.

The Dine in proposition, on the other hand, is… what? The customer eats at the restaurant, taking up valuable real estate, and is served by its staff, but the transaction is managed by Uber, which also takes a commission on the exchange. The restaurant does all the things it usually does, but somehow Uber also gets a cut. The benefits of this setup to Uber are more obvious: It charges the restaurant a fee for taking the order and even sometimes marks up prices while eliminating the cost of labor, which is basically the dream.

Other stuff.

Waymo gets permission to transport passengers in California. Waymo tests wifi in driverless vehicles. Uber will take “years” to make a profit, CTO says. US national security panel approves $2 billion Softbank investment in Cruise. Ola Electric raises $250 million from Softbank. Ola gets London license to compete with Uber. Bolt valued at $1 billion. Grubhub registered duplicate restaurant sites to quietly raise menu prices. Amazon scrutinized over Deliveroo investment. Deliveroo dark kitchen closes after couriers strike. Five Uber Eats couriers killed in Mexico in past six months. Meditation app Calm raises $27 million. Paris-based Cubyn raises €12 million for delivery logistics. Urban-planning startup Venn raises $40 million. Tumult at Brandless. No more free lunch at Opendoor. Airbnb for stuff. Hedge funds tracking private jets. Montreal upset by unruly e-bikes parking. Lee Iacocca bet on e-bikes and scooters. Why electric scooter laws don’t work. Do Not Let This Plague of Electric Scooters Come to Britain.


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Send tips, comments, and sanpietrini to @alisongriswold on Twitter, or oversharingstuff@gmail.com.

Tip your delivery worker in cash

CLIX

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Tips.

We talked last week about how DoorDash recently overtook Grubhub to become the leader in US online food delivery. DoorDash surged ahead thanks largely to $2 billion in financing from investors like Softbank. Money isn’t everything, but it’s helpful to have a big pile of it when a lot of your growth depends on giving out coupons and free stuff to customers to get them to start using your platform.

What we didn’t talk about was the driver side of that equation, which is where things really get weird. You might recall DoorDash came under fire earlier this year for using customer tips to subsidize driver wages. DoorDash promises a “guaranteed minimum” payment on each order, and it counts customer tips toward that minimum, rather than on top of it. Here’s how DoorDash explains this on its help page:

I’d guess most DoorDash customers don’t fully appreciate how their tips are being used, so let me spell it out: So long as your tip counts toward the guaranteed order minimum set by the company, it doesn’t matter to the worker whether you left it. They get paid the same regardless. Who it matters to is DoorDash, because if you don’t leave a tip, the company has to cough up the minimum pay for the job itself.

DoorDash is essentially using a tipped minimum wage. In many but not all states, employers can pay tipped employees like waiters and bartenders less than the prevailing minimum wage as long as they earn enough tips per hour to make up the difference. This reality of how tipping works is at odds with the popular conception among US consumers that a good tip ought to be earned by the worker. It’s one of many reasons why tipping is such an abysmal practice.

Federal law requires employers to pay minimum wage workers at least $2.13 per hour, plus more if they don’t earn enough in tips to meet the prevailing minimum wage. Many states require the employer to pay more than $2.13, and limit the amount of tips (called a tip credit) they can put toward meeting the combined minimum. Arizona, for instance, requires employers to pay a minimum cash wage of $8 an hour and limits the tip credit against the minimum wage to $3, for a combined rate of $11 an hour.

DoorDash’s policy of paying workers a base rate of $1 and then an unlimited tip credit would run afoul of that federal minimum for tipped workers, but DoorDash workers are independent contractors, not employees, and so they aren’t protected by federal (or state, or local) labor law.

If DoorDash workers were suddenly found to be employees, on the other hand, as could happen under a bill being considered in California, then it would be a different story. In California specifically, DoorDash would have to pay couriers the full state minimum wage of $12 an hour out of its own coffers. Any customer tips would be extra on top of that, as they should be.

In a lengthy blog post last week, DoorDash CEO Tony Xu defended the company’s tipping practices. DoorDash, he said, had held worker roundtables about its pay policies and conducted online surveys (h/t to Eric Newcomer for the link), and would be sticking with a guaranteed minimum that included tips, which “means that Dashers are more likely to accept all kinds of deliveries because they know what their earnings will be even if the customer provides little or no tip.” This would also be the case if DoorDash workers were protected by a minimum wage, but, the gig economy!

Is DoorDash’s policy tip theft? I am not a lawyer, but you can see why it rubs people the wrong way. Tips are another way in which DoorDash conceals the true cost of its service—as a customer, you pay service and delivery fees, but you are also expected to leave a tip through the app, where DoorDash can see it, that is really a wage. You bear the labor cost so that DoorDash, a company with $2 billion in funding, doesn’t have to.

It’s worth remembering that DoorDash isn’t the first delivery company to be accused of doing something sketchy with tips—Postmates just agreed to an $85,000 settlement over alleged tipping violations—and it certainly won’t be the last. A tip: If you want to be sure your tip is going to the worker, don’t use the app. Leave it in cash.

Secrets secrets…

…are no fun, especially when they’re between Uber and Lyft and labor unions. The ride-hail companies are in talks with “a few large unions” to exempt drivers from full employment protections in California, the New York Times reported over the weekend. One of those unions is the Service Employees International Union, which represents roughly 2 million US workers.

California is weighing a bill to change state labor law, known as AB5, that seems likely to declare ride-hail drivers employees instead of independent contractors. Uber and Lyft, who have vocally pushed back on California’s legislation, now seem to be hoping to broker a back-room deal that would create a carve-out for their workers, and help them avoid paying the estimated $3,600 in added costs per driver of employee classification.

Uber worked with a union to create an advocacy group for drivers in New York City in 2016 as a preemptive move against drivers attempting to organize. The group that was formed, the Independent Drivers Guild, advocates on behalf of drivers and has successfully pushed for major changes including Uber’s adoption of tips and the city’s pay floor rules for ride-hail drivers, but it is explicitly not a union.

Drivers in California, meanwhile, are angry at anti-AB5 messaging Uber and Lyft have pushed on them. One driver told Recode he automatically signed a petition from Uber without realizing what it was. Another driver told something similar to CBS San Francisco. Lyft didn’t send a pre-written petition, but used its app to push out a form for drivers to fill in with their name and message, and send to their legislators.

I’m fortunate enough to never have received a push notification from an employer asking me to sign a petition or “Take Action” with an email to my legislators. I imagine it would be quite stressful! We live in a world where our information is never really private, and false urgency pervades everything from Slack messages to the news cycle, but there is something especially icky about a company using the contact information it has on file for you—contact information you had to provide to be able to do the job!—to push a political agenda.

Best Burger Corp.

The BBC set up a fake burger restaurant to see how easy it was to start selling food on Uber Eats. Then they made a video about it.

“I am astonished by what I saw, but also very, very alarmed,” says Mark McGlinn, the food safety expert who received the burger that the BBC reporter grilled on his patio, topped with lettuce, and balled up in some foil for an Uber Eats delivery person to pick up. Tell me this is not one of the saddest burgers you’ve ever seen.

“We’re in desperate times, it seems to me, if very, very large food delivery platforms can be operating in this way,” says McGlinn.

Uber told the BBC in a statement it was “deeply concerned by this breach of our food safety policy” and “it is unacceptable that a restaurant that did not meet our requirements was able to use the platform.”

For more fake restaurant content, I highly recommend this Vice video from a reporter who turned his shed in Dulwich into TripAdvisor’s top-rated restaurant.

Scooters!

The scooter bubble has bred an I-rode-a-scooter-and-wrote-about-it bubble:

Elsewhere, Lisbon is battling the “scourge” of electric scooters with fines of €60 to €300 for companies whose scooters clutter up public rights-of-way.

This time last year.

A simple, brilliant formula for paying Uber drivers more

Other stuff.

Getaround buys Norwegian car-sharing company Nabobil for $12 million. Uber warns UK against over-regulating driverless cars. Uber co-founder Garrett Camp buys $72.5 million Beverly Hills estate. Careem shuts Sudan operations per Uber deal. Former Uber exec Emil Michael vetted for Trump cabinet position. The Uber Eats economy. Uber adds bikes and scooters to main map. Grocers test prepared foods delivery. Airbnb launches luxury rentals. Lagos one of Airbnb’s fastest growing markets. LA home-sharing rules take effect. Google VP of finance joins Postmates board. Lyft donates $150,000 in rides to US immigration groups. Lyft driver arrested for sexually assaulting passenger. Uber settles with UK women who accused driver of sexual assault. Driver app Mystro says it was blocked by Lyft. Uber Driver Pulls Out Sex Toy on Cops Who Feared It Was a Gun. NYC Family Accused of Running Illegal $5 Million Airbnb Ring. Cash deserts. Robot chefs. Scooter rage.


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Send tips, comments, and fake Uber Eats restaurants to @alisongriswold on Twitter, or oversharingstuff@gmail.com.

Grubhub is sick of hearing about DoorDash

CLVIII

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


I’m heading to Paris for work Wednesday through Friday, because a perk of being based in London is that Paris is quite close and going there is no big deal. I plan to test out all six bajillion scooters for the sake of journalism. If you will also be in Paris and would like to join me in this epic undertaking, or grab a scooter-free coffee, shoot me a note here or on Twitter.

“Uncle Masa.”

Grubhub, the longtime king of US online food delivery, fell to DoorDash in May, according to new credit transaction data from research firm Second Measure. DoorDash claimed 32% of sales that month among the food delivery companies Second Measure tracks—see chart below—compared to 31.7% for Grubhub. Uber Eats trailed in third with 19.7% of sales (a bad sign considering how much Uber spent on Eats driver incentives in the first quarter), followed by Postmates with 10.2%. Almost everyone’s sales are still growing overall with the market, but DoorDash is taking a bigger slice of the proverbial pie.

DoorDash has over the past year pulled away from a pack of Silicon Valley startups jockeying to win the food delivery space. It helps that DoorDash is the definition of richly funded. It’s backed by $2 billion in financing from investors including Softbank, of course, and was last valued at $12.6 billion, nearly double the $6.6 billion market cap of publicly traded Grubhub. DoorDash isn’t profitable, while Grubhub is.

This funding is a sore point with Grubhub execs, who have tired of hearing about DoorDash. Both DoorDash and third-party data providers like Second Measure were the subject of much conversation at a Grubhub dinner I attended in New York City in April. Grubhub CFO Adam Dewitt said DoorDash’s story was “aided by some grossly incorrect third-party credit card panels.” Grubhub CEO Matt Maloney called Softbank CEO Masayoshi Son “Uncle Masa” and said Grubhub could also post huge growth numbers if it were willing to spend $1 billion a year on subsidies for diners and restaurants. “Sometimes you can get free money and sometimes you can’t,” Maloney said. “The current practices have to break when there’s a cost of capital.”

Food delivery, as we’ve talked about before, is a tricky business, without much money to go around for all the parties involved. Companies like DoorDash make money not only from the fees their customers pay, but also from the cut of revenue they take from the restaurant on the sale side. As anyone in the restaurant business knows, margins are already thin enough without having to make room for a delivery startup.

Some of the biggest chains are now pushing back. “McDonald’s Corp., Applebee’s and Cousins Submarines Inc. are among chains negotiating to pay lower commissions and asking their delivery partners to spend more on marketing and promotional discounts,” the Wall Street Journal reported June 23. The irony is that these big chains are likely already getting a better deal. Uber, for instance, noted in its IPO filing that it charged “a lower service fee to certain of our largest chain restaurant partners,” which it said sometimes led to Uber losing money on the transaction.

Chains can extract better terms because they make up a bigger chunk of sales for delivery platforms. Smaller restaurants have the same problems with delivery companies but not nearly as much bargaining power. Take Mission Pie, a local favorite in San Francisco whose owner said she couldn’t afford to pay a 25% to 30% commission to delivery services, because it would eat up her entire profit margin. Last week, Mission Pie said it would close in September after 12 years in business, faced with the “extraordinary increase in the cost of living in the Bay Area.” Profits declined even as the cafe got busier, the cafe’s founders wrote in a Facebook post, adding that the options they considered for expanding proved to be bad for business. “We’re looking at you, delivery apps,” they wrote.

Scooters!

Nashville mayor David Briley would like to ban them after a man died riding one. Brady Gaulke, 26, died in May after being struck by a vehicle while riding a Bird scooter. Police said Gaulke made an improper turn onto the road from the sidewalk around 10pm on May 16, when he was hit by a Nissan Pathfinder. He died of his injuries three days later. Police later concluded that Gaulke “operated a Bird scooter in a reckless manner while under the influence of alcohol.” No charges were filed against the Nissan Pathfinder driver.

Gaulke’s girlfriend of four years set up a GoFundMe to raise money for his medical expenses, memorial service, and a foundation that raises awareness around brain trauma. The GoFundMe page, which at last count had raised $13,910 of its $15,000 goal, also called for Nashville to “ban these awful motorized vehicles in our cities.” It included a link to a petition calling for the mayor and city council to ban electric scooter companies that as of today had more than 2,700 of its goal of 5,000 signatures.

On June 21, Briley recommended the metro council end an e-scooter pilot and pass legislation to remove scooters from city streets and sidewalks. “We have seen the public safety and accessibility costs that these devices inflict, and it is not fair to our residents for this to continue,” Briley tweeted, adding that scooters could return in the future under a more rigorous permit process and “with strict oversight for numbers, safety, and accessibility.”

Nashville’s metro council is scheduled to take up Briley’s proposed ban on July 2. In the meantime, the city’s e-scooter companies—Bird, Bolt, Gotcha, Lime, Lyft, Spin, and Uber—are continuing to operate normally. Bird was quick to point out that Briley can’t single-handedly shut down scooters in Nashville. Bird also said it is on track to pay out more than $1 million in wages to locals who charge scooters in 2019 and that banning scooters would put all these scooter-chargers out of work. Uber used to brandish a similar line about drivers being hurt and out of work when cities threatened to ban or restrict its operations. Bird was started by a former Uber guy, so it’s not surprising that Uber tactics remain its M.O.

Meanwhile, in New York, electric scooters and electric-propelled bikes could soon be made legal in the state, if not yet New York City, which would have to nix its own rules prohibiting their use. The agreement clears the way for companies like Bird and Uber-owned Jump Bikes to start service in the state, the result of roughly half a million dollars in lobbying by scooter companies so far this year. More importantly, it brings the city one step closer to permitting so-called throttle electric bikes that don’t require the user to pedal and which are primarily used by food delivery workers. The city has aggressively ticketed these workers and at times confiscated bikes in a crackdown that seems to ignore the yuppie millennials who ride equally illicit scooters around.

Backpedaling.

Chinese bike-sharing startup Ofo has “basically no assets,” a Chinese court ruled June 17, and no ability to pay its debts to suppliers and users. Founded in 2014, Ofo raised more than $2.2 billion from backers including Chinese e-commerce giant Alibaba and ride-hail company Didi Chuxing to popularize dockless bikes in China, then burned through it in a fierce, costly battle reminiscent of the war between Uber and Didi. Ofo’s banana-yellow bikes were plagued by vandalism and theft and discarded by the thousands in piles that became known as bike graveyards. Ofo briefly expanded to the US before shuttering most of its operations there last summer.

Supplier Tianjin Fuji-Ta Bicycle sued Ofo this year in an attempt to recover roughly $36 million. Ofo has also stiffed nearly 12 million customers who put down small deposits to use the service and have requested refunds totaling $170 million. The Chinese court noted that Ofo’s bank accounts either have a zero balance or are frozen and that it has no other valuable assets, because it is apparently that easy to get rid of $2.2 billion.

The story should be a cautionary tale for the Silicon Valley ecosystem and investors who pour funds into money-burning startups in the hopes that one of them will turn out to be the next Uber. Also, if your company’s product is ever trashed so intensely that the rubbish gets nicknamed a graveyard, maybe consider that something has gone horribly wrong.

New hires.

Same-day delivery company Deliv is getting ahead of California’s proposed changes to employment classification by hiring its workers. The company said June 18 it would form a subsidiary, Deliv California, Inc., to hire workers in the state who are currently independent contractors as employees, beginning in Sacramento and rolling out across California by the end of August.

As employees, Deliv workers will get an hourly base wage plus $0.58 reimbursed per mile (the federal rate as of July). They will also receive the hallmark benefits of employment: workers’ compensation and unemployment, paid sick leave, a retirement plan, and health insurance. Deliv will subsidize health care for couriers working 30 hours or more a week, and give other workers access to insurance plans at discounted group rates. For Deliv, making workers employees also means it can manage and train its workforce better than it could with independent contractors.

Deliv is fairly well suited to this change. Its workers already sign up for shifts to make scheduled deliveries, unlike workers for companies like Uber, Lyft, DoorDash, Postmates, who sign on and off as they please and, when on, respond to immediate consumer demand.

Deliv will be an interesting litmus test of how smoothly workers can make the switch from contractor to employee. As California’s proposed changes have gained momentum, many gig companies have issued dire warnings about how classifying their workers as employees would destroy flexibility and limit potential earnings. It’s unclear how much of this is rhetoric designed to frighten workers vs. a legal or financial reality. Deliv’s new employees will be some of the first to find out.

This time last year.

Uber got its license back in London, also, Oversharing joined Substack 🎉

Other stuff.

WeWork sued by former execs for age, gender, discrimination. Presidio Trust rejects WeWork-led development proposal. Waymo partners with Renault and Nissan to “explore driverless mobility services” in France and Japan. Humanising Autonomy raises $5 million to work on driverless-pedestrian interactions. Female ride-hail drivers say companies fail them on sexual harassment. Uber driver sentenced for kidnapping female passenger. Lagos-based Max.ng gets $7 million for ride-hail motorcycles. Cairo-based Swvl raises $42 million for private bus service. Grocery outlet jumps 30% in trading debut. China’s favorite food delivery service worth more than its biggest internet search firm. European cities seek EU help against Airbnb. Uber clean air fee has raised £30 million. Number of US taxi drivers has tripled in a decade. Ampersands. Compost. E-unicycles. “There is no single source of truth for all businesses in all categories.”


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Send tips, comments, and your top Paris recommendations to @alisongriswold on Twitter, or oversharingstuff@gmail.com.

California could crush the gig economy

CLVII

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


👋 from London, where the grass is green and the weather not nearly as bad as everyone says. Oversharing took an extra week off due to life needs like moving and finding a place to live. I have no idea how people did this before the internet, because my entire move was facilitated by digital services. I took Uber from the airport and found a flat on SpareRoom. The absolute best tip I got on relocating to London, and would relay to anyone looking to do the same, was to set up a digital Monzo account. Multiple people had told me getting a traditional bank account is a real headache in which you need proof of a residential address to get a bank, but you need a bank to get an address… you see the problem. Monzo was easy to set up and works like a charm. My coworker John Detrixhe, who recommended Monzo, writes a weekly newsletter on the future of finance for Quartz, and I recommend signing up so that you too can get his savvy advice and insights.

Contract, or not.

Almost every gig company you can think of works because someone at some point figured out that if you hired workers through an online platform and told them they could be their own boss and set their own schedule, then you could treat them as independent contractors instead of employees. Contractors by some estimates are 30% cheaper to hire than regular employees. They aren’t entitled to a minimum wage, unemployment insurance, health care, sick time, family leave, and other benefits that US labor law affords to employees.

Hiring contractors is the secret to why gig services are so cheap. That these services were cheap made them popular with consumers in the first place, which allowed their companies to raise money from venture capitalists, which helped them attract more customers and sign up more contract workers, and so on, until gig platforms became the de facto place for customers to seek out the services they offered, like rides and food delivery, and for workers to provide them.

Now imagine if those workers weren’t actually contractors, but employees who’d been mislabeled as contractors for the better part of a decade. Imagine if gig companies suddenly had to hire their workers as employees, pay them a minimum wage, and provide them with benefits like health care, unemployment insurance, and family leave. The gig model would rupture at its very core. Gig companies may not survive.

That many gig workers could be found employees is no longer a hypothetical. A bill passed by the California Assembly and now with the state senate would classify workers as employees if they don’t perform work “outside the usual course of the hiring entity’s business.” As written, that standard seems likely to torpedo the contractor argument for companies like Uber and Lyft, whose drivers perform the essential function of driving; food delivery companies like DoorDash and Postmates, whose couriers perform the essential function of delivering food; and plenty of other gig companies that rely on contractors to perform their core operations.

Gig companies are scared, and they have turned to scare tactics. Uber and Lyft are urging drivers to sign in-app petitions to “protect” driver flexibility. “Recent changes to California law could threaten your access to flexible work with Uber,” one warning reads, despite the fact that there is no legal requirement that an employee work a fixed schedule. One driver told CBS San Francisco he feared drivers with limited English skills would sign the in-app petition without understanding what it was. Another driver worried the companies would track whether they signed, and Lyft told CBS San Francisco it can see if a driver completes the petition. (Freedom! Flexibility!)

Uber CEO Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer meanwhile took the extraordinary step of co-authoring an op-ed in the San Francisco Chronicle pushing back on the California Assembly’s bill and promising a renewed commitment to job security and work conditions for drivers. Uber, Lyft, and other companies have quietly lobbed California lawmakers since last year to shield them from the “outside the usual course” of business test, which was set out in a ruling by the California Supreme Court in 2018, as Bloomberg’s Josh Eidelson explains in this helpful Twitter thread.

Investors are also taking note. Last week, equity research analysts at Barclays estimated that reclassifying workers could cost Uber and Lyft an additional $3,625 per driver in California. That’s enough to boost Uber’s annual operating loss by more than $500 million and Lyft’s by $290 million. “Any wide-scale reclassification of drivers to employees would be a material negative for ride-hailing and further put into question the long term profitability of the industry,” the analysts wrote.

While the bill is still far from becoming law, that we are even talking about it is a big deal. The current Trump-appointed National Labor Relations Board believes Uber drivers to be independent contractors, but as I’ve said before, local- and state-level efforts could ultimately prove much more powerful than a federal ruling. Just as New York City’s unprecedented pay floor for ride-hail drivers changed the conversation on wage standards for contractors, what happens in California is bound to be watched across the country, if not all over the world.

Fiverr.

Fiverr, an Israel-based startup, is a sort of white-collar TaskRabbit—a freelance platform for services like digital marketing, ghost writing, translation, and video editing that don't require a physical presence. On June 13, Fiverr became the latest gig economy company to go public, following the high-profile debuts of ride-hail companies Uber and Lyft.

Fiverr describes itself as a “Service-as-a-Product” (SaaP) company, an unwelcome riff on the established "Software as a Service" category. Fiverr makes money on service and transaction fees from bookings processed through its platform. It offers more than 200 types of service listings, which it calls “Gigs,” a word it has registered a trademark for. (Other registered word marks include “Gig,” “Fiver,” “Fiverr,” “Fiverr Faces,” and “In Doers We Trust,” the tagline on its infamous subway ad campaign.) Fiverr reported a net loss of $36.1 million on $75.5 of revenue in 2018, nearly double its loss from the previous year.

Financial results are only part of the story, though. To test the platform out, I hired three Fiverr sellers to write about Fiverr’s IPO for Quartz, for $5, $10, and $15, respectively.

You get what you pay for. Two of the stories I received were rife with plagiarism, detected with a quick Google search. A third fell through after the seller said I didn’t provide enough information, and asked me to cancel the order. Fiverr bills itself as a time-saver for busy professionals, but it took me far longer to find sellers, provide instructions, wait for the deliveries, and check the work for plagiarism and errors than it would have to simply write about the IPO myself.

(A sample of the $5 story we commissioned.)

This is hardly surprising. It would be unreasonable to expect to be able to buy high-quality work in 24 hours for $5, a rate below the US minimum wage if the worker spent more than 40 minutes on the task. Fiverr doesn’t disclose where its workers are based—its regulatory documents note they live in more than 160 countries—but I’m willing to bet that many of them are located in places where the prevailing wages are much lower than in the US and Western Europe.

What Fiverr does share is that 70% of its revenue in the past two years came from buyers in the US, UK, Canada, Australia, and New Zealand. It’s clear the company’s business depends largely on its ability to put sellers in front of buyers where their services are priced below the market. Fiverr sells the idea that such a platform is a win for buyers and sellers—facilitated by technology!—when in reality it may not be to the liking of either party.

Scooters!

Uber pulled its Jump bikes and scooters from San Antonio, Texas, last week after the city proposed changes that would cut its fleet in half. San Antonio has asked (pdf) seven companies currently operating there to apply for one of three permits as a dockless vehicle operator. The city plans to cap the number of dockless vehicles on its streets at 5,000—there is currently no cap and about 16,100 vehicles—and has proposed new fees of $100 per vehicle and an annual fee for scooter racks and corrals. An Uber spokesman told Texas Public Radio the new rules weren’t why Uber decided to leave. According to survey results (pdf) released by the city in May, about 80% of respondents felt dockless vehicles could look cluttered, 64% said e-scooters were often parked in their way, and 60% said they’d like to see fewer dockless vehicles.

Over in Paris, which I hear now has more scooters than people, mayor Anne Hidalgo says the city needs “order and rules to assure road safety and to calm the streets, pavements, and neighborhoods.” Paris was shaken June 10 by its first reported death of an e-scooter rider, 25, who was struck by a truck. The week before, an 81-year-old man reportedly died outside of Paris days after being knocked over by an e-scooter. Paris had already banned riding scooters on the sidewalk, and planned to limit speeds to 20 km per hour (12 miles per hour) and 8 km/hr (5mph) in pedestrian-heavy areas. The city also plans to whittle its 12 scooter operators down to three and to establish a cap on vehicles, which currently number around 20,000. The city levies fines of €135 ($152) for riding on the sidewalks and €35 ($39) for blocking the sidewalk when parked.

Elsewhere in scooters, Bird bought Scoot, Uber previewed an updated fire-engine-red Jump scooter, Lyft unveiled a scooter with pink wheels, Xiaomi released a bigger bulkier scooter, and a handful of scooter startups launched service in Berlin, making my new home of London the last major European city where e-scooters aren’t legal.

Adventures.

First Airbnb had homes and then trips and magical trips, so why not also adventures? The home-sharing company recently unveiled Airbnb Adventures, described as “Hosted journeys to extraordinary places,” because god forbid someone go to an ordinary place. An adventure in Airbnb vernacular seems to be a multi-day trip, which to me sounds pretty magical, maybe they should call them magical adventures. Sample Adventures on Airbnb include “Around the world in 80 days” (poor Jules Verne), “Hike a Sacred Mountain with Warriors,” and “Island hopping & villages in Indonesia.” Should you live in San Francisco and feel like an adventure, er, experience, closer to home, Airbnb also offers tours of its global headquarters for a mere $24.

This time last year (extended edition).

Bird is the fastest startup ever to become a unicorn

Everything we thought we knew about the gig economy is wrong

San Francisco got rid of the scooters

Other stuff.

World’s top bicycle maker says “made in China” is over. Korean hotel platform Yanolja raises $180 million at $1 billion valuation. Why Airbnb’s IPO Will Outdo Uber’s and Lyft’s. Thumbtack raising $120 million at flat valuation. India’s Bounce raises $72 million for electric scooters. Getaway raises $23 million for “mindful escapes to tiny cabins.” Chinese funding slows to US startups. Grab discussed buying Asia payments startup 2C2P. Uber CEO blames Trump trade war for lackluster IPO. New York City to extend ride-hailing cap. Uber partners with Fair on cheaper cars for drivers. Uber to deliver McDonald’s by drone in San Diego. Kango expands Uber-for-kids service. Aurora buys lidar company Blackmore. Volkswagen drops Aurora. US Postal Service testing self-driving trucks. US House judiciary committee launches antitrust probe of big tech. Walmart adds unlimited grocery delivery. Uber, Bird lose bid for tariff relief on Chinese bikes and scooters. Criminal “gig economy” on rise in the UK. Airbnb Tony Stark’s Avengers: Endgame cabin. Uber Copter. Bird Cruiser. San Francisco median rent hits new highs. Why London Is Better Than New York.


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 Fiverr requests to @alisongriswold on Twitter, or oversharingstuff@gmail.com.

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