Dog-sharing booms, Munchery gets desperate, and Uber’s Jedi mind tricks

LII

Exquisite calibrations.

Here is a story from Noam Scheiber at the New York Times, “How Uber Uses Psychological Tricks to Push Its Drivers Buttons.” The story is long, at more than 5,000 words. It’s also filled with phrases like “extraordinary experiment” and “exquisitely calibrated” to indicate just how lab-rat-like Uber’s management of its drivers is. So, what are these tricks? Congratulating drivers on getting midway to an earnings goal. Loading the next fare before the current ride ends. Sending messages that encourage drivers to head to the morning rush, or toward a recently finished concert. “And most of this happens,” Scheiber writes, “without giving off a whiff of coercion.”

Ok, I guess. Alternatively, what if there was no “whiff” of coercion because there was no coercion? Uber signed up a bunch of people to drive on its platform and then it gave them tips on ways to earn more money. We might consider that a “trick” if Uber’s advice didn’t actually translate into higher earnings, or if Uber promised incentives that it never paid, but Scheiber has no evidence of anything like that happening. What he does have is a lot of adjective-laden insinuations that Uber is doing something dark and untoward: 

While the experiment seemed warm and innocuous, it had in fact been exquisitely calibrated.

Uber is no angel in how it manages its drivers. The company has fought to keep drivers classified as independent contractors, signed thousands of them into shady auto-financing agreements, misled them about how lucrative driving for Uber actually is, and stubbornly refused to build tipping into its app. But the “psychological tricks” that have the Times so unsettled seem less like an Uber problem than a corporate-America-in-the-age-of-big-data problem. Here is Matt Levine at Bloomberg View:

Oh boy are we going to start seeing a lot of this. For as long as there have been managers, they have tried to figure out how to motivate their workers to work faster and better. Many books have been written about the subject, and some of them have, perhaps, even been read. But the basic technique of management has always been: I'm a human, and you're a human, and I am going to try to use my understanding of how humans work to get you to work more.

Elsewhere: Uber Had Male Managers Pretend to Be Women to Get Drivers to Work More.

DTR.

Pittsburgh would like Uber to define the relationship. Mayor Bill Peduto is looking to have Uber sign a memorandum of understanding with the city, he told a local news station. Peduto wants Uber to turn over data that could help the city improve its street safety and traffic flow. “That information should be something that is shared,” he told WPXI. Peduto is also reportedly seeking better working conditions for Uber drivers, services for the elderly, and improved fuel efficiency. Uber claims it hasn’t seen the memorandum.

Uber came to Pittsburgh in 2015, gutting Carnegie Mellon University to set up a research center on driverless technologies. Peduto initially shrugged off the talent raid and welcomed Uber with open arms, hopeful that the company’s brand and multibillion-dollar business would help put his aging steel town back on the economic map. Two years later, Uber’s “partnership” with Pittsburgh has remained one-sided, and Peduto’s patience has worn thin. “If they are going to be involved in economic disruption, they have a moral obligation to society,” Peduto told the Wall Street Journal. “In a partnership, it’s not what we can do for them.”

Dogs.

2017 is the year of the rooster but in the sharing economy it’s the year of the dog. Already, there’s been a flurry of activity among dog-sharing startups. On March 29, dog-sitting platform Rover acquired dog-boarding platform DogVacay in an all-stock deal at an undisclosed price. Two days later, TechCrunch reported that Wag, “another player in the dog-walking space,” had raised two rounds of funding over the last two years, totaling about $19 million. While we’re counting, there’s also DogHero, Fetch, BorrowMyDoggy, HouseMyDog, BabelBark, Baubnb, and HappyTail. Many are eyeing opportunities in the broader pet-sharing space. “We’re going to be taking a close look at anything that can help people become amazing pet owners despite the challenges of modern living,” says Rover CEO Aaron Easterly.

As is almost universally true in the sharing economy whether you deal in houses or cars or food or pets, success involves getting laws changed. In Colorado, for example, online pet-sitting services are currently illegal. The Denver Business Journal reports that Lisa Jacobson, a single mother in Colorado Springs who earned $10,000 on Rover in 2016, received a visit from the Colorado Department of Agriculture this past February after a “large commercial kennel” lodged a complaint against her. Jacobson now supports house bill 1228, which would legalize watching up to three pets without a commercial kennel license. Meanwhile, Colorado governor John Hickenlooper has signed a law that loosens restrictions on at-home child-care providers, which means watching dogs is currently more tightly regulated in the state than watching children.

Recapping.

More bad news at food delivery startup Munchery, which has raised $5 million and is seeking up to $15 million in a last-ditch bid to stay afloat. The terms weren’t cheap. Per Bloomberg, Munchery has “practically eliminated” the stakes of its founders and any former employees in the recapitalization:

As part of the new deal, shares were issued to investors as part of a convertible note—a loan that can later be exchanged for equity—and, in this case, caps the company's valuation at $80 million, one of the people said. Investor demand could push the valuation above that threshold. The value of shares that may be doled out to backers later will change depending on the company's subsequent valuation. Munchery had raised $5.6 million in the round as of February, the person said. It created a new pool of options to retain current employees.

The use of a convertible loan instead of equity in a recapitalization is somewhat unusual. The new round doesn't give the company a valuation, and its worth is dependent on a future round of financing. Old investors were asked to pony up more money or see their stakes lose their value, according to one person familiar with the matter.

James Beriker, who joined Munchery as CEO in November, has also cut jobs across the company. Munchery lost nearly $120 million in seven years, sometimes burning through $5 million in a single month.

Other stuff.

Uber’s Anthony Levandowski will take the Fifth. Waymo claims Uber violated a court order to produce documents. Lyft is woke. Blue Apron hires bankers for 2017 IPO. Postmates picks up an Obama alum. DoorDash partners with Jack in the Box. Nevada kills strict regulatory proposals for Uber and Lyft. Uber settles with Pennsylvania taxi regulator. New York dismisses taxi-owners lawsuit. Uber lets riders edit their pickup spot. LeasePlan expands Uber partnership in Europe. Careem explores IPO. Grab buys e-commerce startup Kudo. Uganda’s Uber for Motorcycles Focuses on Safety. Self-driving talent flees Uber and Google. Ford speeds past Uber on driverless cars. Freightos gets $25 million led by GE. Short-term rentals capped in Portland, Maine. People leave weird shit in Ubers. JoyRun raises $8.5 million. Lyft Shuttle. Ola e-cabs. Road pricing. Carvana IPO. Uber diversity. Uber for teachers. Jewber.