Infighting at UberEats, Airbnb dodges discrimination, and GOOD LUCK AMERICA

XXXIV

ARE YOU STRESSED? ME TOO. DID YOU VOTE? GO VOTE. TAKE UBER. MAKE THE MOST OF THIS GARBAGE ELECTION BY VOTING FOR BETTER TRAINS AND BUSES.

Disclosures.

Not so long ago banks were tripping over themselves to get in Uber’s good graces. Banks like Morgan Stanley and JPMorgan made big announcements about adding Uber rides to their employee reimbursement programs, likely hoping to land Uber’s business for its eventual IPO. Ah, but times change. Here is a story from Bloomberg, “Banks Passed Up Uber Share Sale on Lack of Data.” Bloomberg reports that while Bank of America and Morgan Stanley sold shares of Uber to their wealthiest clients earlier this year, JPMorgan Chase and Deutsche both passed because Uber was unwilling to disclose key financial details. Specifically:

The 290-page prospectus Morgan Stanley sent to prospective investors before the January sale didn’t include Uber’s net income or annual revenue. The document did include 21 pages of risks, namely competition, regulatory hurdles and no assurance that the clients would see any return on their investment.

According to Bloomberg, JPMorgan and Deutsche “were concerned they wouldn’t be able to fill demand for the offering given the lack of specifics.” Morgan Stanley, meanwhile, is well on its way to incubating a unicorn based on the reassurance it offered to prospective Uber investors: “the development of insights and big ideas is valuable to the investment process, whereas obsession over incremental ‘information’ flow is not.”

Elsewhere, here is an interesting piece (paywall) from Amir Efrati at The Information on infighting between the UberRush, UberEats, and core Uber teams. Uber has been bullish on Eats lately, pushing it out to nearly 30 cities. Eats is reportedly “on margin” profitable in three of them—San Francisco, New York, and Los Angeles. In theory, it could make a lot more money for both Uber and drivers if the company gets enough demand and figures out how to bundle deliveries together. On the other hand:

Resistance from some city managers to making drivers available for UberEats or UberRush has led to a lot of one-off negotiations and “horse-trading” between general managers of the different businesses within individual cities, said one person who’s been briefed on such discussions. It raises the question of how Uber will be able to grow all the businesses in tandem, especially considering that churn in its driver supply is the single biggest concern the company faces on a day-to-day basis.

Forced arbitration.

We talked a while back about Gregory Selden, the 20-something black man who sued Airbnb for discrimination. Selden was rejected by an Airbnb host in in Philadelphia when he attempted to book a stay in March 2015. As an experiment, he contacted the same host again using two fake Airbnb profiles for white people—“Jessie” and “Todd”—and had both requests accepted immediately. Selden filed his suit in US district court in May, just as other stories of discrimination on the home-sharing platform and #AIrbnbWhileBlack were gaining traction. The case looked poised to be a referendum on race and equality in the sharing economy until, last week, it all came to a halt: Airbnb, citing its terms of service, successfully forced Selden into arbitration.

Arbitration clauses are all too common, so while that’s perhaps not the best for consumers it’s also not terribly surprising. Here’s what IS. According to the New Yorker, an Airbnb spokesman specifically pointed out that under the company’s terms of service, “guests also retain the ability to take action against hosts.” In other words: Airbnb, a company worth $30 billion, has created a legal setup where it is protected from most actions, but has left its hosts, the people it so often says are just trying to “make ends meet,” open to lawsuits. For a company that has repeatedly branded itself an altruistic defender of the middle class, that might not be the best look.

Postmates.

More details on the Postmates raise, this time from Jason Del Rey at Recode, who reports that investors “changed their preferred stock to common stock so employees wouldn’t flee.” Preferred stockholders get a liquidation preference on their investment, which basically means that they can claim their money before other shareholders (like employees) if the company sells. For investors, this is an important downside protection. It helps to ensure that if a startup like Postmates sells for less than they thought it was worth, they still get something back. The setup is obviously less good for other (common) shareholders, who could get absolutely nothing under certain conditions. In Postmates’ case, the company must have worried that employees would feel screwed by its funding terms (ahem) and quit en masse to negotiate a change like this. Of course, per Postmates CEO Bastian Lehmann, all is well. “I wouldn’t say we bled,” he tells Bloomberg. “We’re operating in a space that’s a little underappreciated right now.”

“So many jobs.”

Here is a Q&A from Business Insider with Coople, the “Uber for short-term staffing.” How is that different from a traditional staffing agency, you ask? Great question, but not answered in this article. Instead, the first Q is “In what circumstances do you see Coople’s application being the most useful” and the A begins “There was a Coldplay concert in Zurich over the summer” so, you know, good start. Coople launched in Switzerland in 2011 and claims to have signed up more than 100,000 workers. It dispatches them to some 5,000 employers, from airports to hotels to, yes, Coldplay promoters. “The goal is to provide a platform with so many jobs that someone can come and work as much as they want,” says the Coople exec, which even without the Coldplay sounds like a particular form of gig economy hell. 

Other stuff.

Startup boardrooms are “too incestuous.” How self-driving cars can reduce pollution. Hong Kong Startup Wants to Be the Uber of Office Spaces. China’s Airbnb raises $65 million. Zoox valued at $1.5 billion. Uber redesigns app. Uber endorses political candidate. Hundreds of Uber drivers seek backpay in the UK. Uber could face huge tax bill in the UK. Uber goes it alone in Southeast Asia. Uber, Lyft, and the Red Queen. Airbnb rental ends in disaster. Airbnb fate postponed in New York. WeWork sells offices to corporate clients. Unit economics strike ClassPass. Rocket Internet gets an exit. Why Do Millennials Hate Groceries? On-demand birth control. Bros finding bros. “Sea change” in the food world. The Voice of AOL’s “You’ve Got Mail” Is Driving an Uber in Ohio.