|May 2 2017||Public post|
The most incredible thing about Juno was always how much good press it got. Talmon Marco arrived in New York with his pitch about a “better” “more ethical” ride-hailing company in April 2016 and the media ate it up. Maybe by then people were just sick of Uber or maybe they really bought it. Drivers certainly did. Juno attracted thousands of them by pledging to address all of Uber’s “pain points.” Marco said Juno would keep its commission low, at 10% of a fare, and operate a round-the-clock support center. Juno also told drivers that they could earn shares through a special restricted stock unit (RSU) program, giving them a stake in the company’s long-term success.
Juno signed up its first driver on Dec. 2, 2015, five years to the day that Marco started his previous company, voice-message service Viber. Marco started Viber when Skype was already a dominant messaging platform; in 2014, he sold it to Japanese e-commerce company Rakuten for $900 million. It took him less time to flip Juno. The company said last week that it had sold to Gett, another local ride-hailing startup, in a deal priced at $200 million.
Juno was unusually quick to build credibility with drivers but just as swift to lose it. In emails to drivers on April 26, Juno cancelled its stock program, “effective immediately.” It told drivers with RSUs they could receive a “one-time payment” “subject to certain conditions.” The previous summer, Juno told drivers a single RSU was worth $0.20. It offered them a choice between $100 in cash or 500 RSUs as a sign-up bonus. Emails forwarded to me and other reporters last week indicated that Juno ended up valuing its shares at less than two cents each. At that price, the stock-based bonus Juno advertised is worth a little less than $9. Drivers, unsurprisingly, feel betrayed. “Juno promised us a future and they took it away from us,” one told me.
Still unclear is whether that future was ever real in the first place. In a “legal blurb” at the bottom of its note to drivers last Wednesday, Juno said it had been “considering changes to the RSU program to ensure compliance with US securities laws” when its talks with Gett began. “Given these discussions with the SEC, Juno was considering, among other things, whether the RSUs previously granted were void under the terms of the RSU program,” the email stated.
When I interviewed Marco last summer, at Juno’s office on the 47th floor of One World Trade Center, he told me the RSU program had been approved by the New York state attorney general and was “all set to go.” We discussed the allocation formula (a pro-rata based on driver earnings, adjusted so that the top tier of drivers got proportionately more shares), and Juno’s plan to distribute half of its equity to drivers. We also discussed Gett, which Marco openly snubbed. “I mean Gett has been operating here for how long?” he said. “At least two years, probably more. We have more drivers than Gett, we have more daily rides than Gett.” Maybe he had already pegged them as a potential buyer.
Airbnb yesterday announced a settlement between it and San Francisco over short-term home rentals. The deal requires residents who wish to list a rental on Airbnb or Homeaway to first provide their short-term rental registration number. The companies have also agreed to give San Francisco a monthly list of rentals in the city “with sufficient information to allow the city to verify that the unit is in fact registered.” There are currently more than 8,000 Airbnb listings in San Francisco but only 2,100 registered hosts, the city attorney’s office said yesterday, so Airbnb has some scaling up to do.
Separately, Airbnb last week agreed to let California test its hosts for racial discrimination to resolve a complaint filed by the Department of Fair Employment and Housing. Per the Guardian, the deal lets the state “do fair housing tests on hosts in California who have been subject to discrimination complaints and have three or more listings”:
The tests would mirror the process investigators have used in traditional rentals where black and white applicants, who otherwise have identical backgrounds, are both sent to try and secure a lease from a landlord. With Airbnb, DFEH investigators could set up fake accounts and make reservation requests to determine if a host is discriminating.
California isn’t the only state concerned about discrimination on Airbnb and in the broader sharing economy and you can bet that other cities and states will be watching to see how these tests play out. Meanwhile, Ben Edelman, the Harvard professor who previously found evidence of racial discrimination on Airbnb, thinks it’s ridiculous that California needed Airbnb’s OK to do this. “The regulator amazingly needs their permission to regulate,” he told the Guardian. ”A policeman doesn’t need my permission to use a radar detective to see if I’m speeding.”
Elsewhere, Boston College freshmen are renting houses on Airbnb to throw parties:
They spent $475 to rent the house, plus some extra money for alcohol and accessories. The house had two floors with several bedrooms.
They created a private Facebook event for the party, inviting dozens of their freshman friends. Over 50 people attended the party that night. The guys said that, besides a cracked ice cube tray and a broken plastic sign on the front lawn, they left the house in good condition.
Alas, not every homeowner renting to drunk college freshmen is so fortunate. Another group of students who booked a house in Somerville were hit with a $600 cleaning fee and banned from Airbnb after they caused “permanent damage” to the home. “Most BC students have more money than sense,” an anonymous freshman told the student paper, which sounds about right.
Here is a story about on-demand parking startup Luxe, which starting in June will no longer provide on-demand parking. The company emailed users last week to say it would end door-to-door valet service in San Francisco after May 25 and launch a new service this summer “that makes finding parking and servicing your vehicle even easier.” Luxe has raised $75 million and CEO Curtis Lee said on Twitter that the company still has “plenty of cash,” whatever means. “We started Luxe four years ago to tackle the problem of scare parking in urban centers,” Luxe wrote in its email to customers. And then… it failed? This basically seems to be the point the email, not that Luxe says so explicitly. For all that failure is lauded in Silicon Valley, startups still don’t particularly like to admit defeat, even when their business models are the worst.
More in Quartz: The On-Demand Economy Is a Bubble—And It’s About to Burst.
Silicon Valley might boast the most tech unicorns but Brooklyn has the world’s only unicorn-horn store. It’s called Brooklyn Owl and I dropped by on Sunday afternoon. Brooklyn Owl doesn’t open officially until next weekend, but a pink-lettered sign outside invited me in. Inside, the shelves were stacked with sparkly cloth unicorn horns that vaguely resembled soft-serve ice cream cones. There were pink ones and gold ones and rainbow spiral ones. Cory Bruce, one of the shop’s owners welcomed me, and asked if I’d like to go on the unicorn adventure. Obviously I said yes.
Cory, who was wearing a bright lilac T-shirt, handed me a small purple flashlight and told me to look for “my words” on the wall. The wall was rather short and I failed at finding anything, so he suggested I search lower. “Some unicorns are smaller than others,” he said. Just below the bottom shelf of unicorn horns the flashlight revealed the phrase, in curly script, “You can do anything.” I will not tell you what happened next at the risk of spoiling the surprise for future unicorn adventurers, but let me say it involved a talking magic mirror.
“We like to encourage people to be bold and brave and that’s kind of what wearing a unicorn horn is,” Cory told me. More customers came in. “Oh my GOD, this is amazing,” a woman gasped. They milled about the store admiring the merchandise. “I just don’t know if this would fit me,” said a middle-aged man, holding up a shiny fuchsia horn nearly as tall as him. “How much does the unicorn horn cost?” another woman asked, pointing at a small silver-white one that also came with two unicorn ears. Cory’s wife and shop co-owner walked over to join us. “$32,” she said.
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