Maple crumbles, Waymo needs “smoking gun” on Uber, and WeWork’s overtime hustle
LVII
Cookies, crumbled.
Sometimes a story hands you the perfect metaphor. With Maple it was the cookies. From the start, Maple, a David Chang-backed startup that made and delivered meals in New York, included a free sugar cookie in every order. The “Sugar Shack” cookie was a sweet, chewy concoction, made specially for Maple by award-winning pastry chef Christina Tosi. But earlier this year customers were dismayed to find the company had replaced the cookie in their meals with a brochure bearing a glossy photo of one.
Maple shut down yesterday after just two years in New York. It broke the news in an email to customers and a post online, five minutes before we published our storyand after ignoring multiple phone and email requests for comment. Judging by responses on Twitter and in my office Slack, people were pretty shocked. But the signs were all there. In recent months, Maple had quietly raised prices, adding a $1.95 delivery fee and changing how it calculated sales tax. It took away the cookies (never good!) and, on Sunday (May 7), it closed the kitchen. Maple originally said service would resume at 11am on Tuesday. We know now that it won’t.
I love a good metaphor and they don’t come better than the Sugar Shack cookie. The cookie was fancy, trendy, custom-made, and beautifully packaged. It was everything Maple aspired to be and a literal deal sweetener for customers, who in the beginning paid $11 or $12 for lunches that, to quote this guy on Twitter, were “aggressively unexciting.” The Sugar Shack cookie was Maple’s signature flourish and it was baked and delivered on the dime of venture capitalists. When their money went away, so did the cookie—and, eventually, the rest of Maple’s business.
We talk a lot in this newsletter about how tough the food delivery business is. Tiny margins, intense competition. The genius of Maple was supposed to be (1) saving money on rent for a restaurant and (2) eliminating efficiencies in the food supply-chain to make the business more sustainable. It didn’t pan out. Maple spent a ton of money on food, as Recode discovered in leaked financials late last year. Its executives also tried to use supply-chain efficiencies to save money on the most expensive ingredients. “We’re going to be able to serve an olive oil most restaurants can only afford to use as a finishing oil,” executive chef Soa Davies told me in a March 2016 interview. Saving money on something super expensive doesn’t necessarily make it cheap.
There are more details on Maple’s troubles, including its previously undisclosed 2016 financing, in my story, which I recommend you read here. In other news I received a fabulous email yesterday from a reader, Peter, who says he has savedone of Maple’s cookies. “On my desk sits a mint condition Maple Sugar Shack Sugar Cookie, unopened, in its original packaging,” he writes. “For those left behind in the bitter wake of Maple’s crumbling, it could bring back a moment of sugary bliss for someone in need of that afternoon pick-me-up. Would you help me find the best person to deliver this cookie to?” Well yes of course! Oversharing is Here For It. Peter has even volunteered to mail the cookie to whoever is most in need. Tell me why it’s you at oversharingstuff@gmail.com.
Smokeless gun.
The judge who once said of Waymo’s evidence against Uber, “I’ve never seen a record this strong in 42 years,” has grown more skeptical. “I’ve given you lots of discovery and so far you don’t have any smoking gun,” federal judge William Alsup told Waymo in a court hearing last week. He was referring to definitive evidence that would prove Uber knew Anthony Levandowski, its currently recused head of self-driving technologies, possessed trade secrets when he joined Uber last summer, several months after quitting his job at Waymo, the driverless car unit spun off by Alphabet’s Google.
Waymo also finally made the bombshell allegation it’s been dancing around the entire time, alleging that Levandowski’s driverless trucking startup Otto, which Uber acquired last August, was only ever a “cover-up scheme” to bring ex-Waymo employees and stolen autonomous vehicle knowledge over to Uber. Several pieces of evidence Waymo has to support this theory:
Waymo claims Uber met with Levandowski before he quit in late January 2016
Uber promised Levandowski 5 million shares of stock on January 28, 2016, worth an estimated $250 million, one day after he quit Waymo
On January 29, 2016, Uber’s attorneys emailed about anticipating litigation if the company acquired Otto
Alsup is expected to rule on the case this week. Waymo has requested an injunction, which could temporarily block Uber’s work on self-driving technologies. In the meantime, Uber is taking its self-driving car research to Canada. Elsewhere, the company is facing a criminal investigation over its use of software to evade regulatory authorities, nicknamed Greyball. Uber hasn’t denied this program but instead told officials in Portland, Oregon, that it used Greyball “exceedingly sparingly” in that city before ride-hailing was legalized in 2015, which, you know, makes it so much better.
WeWork too much.
Here is a story from Ellen Huet at Bloomberg on overwork and underpay at WeWork, the shared office space unicorn. Over the last year WeWork has settled a case in arbitration with one member of its “community staff,” the people who run its day-to-day operations, and is facing a lawsuit over overtime pay from at least one other. Its arbitration policies are being scrutinized by the National Labor Relations Board and its non-compete agreements by the New York attorney general. Ellen spoke to more than a dozen former WeWork employees, many of whom are not happy:
“I’m young; I’m a millennial; and we don’t really know our rights,” said Rachel Wynn, a 27-year-old former associate community manager in Washington, D.C., who left in 2015 and is planning to pursue a lost-wages case against WeWork. She and other former community staffers said they gave office tours and hosted events at the space. But they also spent much of their time brewing coffee, arranging catering and fixing printers. Sometimes the job involved catching mice and dealing with office party detritus, including used condoms in the meditation room and vomit in the phone booths.
WeWork has avoided paying overtime to these people by relying on an exception in US labor law for workers whose primary job involves making independent and substantial decisions about the business. Disgruntled staffers—front desk associates, associate community managers, and community managers—are less convinced that their jobs were so empowering:
Tara Zoumer, a 30-year-old former associate community manager in Berkeley, California, who is suing the company over lost overtime wages and wrongful termination, said she wasn't managing anyone but spent her time doing "a million tiny jobs" like fluffing pillows and setting up catering. She left in November 2015 and sued a few months later. Wynn put it another way: “It's not like I was managing anyone besides making sure there was enough beer and soymilk ordered.”
One thing I love about the sharing economy is how good it is at shortchanging workers with a smile. Usually it does this with contractors (Be your own boss! Set your own schedule! So what if we don’t pay benefits?), but WeWork has apparently managed it with traditional employees. It told them to “Do What You Love” and also to “Hustle Harder” as they fluffed pillows, replenished the beer and soymilk, and attended mandatory evening meetings called “Thank God It’s Monday.”
Airbnb4lyfe.
Enough with co-working, onto co-living! Stephanie Lee, a woman who quit her job to travel to Japan and become a full-time freelancer, says she saved nearly $10,000 on rent in 2016 by bouncing between Airbnbs, compared to what she would have spent on living expenses in Los Angeles:
So let's say that I had stayed in Los Angeles, lucked out, and found a rad place for $1,700. I'd have signed a one-year lease and, over that term, paid $20,400 for rent alone. By contrast, my stay at each Airbnb lasted a couple of days at times, but it was mostly weeks and up to a month. I've lived in a countryside surfer dude's townhouse in sleepy North Shore, Oahu for $52/night; a 180sqft Parisian studio—where the bathroom, I'm convinced, was actually made for Stuart Little—for $47/night; and a lavish flat in Hong Kong that cost $48/night, but overlooked the famed harbor and was so high that I thought, This must be what Godzilla sees when he terrorizes cities.
Lee says she typically negotiates her Airbnb rate which I guess is a benefit of arranging your stay with a person instead of a hotel company. I am somewhat skeptical of her numbers, which she admits don’t include costs like flights, but hey, cool life hack.
Other stuff.
Uber’s upfront pricing is helping it overcharge riders and underpay drivers. Go-Jek raises $1.2 billion led by Tencent. Didi adds English version. Google and Uber Are Learning Money Can’t Buy Them Victory in India’s Brutal Food Delivery Wars. Uber owes $40,000 for sending unsolicited texts. Scotch Eighty plagued with Airbnb partiers. YourWelcome raises £1 million. Volvo talks self-driving cars. Postmates delivers 10,000 free burritos for Cinco de Mayo. Instacart customers order ice cream at night. Starbucks gets sued over unicorn frappuccino. Miley Cyrus Wrote Her New Single “Malibu” in an Uber. Panthers’ Michael Oher assaults Uber driver. Sports Agent Fired After Running Up $42,000 in Uber Charges on NBA Player’s Credit Card. North Carolina Woman’s Uber Account Hacked and Used in Russia. Uber drags down Twilio’s stock. Uber for teens. Uber for rural America. Airbnb for charging electric cars. Flyspaces. “Our business model is equal parts Airbnb and Crossfit.”