|Oct 31, 2017||Public post|
Trick or treat.
Happy Halloween! In case you need a last-minute costume, I recommend consulting Quartz's guide to Halloween costumes for the new global economy, 2017 edition. Some of my favorites:
Machine learning: Ask a friend with a dog to give you a picture of their dog. Ask everyone at a Halloween party whether this picture is or is not of a dog. Repeat until you are reasonably certain that the picture is, in fact, of a dog.
Populism: Dress as whatever the majority of partygoers say you should dress as (no matter what).
ICO: In exchange for drinks and candy, give people tokens that represent the right to acquire future drinks and candy, on the blockchain. Leave the party early and never speak to any of them again.
Travis Kalanick (2.0): Take an Uber to your Halloween party. Compliment your driver and tip him $20. Tell every woman at the party you are there to support her. Mention your best friend, Dara. This is the new you. This is how you will return to power. You are Steve Jobs-ing it.
And here's a fun reader submission: "Uber tipping in app: Dress as Lyft app tipping with an Uber sticker sloppily covering the Lyft logo." Send other ideas to firstname.lastname@example.org.
Among his many other misdeeds (e.g., "conspiracy against the United States"), Paul Manafort had a side hustle renting out his New York apartment on Airbnb. Manafort purchased the condo on Howard Street in Soho, a swanky Manhattan neighborhood, through “MC Soho Holdings, LLC,” a corporate vehicle owned by him and his family. He paid around $2.85 million for it, using money from Manafort entities in Cyprus, where he had millions in offshore accounts. He rented it on Airbnb for thousands of dollars a week.
The fascinating thing is not that Manafort had this condo (he may also need to forfeit it, if convicted on certain charges) but that he chose to rent it on Airbnb at all. Manafort's "lavish lifestyle" included three Range Rovers and a Mercedes-Benz, multiple apartments in New York, home improvements in the Hamptons, expensive suits, and nearly $1 million worth of antique rugs from a store in Alexandria, Virginia. These purchases were funded with millions of dollars of wire transfers, mostly from Cyprus and Grenadines.
Not only didn't Manafort need the money from renting an apartment on Airbnb, but in New York, with a few rare exceptions, doing so is explicitly illegal. It is one thing to purchase a trendy Manhattan apartment using laundered money stashed in offshore accounts, it is quite another to plant a red flag on the roof and let it float there breezily by putting that property onto Airbnb, an explicit target of local law enforcement, in exchange for a couple thousand additional dollars a month.
Elsewhere in New York Airbnb news, the city has been slow to collect fines on "illegal hotels," according to a report in Crain's:
More than six months after city inspectors' first round of enforcement, the de Blasio administration has collected only a fraction of the issued fines, which added up to hundreds of thousands of dollars, according to a Crain's analysis. In large part, the trouble is rooted in the city's long-flawed collection system—where cases and appeals can take months to process and landlords have little reason to pay up—which could ultimately defang efforts to curb illegal home sharing.
Between November and May, the mayor's Office of Special Enforcement targeted 16 properties in its first wave of inspections, issuing violations for operating an apartment as a hotel room. Inspectors also fined owners for building-code violations, like missing sprinklers and improper egress routes, and—beginning in February when the new law went into effect—for advertising units online. Few owners have paid up.
According to Crain's, part of the problem is that so-called Environmental Control Board fines are handled by an "obscure city tribunal," and many haven't even been processed yet. The fines also have an eight-year statute of limitations and landlords can largely keep operating without paying them. The small number of Airbnb hosts who have paid up "have tended to be small owners renting out a few rooms, not the operators of illegal hotels that were supposed to be in the city's crosshairs."
Job well done.
"Good jobs" startup Managed by Q said last week that its strategy of treating workers well is working. The company announced that Q Services, its in-house cleaning and services division and original focus of the business, has become profitable.
Tech startups have been known to come up with some creative definitions of "profitable," a term that in Silicon Valley is rarely as straightforward as it seems. There is "gross-margin profitable" and "contribution-margin profitable" and "profitable in a market," all terms that have rather loose definitions that depend mostly on how the company's finance team chooses to do its calculations. TaskRabbit, the "gig" economy startup that was acquired by Ikea late last month, famously described itself as "profitable profitable."
In the case of Q Services, the profitability calculation includes salaries and benefits for all Q Services employees; recruitment, training, and software costs; uniforms and equipment; and insurance and workers’ compensation. It leaves out equity grants, rent for Q’s Manhattan headquarters, and salaries and benefits for corporate employees who work outside the services unit, fairly standard in calculating operating profit.
The bigger story is that Managed by Q, the anti-gig-economy startup, if you will, is on its way to proving that there can be a better future for workers than Uber-for-X contract labor. Q hires its workers as employees, at a starting salary of $12.50 and with benefits like health insurance and a 401(k) plan if they work full time. It was started in 2014 when "gig" companies that hired independent contractors and owned zero assets were all the rage, the weird, old-school kid in a class full of technology platforms.
Three years later, Q Services is profitable and a lot of those gig competitors have gone out of business. One that's stuck around is Handy, a consumer-focused home cleaning company that hires all its cleaners as contractors. Around the same time that Managed by Q shared its profitability news, a "source" told Axios that Handy is "profitable and cash flow positive." For more on Handy, see my 2015 story in Slate.
You thought there would be no Uber this week, didn't you. L O L there is always Uber. Here is an interesting story on Uber Technologies Inc. from MarketWatch, which reports that the Securities and Exchange Commission has greenlighted Uber's "preferred description of its business model":
The ride-hailing service contends its customers are the drivers—not the passengers—and it merely facilitates their trips. Securing the SEC’s blessing of this view of its business model would allow the company to report financial results without disclosing how much money drivers are taking home.
MarketWatch has learned that Uber has already switched to new revenue-recognition rules that have yet to be adopted by most public companies and startups seeking to go public. After consultation with the SEC and its auditor, Uber sees those new rules as allowing it to report only the net revenue that goes to the company when a transaction takes place, leaving out the drivers' take completely.
Gross revenue is all the money Uber makes from rides, food delivery, and other lines of business, but not what it actually keeps. The biggest cost taken out of gross revenue is typically what Uber pays out to drivers and couriers for their labor.
To investors, net revenue is probably a better metric for the company's health. The implication for drivers is less clear. On the one hand, investors like increasing margins, and if investors gleaned from gross revenue figures that drivers were taking too big a chunk of sales, they might pressure the company to charge riders more or pay drivers less. On the other, Uber generally hasn't been great about paying its drivers (they are, after all, contractors who don't get benefits or a guaranteed minimum wage), and concealing the share of bookings that goes to drivers could help Uber continue that practice.
Why Uber Is the Revenge of the Founders. The Case for Uber at $95 Billion. Airbnb partners with condo in Toronto. WeWork buys iconic Lord & Taylor building. Airbnb China Chief Was Ousted Over Relationship With Subordinate. Uber adds surcharges for longer pickups. Uber faces regulatory crackdown in Brazil. SoftBank tells Uber investors to shut up. Grab hires ex-Googler as CTO. Two female Uber employees allege they were "ranked" on their looks. GuestReady raises $3 million to manage Airbnb properties. Delphi buys nuTonomy for $450 million. Uber records first decline in business travel spending. New York Uber Driver Escapes Moments Before Train Crushes His Car. Brooklyn landlord fined $100,000 for cramming dozens of Airbnb guests into townhouse. NHS Hospital Drops Out of "Airbnb" Scheme to Rent Spare Rooms to Patients. Conservatives target "Uber for birth control." The PayPal Mafia of self-driving cars. Uber credit card. Postmates and chill. "VC often compels companies to prematurely scale, which is typically a death sentence for startups."