The pound of flesh was Anthony Levandowski's
CLXXVII
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Pay the bond.
This late edition of Oversharing brought to you by Anthony Levandowski, the one-time tech wunderkind who was arrested today and charged by federal authorities with 33 counts of attempted trade-secret theft:
The criminal indictment from the United States Attorney’s Office of the Northern District of California open a new chapter in a legal battle that has embroiled Google, its self-driving car spinoff Waymo and rival Uber in the high-stakes contest over autonomous vehicles. The case also highlights Silicon Valley’s no-holds-barred culture, where gaining an edge in new technologies versus competitors can be paramount.
Levandowski is the ideal villain for a corporate thriller: a rising star at Alphabet-owned Waymo, he (allegedly) absconded with trade secrets plus a host of Waymo employees to found a competing autonomous technologies startup, Otto, which he sold to Uber for $680 million shortly after Otto exited “stealth mode.” Travis Kalanick, who needs no introduction, found a “brother from another mother” in Levandowski. The pair bonded over shared interests like “winning,” “squeezing our attorneys like toothpaste,” and the “Greed Is Good” speech from the 1987 film Wall Street. They plotted to win and to get their pound of flesh.
Waymo sued Uber in February 2017; the case went to trial a year later in San Francisco. After four days in a packed courtroom, the two companies settled, but a separate federal probe into Levandowski’s actions continued. Lesser mortals might have retreated into quiet obscurity, but not Levandowski. He founded a new driverless trucking startup, Pronto.ai. “I don’t really dwell on the past,” Levandowski told the Guardian last December.
Levandowski, 39, reportedly self-surrendered this morning, and was arraigned in court in San Jose this afternoon. Law360 reporter Dorothy Atkins has a detailed Twitter thread: Levandowski pleaded not guilty to all charges; he didn’t wear a tie. Prosecutors feel he’s a flight risk because he has dual US and French citizenship and made $120 million in bonuses from Google. Friends and family offered up their houses as sureties on a $2 million bond. His next hearing is set for Sept. 4.
The indictment contains new details on what Levandowski allegedly stole from Alphabet. It charges him with downloading files that included schematics for printed circuit boards used in custom lidar products, instructions for customizing and fine-tuning those lidar products, and technical goals for the driverless car team. There are specific file names like “projects/Laser/YBr/ybr-pulser/ybrpulser_1-1-0/driver.SchDoc” and “TBR TESTING STATION.” For once, nothing is redacted.
Federal authorities are taking a victory lap. “Silicon Valley is not the wild West,” said John Bennett, an F.B.I. special agent, at a press conference. “The fast-paced and competitive environment does not mean federal laws do not apply.” Waymo seems cooly pleased; Pronto.ai has promoted its chief safety officer to CEO. Things don’t always work out the way you planned. Levandowski probably never thought that when the pound of flesh came due, he’d be the one to owe it.
Tipping point.
DoorDash announced a new pay structure for delivery workers (“Dashers”) last week, a month after its old tipping policy exploded into a viral controversy.
Under the new model, Dashers are paid a base determined by time, distance, and “desirability,” plus incentive pay, plus customer tips. DoorDash said Dashers will get 100% of tips on top of base pay and promotions, a direct response to the critique that under the old model it used customer tips to subsidize Dasher wages. DoorDash said Dashers will earn more both from DoorDash and overall under the new pay model, which it said will roll out to all Dashers in September. DoorDash said it would work with an unnamed “independent third party” to make sure earnings increase. (Amazon announced a similar change to pay for Flex drivers last week.)
The specific changes to the pay model were less telling than the reasons DoorDash gave for revising it. “We initially resisted change even in the face of public pressure because we built our model in direct response to feedback from Dashers,” DoorDash CEO Tony Xu wrote. “When we rolled out our model in 2017, an overwhelming majority of Dashers told us that they preferred it, and in the years since, we’ve seen meaningful improvements in overall Dasher satisfaction and retention.” He continued:
We thought we were doing the right thing for Dashers by making them whole if a customer left no tip, but the feedback we’ve received recently made clear that some of our customers who were leaving tips felt like their tips didn’t matter. We realized that we couldn’t continue to do right by Dashers if some customers felt we weren’t also doing right by them.
Customer sentiment was also the first of three “guiding principles” that DoorDash shared to explain its new pay strategy:
1. Every customer should feel like their tip matters. Under our old model, DoorDash would boost pay if a customer left little or no tip. Although boost pay was intended to help Dashers, we recognize that it also had the unintended effect of making some customers feel like their tips didn’t matter. Under our new model, every dollar a customer tips will be an extra dollar in their Dasher’s pocket. If you leave a $3 tip on your order, your Dasher will earn an extra $3.
DoorDash has stuck to this version of the story throughout the months-long controversy: We thought we were doing the right thing, customers didn’t understand, so we’ve changed what we do to make customers happy. The entire thing is vaguely patronizing, suggesting DoorDash decided to humor customers who simply failed to see the bigger picture.
I am reminded of how Uber for years insisted it cut driver pay rates each January to help them earn more, because cutting prices boosted demand and what drivers lost in rates they made up in volume. At some point Uber quietly abandoned those pay cuts and a study co-authored by its own researchers later found that actually, nothing Uber did to fares had much effect on driver earnings because the market was so elastic that hourly earnings tended to revert to the same equilibrium.
Quite the contrary to relying on the free market and vague claims from Uber researchers, the most successful effort to date to raise Uber driver wages was accomplished by regulatory intervention—i.e., the pay floor New York City set for its ride-hail drivers. The local taxi commission said in June that the rules, implemented on Feb. 1, lifted driver earnings by $152 million (pdf) in their first three months. Uber CEO Dara Khosrowshahi, for his part, told investors on a call in May that the minimum rates mandated by the city were “translating into pretty substantial price increases to the consumer.”
House hunters.
Here is a story about companies that pay internet contractors to find the exact addresses of properties on Airbnb and HomeAway, essentially “doxxing for money,” as one anonymous worker put it. Contractors use readily available tools like Facebook, Google Maps, White Pages, and Zillow to pinpoint addresses for online listings that sites like Airbnb obscure until booking to protect host privacy. Then they send them to companies like Host Compliance, which sells the intel to city governments:
A current contractor leaked Motherboard an internal training video for those working for Host Compliance. When working on a task, contractors are presented with a Google Maps style interface, with yellow and orange pins on top of buildings, according to the video. Orange pins are ones that the automatic part of the system has determined are likely rental properties, the video narrator says. Contractors can use people search tools such as WhitePages.com embedded within the Host Compliance panel to conduct searches. Workers can then filter potential matches for the correct address by property owner name if they have that information, before selecting which address they believe the Airbnb or other listing is from. At the end, contractors are asked to provide evidence of their work, be that screenshots or links.
Airbnb has a fraught history with cities, particularly when it comes to data. The company has resisted sharing certain specifics of its listings that it says would infringe on user privacy, and which cities argue they need to enforce rules on short-term rentals. Earlier this year, for instance, Airbnb finally agreed to hand over partly anonymized data on some 17,000 listings in New York City—a major development in a nearly decade-long feud between the company and city—but only right before a judge ordered it to turn over even more detailed information on some guests and hosts.
Airbnb should know better than most companies that when it doesn’t provide a service, someone else will pop up to offer it. By turning millions of casual home owners and renters into hospitality providers, Airbnb launched a cottage industry of businesses that help its hosts manage their listings—what I like to call the Airbnb shadow economy. Third-party companies sell property management software, offer à-la-carte services like cleaning and ad marketing help, or manage listings from top to bottom for their hosts. Airbnb is well aware of these services and has tacitly condoned them, advising online that hosts who choose to use third parties will “be held to the same standards and policies as other Airbnb community members.”
Companies like Host Compliance are just another side of this shadow economy. By refusing to share certain data with cities that they desired, Airbnb created a market for that data and companies popped up to provide it. That these companies rely on online contractors who earn piecemeal wages through gig platforms like Mechanical Turk—Host Compliance reportedly pays $2 for each correctly ID’d listing and has a shady-sounding bonus scheme—is also fitting. Host Compliance is a temporary solution to a temporary problem. If Airbnb has a change of heart and decides to start widely providing the data these contractors currently dig up, then Host Compliance won’t have to fire anyone, it can just release its workers back into the MTurk void.
Bad taste.
Analysts at investment firm Cowen think Uber Eats is losing $3.36 per order, will still lose $0.46 per order in 2024, and won’t even hazard a guess at when the unit economics of Uber Eats might become profitable. Where all that money is going is unclear: maybe driver promotions, maybe customer discounts, maybe the same bonfire that burned a $5.2 billion hole in Uber’s second-quarter results. Maybe instead of scrimping $200,000 on Uberversary balloons—roughly the salaries of 1.6 software engineers—Uber should #FindTheMoney by losing less on every burger-and-fries order it delivers to Eats customers. It sounds like there’s a good bit of money to find over there.
This time last year.
Oversharing was off while I hiked around the US Southwest, where I learned that natural arches like Delicate Arch (below) are formed from general weather erosion while a natural bridge is formed primarily by water erosion. Being there was like stepping into a Georgia O’Keefe painting, all grand and imposing and hyper-saturated. I highly recommend it.
Other stuff.
Kamala Harris backs AB5. WeWork competitor Knotel raises $400 million. WeWork acquires Spacious. WeWork HR in turmoil. Uber and Lyft take more from drivers than they say. German cities crack down on electric scooters. Uber rival Bolt starts food delivery service in Estonia. DoorDash buys autonomous driving startup Scotty Labs. Uber suspends Jump bikes in Rhode Island after reports they were used for vandalism and assault. The complete guide to autonomous vehicles. Uber gets $24 million incentive deal for Dallas hub. Grab adds delivery hub for popular Hawker stalls. Cosi raises €5 million for managed short-term rentals. Zuul opens ghost kitchen in Manhattan’s Soho. Uber still claiming to reduce congestion. How to ID scams on Airbnb. Dockless Spin scooters to get docks. Self-diagnosing scooters. LAPD tickets hundreds of scooter riders. Chicago scooter trips peak during rush hour. Liberal candidates spend heavily on services they condemn. Uber paid Beyonce $6 million in stock to play at a party. Travis Kalanick could launch a new cash war in China. Sharing economy transfers wealth from rich investors to rich consumers. Why Norwegian Air is failing. Silicon Valley’s Crisis of Conscience.
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