Uber drivers' credit scores, Blue Apron layoffs, the "freezing robot" problem

LXXX

I was visiting friends upstate this weekend and the grocery was selling "unicorn kisses" seltzer. We bought some to try. It was gross.

Junk debt.

Like a lot of drivers, Anthony Plemonte turned to Uber’s Xchange Leasing program because his credit was bad. Uber leased him a 2017 Honda Civic last October in Boston for $163 a week, plus a down payment of $250. The lease came with unlimited mileage and basic maintenance but didn’t include auto insurance. Plemonte, 42, thought the price was steep, but he figured weekly payments to Xchange would help build his credit history, which the company had checked when he applied for a car. But when Plemonte pulled up his statement on personal finance site creditkarma.com a couple months in, the lease wasn’t there.

Uber said last month that it would shut down Xchange, its US auto leasing division that lost about $9,000 per vehicle. The company stopped issuing new leases on Oct. 6 and has emailed drivers offering $450 electronic Visa gift cards and free Uber rides home if they return their cars to an Xchange dealership within a week.

Xchange targeted a subprime market of drivers with poor or no credit and limited options for getting a car. Many of these drivers assumed making regular payments to Uber would improve their financial standing. Now, as the program winds down, they’re learning that leasing from Xchange didn’t build their credit at all.

That's from a story I reported last week (you can read the full thing on Quartz). Unlike past times where Uber made false claims about how much drivers could earn on its platform, the company never told drivers leasing from Xchange would improve their credit. Instead drivers made that assumption, and they were wrong. A lot of Uber's business takes place in this gray area, between what the company says and what is left for workers to assume. For example, lots of drivers will tell you not to "chase the surge," the phrase for driving to a place where Uber has temporarily lifted prices due to high demand. Uber didn't tell them that; they figured it out after too many hours stuck in traffic, only to miss the busy period. Other promotions Uber offers ("quest," "boost") don't force drivers to work, but the incentives can be so great compared to normal rates that drivers feel like they don't really have a choice.

Uber could make the information less asymmetrical, telling drivers how long a surge will last, or giving them greater visibility into an entire month's worth of incentives, so they could plan out which ones they wanted to work. With Xchange, Uber could have emphasized to drivers that the leases, while good for people with poor credit, wouldn't actually be a path to a better credit score. But better informed Uber drivers are also probably harder to indirectly control.

Elsewhere, Uber "director of people experiences" Jessica Bryndza thinks expecting people to work 70 hours to earn a top performance bonus is "inequitable at its core." She might want to look into the hours being worked by top performing drivers.

"Gig" is up.

"Freelancers are sick of being called 'gig workers'" is the headline on this story in Fast Company, based on a recent study from Upwork and the Freelancer's Union. The report estimates that one-third-ish of Americans are currently freelancing but that only 10% of those people consider themselves part of the "gig" economy. Half of them prefer to identify with the "freelance" economy and 25% with the "on-demand" economy. "'Gig' makes it sound like platforms are, like, telling them what to do and people are not empowered," Upwork CEO Stephane Kasriel says.

Haahaha haah ha well isn't that just great. Lots of people have said for some time now that "gig" platforms like Uber and Lyft and Postmates and Handy don't empower their workers so much as they provide an illusion of control ("be your own boss!" "set your own schedule!") while actually calling most of the shots. See, for example, Uber's recent study in Houston, Texas, that lets drivers buy a week of "accelerated earnings" for a downpayment of $115. Since Uber still assigns all the trips that drivers make, the offer is something like if your boss said, 'give me $100 and I'll pay you extra if you complete enough projects next week. By the way, I assign all your projects."

Or there is this piece from the Guardian, "How the gig economy chews up and spits out millennials," which critiques the idea that gig economy companies offer true flexibility. "We have to be flexible around the times when the orders are there," says Kieran Hughes, 27, a courier for food delivery company Deliveroo. "It's not flexible for me to have to work Friday, Saturday and Sunday to make a living."

Anyway the gig economy isn't dead yet because I am still getting PR pitches about it. Field Nation is a new platform that lets employees in IT and telecom "leverage the gig economy to connect with opportunities that fit their skill set on a project by project basis." Stadium is a group food delivery service. But you've got to wonder how long the terminology will stick around when even Upwork, an online network for skilled freelancers, is trying to distance itself from "gig." Maybe in the future we'll all be "solopreneuers":

Blue Apron layoffs.

Blue Apron, the "technology" company that cuts up meat and vegetables and ships them to people across the US in boxes, is not doing well. Last week the company announced layoffs for 6% of its 5,400 workers, or about 300 people. Most of those laid off were reportedly salaried Blue Apron employees rather than people who work in its warehouses. Blue Apron cut marketing, software development, operations, and business development staff in what CEO Matt Salzberg called a "company-wide realignment."

Blue Apron has struggled since its June IPO, with its stock price now barely above $5 (it went public at $10). In August, the company lost its top human resources exec, fired 14 people on its recruiting team, and implemented a temporary hiring freeze. A big part of the company's problem is that despite whatever it told venture capitalists, its meal kits involve relatively little technology and a lot of human labor. A Blue Apron production facility in New Jersey has reportedly had a hard time retaining workers, with 20 to 30 people departing in a typical week. Blue Apron said yesterday (Oct. 23) that it had hired a new head of HR, Lainie Cooney from DPI Specialty Foods.

Meanwhile, Blue Apron is still giving stuff away to bring customers in the door. Maybe it should consider realigning that.

Driverless cars.

Here is a fun story from Wired on how autonomous cars are anxious drivers:

Next time you're driving down the road or walking down the street, pause to consider how you read your surroundings… imagine you're an autonomous car trying to do the same thing, without that accumulated knowledge or the shared humanity that lets you read others' nuanced behavioral cues. Treating every pedestrian, cyclist, and vehicle as an obstacle to be avoided might keep you from hitting anything, but it could just as easily keep you from getting anywhere.

Researchers call this the "freezing robot problem." To tackle it, they are trying to get self-driving cars to think and drive a little more like humans. For example, researchers want autonomous cars to be able to distinguish between a person approaching a street to cross it, and a person approaching a street to get into the driver's seat of their parked car. There are lots of little cues we process every day that self-driving cars need to learn from scratch.

Another potential solution to the "freezing robot problem" is to make self-driving cars a bit more aggressive. Right now, autonomous vehicles tend to be extremely deferential to other cars and people, and to follow traffic rules to a T. That can cause problems with humans who don't drive that way. "Our car is no longer ultra-defensive, because it knows it can trigger reactions from people, too," says Anca Dragan, a researcher in UC Berkeley’s electric engineering and computer sciences department. "Like other vehicles slowing down when our car merges in front of them."

Other stuff.

Lyft raises $1 billion led by Alphabet. The Great Billionaire Ride-Hailing Swap. GM's Cruise talks to Uber. Airbnb adds professional management tools for hosts. How Airbnb affects rent and home prices. WeWork acquires Flatiron School. WeWork opens a gym. Pay with Google. Uber rents drive-in movie theater in Maryland. Airbnb co-founder shifts to China division. Women raped by Uber driver in India drops Emil Michael from lawsuit. Bike-sharing wars head to the US. Good Universe wins film rights to Susan Fowler story. Lyft hires Katie Dill from Airbnb as VP of design. Lyft & Budweiser plan vintage cars for New York. Lyft gets more popular among business travelers. Chariot resumes shuttle service after brief suspension. The 20 Best Products for 20-Somethings From Costco's New Free Delivery Service. Kevin Durant invests in Pieology. The New York Times interviews Susan Fowler. Cuomo and de Blasio spar over autonomous vehicles. Instacart expands to Ithaca. Meet the Venture Capitalist Getting Professional Athletes Into Startup Investing. Amazon received 238 proposals for HQ2. Dreamforce books up SF Airbnb rentals. LimeBike raises $50 million. Stitch Fix files for IPO. On-demand public transit. A $20 Billion Startup Fueled by Silicon Valley Pixie Dust. "There's more sexist behavior when people are burned out."