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Uber has won its appeals process in London, with a court just now finding it “fit and proper” to receive a probationary 15-month license.
The court granted the license after Uber agreed to be audited, and to pay £425,500 in costs to Transport for London (TfL), the local transit authority. The ride-hailing company lost its license to operate in London at the end of September 2017. Transport for London, the local transit authority, took issue with Uber’s “approach” to various aspects of doing business, including reporting crimes, vetting drivers, and explaining away software that helped Uber conceal illegal operations from law enforcement.
Crucially, Uber never actually stopped operating in London, as it was allowed to continue service until any appeal processes were exhausted. The company’s campaign for reinstatement included circulating petitions to users and emphasizing to regulators that it had changed its tune. Regulators received a personal visit from chief executive Dara Khosrowshahi, who kicked off his time at Uber with a global apology tour.
The outcome is a big win for Khosrowshahi, who has spent his first nine months rewriting Uber’s script for how it does business. While many people at the company feel it has turned a corner, critics and some people loyal to Uber co-founder and former CEO Travis Kalanick have accused Khosrowshahi of being too soft, especially after he cut deals to sell Uber’s regional operations in Russia and Southeast Asia. The victory in London is a sign that Khosrowshahi’s diplomatic campaign to move forward is working.
Once upon a time, venture capitalists were wary of startups that sought to disrupt locally regulated industries. But then came Uber and Airbnb and now we have e-bikes and scooters and, well, times are changing, and startups that compete in government-regulated sectors, per the Wall Street Journal, have come into vogue:
Andreessen Horowitz hosts events in Washington and participates in meetings on Capitol Hill. Former Facebook general counsel Ted Ullyot advises the firm’s portfolio companies on regulatory issues. Social Capital recently formed a partnership with 100 Resilient Cities to provide its startups access to city-level public officials, such as mayors. General Catalyst introduces its founders to a network of contacts who were regulators and policy makers.
And regulators, for their part, have learned from the mistakes they made when working with companies such as Airbnb and Uber, and they are increasingly engaging with companies at earlier stages. At the same time, some startups are finding it can be a competitive advantage to engage with policy makers.
The Journal cites investors Julie Lein and Clara Brenner, who recently closed a $22.5 million fund for early-stage startups focused on urban problems. The Urban Innovation Fund has invested in Chariot, the Ford-owned ride share service, and Neighborly, a bond market for investing in public projects and infrastructure. Lein and Brenner reportedly encouraged Chariot to buck the ride share model by hiring W-2 workers instead of independent contractors, and position itself as a job creator to San Francisco regulators.
Meanwhile, a host of startups are focused on the decidedly municipal task of reinventing the bus. There is FlixBus, a profitable European long-haul bus company now aiming to launch in California; Cabin, an “upscale sleeper bus service”; and Rally, a New York-based startup for intercity routes. FlixBus, like many a good gig economy company, “thinks it has a competitive advantage because it doesn’t own its buses,” reports The Information. Cabin raised $3.3 million in seed funding from Founders Fund, which it spent more than $1 million of buying three buses outfitted with sleeper pods, instead of seats. Bus companies tend to be strictly regulated by states, as well as federal rules on how many hours a driver can be behind the wheel.
Across the broader startup world, it’s also become common for companies to have extensive policy and communications teams, with hires who hail straight from politics. High-profile political imports to Silicon Valley include Chris Lehane, a former operative for the Clinton White House who heads up policy at Airbnb; David Plouffe, Barack Obama’s 2008 campaign manager who joined Uber in 2014 and now works for the Chan Zuckerberg Initiative; and Rachel Whetstone, formerly head of communications at Uber and now climbing her way up the ladder at Facebook.
It is possible to read the increased political savvy of startups as a sign that the industry is maturing. Uber got very far for many years by neither asking permission nor begging forgiveness, but eventually the strategy stopped working. 2017 was as much a referendum on Uber’s toxic corporate culture as the many politicians it angered. Airbnb went through a similar transformation in 2017, moving from political hardball to compromise in cities that were skeptical of its short-term rentals.
With scooters and bike share, the cycle has accelerated. The honeymoon period of defying regulators lasted months instead of years before local officials said enough, with San Francisco rounding up electric scooters and demanding the companies apply for legitimate permits before they could resume operating. In Seattle, bike share company Ofo is complying with rules laid out by the University of Washington to avoid a flat-out ban. The early Uber playbook worked because it caught everyone off guard; now that cities are on alert, startups need their policy staffers and backing from regulatory-inclined venture capitalists to figure something else out.
Breakfast at WeWork.
For breakfast this morning I went to WeWork, which packed at least a hundred people into its New York headquarters to discuss WeWork’s impact on the New York real estate market, and interest in collaborating more with landlords. There was clumpy oatmeal and two kinds of fruit water and platters of avocado toast. There were lots of men in suits, milling about to the beat of “Baby I’m Yours.”
WeWork, which is looking to raise money at a $35 billion valuation, often makes grandiose claims, and the presentation by chief communications officer Jen Skyler had a particularly impressive one. “If you were to take all these members and say they were one company,” she said, referring to the 50,000-plus paying members WeWork has in New York City, “we would be the largest private sector employer in the city.”
This is a baffling statement. WeWork members, after all, aren’t anything like WeWork employees. They don’t get paid by WeWork or receive employment benefits, nor are they working on WeWork’s corporate business. Quite they opposite, they are paying tenants of WeWork’s office spaces, which start at $350 a month for a dedicated desk. WeWork calling itself New York’s largest private sector employer based on members is like if Amazon claimed to be the city’s biggest employer based on Prime subscribers.
I am increasingly convinced that what WeWork is best at isn’t managing property but spinning an alternate reality, one that uses cucumber-kiwi fruit water and avocado toast to wash down slightly less palatable ideas, like “community adjusted ebitda,” the metric WeWork dreamed up to sell seven-year bonds, which immediately slumped.
“They have an aura,” Kent Covington, the real estate broker seated next to me said. “There are a few companies like that. They’re not profitable, but they can break traditional rules.”
Alana Semuels of The Atlantic dressed up in a yellow safety vest and spent a day delivering packages for Amazon Flex in San Francisco. Her verdict:
“NOT. A. GOOD. DEAL,” I scrawled in my notebook, after having walked down nine flights of stairs, sick of waiting for a freight elevator that may or may not have been broken, and returned to my car for another armful of packages.
Flex is Amazon’s last-mile delivery program—in other words, the people that bring stuff from stores and Amazon warehouses to your door. Flex workers are employed as contractors, i.e., they don’t get benefits and pay their own on-the-job expenses, like gas, car repairs, and depreciation. Semuels signed up by downloading an app, completing a background check, and watching 19 introductory videos, followed by short quizzes, on how to deliver packages (she wasn’t paid for that time).
Unlike Uber drivers, who can log on and off the app as they please, Flex drivers sign up for mini-shifts. Like Uber drivers, Flex workers can be “deactivated,” sometimes for opaque reasons, abruptly cutting off their income stream. Semuels worked a Tuesday 11am to 2:30pm slot that paid $70. She didn’t walk away with nearly that much:
In total, I drove about 40 miles (not counting the 26 miles I had to drive between the warehouse and my apartment). I was paid $70, but had $20 in expenses, based on the IRS mileage standards. I had narrowly avoided a $110 parking ticket, which felt like a win, but my earnings, added up, were $13.33 an hour. That’s less than San Francisco’s $14 minimum wage. I eagerly awaited my paycheck, which was supposed to be deposited into my bank account the Friday after my shift. It never came. Something had gone wrong with the way I entered my bank-account number into the app, and when I wrote to support to report this, I received a form letter back that said I was emailing Amazon from the wrong email address. I’m still corresponding with Amazon to figure out exactly how to get paid—more time spent trying to eke out a meager wage in the gig economy.
Portland proposes Airbnb fee to fund affordable housing. Airbnb fears defeat by New York City council. Supervalu partners with Instacart on distribution for independent grocers. Uber names new president of India and south Asia. Uber promises bonuses to drivers with electric vehicles. Honolulu mayor vetoes bill to limit surge-pricing on Uber and Lyft. First city in Spain to ban Airbnb. Driverless car startup Voyage lures Uber, Tesla vet. Lyft develops “last mile” feature. New York appeals panel says Postmates courier not an employee. DC proposes lifting taxes on ride-hail. Driverless Wheelchairs Bring Independence. What Happens If Your UberPool Co-Passenger Misbehaves? Brits Who Booked Airbnb Property for Full-Sized Pool Table Shocked to Find It’s a Kids’ Version. The US startup is dying out. Airbnb for academics. Airbnb for camping in Canada. Instacat.