|Sep 26 2017||Public post|
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High cost to a bad reputation.
Dara Khosrowshahi is already distinguishing himself from Travis Kalanick. Uber’s new CEO is striking a conciliatory tone in London after the local transit regulator declined to renew the ride-hailing company’s license. “While the impulse may be to say that this is unfair, one of the lessons I’ve learned over time is that change comes from self-reflection,” he wrote in an email to Uber employees. “The truth is that there is a high cost to a bad reputation. Irrespective of whether we did everything that is being said about us in London today (and to be clear, I don’t think we did), it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another.”
Consequences! Reputations! Self-reflection! This is definitely not Travis Kalanick. Maybe it is what Travis 2.0 would have been like, if we had ever been able to really meet him. (Shoutout to my Quartz coworker April Siese for getting a @travisk like on her tweet last week:)
As I’ve said before, Travis Kalanick 1.0 made Uber great by explicitly not caring about those things. He broke a lot of rules and pissed a lot of people off and never worried about actions he took in one part of the world having consequences in another part. Travis didn’t ask permission or beg forgiveness and that is arguably what allowed Uber to upend the global taxi industry and redefine transportation as we know it.
That said, the CEO who makes a company great is not necessarily the same person who allows it to continue being great. Travis was great for Uber when it was a fast-growing, rule-bucking startup, and less great as it became a $68 billion corporation that operates in hundreds of cities around the world. Uber isn’t a public company yet but it’s been forced to start acting like one, and Khosrowshahi, who has actually run a large public company and seems to have a degree of humility, is probably a better person for that job.
As for what happened in London, Uber isn’t actually banned, contrary to a lot of breathless headlines. The company is allowed to keep operating while it appeals Transport for London’s decision in court, which could take “any length of time.” Uber has already begun its campaign for reinstatement, imploring its London users by email to “Save your Uber in London,” as it has before in countless US cities that try to regulate it. Consumer sentiment is also in Uber’s favor, since London’s black cabs are notoriously expensive. For all the bluster this decision has caused, my guess is that it doesn’t disrupt Uber’s service in the slightest. By the time the appeal makes its way through court, either Uber and London will broker a deal, or the city will back down.
It pays to be nice.
Elsewhere in reputations, gone are the days of Uber and Lyft competing on price cuts. Today the two companies are busy trying to provide the most perks to their drivers. Uber has tweaked earnings, added phone support, and modified its ratings system as part of its ongoing “180 days of change” campaign. Lyft, which has historically treated drivers better than Uber, yesterday pushed out its own bundle of driver-friendly updates (24/7 phone support, Spanish-language phone and email support, and faster online claims processing). Earlier this month it also improved its “destination mode” setting that lets drivers specify where they’d like to end up after a trip.
One interpretation of this is that Uber has turned over a new leaf and actually wants to mend things with its drivers, particularly in the wake of a viral video that showed Travis Kalanick (1.0) berating a driver who complained about low wages.
A more cynical interpretation is that driver acquisition and retention has started to become a much bigger challenge for Uber, which churns through at least 50% of its workforce, and maybe more, in a single year. That was perhaps sustainable when Uber was a richly funded startup with no concerns about profitability, a seemingly endless pool of people interested in driving for it, and driverless cars on the ever-rosy horizon. It has probably become less sustainable as Uber has evolved into an established company that needs to worry about its bottom line (driver acquisition is expensive), has burned through a lot of people (by the roughest of math, there are several hundred thousand people in the US and more globally who have stopped driving for Uber), and has lost confidence in its rosy driverless car timeline (see: the lawsuit with Waymo). Being nicer to drivers is also probably better for business.
Omnichannel meal kit service.
Meal kits are boxes of meat and vegetables and other cooking ingredients that are assembled by humans in a warehouse and shipped out to people across the country, also by humans, for them to cook. They used to be a hot commodity in Silicon Valley but lately have been less hot. The chilling effect seems to have happened not because venture capitalists realized there is very little technology involved in a meal kit, but because meal-kit company Blue Apron went public in July and was promptly destroyed by the market.
But someone is still interested in meal kits:
Albertsons Cos. is buying the Plated meal-kit service, the first acquisition of a prepared-meals company by a national grocery chain as supermarkets scramble to keep shoppers coming to their stores.
The New York-based Plated, which does business as DineInFresh Inc., will operate as a subsidiary of the U.S.’s second-largest grocery chain, the companies said. Customers will be able to buy a rotating selection of meals like chicken Marsala with roasted potatoes and feta-stuffed lamb burgers for delivery or pickup at Albertsons stores in coming months. They cost $10 to $12 a serving.
Albertsons is the parent of grocery brands including Safeway, Randalls, Star Market, and Shaw’s. It didn’t disclose a price for the Plated deal, but Bloomberg reported it was about $200 million. The companies are now advertising Plated as the “first omnichannel meal kit service,” a jargony way of saying you can buy it online or in stores. Interestingly, Plated CEO Josh Hix says the company doesn’t have any plans to start assembling its in-store meal kits in Albertsons stores, which I would think is a main advantage of working directly with a grocery store. He is enthused about having access to Albertsons’ refrigerated delivery trucks in eight cities, which might allow Plated to cut down on its use of the “refrigerated box,” aka, a box stuffed with an absurd number of ice packs. In the meantime, with so many other meal kit companies up for grabs and Amazon’s acquisition of Whole Foods, Plated probably won’t be the only omnichannel meal kit service for long.
Open the fridge doors, Hal.
Elsewhere in delivery, Walmart wants to let its delivery people directly into your home:
The world's largest retailer announced Friday that is testing a delivery program in Silicon Valley that would allow customers to use smart-home technology to remotely open the door for delivery workers and watch a livestream of the delivery by linking their phones with home security cameras.
Bentonville, Ark.-based Wal-Mart said the in-home delivery service is aimed at busy families that don't have time to stop at a store or unpack their groceries.
People will sacrifice a stunning amount of security and privacy for convenience, but it remains to be seen whether that includes entry to their homes. The more trust is involved the more branding also tends to matter and Walmart does not have the best of branding. Walmart is known for its dour, underpaid staff, its chaotic and often empty shelves, and of course its rock-bottom prices. Those things might bring shoppers into stores but it is less clear whether it will convince shoppers to bring Walmart delivery people into their homes. The logistics also seem tricky. Has Walmart ever seen a typical family’s fridge? It’s messy. Putting in groceries is like playing a very un-fun game of Jenga. It’s not nearly as simple as opening the door and dropping them off.
But some people are excited! “I love everything Walmart is doing right now,” saysMichael McDevitt, CEO of meal-kit startup Terra’s Kitchen. Maybe he is also hoping to get acquired, and become an omnichannel meal-kit service that saves money on its refrigerated boxes.
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