Don’t mess with Dara’s payday.

This past Monday, Uber CEO Dara Khosrowshahi penned an op-ed piece in The New York Times, saying gig workers deserve better in response to California’s new law, Assembly Bill 5, requiring companies like Lyft and Uber to classify their drivers as full-time employees:

Why not just treat drivers as employees? Some of our critics argue that doing so would make drivers’ problems vanish overnight. It may seem like a reasonable assumption, but it’s one that I think ignores a stark reality: Uber would only have full-time jobs for a small fraction of our current drivers and only be able to operate in many fewer cities than today. Rides would be more expensive, which would significantly reduce the number of rides people could take and, in turn, the number of drivers needed to provide those trips. Uber would not be as widely available to riders, and drivers would lose the flexibility they have today if they became employees.

So Uber’s business model can’t support drivers-as-employees. Boohoo.

Let’s be clear though: Uber was not established to provide a flexible lifestyle for drivers.

So what is Khosrowshahi proposing?

I’m proposing that gig economy companies be required to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off. Independent workers in any state that passes this law could take money out for every hour of work they put in. All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.

Let’s not forget the terms under which Khosrowshahi was hired after Travis Kalanick was forced to resign as Uber’s CEO in 2017:

Dara Khosrowshahi could get a huge payday — totaling more than $100 million according to a source — if Uber’s IPO valuation hits $120 billion and stays at that level for 90 consecutive days.

The Uber CEO will also get the payout for selling the company for $120 billion, according to a disclosure the company’s its S-1 documents.

Having a bunch of fairly paid employee drivers at Uber could take a serious bite out of that $100 million carrot.

Categories:

Business, Career

Kickslowed

Like many businesses, Kickstarter isn’t in good shape these days:

Crowdfunding platform Kickstarter is the latest company to resort to layoffs during the economic downturn caused by the coronavirus pandemic. The company filed a regulatory notice in New York last week revealing it had laid off 25 employees, or about 18 percent of its workforce. But Kickstarter tells The Verge its workforce reduction is more than twice that, as 30 employees decided to take voluntary buyouts as negotiated between the company’s management and Kickstarter’s employee union.

“The filing is correct, however, it does not reflect an international employee that was affected, nor does it take into account further staff reduction via the voluntary buyouts offered to staff. In total, we’ll see a 39 percent reduction in staff,” a Kickstarter spokesperson tells The Verge. “The majority of those leaving chose voluntary separation packages, and everyone affected is staying on through this week through the transition.”

On the positive side, it’s cool to see interesting wearables projects that have launched in response to the COVID-19 pandemic.

I hope Kickstarter doesn’t go away. From a quick scan through the site, there looks to still be a lot of interesting projects launching on their platform.

To have a business you need to have more than a business?

The Verge has a profile on electric skateboard startup Boosted:

Born out of a Stanford startup incubator in 2012, Boosted pretty much single-handedly popularized the idea of electric skateboards — or, more specifically, remote-controlled longboards powered by electric motors. The company launched an overwhelmingly successful Kickstarter that same year and started shipping in 2014. Co-founder and former CEO Sanjay Dastoor often talked about wanting to grow Boosted beyond skateboards into a company that made “last-mile” vehicles in other form factors. But it wasn’t until he stepped down and was replaced by fellow Stanford mechanical engineering grad Jeff Russakow in 2017 that Boosted tried to make that happen.

It seems that in today’s day and age it’s not sufficient to have a great idea and turn that idea into a business. There’s this urge to weaponize your company into something that can take on anything and everything. “No! We’re not an electric skateboard company! In a year we’ll be making autonomous cars and Mars rovers!”

Granted their entrance into the electric scooter market is a natural extension of their skateboard business, but shouldn’t you have success with your core product before expanding and diversifying?

It’s always about raising money, never making money.

Categories:

Business, Product

Money Priorities

Gizmodo: WeWork Delaying Mass Layoffs Because It Can’t Afford Severance:

WeWork, the company that is either a transformative way of life or a dangerously overleveraged real estate company posing as a cultish tech firm, is planning on laying off thousands of employees.

… Just as soon as it can scrape up the cash for severance costs, anyhow.

Earlier on Monday, reports indicated that WeWork investor SoftBank was preparing a $5 billion bailout package that may give it 70 percent or higher control of the company at a valuation of $8 billion, a catastrophic fall from WeWork’s prior claims to be worth $47 billion. (As of just a few weeks ago, WeWork was still hoping for a valuation in the $20 billion range.) Business Insider later reported that staff received emails indicating there will soon be layoffs at the company; according to another report from the Wall Street Journal, sources say that thousands of people are slated to lose jobs but that the decision had been delayed because WeWork has only “weeks” of money left and can’t afford to pay severance. The paper noted that SoftBank’s offer would cover buying “more than $1 billion of stock from existing investors and employees.”

But wait! What about founder Adam Neumann, the CEO dude who was asked to step down in September? Does he get anything?

I’m glad you asked:

However, the details around Neumann’s payoff were dramatically under-reported as the journal reports that Softbank will provide the former CEO with around $1.7 Billion as part of the deal (and extend a $500 million line of credit to the kabbalah follower).

SoftBank can’t scrounge up the severence cash, but they sure as shit can get founder Adam Neumann $1.7 billion. Got it. Thanks.

Categories:

Business, Finance

Tim Cook & Tariffs

Neil Cybart: Tim Cook Continues to Thread the Needle:

Taking a step back to look at the big picture, Apple is not being targeted by either the U.S. or China. If anything, Apple is being boosted by the U.S. with tariff exemptions and delays.

The tariffs that were set to be placed on Apple’s product line on September 1st have been delayed until December 15th. Looking through the list of products that benefit from the delay (iPhone, MacBook, iPad, iPod Touch, Apple TV), the decision to delay could have very well be renamed the iPhone exemption. It would seem that Tim Cook had a direct role in delaying the tariffs as he apparently talked to Trump about the latest round of tariffs.

Cook made the bet to engage with the current U.S. administration (he has explained his decision numerous times over the years) and it would appear that his bet has contributed to Apple successfully navigating the current environment with just some minor cuts and scrapes here and there.

It is certainly possible that the 15% tariffs will be applied to Apple’s entire product line once December 15th rolls around. However, at this point, it’s probably just as likely that certain exemptions will be granted to Apple as we approach December.

To be human is to make shit up as we go along. Tariffs are tariffs until they aren’t tariffs.

Nothing we make is concrete. Ever.

quote from Above Avalon via Phillip Elmer-DeWitt

“…not with a bang but a stab in the back.”

Billionaire David Koch died today. Malcolm Jones wrote a piece on him over at The Daily Beast.

The last paragraph is a good one:

It is hard to muster much sympathy for a multi-billionaire, but spare a tear for David Koch, who in his last years apparently became the final victim of his own brother’s relentless desire for control. In 2018, Koch Industries announced that David Koch was retiring due to ill health. But two sources close to the family told reporter Jane Mayer that “Charles pushed David out. It was done with a wink, and a nod, and a nudge.” Another family associate confirmed this: “Charles had been pushing him out for quite some time. David kept resisting. It was bad. Charles took control.” And so ended one of the most remarkable careers in American business and American politics, not with a bang but a stab in the back.

Good riddance.

Categories:

Business

“make something good and see what happens”

In an interview with Edge Magazine, Panic co-founder Cabel Sasser revealed Mark Zuckerberg was interested in buying his company (I’m not sure how long ago).

Cabel passed (via Engadget):

“Maybe that’s why we’re put on this planet: to be an example of like, you can move slowly. Make sure you have enough money in the bank, make something good and see what happens. You don’t have to go for world domination.”

The world would be a better place with more Sassers and less Zuckerbergs in it.

Categories:

Business

American capitalism is broken

David Leonhardt writing for The New York Times on American capitalism and Elizabeth Warren’s proposed bill in the Senate:

In the years that followed, corporate America largely followed this prescription. Not every executive did, of course, and management and labor still had bitter disputes. But most executives behaved as if they cared about their workers and communities. C.E.O.s accepted pay packages that today look like a pittance. Middle-class incomes rose faster in the 1950s and 1960s than incomes at the top. Imagine that: declining income inequality.

And the economy — and American business — boomed during this period, just as Benton and his fellow chieftains had predicted.

Things began to change in the 1970s. Facing more global competition and higher energy prices, and with Great Depression memories fading, executives became more aggressive. They decided that their sole mission was maximizing shareholder value. They fought for deregulation, reduced taxes, union-free workplaces, lower wages and much, much higher pay for themselves. They justified it all with promises of a wonderful new economic boom. That boom never arrived.

Even when economic growth has been decent, as it is now, most of the bounty has flowed to the top. Median weekly earnings have grown a miserly 0.1 percent a year since 1979. The typical American family today has a lower net worth than the typical family did 20 years ago. Life expectancy, shockingly, has fallen this decade.

Income inequality is too real.

Free market capitalism sounds great to some, and so does not having speed limits for automobiles, but the truth is we need regulations. They exist for a reason and they serve a real purpose.

A, B, C, D – Always Be Collecting Data

It turns out that Facebook could in fact use data collected from its Portal in-home video device to target you with ads:

Facebook announced Portal last week, its take on the in-home, voice-activated speaker to rival competitors from Amazon, Google and Apple.

The biggest question surrounding the device: Why should anyone trust Facebook enough to put Facebook-powered microphones and video cameras in their living room or kitchen? Given Facebook’s year of privacy and security issues, privacy around the device — including what data Facebook collects and how it’s used — has been an important part of the story surrounding Portal.

That’s why we need to update our reporting.

Last Monday, we wrote: “No data collected through Portal — even call log data or app usage data, like the fact that you listened to Spotify — will be used to target users with ads on Facebook.”

We wrote that because that’s what we were told by Facebook executives.

But Facebook has since reached out to change its answer: Portal doesn’t have ads, but data about who you call and data about which apps you use on Portal can be used to target you with ads on other Facebook-owned properties.

Shocking! A company making money through targeted ads based on the profiles of over 2 billion active Facebook users might use that data to help their bottom line.

The longer Facebook is around the creepier it reveals itself to be.

Donald Trump, self-made liar and thief.

A solid piece of investigative journalism from The New York Times on the “self-made” empire of Donald Trump:

President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.

Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help.

But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.

Just another reminder that Donald Trump is a liar and a thief.

Categories:

Business, Finance, Tromp

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Logitech Buys Blue

Back on July 30 it was announced Logitech is acquiring Blue Microphones for $117 million in cash:

Logitech is making a big purchase to secure a foothold in high-end audio recording. Tonight, the company announced that it’s acquiring Blue Microphones for $117 million. The all-cash transaction will result in Blue, known for USB condenser microphones including the Snowball and Yeti, joining Logitech’s existing portfolio of brands. Aside from Logitech and Logitech G, the company also owns Astro Gaming, Jaybird, and Ultimate Ears. Yeah, it’s putting together quite the roster.

This seems like a good move.

I’ve been using a Yeti mic by Blue for a few years now to record Weekly Exhaust and I’ve always been a fan of Logitech peripherals, particularly their M705 wireless mouse.(h/t The Wirecutter)

Categories:

Business, Product

“We’re not equipped for it.”

Om Malik on e-cigarette company Juul:

In a CNBC news report, Juul spokesman Matt David said: “Like many Silicon Valley technology startups, our growth is not the result of marketing but rather a superior product disrupting an archaic industry.” First of all, there is nothing technological about this company — unless you count behavioral addiction as a common ground with Facebook and others like them. It is utter bullshit, and reporters should know better than letting this slide without serious questioning.

From Business Insider (which called it iPhone of e-cigarettes) to CrunchBase, everyone seems to marvel over their growth rates, their post-Unicorn valuations, and jaw-dropping success at raising capital. And very rarely have I seen anyone stand up and point out that it is no different than traditional tobacco peddlers like Marlboro and Camel. They are peddling nicotine-based addiction. By focusing on charming founders, their backgrounds, large amount of funds raised and crazy valuations, no one is asking the right question: why are we supporting this company that is essentially Camel 2.0?

Addiction is a profitable and high-growth business. Ask the cartels selling other addictive products. “And is it an ethical business?,” asks Crunchbase. “We can’t answer the latter question here as we’re not equipped for it.” Yes, you are! Any halfway decent person can see that tobacco & nicotine industries are driven by greed and have preyed on human frailty.

Their “we’re not equipped for it” response reminds me of Facebook’s initial response to the use of social media platforms by Russians to manipulate politics in the United States. “We’re powerless! There’s nothing we can do!”

Fast-forward to today when Facebook announced it removed 32 Pages and accounts from Facebook and Instagram because they were involved in coordinated inauthentic behavior:

It’s clear that whoever set up these accounts went to much greater lengths to obscure their true identities than the Russian-based Internet Research Agency (IRA) has in the past.

Rather than be proactive about taking down accounts & pages that violate Facebook policies, they’d rather do nothing until something bad happens. They don’t want anything effecting their bottom line so they’d rather do nothing. It’s shameful.

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Business

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