Aug 20, 2019
Apple's Goldman Sachs credit card is now available for all (iPhone-owning) Americans Read More "Hover"... That's the non-swipe verb Apple envisions you motioning with your new Apple Card, the digital-native payment method it announced in May last year. Welp, it's finally available to all (in the US), and you apply through the Wallet app on the iPhone. If you're approved, you get:
Hoverability: Apple Card's natural habitat is Apple Pay, the contactless payment method built into the Apple Wallet app.
Privacy: The card doesn't even have a number. It's witness protection program approved, and totally encrypted, generating a new digital number with every transaction.
Rando coolness: When you first get your card, it exists on your phone in a blank-slate white hue. Then it changes color based on what you buy (restaurants = orange).
3 is for me... People ❤️ points. So Apple's giving you 3% cash back when you make Apple purchases or pay for an Uber. If you pay through Apple Pay on your iPhone, you get 2% cash back. But there's also a physical brag-worthy titanium card — Apple only gives 1% cash back when you pay non-digitally. It's subtly incentivizing iPhone-dependency via points.The Takeaway:Apple Card is access to iPhone Nation... CEO Tim Cook wants Apple Card to become a status symbol. He knows that, and is offering up membership to what we're calling "the 3% Club": merchants that will offer Apple Carders 3% cash back. Here's why we expect more companies to ask Apple to join the deal and exclusively accept Apple Card:
What merchants pay: That cash back you get comes from somewhere — the store pays it.
What merchants get: The loyalty from iPhone Nation — if you get 3% off every Uber ride, are you really gonna take Lyft?
Jul 23, 2019
Uber launches a membership service fueled by its core advantage over Lyft Read More Hungry and lazy?... There's an app for that. Uber is piloting a membership service in San Francisco and Chicago. For $24.99 a month, users will get a fixed discount on each Uber ride, free delivery on Uber Eats, and 30 minutes of JUMP bike-share and scooter rides per day for free.
Variety gets 5 stars... Technically, Lyft has a monthly subscription too (an unlimited pass called "All Access"). But Uber's competitive advantage is all the logistics options for a variety of daily needs packed into one monthly charge. Lyft doesn't have that. Need to drive far? Uber's membership covers it. Just need to scoot around the corner? It's covered. Want a gyro STAT? All included.The Takeaway:"Prime-ification" is happening... Amazon brought the club concept to a mass audience with $119/year (or $12.99/month) Prime. Uber's pulling the same move because it knows that once you commit, you're a sticky customer. Already paid the month's Uber membership fee? You won't even open Lyft (unless Uber's surge pricing is crazy). Membership programs thrive on that guilt — and the recurring, consistent revenue they drive may get more business models Prime-ifying.
PS: What will get "Prime-ified" next? Tweet your guess @RobinhoodSnacks.
Aug 7, 2019
Lyft shares jumped, but 2 other stories revealed its "de-wokeing" Read More "Use code EARNINGS to get 15% off your 1st ride"... Lyft jumped on word that revenues surged 72% to a new record high. But because those discount codes it dishes out to drive growth are getting expensive, we noticed its growing loss.
Last year’s 2nd quarter = Lyft lost $179M
This year’s 2nd quarter = Lyft lost $644M
The good news: That loss was huge, but Lyft thinks 2019 is its "peak loss" year — losses will shrink from here on out (and hopefully/eventually become profits).
But then we noticed 2 other stories... and both looked less good on Lyft. Together, they highlight a couple major issues that de-woke Lyft's previous wokeness.
It's not handling harassment well: If a driver bothers you, Uber's got a panic button that takes just 1 click to report – The Washington Post notes that it takes a bunch of clicks to reach Lyft's safety team (and their responses haven't been satisfactory).
Congestion — it's a problem: Uber and Lyft commissioned their own report on traffic. Turns out a whopping 14% of vehicle miles traveled in San Francisco are ride-hails — and ~40% of driver time overall is spent cruising around without riders.The Takeaway:Lyft had one advantage over Uber... Reputation. Uber owns more of the ride share market, offers more services (like Uber Eats), and has more big bets (like UberFreight). Lyft had a #DeleteUber reputation advantage that helped it gain market share last year. It can't afford to waste that.
Sep 26, 2019
Endeavor cancels its IPO the night before it was supposed to happen Read More They're supposed to be celebratory... IPOs feel like graduation or getting your Instagram account verified. But 2019 — the year of the tech IPO — has been the opposite. Talent agency Endeavor just canceled its IPO less than 24 hours before it was supposed to happen. This is the entertainment company that repped Denzel and owns half of Ultimate Fighting Championship.
There are fewer rainbows out there for unicorns lately... That's why Endeavor dipped out. The share price that a company IPOs at matters to its existing investors — they own stock in the private company and want to eventually sell once it becomces public. Here's what's happened to stocks lately once they IPO:
Uber & Lyft are down 31% and 43% as investors wonder if they'll ever become profitable.
SmileDirectClub and Slack both had painful starts, down 36% and 42%.
Peloton is only 1 day in but already sweating.
WeWork is a whole different category — Its valuation was $47B the last time it raised money from private investors, and could be re-priced down to a $15B valuation (or less) when/if it IPOs.The Takeaway:Private markets were hype, public markets are reality... In 2017, SoftBank scrapped together $100B from insanely wealthy people, companies, and countries to invest huge sums in startups. The venture capital firm gave Uber, WeWork, and Slack gigantic checks to fund their growth, also driving their valuations up. But Wall Street's been more skeptical, slashing those valuations by hammering their stock prices. Now unicorns might wait to IPO until their chests grow profit hairs.
Jul 17, 2019
Domino's earnings reveal cracks in its delivery dominance Read More Emphasis on the "no's"... Shares of Michigan-based Domino's (mozzarella is stretchier in the Midwest) fell 9% on word that sales growth slowed to just 3% for restaurants in the US (it was even worse internationally). Domino's tech-savviness helped it get pizza to people faster and shot the stock up over 3,300% in just 10 years. But now new technology is attacking it.
"Aggressive activity from 3rd-party delivery aggregators"... The Domino's CEO gave DoorDash, Postmates, Uber Eats, and GrubHub the Voldemort treatment — He dropped "3rd-party aggregators" 19 times in the earnings call with analysts yesterday. Instead of even mentioning the Big Four food delivery apps, he bemoaned the promotions they're all giving away to entice orders.
The Big Four have democratized access to delivery from McDonald's to Chipotle to Sweetgreen to Shake Shack to a bodega.
Domino's is trying to be more like the Silicon Valley darlings — it just added "track my pizza" with GPS.
The Takeaway:Domino's isn't a pizza company — it's a delivery company... And the delivery competition is on its A-game. In the past, we were typically limited to pizza or Chinese when it came to staying in and ordering delivery. Now, the Big Four delivery apps have deconstructed that, and Domino's faces delivery competition from any place with a stove and plastic to-go containers.
Oct 4, 2019
The 4th Uber app has arrived: Uber Works is the Uber for temp workers Read More Who's going to make the "Uber for staffing"?... Turns out it's Uber. With deep profitability problems in its core ride/food delivery apps, Uber hopes this becomes its profit puppy: Uber Works. The new app is the essence of gig — connecting humans who want work with people who need work. It launched in Chicago, and here are some scenarios you could Uber Work for:
🍽 Events: Cook, bartend, set-up/clean-up. Uber Works finds the restaurant, bar, or party that's desperate for side-hustlers.
📦 Warehousing: Help with inventory, shipping, or packaging. Uber Works connects you with a factory in need.
Staffing is hard... and it's dominated by local or industry-specific firms sticking people like Ryan Howard into a role at Dunder Mifflin (and charging a fee for it). Uber Works replaces that with its app's secret algorithm to balance supply with demand through dynamic (aka "surge") pricing. The pricing in this case being an hourly wage.The Takeaway:Uber's got an "independent contractor" problem... but Uber Works probably won't face it. California recently passed a law requiring Uber to treat drivers as full-time employees with benefits (benefits = expensive.). With Works though, Uber is purely a middleman, taking a fee from a variety of businesses that find gig workers via Uber. It's a cleaner transaction with fewer legal question marks.
May 22, 2019
A leak just revealed "Uber Eats Pass" (aka unlimited free delivery) Read More Sauce on the side... forever. Turns out Uber's food delivery app wants a seat at the subscription table — Uber Eats is working on unlimited food delivery for $9.99 a month. “Uber Eats Pass” will waive the typically 15% delivery fee on your evening enchilada ritual, but still require that order minimum. And Uber Eats already cooks up good numbers:
It makes up 13% of Uber's total revenues (according to the IPO paperwork).
And while ride-hailing revenue grew 33% for Uber last year, Eats surged 149%.
Now Uber Eats is the biggest food deliverer on Earth outside of China.
One thing tastes better than this story... It's how it went down. Jane Manchun Wong is a “reverse-engineering specialist”: She looks through code hidden in apps, puts two-and-two together, then tips off TechCrunch with a juicy story. She discovered not-yet-announced images for "free delivery" and the other deets that make up this story.The Takeaway:Subscriptions are all about “guilt” loyalty... Competitors DoorDash and Postmates already have the same monthly commitment passes. But if you're an Uber Eats Pass-er, you'd hate yourself wasting money on delivery fees with other apps. Loyalty leads to habits — And once Uber Eats enables your Monday maki roll routine, Uber could raise prices in the future.
Sep 12, 2019
California disrupts the disrupters, classifying Uber/Lyft drivers as "employees" Read More Flashback to Uber's IPO in May... Deep in its filing paperwork (aka "S-1"), Uber listed a nightmare policy scenario under the "risks" section:
“Our business would be adversely affected if Drivers were classified as employees instead of independent contractors.”
That. Just. Happened... California's AB5 law (brutal name) passed late Tuesday to go into effect Jan. 1, pending the governor's signature (he said he'll sign). It requires Uber, Lyft, and other gig icons to grant full employee benefits, pay, and anniversary balloons to their drivers — that's instead of the 1099 form drivers currently get as independent contractors.
Uber's response = Not doing it... This seems destined for a legal battle. Here's how this law would be good and bad for the world:
The Good: Uber drivers would receive reliable (and probably higher) pay, benefits, and the opportunity to unionize.
The Bad: Uber claims it would need to schedule driver shifts, stealing their "drive when you want" freedom. The higher overall driver pay would also probably translate to higher prices for you and us riders.The Takeaway:Don't forget Uber & Lyft's dirty little secret... To transition from hugely unprofitable to actually make money, they've got 3 options:
Pay drivers less (not happening with this new law)
Increase prices for Uber rides
Replace drivers with self-driving car technology
#2 could happen because of this new law. The pressure to get to #3 will be even greater.
Sep 10, 2019
Uber invests big in "Freight" — the Uber for pallets of stuff in tractor-trailers Read More Freight just brought sexy back... Uber wants to make trucking its next profit puppy. Just like ride-hailing, Uber Freight connects drivers (of 18-wheelers) with riders (Budweiser's beer kegs or Land O'Lakes' stacks of butter). Uber just announced that Freight is its fastest-growing business line, so it's investing more in a big way:
Cash: Uber's Freight line will get a $200M investment each year.
Personnel: Uber's hiring 2K people at its future 2nd-biggest location (and the only other one besides SF that gets engineers) — Chicago = Freight HQ.
Perks: To sign up new truck drivers to the gig-for-cargo platform, it's offering discounts on gas, free tires (but seriously — tractor-trailers need 18 of 'em), and cash bonuses.
Uber's spending money to stop losing money... It lost a gargantuan $5B last quarter (the last 3 months), and loses $3.36 each time someone delivers an Uber Eats meal. It's funneling money away from marketing (it laid off 400 this summer in that dep't) and toward this growing bet.The Takeaway:Freight has to be different than the rest of Uber... Uber's 3 non-Freight divisions — rides, bikes/scooters, and Eats — all face copycat competition. Without barriers to entry to creating an app platform, Lyft, DoorDash, and others keep prices low and competition fierce. Uber must find a way to prevent an Amazon Freight or Lyft Trailer from becoming a thing. 
