Apple has released figures about the iOS App Store and revealed it has created 300,000 new jobs since the coronavirus pandemic began.
Apple has been under fire for how it operates and manages its App Store. In particular, it is locked in a legal battle with Fortnite maker Epic over the fees it charges. It’s little wonder that Apple is eager to prove the App’s Store’s value.
“The iOS app economy has created nearly 300,000 new jobs since April 2019, helping to provide opportunities for Americans of all ages even as COVID-19 continues to create immense challenges and uncertainty for communities across the country,” reads Apple’s blog post. “Developers nationwide — including companies such as Caribu, H‑E‑B, and Shine — have adapted their businesses to make sure they can keep supporting their customers during a challenging time.
“Since the App Store launched in 2008, the iOS app economy has become one of the fastest-growing sectors of the economy. Despite the pandemic, the App Store continues to provide economic opportunities for entrepreneurs of all sizes, helping anyone with an idea reach customers around the world and take advantage of new opportunities that would never be possible without it. The App Store ecosystem now supports more than 2.1 million US jobs across all 50 states — an increase of 15 percent since last year — as part of the 2.7 million jobs Apple supports across the country.“
Zoom reported its quarterly results, smashing expectations as the company’s revenue was up 355% year-over-year.
Zoom has become the de facto standard videoconferencing platform in the wake of the coronavirus pandemic. It is widely used by businesses, government agencies, schools, churches and individuals. Despite some early security and privacy missteps, the company has continued to address concerns and win customers.
Based on its quarterly results, those efforts have paid off in spades. The company reported quarterly revenue of $663.5 million, well above a consensus of $500 million, representing a 355% year-over-year increase.
“Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform. At Zoom, we strive to deliver a world-class, frictionless, and secure communication experience for our customers across locations, devices, and use cases,” said Zoom founder and CEO, Eric S. Yuan. “Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year in Q2 and enabled us to increase our revenue outlook to approximately $2.37 billion to $2.39 billion for FY21, or 281% to 284% increase year-over-year.”
Interestingly, Zoom reported it has 988 customers that are paying more than $100,000 each, a 112% increase from the year-ago quarter.
“Amazon then has turned around and supported a bill in California to say that every other online marketplace that’s not acting like a retailer (as Amazon is) should be held strictly liable,” says Etsy CEO Josh Silverman. “So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight. It’s really an anti-competitive act from amazon to consolidate their market power.”
Josh Silverman, CEO of Etsy, discusses how Amazon is using its financial power to cynically support legislation it was previously against for the sole purpose of crushing smaller competitors such as Etsy:
Wolf In Sheep’s Clothing To Protect Amazon’s Market Power
I think this is an important issue and it’s important for everyone in America. This is a wolf in sheep’s clothing designed to protect Amazon’s market power and extend Amazon’s market power. It’s dressed up to look like consumer protection.
Here’s what’s going on. Consumers, of course, need to be protected if something goes wrong with a purchase. There’s a long history of law that says if you buy something from a retailer and something goes wrong that retailer is strictly liable. It also says if you buy something on a marketplace the vendor on the marketplace is liable but the marketplace itself is not. Think if you buy something from a flea market, the landlord who owns the parking lot is not liable, it’s the person you bought it from at the flea market.
Tremendous Consequences For Etsy Should Amazon Prevail
So the question, and there’s been a gap in recent law, what happens when a marketplace starts to look and act like a retailer? We don’t need California to come and pass a law on that because the California judiciary just settled that issue last week. They said Amazon looks like a duck and smells like a duck so it acts like a retailer. It exerts control, it picks the inventory, it stores the inventory in its warehouses, it pick-packs and ships the inventory, it puts it in an Amazon box and it delivers the box to your door in an Amazon van. It said Amazon meets the standard of acting like a retailer and therefore it should be liable like a retailer.
Amazon then has turned around and supported the bill in California to say, well then every other online marketplace that’s not acting like a retailer should be held strictly liable. So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight.
Anti-Competitive Act By Amazon To Consolidate Market Power
Amazon has previously been fighting these kinds of bills for years. It’s so cynical. They lost this court case because the court found that they act like a retailer. So they’re now strictly liable in the cases where they act like a retailer. The court didn’t find that they do it every time. The court set a standard for what are the tripping points. They gave guidance for other courts on when is a marketplace actually acting so much like a retailer that they should be held strictly liable. Amazon would trip that wire most of the time.
Amazon then flipped and said well this is an inconvenience for us but it would be a crushing burden for small businesses, for our competitors, for people like Craigslist or Etsy. They’ve now backed a law saying since we have to do this because we act like a retailer we want all online marketplaces to also be held liable even if they don’t act like a retailer. The reason is that this is so complex that a smaller place, a marketplace like Etsy, which never touches the merchandise, which doesn’t fulfill, which doesn’t pick pack and ship, simply can’t comply. It’s really an anti-competitive act from amazon to consolidate their market power.
Etsy CEO Josh Silverman: Anti-Competitive Act By Amazon To Consolidate Market Power
Asana has filed to go public and, in the process, disclosed its commitment to Amazon’s AWS as its cloud platform of choice.
Popular collaboration tool Asana filed to go public this week. Asana is the brainchild of Facebook co-founder Dustin Moskovitz and Justin Rosenstein, a former Facebook and Google engineer.
What’s more interesting than Asana’s IPO, however, is the disclosure of its cloud budget and where it is spending that budget. Business Insider delved into the paperwork and discovered that Asana has agreed to spend at least $20 million on AWS cloud services.
“Asana in December 2018 agreed to a 27-month contract with AWS, committing to spend at least $9 million on cloud services in 2019, and an additional $11 million in 2020,” wroteBusiness Insider. “The company had $5.4 million left to spend to fulfill the minimum as of April 30 of this year.”
As the cloud market continues to heat up, with AWS, Microsoft and Google fighting for dominance, this is a big win for AWS.
Mad Money’s Jim Cramer sat down with Akamai CEO Tom Leighton to discuss the impact 5G will have on the web.
Akamai Technologies is one of the premier content delivery networks, providing critical services to companies around the world. As a result, the company has unique insight into new internet technologies, especially those that promise the transformative effect of 5G.
Cramer asked Leighton about streaming platforms, and whether they were all Akamai customers.
”We work with Netflix, but don’t deliver the long-form videos today. We’re much more diversified today, so there’s no single really large customer on our platform. We work with pretty much all the world’s major brands, including the sporting events.”
The interview then turned toward 5G specifically, with Cramer asking if 5G would essentially do away with the need for TVs.
”You’ll have a device always. Maybe it’s not your traditional TV. I think the devices are obviously changing. And I think 5G is a really exciting technology for the future, not just for watching video, but for the potential of all the IoT applications. The whole paradigm of the web could be changing. You know, we already operate an IoT platform. We have dozens of customers that are early adopters. The protocols there are all different than the web, and they’re a lot more efficient. The paradigms are different. I think that’s an exciting part of the future…”
Leighton then expressed that the switch to remote work, remote learning, online banking, home entertainment and other post-pandemic changes were providing tailwinds for the company. As a result, their profits are up 30% year-over-year.
Akamai CEO Says 5G Will Change the Paradigm of the Web
“The ultimate solution for Uber and Lyft is autonomy,” says Loup Ventures Managing Partner Gene Munster. “If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. However, this will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.”
Gene Munster, Managing Partner at Loup Ventures, discusses how California in forcing drivers to be employees may ultimately speed up the efforts of Uber and Lyft to go fully self-driving and thereby simply eliminate all human drivers:
What Would The Drivers Want?
Both Uber and Lyft are in a tight spot. There was reprieve today. But this topic is not over with this vote coming November 3rd and California’s influence that they can have with other states. If you put all of this together and think about if these changes to employees across the country, it could be a 15 percent increase (in costs). This is effectively their profit margins.
I do want to caution the voters of California and also some of the lawmakers on one aspect. What would the drivers want? Most of these drivers use both apps, both Lyft and Uber. If they are employees they likely will be restricted from jumping from app to app. That would cut down some of their rides and cut down what they will be paid on an hourly basis. I don’t think that the right path here is as clear for the drivers in simply becoming an employee.
Ultimate Solution For Uber and Lyft Is Autonomy
The ultimate solution for Uber and Lyft is autonomy. If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. One of the unique things about Lyft and Uber is it is a two-sided marketplace. They have drivers and riders. In an autonomous world you don’t need drivers. Essentially, that would leave Lyft and Uber with their key asset, their brands around movement. I think that is an asset but I don’t know if it is worth $55 billion.
What I really take away from this is that over the next few years there are going to be ups and downs related to this regulation. Longer term, we know where this is going. Cars should be autonomous for safety reasons and productivity reasons. Ultimately, ridesharing with Uber and Lyft is going to be fully self-driving. This topic we are discussing today is going to be largely irrelevant.
Lyft is already testing self-driving rides in Las Vegas
Google and Tesla Will Compete With Uber and Lyft
There are some key nuances to an autonomous ridesharing business model. As I mentioned, there is a two-sided marketplace. That’s really what makes Lyft and Uber special today. One of the sides of the marketplace, the drivers side of this, is under some pressure right now. But if we eliminate the drivers side then you don’t even have a marketplace. You are just trying to get consumers to ride. That opens up new competitors. There are about six of them that are trying to get there.
The autonomy option is a better option for Lyft and Uber than what they currently have with humans driving. For an investor it’s a more profitable option. However, ultimately it will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.
I Would Put My Money On Lyft
Assuming their ballot initiative wins in November, I’m in the Lyft camp. This is partly because I like their focus just on the US and on ridesharing. I think that the Uber Eats business, while its had a tremendous tailwind, it will get progressively more competitive and it’s tougher to make money in that business.
Ultimately, if I had my choice I would put my money on Lyft. There is another X factor here. There is something subtle about Lyft’s culture. It is a more investor friendly culture and that influences my view.
Ultimate Solution For Uber and Lyft Is Autonomy, Says Loup Ventures Managing Partner Gene Munster
Google’s recent decision to start restricting third-party camera access in Android appears to be privacy-related.
Google made headlines when it was discovered that Android 11 would feature a major departure in how camera access was handled. Starting with that version, apps that want to take a photo or video will have to use the built-in camera, rather than any third-party camera. This would even apply when the user has selected a third-party camera as their default.
In a note on IssueTracker, Google’s engineering team confirmed this was intended behavior, saying “we believe it’s the right trade-off to protect the privacy and security of our users.”
According to The Verge’s Shawn Hollister, Google is specifically worried about EXIF location metadata, and this move is aimed at preventing third parties from abusing that information.
While this move will certainly impact a number of developers who make excellent third-party camera apps, it’s still nice to see Google taking additional steps to protect user privacy.
“I don’t think we are ever going to see a return to the old New York,” says New York resident and entrepreneur James Altucher. “Sixth Avenue is empty. Something like 30-50 percent of the restaurants in New York City are probably already out of business and they’re not coming back. The offices in Midtown where most of the millions of workers go to work in New York City, why are they empty?”
James Altucher, author, podcaster, entrepreneur, and angel investor says that New York City isdead forever. Altucher discusses how the forced business closures have permanently altered how business is done making it unnecessary for employees to remain in this high cost and highly taxed city:
Manhattan Offices May Remain Empty Permanently
Sixth Avenue in Manhattan is empty. Something like 30-50 percent of the restaurants in New York City are probably already out of business and they’re not coming back. The offices in Midtown where most of the millions of workers go to work in New York City, why are they empty? They are allowed to be open but most companies now are encouraging workers to be remote. Citigroup, JPMorgan, Google, Twitter, and Facebook, they want employees to be remote for maybe years or even permanently.
This completely damages not only the economic ecosystem of New York City, the restaurants, transportation, office buildings, and commercial real estate but what happens to your tax base when all of your workers can now live anywhere they want in the country? And not even just in the suburbs either. They are going to go to all of the cities like Nashville, Miami, Austin, and Denver. They are leaving the city because they can work in places that have a cheaper cost of living and a lower tax basis.
What happens to the tax revenues of New York at the same time that deficits are soaring? All of these numbers and apocalyptic statistics what’s going to reverse that? It’s only going to get worse.
We Are Never Going To See A Return To The Old New York
I was born here and I’ve lived here for my whole adult life and I have five kids in New York City. But yes, I don’t think we are ever going to see a return to the old New York. The good news is that this means financial, creative, and artistic opportunities are going to be dispersed for the first time throughout the entire country now. It is not going to be isolated to just a few spots like New York, San Francisco, or L.A. Everybody is going to have opportunity.
What makes this different is bandwidth is ten times faster now than it was in 2008. People really can work remotely now and have an increase in productivity.
We Are Never Going To See A Return To The Old New York – James Altucher
California Assembly Bill 5, which has been upheld in a recent court ruling, literally bans the right of an individual to work for themself according to California Assemblyman Kevin Kiley (R). The law will ban hundreds of different professions and especially the hundreds of thousands of jobs created by the gig economy over the last decade.
Here is how California Assemblyman Kevin Kiley describes the laws impact:
This law, California Assembly Bill 5, has made it impractical for Uber and Lyft to operate here. Everyone saw this coming. We’ve known this whole year that this law has been devastating for people. It’s actually devastating not just for Uber and Lyft but for hundreds of professions in California.
This law, AB-5, has basically banned being an independent contractor or an independent worker. It says you have to be in the employ of someone else. They are shutting down Uber and Lyft and that will leave 100,000 of their drivers out of work. We have millions of Californians who also rely on their services. It’s going to be yet another blow to our economy which is already doing about as bad as any state in the country.
California Law Kills Uber and Lyft And The Entire Gig Economy
“We said every single opportunity is a moment where we have to pivot and move fast,” says Airbnb CEO Brian Chesky. “What actually happened was, first of all, you have to have the mindset, a mindset of hope, of optimism, and of resiliency, that we’re going to get through this. And not only are we going to get through this but every one of these crises is going to lead to a new point of innovation. Let’s look for moments and a moment happened.”
Brian Chesky, co-founder, and CEO, Airbnb, discussed with author and podcasterSimon Sinek how the pandemic crisis motivated the company to be more innovative:
Every Crisis Should Lead To A New Point Of Innovation
Andy Grove, one of the founders of Intel, said that bad companies are destroyed by a crisis, good companies survive a crisis, but great companies are defined by a crisis. I wanted us to be in that third bucket. So much of it is mindset. If you think you’re going to win, if you think that this is going to define you in a positive way and you’re going to learn something from it and it’s going to make you stronger, it kind of happens. So much of your mindset as the leader becomes the psychology of the organization and that psychology really becomes a collective consciousness. It becomes real.
So that was the thing. We said every single opportunity is a moment where we have to pivot and move fast. What actually happened was, first of all, you have to have the mindset, a mindset of hope, of optimism, and of resiliency, that we’re going to get through this. And not only are we going to get through this but every one of these crises is going to lead to a new point of innovation. Let’s look for moments and a moment happened.
In Just 14 Days We Pivoted The Entire Product Line
With social distancing, we had to shut down in-person Airbnb Experiences. Airbnb is known for homes but we also have three-hour activities that you can book with people all over the world. They got paused. Suddenly, we started doing listening sessions with our hosts. It’s important, by the way, to listen and be curious. I don’t think it’s so much in life that you have to have ideas as much as it is to be a receiver for ideas. It’s not my job to have an idea and it’s not our job for any of us to have ideas. We need to be receivers. We’re like radio antennas, we just got to get on the right signal and people will tell you things.
People told us they wanted to host but since they can’t do it in person, can they offer them online? At first, I thought to myself, no you can’t offer them online. We’re about connections in the real world. Then, I thought, well if that’s the case there’s not going to be a lot of connections anytime soon. So we quickly realized that we should get in on this. So within 14 days, we pivoted the entire product line to offer online experiences. Now we have 800 experiences and 200 Olympians including Jackie Joyner-Kersee. They do these activities where you can actually go online and meet them and remotely be on an Experience with them.
Preservation Mode Is A Very Dangerous Place To Be
I think so much of it was turning on a dime. I never wanted to just be focused on survival. If you focus on survival that’s probably all you’re going to get. All these other companies I saw were like just shuddering their businesses and just in defensive mode and preservation mode. I think preservation mode is a very dangerous place to be. The more resources the company accumulates the more they start worrying about losing things. It’s like a parent with an overactive amygdala putting the helmet on their child before they go outside because you’re worried something’s going to happen. They can never live their life.
It’s the same thing with a company. You have got to be concerned but not so concerned that you protect the company from itself and you’re afraid to do anything and you’re just preserving resources. Actually, that’s the worst possible thing ironically for shareholders. Shareholders need the company to grow. This weird obsession sometimes that some people have with serving shareholders is not actually in the shareholder’s best interest. They need companies to create value and therefore they need to be focused on doing new things people love. That’s what needs to happen to create value.
Airbnb CEO Brian Chesky: Every Crisis Should Lead To A New Point Of Innovation
“Tim Sweeney, CEO of Epic Games, feels that Fortnite is large enough and scaled enough and that Apple needs Fortnite more than Fortnite needs Apple… and Google too for that matter,” says Alex Kruglov, CEO of pop.in. “Tim very intentionally wanted to get kicked out of the store. There is no other way to explain what they did so that they can make this very public and so they can have a lawsuit.”
Apple and Google Must Reduce The Tax On Developers
I definitely like the idea of challenging both the Apple store and the Google store in getting them to reduce the tax that they charge all of the developers. There are two potential issues here. Issue number one is that the tax is decided by Apple and Google and can be changed at any time. There is nothing that developers can do because there is no other place we can go to. There is no other way to get on the devices and a person usually has only one device.
Secondly, kind of similar to TicketMaster in the 90s, when Pearl Jam went against them, they control the entire ecosystem. This includes the ability to advertise within your store to get your app downloaded. I love Apple’s clean well-lit ecosystem. I love what they’ve built. But if there is a bigger player who has leverage who can help the rest of us run more successful and profitable businesses I am all for it.
Apple Needs Fortnite More Than Fortnite Needs Apple
Tim Sweeney (CEO of Epic Games) is doing this very deliberatively. There is no question about it. If you follow Tim on Twitter or just in general, you know that he has been on this campaign for quite some time, since before they started their own ecosystem. Epic has its own store and they let developers opt-in to their fee system where they charge 12 percent.
He feels that Fortnite is large enough and scaled enough and that Apple needs Fortnite more than Fortnite needs Apple… and Google too for that matter. Tim very intentionally wanted to get kicked out of the store. There is no other way to explain what they did so that they can make this very public and so they can have a lawsuit.
Apple Under Pressure To Reduce App Store Fees
Apple has been perceived as the good guy. Then on the other side with Google where with Facebook they are monopolistic given that they control essentially the entirety of the advertising system. So where do I think this ends up given the scrutiny that Apple is facing? I think that there is a very good chance that they will come back and reduce the fees and also opt-in to something firm as opposed to the set of rules that are all over the place.
This is a pretty inexpensive way for both Apple and Google to say they are listening (to developers). We’ve heard the developers and we are going to do the right thing. I’m predicting this but this is definitely not what they have done over the last decade.
Apple Needs Fortnite More Than Fortnite Needs Apple says Alex Kruglov, CEO of pop.in
Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees.
Uber, Lyft and the state of California have been locked in a battle over how to classify the two companies’ drivers. Under the Assembly Bill 5, gig workers are considered employees if they are critical to a company’s business. The law has profound implications for companies like Uber and Lyft, whose entire model is geared around independent contractors.
In his ruling, the judge granted a preliminary injunction preventing Uber and Lyft from classifying their drivers as independent contractors, effectively making them employees. While both companies plan to appeal the ruling, according to The Verge, Lyft President John Zimmer made it clear that losing the appeal would result in Lyft leaving the state. In a call with investors, he said: “If our efforts here are not successful it would force us to suspend operations in California.”
Uber and Lyft’s case will have far-reaching consequences for the gig economy in California and beyond.
A court has ruled Amazon is liable for defective products, including those sold by third-party sellers.
To date, Amazon has managed to avoid being held liable for defective products sold by third parties in its Marketplace. A California Court of Appeals ruling changes that, however, reversing a previous decision by a San Diego Superior Court.
The case centers on a woman who purchased a replacement laptop battery that later exploded, injuring her. Amazon has argued it is merely a service provider, and therefore shouldn’t be held liable. In her ruling, Justice Patricia Guerrero said Amazon’s involvement went far beyond that of a service provider.
“As a factual and legal matter, Amazon placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here. Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her. Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase. Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer.”
This ruling will likely have profound implications on Amazon’s business, although what those are remains to be seen.
“It was a strong quarter for us certainly across almost every metric,” says PayPal CEO Dan Schulman. “What’s happened is the world has accelerated from physical to digital across almost every industry. If you look at health care it’s all about telemedicine right now. If you look at education it’s about remote learning. If you look at the retail industry it is now about online almost over offline or physical locations in store. If you look at the restaurant business you really can’t be in business.”
Schulman says that it is imperative for businesses to move toward a digital-first strategy. “If all you’re doing is trying to serve customers at your location given social distancing and the number of people coming out (you won’t survive),” he said. “You have to be about takeout and delivery. Across every industry, we’re seeing this surge towards a digital-first strategy. All of the tools and products and services that we offer are probably more relevant and important across multiple industries than they’ve ever been before.”
PayPal CEO: Across Every Industry, We’re Seeing a Surge Towards a Digital-First Strategy
We will have to essentially shut down Uber until the voters decide.
Reclassifying drivers from contractors to employees is unfortunate.
You would just get a much smaller service at much higher prices.
The vast majority of our drivers don’t want to be full-time workers.
Really unfortunate at a historical time of unemployment in California.
It would put vast swaths of our drivers out of work.
It would take away transportation from hundreds of thousands of Californians.
Our labor laws are hopelessly outdated.
It’s essentially how Uber started, kind of a black car service with few cars.
We can’t go out and hire ten of thousands of people directly overnight.
We would focus on the center of cities versus smaller cities or suburbs.
“We think the ruling by a California judge was unfortunate on reclassifying drivers from contractors to employees,” says Uber CEO Dara Khosrowshahi. “We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.”
Dara Khosrowshahi, CEO of Uber, discusses a court ruling requiring Uber to classify Uber drivers as full-time workers. Khosrowshahi says that this will force Uber to become a much small black car service focused on city centers and with much higher prices for rides. Essentially the service would no longer exist in California suburbs and rural areas:
Vast Majority of Uber Drivers Want To Remain As Contractors
We think the ruling (in California) was unfortunate (on reclassifying drivers from contractors to employees). We obviously respect the law and the judge. We do have about eight days now where there is a stay. We are going to go back to the court and appeal the ruling and hope that the court reconsiders. If the court doesn’t reconsider then in California, it’s hard to believe we will be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while. Really, the big question is in November with Prop. 22, we have a proposition out there that puts forward what we believe is the best of both worlds.
The vast majority of our drivers, a 4-1 ratio, want flexibility, and don’t want to be full-time workers. With Prop. 22 drivers can continue to have the flexibility that they have but they can enjoy the protections, benefit fund, an earning standard so that they have the protections that many people associate with full-time work. We are hoping that in November the California voters can speak. We are confident that this better way which is kind of the best of both worlds will be the way going forward for California.
We Will Shut Down Until The Voters Decide In November
In California, we have changed our model substantially. For example, riders in California pay drivers directly. Drivers can set their own price as an independent contractor would. Drivers have all the flexibility to decide whether or not they want to take a ride or not. We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.
It would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians. It would be really really unfortunate. Obviously we would look to comply with the law long-term and we’re hoping the law gives us the best of both worlds. Our labor laws are hopelessly outdated. You’ve got the haves and have-nots and you can have actually a better way.
Smaller Service, Higher Prices, Only Focused On Big City Centers
Hopefully, the courts will reconsider. By no means do we want this to happen. If they don’t we are going to have to work to move to a full-time model. It’s essentially how Uber started, kind of a black car service with very few cars on the road and much higher prices. So we will look to flip to a full-time model but this is a model that we built over ten years. We can’t go out and hire ten of thousands of people directly overnight. It would take a significant amount of time to switch over. We have teams thinking about it and working on it. We don’t think it’s the likely outcome by the way and we would look to get back on the road as quickly as possible.
You would just get a much smaller service, much higher prices, and probably a service that’s focused on the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now. That’s the reality. It’s not a game of chicken or one way or the other. It’s really up to the courts and we are going to comply with the law. We will look to get going but it will be a very very different service once we get going.
Uber CEO: Will Shut Down In California Until Voters Decide
“We expect around one in four restaurants to close and to not be able to return because of COVID,” says OpenTable CEO Debby Soo. “Unfortunately, now we think that number might even be conservative. Restaurants are going through a grueling time right now. We don’t know when it is going to come back to pre-COVID levels but it is likely to be after there is a vaccine available for people to take.”
One In Four Restaurants Closing Now Appears To Be Conservative
We expect around one in four restaurants to close and to not be able to return because of COVID (related mandates). Unfortunately, now we think that number might even be conservative. Restaurants are going through a grueling time right now. They are having to pay for their wait staff and rent is a huge cost. For restaurants to open back up any type of government aid that can be given to them would be amazing and is necessary. But also again, people have to feel comfortable being in an enclosed area and feeling safe to be around other people. With a lot of the restaurants space is a constraint.
We are thinking (about what’s going to happen in the winter when people will want to go into restaurants). It’s very much top of mind for restaurants who are right now experiencing a great surge in demand because it’s summer and dining out is so popular and prevalent. I imagine that takeout and delivery will continue to gain share, especially in the colder months. People now are much more willing to order food and get it delivered or to go and pick it up. That will be one of the main lifelines for restaurants during the colder months.
Vaccine Needed For Dining To Come All The Way Back
For dining to return all the way back to pre-COVID levels, a vaccine will be needed. However, we do see dining demand starting to pop up. We recently ran a survey at OpenTable and 25 percent of our respondents said they were dining out at least once a week. That demand is definitely there. Of course, safety precautions are very top of mind for both our restaurants and diners. They want to make sure that the restaurants are keeping both their employees and patrons safe with mask-wearing, table spacing, and all of that.
We don’t know when it is going to come back to pre-COVID levels but it is likely to be after there is a vaccine available for people to take. However, we are seeing signs of life and we know that diner demand is there. People are itching to get out and eat.
Launched Myriad Of Features In Response To COVID
We’ve recently launched a myriad of different features to adapt to the quickly changing environment around us. We launched Takeout which for diners is a really convenient way to browse a restaurant’s menu, order a meal, and pay all from your OpenTable app. For restaurants, it’s great because it is an additional revenue stream. We also released a new feature we call Safety Precautions. When you come to OpenTable for each restaurant that you are looking at going to you can see a list of all the specific safety and health initiatives that restaurants are following to keep their diners and staff safe.
We also recently launched Experiences. This can be anything from a happy hour to a prix fixe menu or a chef’s table. We are seeing a lot of demand for this, even now when people are still not completely comfortable going out to eat. There is this hunger and need for special occasions and these types of experiences.
OpenTable CEO Debby Soo: One In Four Restaurants Closing Is Conservative
“Until we fix this occupancy problem, even though you are open, it is not possible to pay full rent,” says Landry CEO and reality TV host Tilman Fertitta. “How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.”
Tilman Fertitta, Landry’s chairman, and CEO talks about his frustration with the incompetence of the State of New York and the City of New York in dealing with restaurant reopenings:
It’s Unbelievable That New York Won’t Give Us A Metric To Reopen
We love to complain about leadership on a national level and on some state levels but nobody knows what to do. Everybody wants to blame DC right now but we are sitting here in New York and they can’t even give us the metics and say if the pandemic only has this much hospitalization or cases for a 14-day rolling average. Then you can plan on opening your restaurants at 25 or 50 percent. We get absolutely no information at all out of the State of New York and the City of New York. The City of New York is unbelievable that they will not give us a metric when they can open these restaurants.
Just think about it. Everything is a metric and everything is data points. We all want to blame everybody else for the data points and not making decisions. Wouldn’t you look at four or five key data points and say as soon as we hit these data points you are going to open? What is so difficult about that? We hear about the great leadership of New York and up east in New Jersey while we are treating the rest of the country like they’re from other countries that they are quarantining us and they can’t even go visit up there. It’s ridiculous right now. Yet they won’t even give us business and data points to operate. In New Jersey, you still can’t have a drink of water in the casino unless you are dehydrating and you are about to pass out. It’s extremely comical to me.
Lack Of Unions In Regional Casinos Enabling Them To Thrive
All the regional casinos are doing extremely well, take out New Jersey of course. I hate to say this but the reason the regional casinos are doing so much EBITA right now is that number one, people are moving around, they don’t have to fly in, and you don’t have the union wages in the regional casinos. They are also not opening their buffets and all their full service restaurants. You are really able to watch your costs in a regional casino that you can’t in Vegas or in New Jersey where you have the high union wages. It’s tremendously helping us all.
But we are doing 100 percent of the same gaming revenue in the regional casinos where in Vegas you are doing below 50 percent and in Atlantic City, you are doing about 40 percent. Regional is where you want to be right now.
Not Letting Restaurants Open Fully Is a ‘Taking By The State”
The State of Missouri is one of the few states that lets us open 100 percent of the occupancy of our restaurants as long as we keep six-foot distancing, which we 100 percent do and abide by. They’re for it because you are able to open the establishment and can seat your seats and still be careful. That’s why you are running the best same-store sales comps in that particular market right now.
Until we fix this occupancy problem, even though you are open, how do you pay full rent? How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.
Disney Is Not Even Hitting 20% Occupancy Target Right Now
We are down 70 percent in Orlando and we have some of the biggest stores at Disney. They are coming out now and saying it. The traffic is just not there. I give Disney a lot of credit for going out and putting great protocols to protect their guests. They were only going to let 20 percent of the park’s occupancy come in. I don’t think they are even doing 20 percent.
This is a problem all over America right now that you can’t even do the business. I’m not speaking for Disney but I know my restaurants aren’t doing 20 percent down there right now. We usually do a lot more than the parks do when it comes to percentages.
Landry’s CEO Tilman Fertitta: Not Letting Restaurants Open Fully Is a ‘Taking By The State’
Some things in the new world will change forever. Customer meetings will change forever. In the past, I never thought that I could do a Zoom call or a Teams call with the CEO of a company I’m trying to sell to. In the future, I don’t think my customers will want me to come and see them. There’s continued opportunity for remote access. Anything that allows you to connect with clients online or build the brand is going to be really valuable. I had an Instagram Live yesterday with Kris Jenner. She’s been selling online for years now. Every business needs to move online, especially small business.
Robert Herjavec, mega entrepreneur and Shark Tank star, says on CNBC that the coronavirus crisis has caused the word to change forever. Meetings will never be the same and many other post-pandemic changes are in store:
Customer Meetings Will Change Forever
When all of this first happened we wanted to use Zoom because all our customers use Zoom. But I have got to tell you, some of the security issues are really pretty bad within Zoom. So we’ve switched over to Microsoft Teams. I think that’s one of the reasons that Microsoft stock is doing so well. The use of Teams at the corporate enterprise level is really taking off. We’re also seeing Webex usage really go up. There was also the acquisition of BlueJeans (by Verizon), another video conferencing platform.
I have become very optimistic about the return, whenever the return is, and what the world will look like. Some things in the new world will change forever. Customer meetings will change forever. In the past, I never thought that I could do a Zoom call or a Team’s call with the CEO of a company I’m trying to sell to. In the future, I don’t think my customers will want me to come and see them. There’s continued opportunity for remote access. Anything that allows you to connect with clients online or build the brand is going to be really valuable. I had an Instagram Live yesterday with Kris Jenner. She’s been selling online for years now. Every business needs to move online, especially small business.
We’re Into This For The Long Haul
I used to think that we were in a light switch moment where miraculously President Trump will get on the news and say we’re all back on this date. But I think what we’re seeing now in California and in New York is that it’s going to be⎯⎯we’re into this for the long haul. Certain parts of the economy will go back quickly. But even the ones that do go back are going to be limited.
Restaurants will have to distance half the tables. If I have more space in my restaurant can I charge more along that line? I think it’s going to be challenging but with all those challenges there’s going to be opportunities. The key for me about going back is testing. What that means and how people get tested. There’s a great new saliva test that was approved by the FDA where people can do it at home and I think we just have to be able to do that at scale.
Nobody Wakes Up And Says “I Want My Life To Suck”
Shark Tank is a mirror to what’s happening in the American economy. When we started the show twelve years ago it was during the financial crisis. Nobody could get a loan. So people started a lot of businesses that you didn’t need capital for. Then we moved to online selling. This will be the same thing. If I’ve learned anything on twelve years from Shark Tank it is that the human condition is about hope. Nobody wakes up and says I want my life to suck. Every time somebody comes on Shark Tank they are full of hope and they’re full of optimism.
This is a challenging time but entrepreneurs will figure it out. The key though is you’ve got to have a growth plan. The stimulus plan, the protection plan, all these relief funds, are simply survival funds. They are not growth funds. If you don’t have a plan to grow, if you don’t have a plan to gain market share, getting a stimulus today is just keeping you in business. It’s not helping you to grow. You’ve got to have a game plan for that.
I want to know what people’s plan is for survival. It makes me want to invest in two types of companies, either a company that has a very strong balance sheet or companies like an Uber or a small business that can scale back its costs. I want to invest in a company that can quickly scale its expenses to meet a decline in revenue or vice versa. So fluidity and the ability to adapt in a small business is really going to be the key. I don’t want to invest in a business with a large infrastructure, buildings, equipment, and all that kind of stuff. That stuff is very difficult to scale down.
Customer Meetings Will Change Forever, Says Shark Tank’s Robert Herjavec
“There’s a lot of crazies out here in Arizona,” said Uber driver Randy Clarke in a very interesting online chat with Uber CEO Dara Khosrowshahi. “I just wish you guys had some sort of way for us to put our rules of our vehicle on the app so the passengers know what to expect beforehand.”
“For example, in January this guy came into my car trying to get into the front seat. I don’t like to allow people in the front seat when I’m driving alone at 11 o’clock at night. He gets mad after I cancel the ride he jumps in the back and argues with me, calls me the N-word, slams the door and leaves. What that guy did was bad and disgusting, definitely not good.”
https://youtu.be/kRpbHp8UbaQ
“But if there was a way for him to know that I don’t allow people in the front seat when I’m driving with them alone I’m sure he would have just canceled there and then.”
Then Uber driver Randy Clarke gave Uber’s CEO a suggestion. “I just wish there was a way for us to upload dashcam footage directly to you guys. Sometimes I get to run around and they transfer me to safety and support. There needs to also be some sort of way for Uber to somehow encourage the footage in case something was to happen.”
Randy added, “I think a lot of drivers are afraid of the dashcam policy you guys have in where we can’t put the footage out or we get deactivated. In my situation, I was like whatever happens happens. I showed people the footage and lo and behold he was a guy who owned a business in my community and he got a lot of crap for that.”
“Dashcams Is Technology That We’re Working On,” Says Uber CEO Dara Khosrowshahi
“Well he sounds like he deserves a lot of crap for that,” said Uber CEO Dara Khosrowshahi. “Dashcams and in general taping rides, etc. is actually technology that we’re working on. There’s this fine balance with privacy concerns. You guys know with TikTok and all that stuff, privacy is rightfully a huge thing.”
“Most drivers are like you, good people that are totally open to dashcams,” says Khosrowshahi. “Hey take the footage, I have nothing to hide, this is part of my profession, I act well and I treat my riders well so they don’t have a problem. I think a lot of riders when they’re in the car they do expect privacy and they’re nervous about the balance of safety and privacy. Safety’s super important as well. They’re both important. So we’re trying to work on technologies that balance the two.”
Khosrowshahi added, “Every single state statute, by the way, is different. So you can’t have one solution. You’ve got to have a state-by-state solution that works for everybody. I really would like to get something that bridges that and balances safety and privacy, but it’s a lot of work to do so. The tech teams are totally working on it. So one day Randy we’re gonna get you that magic!”
“There are solutions you can imagine where we don’t take the dashcam footage but we only take it if you tell us that there’s an issue It’s in the cloud someplace and no one has access to it. We want to do it the right way because we should not be inappropriately watching someone if we don’t have to. It’s only for those exceptional circumstances.”
“Exactly,” says driver Randy. Some people do it for clout while others just want to do it just to make sure it doesn’t happen again. So I totally understand that.”
“We see the shift to distributed work as transformative as the shift to cloud or mobile,” says Dropbox CEO Drew Houston. “Our product is made for distributed work. Our customers have turned to Dropbox for flexibility with work since the beginning and post-COVID we’ve seen an uptick in demand. I see it making our opportunity a lot bigger. We’re in the first inning of this shift.”
Drew Houston, founder and CEO of Dropbox, discusses how the shift to distributed work is as transformative as the shift to cloud or mobile:
Shift To Distributed Work As Transformative As Shift To Cloud
Our product is made for distributed work. Our customers have turned to Dropbox for flexibility with work since the beginning and post-COVID we’ve seen an uptick in demand. Most importantly, in the long run, we see the shift to distributed work as transformative as the shift to cloud or mobile. I see it making our opportunity a lot bigger. We’re in the first inning of this shift. None of the tools we’re using were really purpose-built for this environment and that’s what we’re focusing on.
That shift to working from home happened in the most dramatic and abrupt way possible. No one designed it. So back in March, we asked ourselves what if we made the work from home experience really great? What new tools and technology would you design for this world? We completely reoriented our product roadmap around the opportunity. That’s really what we’re focused on. I’m really excited about some of the launches we have for our second half.
Dropbox Customers Tend To Employ Knowledge Workers
We certainly have customers of all sizes including a lot of small businesses. Clearly, we’re all keeping an eye on the macro environment. It’s a challenging environment, but in general, Dropbox customers tend to be businesses that employ knowledge workers that can work from home and so they’re relatively less disrupted. Dropbox is often essential to their business operations as opposed to discretionary because all businesses need to collaborate around content. We’re keeping a watch on all the trends but we’ve seen a lot of health and stability in the business.
We had a great quarter and we’re profitable. We had a bunch of great launches and we’re helping a lot of our customers with the shift to distributed work. These are the things we focused on. I fundamentally believe if you build great products and make your customers really happy your stock price will take care of itself in the long run.
Dropbox CEO Drew Houston: Shift To Distributed Work Is Transformative
“We’ve partnered with the National Restaurant Association for a restaurant safety app called VirusSAFE Pro,” says Restaurant Impossible host Robert Irvine. “When you say you’ve done something, say you’re cleaning the refrigerator, and you’re actually outside smoking a cigarette, I know because of geotagging that you didn’t clean that when you said you did. It’s really about accountability of duty of care. What we’re trying to do is put back the consumer of customer confidence through transparency.”
Robert Irvine, celebrity chef and host of Restaurant Impossible, discusses the launch of his new app VirusSAFE Pro which helps restaurants and consumers monitor the implementation of safety protocols. Irvine says the key is restoring “consumer confidence” in restaurant dining:
VirusSAFE Pro App Helps Restaurants Stay Healthy
We’ve actually partnered with the National Restaurant Association for a (restaurant safety app) called VirusSAFE Pro. It enables checklist reminders on your phone so that COVID-19 safety protocols are done in a timely manner and all the protocols are completed. You think about standing operating procedures for restaurants especially in the COVID-19 times where we’re looking at masks and gloves and everything that’s clean.
We’ve all been to airports and restaurants where people say that things have been done and they actually haven’t. VirusSAFE Pro is an app for phones that also has a desktop which helps with mitigation. When you say you’ve done something, say you’re cleaning the refrigerator, and you’re actually outside smoking a cigarette, I know because of geotagging that you didn’t clean that when you said you did. It’s really about accountability of duty of care. What we’re trying to do is put back the consumer of customer confidence through transparency. That’s the biggest part. It’s simple. It’s easy to use. It provides verification of stuff done in real-time.
Right Now The Problem Is Consumer Confidence
It’s 99 percent fail-safe as opposed to a pen and a piece of paper. I can actually tell you where you are and what you are doing. This is the only consumer-facing app that when you’re verified and you’re using that system you can put a check and verified sticker in your window. A consumer can then take their smartphone use it on the QR code and find out exactly what’s been done for the last 24 hours or 48 hours of your protocols. That allows a guest who has two kids that are below three years old or an 89-year-old grandmother to feel safe to go back into your restaurant. Right now the problem is consumer confidence.
It’s tracking everything that we’ve done for two years or more. You know what it’s like right now, everybody’s saying I got sick in your restaurant. Now I’ve got this mitigation tool to say we have done our best practices and protocols and our duty of care to make sure you are your safest. There is no system that’s 100 percent clear but this is 99 percent that we can follow what you’ve done, how you’ve done it, and make you want to get back to a restaurant. If you don’t do this and this is a big don’t, we already are at 30 to 40 percent of failure with the restaurants that will not be able to come past this pandemic. That is a huge amount when we’ve got 11 million folks out of work.
Restaurant Impossible Reopen
I’ve just reopened six restaurants in three weeks in four states following COVID-19 closures putting in new practices and protocols to make sure that consumers are safe. You will hear more from me regarding this on my TV show Restaurant Impossible Reopen which you’ll see very soon. It’s really important that we take these protocols seriously.
Robert Irvine: New App Makes It Possible For Restaurants To Reopen Safely
