Ideaforge

As the world looks to reopen after weeks of lockdown, governments are turning to contact tracing to understand the spread of the deadly coronavirus.

Most nations are leaning toward privacy-focused apps that use Bluetooth signals to create an anonymous profile of where a person has been and when. Some, like Israel, are bucking the trend and are using location and cell phone data to track the spread, prompting privacy concerns.

Some of the biggest European economies — Germany, Italy, Switzerland and Ireland — are building apps that work with Apple and Google’s contact-tracing API. But the U.K., one of the worst-hit nations in Europe, is going it alone.

Unsurprisingly, critics have both security and privacy concerns, so much so that the U.K. may end up switching over to Apple and Google’s system anyway. Given that one of Israel’s contact-tracing systems was found on an passwordless server this week, and India denied a privacy issue in its contact-tracing app, there’s not much wiggle-room to get these things wrong.

Turns out that even during a pandemic, people still care about their privacy.

Here’s more from the week.

THE BIG PICTURE

Zoom acquires Keybase, but questions remain

When Zoom announced it acquired online encryption key startup Keybase, for many, the reaction was closer to mild than wild. Even Keybase, a service that lets users store and manage their encryption keys, acknowledged its uncertain future. “Keybase’s future is in Zoom’s hands, and we’ll see where that takes us,” the company wrote in a blog post. Terms of the deal were not disclosed.

Zoom has faced security snafu after snafu. But after dancing around the problems, it promised to call in the cavalry and double down on fixing its encryption. So far, so good. But where does Keybase, largely a consumer product, fit into the fray? It doesn’t sound like even Zoom knows yet, per enterprise reporter Ron Miller. What’s clear is that Zoom needs encryption help, and few have the technical chops to pull that off.

Keybase’s team might — might — just help Zoom make good on its security promises.

Source: Tech Crunch

Earlier today news broke that Uber is pursuing an acquisition of Grubhub. The global ride-hailing giant is worth a multiple of the American food delivery service, making the tie-up financially feasible, provided that a palatable price can be found for both parties.

The Wall Street Journal broke the news; you can read TechCrunch’s coverage of the deal here.

The deal could shake up the large, if generally unprofitable American food delivery market, a space contested by Uber’s Uber Eats service, Grubhub, DoorDash and Postmates. The combination could create the largest food delivery entity in terms of sales, changing leadership in its market and perhaps reducing competition.

Let’s unpack the deal in terms of its cost, why Uber has to pay in stock, how large a combined Uber Eats/Grubhub entity would be compared to its competition and why adjusted EBITDA helps us understand how this acquisition could give Uber’s bottom line a shot in the arm.

An all-stock purchase?

In normal times, this deal would likely be a mix of cash and stock. However, in 2020, with Uber’s market position being what it is, it’s likely that this would be an all-equity transaction. Why? Because Uber needs to conserve cash at nearly all costs. Its only historically profitable division (ride-hailing generates heavily adjusted profits) is in the tank, with ride volumes down as far as 80% in April, compared to its year-ago period.

Source: Tech Crunch

Slack has started to strip uploaded photos of their metadata.

What may seem like an inconsequential change to how the tech giant handles storing files on its servers, it will make it far more difficult to trace photos back to their original owners.

Almost every digital file — from documents on your computer to photos taken on your phone — contains metadata. That’s data about the file itself, such as how big the file is, when it was created, and by whom. Photos and videos often include the precise coordinates of where they were taken.

But that can be a problem for higher-risk Slack users, like journalists and activists, who have to take greater security precautions to keep their sources safe. The metadata inside these files can out sources, deanonymize whistleblowers, or otherwise make it easier for unfriendly governments to target individuals. Even if a journalist removes the metadata from a photo before publishing, a copy of the photo — with its metadata — may remain on Slack’s servers. Whether a hacker breaks in or a government demands the data, it can put sources at risk.

Slack confirmed to TechCrunch that it’s now started to strip photo metadata, including locations.

“We can confirm that we recently began stripping EXIF (exchangeable image file) metadata from images uploaded to Slack, including GPS coordinates,” said a Slack spokesperson.

TechCrunch tested this by uploading a photo to Slack containing location data, then pulling a copy of the image from the server. That server copy, when checked again, no longer had location data embedded in the document. Some metadata remains, like the make and model of the device that took the photo.

Slack did not say what prompted the change.

Source: Tech Crunch

Hundreds of Uber and Lyft drivers are staging a caravan protest at Uber’s San Francisco headquarters to demand Uber comply with gig worker protections law AB-5, pay into the state’s unemployment insurance fund and drop the ballot initiative it proposed along with Lyft and DoorDash that aims to keep gig workers classified as independent contractors.

“Uber, Lyft and other gig companies are continuing in the same path of abusing and completely taking advantage of workers while putting them at risk,” rideshare driver and organizer with Gig Workers Rising Edan Alva told TechCrunch. “The thing is, it’s never been clearer than during these times how benefits, sick days and unemployment benefits are absolutely critical for workers, especially for workers who are considered essential and are the most vulnerable in society overall. What they earn immediately goes to sustaining themselves and their families.”

A recent survey in San Francisco found 45% of gig workers can’t afford a $400 emergency payment without borrowing and 78% of gig workers are people of color. As part of the protest, drivers also want shareholders to know that when they invest in companies like Uber or Lyft, “they become part of the problem,” Alva said. He added that they will shine the light on them in the same way they shine the light on Uber and Lyft.

Additionally, if Uber and Lyft were to classify their drivers as employees, they would be required to contribute to state and federal unemployment funds. According to a recent study by UC Berkeley’s Center for Labor Research and Education, Uber and Lyft contributions in California would come out to $413 million in additional funding based on the wages of drivers from 2014 to 2019.

This protest comes shortly after California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco, filed a lawsuit asserting Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. The suit argues Uber and Lyft are depriving workers of the right to minimum wage, overtime, access to paid sick leave, disability insurance and unemployment insurance. The lawsuit, filed in the Superior Court of San Francisco, seeks $2,500 in penalties for each violation, possibly per driver, under the California Unfair Competition Law, and another $2,500 for violations against senior citizens or people with disabilities.

“We are incredibly ecstatic that the AG recently decided to follow through and enforce AB-5,” Alva said. “But Uber and Lyft are still trying to eliminate legislation that provides workers those rights. It’s such a level of entitlement and disregard to human lives. It’s good the state of California is going after these companies. From the perspective of the worker, I feel like we as workers need to come together and we need to send consistently and relentlessly a very clear message that this is unacceptable.”

Shortly after the lawsuit was filed, the group behind the anti-AB-5 ballot initiative, Protect App-Based Drivers & Services, said the suit “threatens to eliminate rideshare and delivery services.” This group is mostly funded by Uber, Lyft and DoorDash. In August, each company put $30 million into the initiative. Since then, the initiative has gathered support from thousands of drivers, according to the group.

“When I saw what this initiative was, I just saw it as a win-win,” rideshare driver Jim Pyatt told TechCrunch. “In terms of the insurance, guaranteed income — how could I go wrong in supporting that.”

Beyond AB-5, however, drivers protesting today are also of concerned about the lack of masks, hand sanitizer and disinfectants being made available to them. Both Uber and Lyft have begun taking some steps to provide drivers with personal protective equipment. But not enough was being done before Alva ultimately decided to stop driving in April.

“By the time I stopped working for Lyft, I was making $5 an hour,” he said. “There was no point in putting myself at risk and at the same time earning that little. If they invest half of what they invest on trying to repeal AB-5, I’m sure our workers would have been well-equipped at this point.”

Mekela Edwards, a rideshare driver and organizer with We Drive Progress, has similarly stopped driving during the pandemic. Edwards, who is self-isolating at the direction of her doctor, told TechCrunch she helped organize the protest because she wants to bring attention to the problems drivers are facing. One of the biggest issues, she said, is that drivers are misclassified in California. Beyond that, Edwards says she and many other drivers have faced difficulties trying to get financial assistance from Uber.

Uber first announced its financial assistance policy in March. At the time, only drivers who were diagnosed with COVID-19 or placed in quarantine by a public health authority were eligible. Since then, Uber has expanded it to include drivers and delivery people who have been told to “individually quarantine” because of a pre-existing condition that puts them at a higher risk of facing serious illness from the coronavirus.

Edwards, whose doctor advised her it wasn’t safe to drive due to her asthma, said she applied for financial assistance from Uber but never heard from the company. And instead of spending millions on the ballot initiative, Edwards wishes Uber would use that money to better support drivers during the pandemic.

“That’s money they could be spending to support us,” she said. “We enjoy the work we do. We just want to be respected and appreciated like any worker should be.”

TechCrunch has reached out to Uber. We’ll update this story if we hear back.

This story is developing…check back for updates.

Source: Tech Crunch

Heading into earnings season, you might have expected Uber and Lyft to suffer.

After all, global travel slowed toward the end of Q1, so how could these companies have done well? Continuing the same line of thinking, given that they are both unprofitable and are valued more on growth than trailing earnings, with growth slowing would there be much to celebrate?

The answer was a resounding “yes.” Uber and Lyft both rallied toward the end of last week following their successive earnings reports.

Today, let’s go back and remind ourselves how Uber and Lyft performed against Q1 expectations and what they said about the hits they took in March (Q1) and early April (Q2). Then we’ll ask ourselves why their shares rallied despite telling investors that their businesses had begun to fall sharply in the COVID-19 world.

(And, no, the answer to everything isn’t Uber Eats. More on that at the end.)

Expectations

Lyft reported earnings first, telling investors its Q1 results on May 6. Here’s how they stacked up:

• Lyft lost $1.31 per share against revenue of $955.7 million in Q1.
• The firm missed expectations on profit (-$0.64 expected), and beat on revenue ($897.9 million expected).

Uber reported the next day. Here are its top-line numbers from May 7:

• Uber lost $1.70 per share in Q1 against revenue of $3.54 billion in Q1.
• The firm missed expectations on profit (-$0.83 expected), and beat slightly on revenue ($3.51 billion expected).
  

  
  Source: Tech Crunch

We recently interviewed Jon McNeill to learn more about his newest project, a startup studio called DeltaV Ventures. But we also wanted to hear about what it’s like to work inside of Tesla and Lyft.

McNeill spent two-and-a-half years as the carmaker’s president, heading up global sales, marketing, delivery and government relations before heading to Lyft in early 2018, where he served as COO for 18 months. (He left four months after the ride-hail company’s IPO last year.)

He shared his take on his experience at both places, and what, from each, he is using and eschewing at DeltaV. Our conversation has been edited lightly for length and clarity.

TechCrunch: What was it like working with Elon Musk?

Jon McNeill: To me, it was fascinating. He’s the best practitioner of my craft as an entrepreneur. It’s hard to name another entrepreneur who has started four companies, all of which are worth more than $10 billion in market cap [and] several of which are worth more than $50 billion.

We were in hyper-growth mode, and there were no playbooks. Like, literally, when I started, the company had about $2 billion in annual run rate revenue, and three years later, it had $20 billion in annual run rate revenue. And there are no playbooks for that, so we were innovating constantly to either try to get ahead of that growth or just to keep up with it.

Source: Tech Crunch

After investigative reporting revealed his undisclosed involvement in shooting at a synagogue with KKK members at age 17, the CEO of Banjo will leave the company he founded.

In a short blog post, the company announced a “change in leadership” and the resignation of its founder and CEO Damien Patton. The Utah-based company will transition “to a new, reconstituted leadership team effectively immediately.”

“I am confident Banjo’s greatest days are still ahead, and will do everything in my power to ensure our mission succeeds,” Patton said in the post. “However, under the current circumstances, I believe Banjo’s best path forward is under different leadership.”

Patton leaves the company as valuable contracts with its home state of Utah went on hold in light of the explosive report, published in OneZero. The story revealed that at age 17, Patton drove a KKK member past a synagogue while he shot at the building. He reportedly went into hiding at a white supremacist training camp after the incident.

In a statement provided to TechCrunch, Utah’s Attorney General office said it was “shocked and dismayed” at reports of Patton’s prior affiliation with hate groups.

The company’s CTO, Justin R. Lindsey, who joined the company full-time less than a year ago, will step into the top role.

Even prior to revelations of Patton’s past, Banjo had come under scrutiny by privacy advocates for its pivot from a social tech company into a real-time intelligence platform for law enforcement. Last year, the company’s director of government affairs for Utah told a group of public officials that Banjo “essentially [does] most of what Palantir does, we just do it live.”

In its blog post announcing Patton’s departure, the company emphasized its “unswerving commitment” to protecting private data and characterized its work as “technology solutions that protect privacy.”

Source: Tech Crunch

The entire world has run smack into the biggest economic wall since the Great Depression, and the US stock market is … above where it was this time last year. American tech megacorns like AirBNB, Lyft, and Uber have laid off 20% of their staff … and the Big Five tech companies are worth a record 20% of the entire market. What the hell?

Yes, those three cited companies are directly affected by the coronavirus pandemic, but so many sectors are — travel, retail, hospitality, entertainment, events, real estate, business services, to name only a few — that every other sector is inevitably indirectly affected too.

So what are the markets, in their infinite wisdom, collectively expecting? The old saw has it that the market is a voting machine in the short term, but a weighing machine in the long run. What futures are being weighed?

I see seven possibilities bouncing around in time’s great lottery machine:

The Flying V

The future: In this, the best and laziest of all possible futures, we have beaten down the virus’s attack; a few easy countermeasures such as hand-washing, mask-wearing, and surface-sanitizing prevent future exponential growth, and when the lockdownss end, people flock back to their previous activities. Maybe a few extra months for some sectors, but come the autumn, schools reopen, flights resume, and life basically returns to normal. The economy and its jobs soon follow, and this short, sharp, V-shaped recession is behind us by November.

Probability apparently assigned by the market and many politicians: Call it 40%.

Its actual likelihood: This is delusional idiocy. Even with strict lockdowns, case counts are only plateauing in many areas. Mask wearing and hand washing are good and important, but not enough, and Americans have committed murder rather than wear masks. Most importantly, there is no way in hell people will flock back to previous activities as before — data shows they actually abandoned them before lockdowns were introduced. Consumer spending, and hence jobs, and hence the economy, will continue to suffer, lockdowns or no, while the virus is out there and (very understandably) keeping people in their homes.

The Christmas Tree

The future: We live in a world of Green Zones and Red Zones. In green zones, case counts are kept to near-zero, outbreaks are tracked with frequent ubiquitous testing — for which people are paid $50/test, to ensure underclasses don’t go untested — and forcefully squelched by aggressive contact tracing and away-from-home quarantines. People coming from Red Zones are kept in quarantine buffers before entry is allowed. In green zones, economies are roaring, but in red zones, the battle against the virus continues, and economies remain semi-comatose. Red and green zones are roughly equally distributed, so the economy is only half as bad as it would be in an all-red world.

Probability apparently assigned by the market and many politicians: Maybe 5%?

Its actual likelihood: I mean, we live in this already — Taiwan, South Korea, New Zealand, and (apparently) China and Vietnam are Green Zones. The likelihood of this extending to Europe and the USA, though … I don’t know. California moved fast and is competently governed, but now has roughly as many confirmed cases as all of China (allegedly) did. Hard to pack that mushroom cloud back into its uranium casing. But not impossible, with enough testing and tracing. Meanwhile, states with governments in denial will not dedicate the resources required to turn green. So, plausible, but IMHO not actually likely for the USA or Europe, much less South America or sub-Saharan Africa. I would think it a quite likely future for my homeland Canada … except we’re too tightly connected to fractured and incompetent America.

The Hammer And The Dance

The future: As described by Tomas Pueyo in a viral and pretty-good piece that came out a couple of months ago, the current lockdowns (The Hammer) are followed by the virus sine-waving indefinitely: it seethes, and from time to sporadic time erupts anew, and those eruptions are followed by localized screw-tightening including further lockdowns. But we keep it below health-system capacity, and we buy enough time such that when a vaccine is finally found and distributed, we haven’t come anywhere near herd immunity, and have thus saved many lives. The economy sine-waves too: surges of normalcy followed by massive ebb tides continue through 2020 and well into 2021 at the least.

Probability apparently assigned by the market and many politicians: Say 10%.

Its actual likelihood: I’d think reasonably high. We know lockdowns can plateau and reduce the virus; I fear that generalized incompetence and intransigence makes a Christmas Tree future implausible, at least in the USA, whose people and politicians tend to confuse organization with tyranny, and instead favor crude instruments such as lockdowns: and given those circumstances, this is the least bad option. I fear dangerous overshoots during “The Dance,” but I don’t think they’re inevitable. However, from an economic POV, this is not a good solution. People will continue to feel unsafe, and the economy will continue to be hit by hammerblows, albeit lighter than the one we’re in now.

The Silver Bullet(s)

The future: We’d best conservatively assume that, even if accelerated by human challenge studies and simultaneously building factories for seven different vaccines, we’ll be at least well into 2021, and possibly some distance beyond, before we get a vaccine. But a vaccine is not the only possible medical solution. If we find prophylaxes or treatments which, singly or in combination, render the disease much less dangerous, that would be hugely beneficial and change the proverbial game.

Probability apparently assigned by the market and many politicians: At least 35%. You can almost hear them screaming “Nerd harder!” at the doctors and scientists.

Its actual likelihood: Well, call me Pollyanna if you will, but I actually think this is fairly plausible. It’s still early but we’re already seeing (very initial) studies indicating that not just one, not just two, but a few different treatments may be beneficial. I want to stress again: very initial, and like hydroxychloroquine, may yet be ruled out by better data. But presumably the more we learn about this disease the better our treatments will get. The question is how much better, and how fast — but “much better, quite soon” is at least within the realm of possibility.

The Cattle Drive

The future: We basically give up on fighting the virus — while still trying to keep it from overwhelming healthcare systems and doing our level best to protect the elderly, the immunocompromised, the diabetic, etc. etc., with the fabled goal of Herd Immunity. Unfortunately we’ll almost certainly overshoot the actual Herd Immunity number, and it’s next to impossible to protect the elderly (“Who do you think works at those nursing homes? Highly trained gibbons?”), so this will almost certainly kill a lot of people who don’t have to die, while also not doing much for the economy since no one’s actually all that eager to rush out and catch a virus which has some chance of becoming the worst experience of your adult life even if it doesn’t ultimately kill you.

Probability apparently assigned by the market and many politicians: I’d like to think they don’t give this more than a 10% chance, largely because they know it wouldn’t fly with the public and also wouldn’t be particularly good for the economy.

Its actual likelihood: This is kind of the worst-case “Hammer and Dance” scenario, in which we just barely keep health-care systems from bursting. People call it “the Swedish model,” and we’ll see what happens there, but note that Sweden’s population is roughly comparable to New York City’s, and “the NYC model” sounds a whole lot less appealing. I think the cautionary tales of New York and Lombardy will keep most of the West from trying to deliberately seek out herd immunity.

The Second Wave

The future: After we relax the current lockdowns, everything seems fine. A few sporadic outbreaks here and there, the virus continuing to smolder a little, but basically a fire which is guttering and going out. But it turns out that it’s seasonal — and then — come the autumn — a completely unexpected second wave, which nobody predicted or saw coming, hits! You know, just like the Spanish Flu!

Probability apparently assigned by the market and many politicians: 0%.

Its actual likelihood: I too think this is very unlikely. First, if the virus is susceptible to heat and humidity, explain Ecuador and Brazil. Second, and more importantly, unlike the Spanish Flu, we have the example of the Spanish Flu to be warned by. Come the autumn, and again the winter, half the world will be watching all the data with keenly twitching antennae. Surely we can’t be collectively dumb enough to be ambushed by a Second Wave again. Right? Right?

The Double Tap

The future: This isn’t so much a new future as an add-on to any of the above. In this future, the coronavirus triggers a chain of effects which cascade into another, different massive crisis, while we’re still dealing with this first one. Say, an attempt to postpone November’s presidential election, followed by a constitutional crisis and calls for the US military to intervene. Or a huge spike in food prices around the globe, followed by widespread famine, riots, and revolution. Or the fracturing of a major nation hit particularly hard by the virus, e.g. Brazil or Russia or India.

Probability apparently assigned by the market and many politicians: 0%; second-order effects are generally beyond their remit.

Its actual likelihood: Pretty small … but not zero, and definitely worrying.

Source: Tech Crunch

“I just think change unfairly favors the startup, the nimble small company,” says Roelof Botha.

The Sequoia partner, whose portfolio includes Unity, 23andMe, Instagram, Instacart, Xoom and YouTube, says he’s hopeful about the opportunities this pandemic has created for companies across a variety of sectors, including healthcare, cloud computing, social and others.

We spoke for an hour with Botha about several topics, including how user behavior is rapidly evolving, trends he’s seeing, his outlook on economic recovery, how he’s evaluating new investments and how fundraising itself is changing. Fun fact: Sequoia has made 10 investments over Zoom since the coronavirus pandemic forced us to stay at home.

The full conversation was broadcast on YouTube, and the embed appears below.

Side note: Extra Crunch Live is our new virtual speaker series for Extra Crunch members. Folks can ask their own questions live during the chat, with guests that include Aileen Lee, Kirsten Green, Mark Cuban and many, many more. You can check out the schedule here.

Below, you’ll find a lightly edited transcript of our recent chat with Botha. Enjoy!

The differences in fundraising based on stage

When you’re listening to a seed-stage company, it’s often about the story. The founders paint a vision of the future. That’s part of what I love about my job, by the way. You’re sitting there and you’re trying to imagine what the world is going to look like one day and whether this company is on the right side of history. Or is it implausible that this will happen? It’s so much fun to sit there and think about that. At the seed stage, it’s about the story.

As you get to a Series A or Series B stage, the company will definitely start to have some metrics: usage numbers, early adoption numbers. If it’s an enterprise company, what are people willing to pay for your product? You start to get a sense of the metrics that back up the story. If the metrics don’t support the story, then you start to wonder if that company makes sense. In the long run, you need to have financials that flow from the metrics. But that’s typically at a Series C or later stage. And clearly, by the time a company goes public, you need to have connected story to metrics to financials.

Source: Tech Crunch