Kia Kokalitcheva

Lyft will develop its own autonomous driving tech

Lazaro Gamio / Axios

Doubling down on its investment in self-driving cars, ride-hailing company Lyft is set to open a new office in Silicon Valley that will focus on autonomous driving tech. Named after the highest level of autonomous driving — Level 5 — the facility will house several hundred employees by the end of 2017.

In-house tech: Until now, Lyft's self-driving car efforts have been limited to working with other technology makers by providing them access to its ride-hailing network and data via its Open Platform. But now the company plans to develop its own technologies to tackle mapping, perception, localization, path planning, and motion control. Already, 10% of the company's engineers are working on autonomous driving tech, says Lyft.

Why it matters: Lyft's new move is not only a significant increase in its investment in self-driving cars, but it's also turning into a more direct competitor to its partners like Waymo and GM, which are developing their own versions of autonomous driving tech.

Open approach: Lyft says it plans to make some of its technology and resources available to its platform partners. It also plans to contribute to the broader industry by publicly releasing some data, publishing research papers, and opening access to its network for research, according to Luc Vincent, Lyft's head of autonomous driving, though it's not made concrete plans yet.

Future drivers: Lyft says that it will always employ drivers in some capacity even when self-driving cars become a reality—either to drive in situations in which autonomous systems can't, or to fulfill other functions. This echoes the predictions of other tech leaders, who have said that while self-driving cars will eliminate driving jobs, they will give rise to a slew of new jobs.

Planned testing: Lyft says it's still on track to roll out a pilot program in partnership with self-driving car startup nuTonomy later this year in Boston. It's also still planning to debut a program with GM, though it's unclear when this will happen. Company execs also declined to comment on Lyft's plans to get a self-driving car testing permit for its home state of California.


Y Combinator raising $1 billion for new fund

Rebecca Zisser / Axios

Silicon Valley startup accelerator Y Combinator is raising up to $1 billion for a new venture capital fund, Axios has learned from multiple sources. No word yet on when it is expected to close. YC is also making changes to its investment organization.

Why it matters: Y Combinator is one of the most influential startup entities in Silicon Valley, having incubated such companies as Airbnb, Dropbox and Stripe. But, at it's core, it's an investor — so it's no surprise to see it evolve and expand its reach.

Details, per sources:

  • Merger: This is technically for YC's second Continuity fund, the first of which was a $700 million vehicle designed to invest in later-stage rounds of companies incubated by YC. But YC has decided to merge its existing early-stage investment program with its later-stage fund, so the $1 billion would go toward both.
  • Inside and out: YC has strayed a bit from its original Continuity mission, in that it's now willing to selectively back companies that didn't participate in its accelerator program (something it originally said it would not do). So far it's only done one such deal, which remains unannounced, but more could come. This puts YC more squarely in competition with traditional VC funds that usually invest in startups after they've completed the accelerator program.
  • Seats at the table: All full-time YC partners have equal economics in the funds, with everyone invited to investment meetings. The actual investment committee, however, is only three people: YC president Sam Altman, YC Continuity CEO Ali Rowghani and Continuity Fund partner Anu Hariharan. There was originally a fourth seat representing the rest of the YC partners collectively, but it has been eliminated, in part, to streamline signature approvals.
  • Still marketing: YC declined comment when contacted by Axios.

SoFi plans to launch VC fund

Online personal finance company SoFi, which is viewed as a 2018 IPO candidate, is working to launch a strategic venture capital group, CEO Mike Cagney told Axios from the sidelines of the Fortune Brainstorm Tech conference in Aspen.

One big difference between this and most other corporate VC efforts, however, is that SoFi plans to solicit outside investor commitments (i.e., limited partners). The company itself would contribute a cornerstone commitment and serve as general partner.


BMW is backing an online used car marketplace

Shift Technologies

Shift, an online marketplace for used cars, has raised $38 million in Series C funding led by BMW iVentures.

Industry view: Shift's latest funding comes within months of rival Beepi shutting down (after raising $150 million), and Carvana going public and trading well. "I think it's nothing but good news for Shift because we have a very clear comp" in the public market, Shift CEO George Arison told Axios. "The beauty of this industry is that it's not a winner-take-all situation."

Shift data:

  • Shift says it made $9.5 million in gross profit last year (Carvana brought in $19 million, for comparison).
  • 50% of Shift's total customers are millennials, though more sellers are millennials.
  • 70% of customers who use Shift's financing services are millennials.
  • Roughly 55-65% of all Shift buyers get financing, which is less than traditional car dealerships, according to Arison.

Deal: Along with BMW, new investors DCM and G2VP, were joined by existing Shift backers DFJ, Highland Capital Partners, and Goldman Sachs Investment Partners also participated. BMW iVentures partner Christian Noske joined the board, with DCM's Jason Krikorian and G2VP's Brook Porter joining as observers.


The future of jobs is still a mystery

Alastair Grant / AP

Political, business and technology leaders are turning their attention to the rapidly changing workforce, but they are only beginning to understand what the future of employment looks like and what matters most to workers, several acknowledged at Fortune's Brainstorm Tech conference in Aspen.

Why it matters: Our ability to make employment transitions as painless as possible will hinge on our ability to get ahead of these trends. Apparently, we have a long way to go.

What workers care about: Contrary to popular assumptions, most American workers are more concerned about having a stable and consistent income than making more money, said DoorDash CEO Tony Xu, whose company employs independent contractors to make food deliveries.

"We are in a data desert," said Bloomberg Beta chief Roy Bahat in reference to the relative lack of data about employment trends and predictions. He added that much of the data collected by the federal government every year tends to pertain to full-time employees and fails to show trends for other types of workers.

Echoing the sentiment that we need more granular data, former Secretary of Commerce Penny Pritzker added that "nobody's interested in the average temperature in America."

Basic income: Michael Chui of the McKinsey Global Institute said that redeploying workers is more important than trying to implement a universal basic income, which some believe is the answer to worries about rising joblessness. "If you believe we need [universal basic income] to solve mass unemployment, you need to think about what problems you're trying to solve."

Bloomberg Beta's Bahat had a slightly different take: "It's not a great way to solve mass unemployment, but it is a great way to think about stable income."


McChrystal: To the world, "America First" sounds like "America Only"

Steven Senne / AP

America's foreign policy should focus on its relationships with other nations and how it nurtures those, said retired Gen. Stanley McChrystal on Monday at Fortune's Brainstorm Tech conference in Aspen.

"We're in a world where there are lot of nations that matter, and how we knit together… I think American foreign policy needs to be focused on that," he said.

America only: "The mere saying of 'America First' — of course it sounds good! But when you're making a bumper sticker and putting it in a car, what you're saying is 'America Only,'" he said, adding that the country needs to pay more attention to how it presents itself to people around the world.

Trump's leadership: "I don't think his hair would have passed my command standards," said McChrystal when asked to assess Trump's leadership level.

Leadership book: McChrystal is currently writing a book with two co-authors about leaders throughout history, pairing several of them and analyzing their styles. Though it's not been decided, McChrystal would like it to be titled, "Leaders: A general theory of relativity," he said.

Not about the tech: McChrystal, whose firm helps companies with their technology and strategy implementations, says the problems are never about either of those things — it's about getting the company to change its behavior.


Instagram COO explains why its "Stories" clone is unique

Instagram borrowed Snapchat's "Stories" format, but what makes it unique is how it works in concert with the rest of the photo-sharing app's features, Instagram COO Marne Levine explained at Fortune's Brainstorm Tech conference in Aspen.

"We've acknowledged over and over again that we did not invent the Stories format," said Levine. "It's a great format and it works well in our community," adding that Stories lets users post photos they often wouldn't post as traditional Instagram photos.

Why it matters: Instagram's decision to launch a feature identical to Snapchat's Stories last August has been met with both criticism and praise for getting its users to adopt it so quickly (currently 250 million people are using Instagram's Stories every day). The competition between the two apps is well known, and Stories has become the new battleground.


GM's self-driving unit is launching ride-hail app next week

AP Photo/Paul Sancya

Cruise, the self-driving car startup acquired by General Motors last year for nearly $1 billion, next week will launch an app for its employees to hail rides from one of its vehicles in San Francisco, CEO Kyle Vogt said on Monday at Fortune's Brainstorm Tech conference in Aspen. The cars will still have human back-up drivers.

Cruise currently has vehicles being tested on the roads of San Francisco, Phoenix, and Detroit, and is adding 100 more cars next week, according to Vogt. It began to quietly test the app over six months ago, letting employees get a ride to the office only.

Just the beginning: Silicon Valley consensus is that urban road transportation will eventually be dominated by autonomous vehicles summoned by ride-hail apps (like Uber and Lyft, just without the drivers). Alphabet's self-driving car unit has also made available a ride-hailing app to customers in Arizona to test how they use such self-driving rides.


SurveyMonkey wants to win over big businesses

Courtesy of SurveyMonkey

SurveyMonkey, the company best known for its easy-to-make surveys, is making a push into serving big businesses, and hopes to get its IPO plans back on track.

Why it matters: SurveyMonkey's had a rocky two years following the unexpected death of former CEO Dave Goldberg, which led to big management changes, a substantial layoff of employees in is business sales team, and uncertainty regarding IPO rumors at the time. CEO Zander Lurie told Axios the company is putting itself in a position to potentially go public in the future, helped by its new push, though going public isn't SurveyMonkey's only option.

New tools: The company is releasing new versions of three of its tools, including one for employee feedback—human resources is one of the top three uses of SurveyMonkey's surveys, according to Lurie.

New moves: SurveyMonkey also recently shook up its board of directors, with the addition of tennis star and entrepreneur Serena Williams and Intuit CEO Brad Smith. They replaced HP CEO Meg Whitman and Turbonomic executive chairman (and brief SurveyMonkey CEO) Bill Veghte.

The story has been updated to clarify that IPO rumors surfaced before Goldberg's death in 2015 and that it's only one of the company's options.


A 60-year-old California law may help women fight investor harassment

Lazaro Gamio / Axios

While Silicon Valley is busy tweeting about the latest sexual harassment scandal, female entrepreneurs might already have a legal tool to protect themselves from venture capital's bad behavior: a 1959 California civil rights law.

Though it hasn't yet been tested in this particular situation in court, Joelle Emerson, founder of workplace diversity and inclusion consultancy Paradigm, says it could be a valuable tool as Silicon Valley works to re-calibrate its sexist culture.

The Unruh Civil Rights Act: Passed in 1959, the Unruh Civil Rights Act prohibits businesses in California from discriminating against potential patrons on the basis race, gender, age, religion, and so on. Originally enacted as a way to combat discrimination against African Americans by business establishments, the law eventually became a central protection for people with disabilities. Here's the statute's text:

All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.

The legal argument: The statute clearly applies in the case of an attorney and his client, a doctor and his patient, or a landlord and a tenant. A pitch meeting between a startup founder and venture capitalist is no different, said Phyllis Cheng, who headed California's Department of Fair Employment and Housing from 2008 to 2014.

"Let's look at something like a store — that's a public accommodation because you're inviting people into your store," she told Axios, adding that the store manager can't discriminate against some people even if they don't make a purchase.

Burden of proof: In a court of law, a female entrepreneur victim of sexual harassment or discrimination by an investor would have to prove:

  • The person needs to be a member of the class (i.e. be a woman in this context) and there's a business relationship (the two are meeting to discuss a potential investment)
  • There was sexual harassment or discrimination and the person was denied some kind of benefit ("I won't fund you unless you go on a date with me").
  • The person can't easily terminate the business relationship.
  • And that loss of benefit actually happened or will happen as a result of the misconduct (the investor declines to provide funding).

Some scenarios covered by the statute, according to Cheng:

  • Offering funding on the condition of dates or sexual favors.
  • Offering funding on the condition that the startup replaces a female CEO with a man.
  • Hostile work environment (inappropriate posters, jokes made at the office, etc.)
Caveats: The law has never been tested with regards to investor-entrepreneur relationships, so there are unknowns.
  • For example, the law requires that the harassment be "severe or persistent" and rulings in cases like Hughes v. Pair and Ramirez v. Wong have found that a single instance of sexual comments or action don't meet the bar. That said, Cheng argues that the law is written liberally enough that the situation's full context can make a difference.
  • The law requires that the victim's business relationship be difficult to end. This is more obvious in the context of a venture capitalist who has already invested in an entrepreneur's company, but less clear if the two are simply meeting to discuss a potential deal. Still, Cheng says that if the investor is significant enough in the industry that the company can't do without, it could be said that the relationship is difficult to terminate or avoid.