Kia Kokalitcheva

Silicon Valley food delivery startup Sprig shuts down

Sprig, one of Silicon Valley's food delivery startups, is shutting down, as The Information first reported and the company confirmed on its website. The startup, founded in 2013, raised nearly $57 million in total funding. Sprig was previously looking for a buyer, according to Bloomberg.

Why it matters: The tech industry has spawned countless food delivery startups, but many have struggled to balance managing operations and very thin margins. What's more, Sprig not only delivered, but also prepared its meals from scratch, something other startups have also struggled to navigate (others like SpoonRocket and Maple have shut down, while Munchery replaced its CEO last year). More broadly speaking, startups across the so-called "on-demand" category—from laundry to home cleaning—haven't fared so well.


Ford veteran returns after brief stint at Uber

Alan Diaz / AP

Sherif Marakby, an automotive executive who left Uber in April after one year, has re-joined Ford, where he previously spent 25 years, according to the Wall Street Journal. Marakby will be a vice president overseeing the company's self-driving and electric-car businesses.

The news comes a few days after Ford abruptly named James Hackett as its new CEO, replacing Mark Fields. Hackett was previously heading the company's Smart Mobility division.

Between the lines: Marakby's departure from Uber was only the latest amid a slew of controversies around the company, including an ongoing lawsuit from Alphabet's self-driving car unit, Waymo. And with Detroit's increasing focus on keeping up in the autonomous driving race and rethinking car ownership models, it's no surprise to see Marakby being wooed back by Ford, which has been heavily investing in those areas over the past year.


Judge orders Uber to hand over Otto acquisition term sheet

Uber has been ordered magistrate judge to give Waymo an unredacted version of the term sheet agreement for its 2016 acquisition of Otto, a self-driving truck company, by the end of the day. During a Thursday hearing the judge concluded there was no legal reason for Uber to censor parts of the document.

There's no decision yet regarding a due diligence report compiled by forensics firm Stroz Friedberg as part of Uber and Otto's acquisition talks. The report is believed to contain incriminating evidence.

Why this matters: Both sides have attempted to keep confidential as much as possible about their technology and businesses. Anthony Levandowski, a former Waymo employee who founded Otto and subsequently joined Uber, has further complicated the situation by asserting his Fifth Amendment right not to testify and attempted to keep certain documents private. Uber has ordered Levandowski to hand over any Waymo documents he has, or risk being fired.

Here's a full timeline of Waymo and Uber's lawsuit.


Uber's fare pricing headaches continue

Jeff Chiu / AP

A new lawsuit filed in Brooklyn federal court accuses Uber of not disclosing that it calculates riders' fares differently than for drivers, according to Fast Company. A similar one has been filed in San Francisco.

Why it matters: Uber's revenue mostly comes from the cut it takes from each ride's fare, so unsurprisingly, it's constantly tweaking its pricing strategies. Unfortunately, it's already amassed a lot of distrust from its drivers, who often feel cheated by the company, and Uber's new "upfront pricing" is increasingly frustrating both drivers and riders.

After it rolled out "upfront pricing" last year, some drivers and riders began to notice differences between the price of some rides and what drivers were paid. Uber explained at the time that it sometimes overestimates a route (causing the rider to pay more), and sometimes underestimates it (causing the company to pay the difference to the driver). It also said that its driver agreement states that driver earnings are calculated based on miles and minutes driven, not the final price of a ride.

The criticisms:

  • Fare cuts: One of Uber's most controversial price cuts occurred every year in January across dozens of cities (it discontinued them this year). Uber claimed it was to spur demand during the post-holidays slump, though it didn't stop drivers from protesting the cuts.
  • Increasing commissions: Uber has tweaked the percentage cut it takes from drivers in various ways, frustrating drivers who see their earnings drop.
  • Artificial "surge pricing" Riders have questioned whether Uber sometimes artificially hikes prices without there being a high demand.
  • Pocketing extra money: Uber's "upfront pricing" has been controversial among drivers who feel their earnings should be calculated based on higher fares when they occur. Uber also revealed recently it's now charging more for certain popular routes.

SoftBank pours $100 million into Uber's main Latin American rival

Jeff Chiu / AP

Just a few months after raising $100 million from China's Didi Chuxing, 99, a Brazil-based ride-hailing company in Latin America, has added $100 million in new funding from SoftBank.

  • Caveat: Though SoftBank finally closed most of its $100 billion Vision Fund, its investment into 99 isn't from it. Due to conflicts of interest, the Vision Fund won't finance ride-hailing companies. Same goes for SoftBank's recent investment in Didi's massive $6 billion round.
  • Mutually beneficial: Bringing SoftBank as an investor is one of the benefits 99 is getting out of its relationship with Didi Chuxing, CEO Peter Fernandez told Axios, adding that access to capital in Latin America is nowhere as easy as in the U.S. or Asia. Another benefit is learning from Didi and its tactics. Though their respective markets are unique, they do have important similarities, such as low car ownership rates and per capital income. For Didi, this is a way for the company to expand internationally, in line with its plans to "play a global game."
  • Family awkwardness: Didi Chuxing is also an investor in Uber, 99's biggest rival in Latin America, and sits on the boards of both companies. With that said, Fernandez says he's not worried about Didi's relationship with Uber at all.

Ford's worried about making cars, not competing with Waymo

Alan Diaz/AP

Ford's abrupt naming of a new CEO—James Hackett, the head of its Smart Mobility division—makes it clear that the company wants to catch up in the self-driving race. In explaining the Ford board's move, NBC aptly pointed out that Waymo is ahead of the automaker (and all other self-driving car companies, for that matter) when it comes to miles driven autonomously and a good track record of safety drivers not having to intervene in cars' operations.

Apple and oranges: But these metrics aren't the only assessment of a company's potential. What's more, the two companies are more likely to work together than to compete with each other given their respective business models and core competencies.

Since Waymo became a standalone unit within Alphabet, new chief John Krafcik made it clear that it has no plans of manufacturing cars on its own—rather, it's focused on building self-driving tech for actual automakers to eventually use. And that's not to mention all the investments Ford has already made into autonomous driving tech and companies, including LiDAR maker Velodyne, and, an artificial intelligence startup founded by Waymo and Uber veterans.

Bottom line: If anything, chairman Bill Ford Jr.'s comments about the need for more cost cutting and streamlining reveal the real reason: Ford needs to focus on making and selling cars at a profit.


Imzy, a Reddit challenger, is shutting down

Imzy, a Utah-based startup that wanted to create a friendlier online community—a "nice Reddit"—said on Wednesday that it's shutting down just two years after its founding, and only seven months after opening its website to the public. The company's final day will be June 23.

"Unfortunately, we were not able to find our place in the market. We still feel that the internet deserves better and hope that we see more teams take on this challenge in the future," co-founder and CEO Dan McComas wrote in a blog post announcing the shutdown.

Backstory: Dan McComas and Jessica Moreno left their jobs at Reddit in 2015 to form Imzy. They aimed to create a safer and more inclusive site whose rules banned hate speech. It claimed to have amassed tens of thousands of users with over 6,000 Imzy communities, and had raised $8 million in funding led by Index Ventures.


Uber owes NYC drivers millions in earnings

Automobile Italia / Flickr cc

Uber has been underpaying New York City drivers since late 2014 when it rolled out a new driver agreement, the company told the Wall Street Journal on Tuesday. Instead of calculating its cut after accounting for taxes and fees, Uber has been doing the math on the larger amount.

Uber says it will refund all affected drivers, including interest, which should amount to about $900 per driver on average. Overall, this will likely cost the company about $45 million, according to an estimate from the Independent Drivers Guild, which represents many NYC drivers.

Don't forget: This is far from the first time Uber's been in hot water over driver compensation. In the last few months, Uber has agreed to pay out $20 million to resolve a complaint to the FTC over its claims about driver pay, and has also admitted to underpaying black car drivers in Pittsburgh since 2015. Its "upfront pricing" approach has also been subject to much criticism for opaquely underpaying drivers.


Advertisers have a new way to show off their Twitter chat bots

Richard Drew / AP

Twitter's new Direct Message Card lets advertisers customize an ad that can pull users into private conversations with their chat bot.

For example, Patrón Tequila's "Bot-Tender" card suggests cocktails. Users can tap on one of the settings ("pool," "party," "cookout," "mountain), and open a Direct Message convo with Patrón's chat bot.

Bots everywhere: Twitter is far from the first social media company to experiment with bots and advertisers—last year, Facebook opened the doors of its Messenger app to chat bots. Twitter seems to still be figuring out how advertisers can best use the features.


Analysts believe Waymo could be worth $70 billion

Courtesy of Waymo

A pair of Morgan Stanley analysts believe Waymo, Alphabet's self-driving car unit, would be worth $70 billion (roughly the same at Uber's current private valuation) if it were to spin out of its parent company, according to an analyst note first spotted by Business Insider.

The reasoning: Waymo's recent partnership with ride-hailing company Lyft will likely help the company rack up more miles driven by its self-driving cars, according to analysts Brian Nowak and Adam Jonas, providing Waymo with more data to improve its technology. Spinning it out could also isolate Alphabet from regulatory challenges (including liability and ethics) faced by the self-driving car industry, leaving it all to Waymo to navigate.

Bigger picture: Waymo is part of what Alphabet considers its "Other Bets"—its experimental units outside of Google. The latter includes Android and YouTube as well, and continues to be the company's revenue engine. However, these Other Bets are getting increasing pressure (especially since the hiring of CFO Ruth Porat) to find ways to make money and reign in their spending. Spinning out Waymo could serve as a first test for Alphabet's Other Bets and their viability as stand alone businesses.