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Closer

Axios Closer

DoorDash and Lyft are the latest companies to show just how much they're benefitting from sustained consumer demand.

Driving the news: Couriers for DoorDash delivered 426 million orders in the second quarter — an all-time high — the company reported on Thursday. Lyft, also on Thursday, reported that ridership rose to its highest point since the pandemic began.

Why it matters: Worries of an economic slowdown have grown as inflation remains elevated and eats away at consumer budgets. But many companies have yet to see a significant reduction in spending.

Details: DoorDash said the frequency with which existing customers ordered last quarter was similar to 2019, and that new costumer sign-ups has not appeared to slow down.

Separately, Lyft's president, John Zimmer, told WSJ that inflation has not appeared to dent demand as of yet.

The big picture: Both platforms rely on gig workers who have been in short supply since the start of the pandemic. 

Each company has had to carefully adjust its spending to incentivize workers without jeopardizing profits. 

Shares of Lyft and DoorDash soared after hours by more than 9% and 15%, respectively. 

Gig work platforms post record results

DoorDash and Lyft are the latest to show just how much they're benefitting from sustained consumer demand.

Photos: Bloomberg, Alexi Rosenfeld/Getty Images

Doordash

Transportation

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The Department of Transportation on Wednesday proposed new protections for travelers, including requiring airlines to provide vouchers that don't expire to passengers unable to fly for pandemic-related reasons.

Why it matters: If enacted, the change would be one of the most extensive overhauls of travelers' rights and airline refund rules.

Details: The department is proposing various changes aimed at both U.S. and foreign air carriers and ticket agents. 

Under the proposed rules, passengers will be eligible for cash refunds if their flight is delayed by 3 or more hours for domestic itineraries or 6 or more hours for international flights — even if the ticket was purchased as non-refundable or if the delay was outside the airline's control.

Airlines will issue vouchers with no expiration dates to passengers who can't travel due to COVID-19 or other communicable diseases. This includes if they're sick, if there's a stay-at-home order or if borders close.

If the carrier or ticket agent received significant financial assistance from the government as a result of a public health emergency, they'll have to provide refunds instead of non-expiring travel vouchers or credits.

By the numbers: Taxpayers have given U.S. airlines $54 billion in COVID-19 government assistance, Reuters reported. 

American Airlines and Delta each received around $12 billion, and United Airlines got about $11 billion.

The rule would only apply to airlines that receive new assistance after the proposal is finalized.

What they're saying:  The department said it has been flooded with complaints about air travel services since the onset of the pandemic. 

“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” Transportation Secretary Pete Buttigieg said in a statement Wednesday. 

“This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

Meanwhile: The proposal outlined that airline representatives "cautioned that overregulation in this area may result in the elimination of that lower-priced fare product" during an Aviation Consumer Protection Advisory Committee meeting.

Where it stands: The proposal will be open for public comments for 90 days, including at an Aug. 22 virtual meeting.  

The Transportation Department will then weigh the comments before finalizing the proposal.

Transportation Department proposes airline traveler protections

If enacted, the change would be one of the most extensive overhauls of travelers' rights and airline refund rules.

A traveler sits at San Francisco International Airport in California on June 13, 2022. Photo: David Paul Morris/Bloomberg via Getty Images

Travel

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Spirit Airlines and JetBlue Airways announced that they have agreed to a merger Thursday, less than a day after Spirit terminated its proposed merger with budget airline Frontier.

Driving the news: JetBlue said in a news release that it will pay $33.50 a share in cash for Spirit in a $3.8 billion deal, which was higher than Frontier's $2.6 billion offer in cash and stock.

Spirit had said Wednesday it planned to hold discussions with JetBlue about a possible deal, Axios' Nathan Bomey reports.

Spirit announced the Frontier deal's collapse after the company's shareholders were poised to vote on it.

Why it matters: The deal, which still needs regulatory approvals and approval from Spirit stockholders, would create the nation's fifth largest airline.

The companies expect to conclude the regulatory process and close the transaction no later than the first half of 2024.

Details: The combined airline with a fleet of 458 aircraft will be based in New York but would have a "significant presence in Florida," according to a fact sheet on a new merger website.

JetBlue said the acquisition would accelerate its growth plan with 1,700-plus daily flights to more than 125 destinations in 30 countries based on December 2022 schedules.

The acquisition will increase relevance for JetBlue in certain key focus cities (Fort Lauderdale, Orlando, San Juan, and Los Angeles) as well as Big Four airline hubs (Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami), the company said.

The airlines will continue to operate independently until after the transaction closes.

JetBlue said if the deal doesn't close due to antitrust reasons, it will pay Spirit a reverse break-up fee of $70 million and Spirit stockholders a "reverse $400 million less any amounts paid to stockholders of Spirit before termination."

What they're saying: JetBlue CEO Robin Hayes said in a statement that the two airlines will work to "continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines."

"By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone," Hayes said, noting that combined the airlines would "still be significantly smaller than the Big Four."

Spirit president and CEO Ted Christie said the merger will be a "game changer" and would "create the most compelling national low-fare challenger to the dominant U.S. carriers."

Spirit-JetBlue merger takes flight after Frontier deal terminated

JetBlue and Spirit are looking to create one of the nation's largest airlines.

Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

Airlines

Whats Next

Axios What's Next

General Motors is launching an ambitious effort to educate the public about electric vehicles, including a platform for curious shoppers to pepper EV specialists with live questions over video chat. 

Why it matters: Automakers are spending billions of dollars to develop electric vehicles, but the public remains wary of them. And dealer salespeople often aren't much help in answering consumers' myriad EV questions, like:

How do you get a home charger installed, and what will it mean for your electric bill? 

Will the power grid even support all these EVs?

Details: GM's new website, EV Live, launches today and is meant to supplement its 4,500-dealer network by allowing customers to schedule one-on-one tutorials about the EV ownership experience.

Trained EV specialists (not digital chatbots!) equipped with video cameras can guide people through various dynamic displays in GM's EV Live studio.

Customers can learn about battery technology and get familiar with different types of charging equipment. 

Specialists can also walk participants through the home charging installation process and refer them to certified installers. 

The free sessions are available to anyone — even non-GM customers — including groups. 

It's not a hard sales pitch, says Hoss Hassani, GM's vice president of EV Ecosystem.

"This is an opportunity to pull more people into the EV consideration pool," Hassani told reporters. "This isn't about us selling a [Cadillac] Lyriq. It's about selling the EV experience."

Reality check: There's plenty of GM marketing embedded in the experience, and by signing up for a live video tour, you're giving permission for a GM dealer to follow up. 

Of note: The sessions are also open to business owners looking to electrify their vehicle fleet — and even to GM's own dealers who want to learn more, Hassani said.

The bottom line: Step 1 in the promised EV revolution? Education. 

Got questions about EV ownership? These GM tutors have answers

Get your EV questions answered at GM's new site

Image of an EV specialist explaining battery technology in GM's EV Live studio

GM's EV Live studio is staffed by specialists who can explaining battery technology, charging, and more. Photo: GM

Electric vehicles

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

National gas prices fell below $4.50 per gallon on Tuesday, marking a two-month low, according to AAA.

Why it matters: The national average for a gallon of regular hit $4.495 on Tuesday, marking around a 10% decrease from June's peak of over $5 a gallon and giving people a bit of relief at the pump during peak driving season in the U.S.

It's the first time the national average for regular gas has slipped below $4.50 since May 16, according to data from the U.S. Energy Information Administration.

By the numbers: The average price of a gallon of gas dipped under $4.50 in at least 25 states, with South Carolina's average of $3.998 being the lowest in the country, according to AAA.

The national average for a gallon of diesel dropped to $5.515 on Tuesday, a drop of 30 cents from last month's average.

What they're saying: "Global economic headwinds are pushing oil prices lower and less expensive oil leads to lower pump prices," Andrew Gross, a spokesperson for AAA, said in a statement on Monday.

"And here at home, people are fueling up less, despite this being the height of the traditional summer driving season. These two key factors are behind the recent drop in pump prices," Gross added.

Go deeper: State Department adviser expects gas prices to fall to $4 a gallon

National average gas price falls below $4.50 a gallon

The small drop gives drivers a bit of relief at the pump during peak driving season in the U.S.

A car fueling up in Hercules, California, in June 2022.

A car fueling up in Hercules, Calif., in June 2022. Photo: David Paul Morris/Bloomberg via Getty Images

Gas prices

Volkswagen's plan to roll out a new line of sporty electric trucks and SUVs under the resurrected Scout brand is a rare chance to win back Americans' hearts, Scout's new boss tells Axios in an exclusive interview.

Why it matters: Despite its global standing as the world's second-largest carmaker, Volkswagen is a chronic underachiever in the United States. Admitting in 2015 that it had been cheating on diesel emissions standards only worsened its reputation.

Now, amid a historic shift to electric vehicles (EVs), VW sees an opportunity to reconnect with U.S. consumers by offering EVs in the segments they care most about: pickup trucks and large SUVs.

Driving the news: Scott Keogh, president and CEO of Volkswagen Group of America, will become president and CEO of Scout on Sept. 1, Axios is first to report. 

He will be succeeded by Pablo Di Si, currently the executive chairman of Volkswagen's South American Region. Di Si will oversee the entire North American region, as did Keogh.

The leadership change was approved by Volkswagen AG's management board, which is meeting this week in Chattanooga, Tennessee — home to the German automaker's growing U.S. manufacturing base.

What they're saying: "It's time now to concentrate more on the U.S. market and the U.S. customer, and one piece of the puzzle, for sure, is Scout," Volkswagen Group CEO Herbert Diess said while chauffeuring me in one of his company's first U.S.-built EVs, the ID.4 compact SUV.

Between Scout and further growth of the Volkswagen and Audi brands, the VW Group aims to double its U.S. market share, which currently stands at about 5%.

"America is probably the country where we have the biggest potential worldwide," Diess told me.

Details: Scout will be an independent U.S.-based company, which will allow it the flexibility to take on partners or other investors — or even go public some day, Volkswagen execs said.

Scout will develop what the company calls a “true American” electric SUV and pickup truck designed for rugged, off-road use.

With a dedicated engineering platform, Scout expects to provide new conveniences and connectivity to meet different needs, like camping, off-roading or work site use.

The hope is that the iconic Scout name can help the company penetrate the highly profitable American market for big SUVs and pickup trucks, which is currently dominated by U.S. brands like Ford, Chevrolet, Jeep and Ram.

Production will start in 2026, and the aim is to sell up to 250,000 Scout-branded vehicles annually in the U.S.

Flashback: The Scout was developed in 1961 by International Harvester as a precursor to the modern SUV. 

It was marketed as an all-terrain family recreational vehicle and eventually came in several body styles, competing with Land Rover, Jeep and the Ford Bronco. Production ended in 1980, but Scout SUVs remain popular with collectors.

The back story: The rebirth of Scout as a rugged EV brand was a fortunate accident for Volkswagen.

The company acquired the rights to the Scout brand name in 2021 when its commercial vehicle subsidiary, Traton, bought truck manufacturer Navistar International (the successor to International Harvester, which went out of business in 1985).

Keogh, on a trip to the beach with his kids, came across a fully restored Scout and fell in love.

When he realized "the rights to the brand were just sitting there," he started advocating for a new electric truck line.

The bottom line: As VW sees it, electrification is a once-in-a-lifetime opportunity to redefine itself.

"Electrification, to me, is a reset," says Keogh.

Editor's note: This story has been corrected to note that Traton’s acquisition of Navistar International was completed in 2021, not 2020.

Scoop: VW turns to electric Scout brand to win back Americans

VW is creating a spinoff U.S.-based EV company

Image of Scout CEO Scott Keogh with a vintage Scout SUV

VW exec Scott Keogh will lead the revival of Scout as a rugged electric truck and SUV brand. Photo courtesy of Volkswagen

All-electric "seagliders" could someday offer fast, low-altitude flights in coastal communities like the Hawaiian Islands.

Why it matters: Electric aviation is the next frontier in the movement of people and goods.

Better batteries, lighter-weight materials and other innovations — plus huge capital investments — are opening the door to novel and lower-emissions transportation solutions like flying taxis, drones and seagliders.

"It's a space race all over again," Billy Thalheimer, CEO of seaglider startup Regent Craft, tells Axios.

Driving the news: Boston-based Regent is partnering with Hawaiian carrier Mokulele Airlines and investment firm Pacific Current to create a seaglider network in Hawaii.

Service is expected to begin by 2025 with a fleet of 12-passenger Viceroy seagliders that will fly like pelicans, about 10 to 30 feet over the water, at speeds of up to 180 miles per hour.

Hawaiian Airlines recently invested in Regent, with an eye toward building a 100-person version of the craft by 2028.

The idea is to offer a cheaper, faster, cleaner alternative to existing ferries and regional air service. 

How it works: The seagliders are designed to operate in what's called "ground effect."

Put simply, an aircraft flying close to land (or water) experiences less drag and more lift. (Here's a good visual explainer.)

Aircraft designers have experimented with "wing-in-ground" (WIG) effect vehicles for decades — the former Soviet Union's Ekranoplan and Boeing's Pelican concept were two examples — but the technology has been difficult to master in choppy seas.

New technical innovations will allow vehicles to glide more smoothly across the waves and make the technology more feasible, Thalheimer tells Axios.

Details: Retractable hydrofoils, for example, lift Regent's aircraft out of the water to navigate the harbor on takeoff.

Then a series of small propellers on the wings provides the lift for slow-speed takeoffs over a short distance. 

This so-called "blown wing technology" is also incorporated into the design of efficient new aircraft being developed by companies like Electra.aero.

Even DARPA, the Pentagon’s premiere research agency, is working on a WIG seaplane design to potentially replace the giant C-17 Globemaster cargo plane.

Seagliders are neither fish nor fowl — while they fly at low altitudes, they're expected to be regulated by maritime authorities, which could mean an easier path to commercialization, says Thalheimer.

Operating a seaglider will be more like driving a boat than piloting an aircraft, he says. 

And digital controls will manage stability, altitude and the transitions between modes in and above the water.

Regent's 12-passenger Viceroy would have a range of about 180 miles, based on existing technology, he says. But as batteries improve, it's expected that future aircraft could go as far as 500 miles. 

Yes, but: With $28 million in funding, Regent still has a long way to go. It won't enter full-scale prototyping until the end of 2023.

You might be flying like a pelican in a few years

12-passenger seagliders will fly like pelicans.

Rendering of a new type of low-flying aircraft that glides above the water like a pelican

Regent's Viceroy concept would glide above the water, linking coastal communities. Image courtesy of Regent Craft

Aviation

Denver

Axios Denver

President Biden on Wednesday nominated Denver International Airport CEO Phil Washington to lead the Federal Aviation Administration.

Why it matters: The incoming FAA chief faces a huge challenge because the nation's air travel system is currently crippled.

Travelers are returning to the skies at pre-pandemic numbers this summer but airports and airlines are struggling with staffing shortages.

The federal agency sits in the crosshairs, as airline executives blame delayed flights on a shortage of air traffic controllers.

Details: Washington has served as Denver's airport chief for only a year, after Denver Mayor Michael Hancock tapped him in June 2021, following former CEO Kim Day's retirement after 13 years. 

He previously led the Los Angeles County Metropolitan Transportation Authority and earlier the Regional Transportation District in Denver.

He served 25 years in the U.S. Army and carries two decades of experience in infrastructure building.

Of note: Washington faced weeks of questions and scrutiny after Axios Denver first reported that he was named in a criminal search warrant and connected to public corruption allegations — which the city initially denied. 

But the Denver City Council ultimately approved his nomination to lead Denver's airport, which is the third-busiest in the world.

Washington's salary stands at nearly $350,000 after a 30% pay bump approved in April. 

What to watch: Earlier this year, Denver approved Washington's vision to spend another $1.1 billion to complete a massive overhaul of the airport's Great Hall, doubling the project's construction cost and pushing back completion dates by four years. 

Should Washington get approved, his successor will inherit a massive project that could shape their legacy. 

Denver Members

Axios Denver Deep Dive

Denver Alerts

Picture of the Denver skyline with DEN written across it.

Get smarter, faster about what’s happening in your backyard with local reporters John Frank and Alayna Alvarez.

Axios Denver Thought Bubble

Biden nominates Denver airport CEO Phil Washington to lead FAA

The incoming FAA chief faces a huge challenge because the nation's air travel system is currently crippled.

Phil Washington poses for a portrait at Denver International Airport on June 29, 2021. Photo: Hyoung Chang/Denver Post via Getty Images

Phil Washington at Denver International Airport in June 2021. Photo: Hyoung Chang/Denver Post via Getty Images

Federal Aviation Administration (FAA)

A pandemic-era record number of people took to the skies over the Fourth of July weekend in the U.S. despite predictions of a hellish few days for air travel.

Driving the news: Nearly 2.5 million people passed through U.S. airport security checkpoints Friday, the most since February 2020. 

Another 2.2 million were screened Saturday and 2.1 million on Sunday.

TSA passenger throughput

Why it matters: The air travel system has been struggling with staffing shortages and other issues, making the past few days a big test for airlines, airports and the Federal Aviation Administration. 

By the numbers: 26.9% of U.S.-based carriers' arrivals were delayed Friday, per FlightAware, with an average delay of 51 minutes. Another 464 flights were canceled.

Of major U.S. airlines, JetBlue had the highest delay rate, at 42.7% of its planned Friday flights. Southwest Airlines had 33.8%, while United Airlines and American Airlines both had around 30%.

Delta Air Lines and American had the highest number of cancellations, at 117 and 113, respectively. That was only around 4% of their total planned flights, however.

Yes, but: Airlines struggled on busy holiday weekends even before the pandemic: Daily delay rates hovered around 20% on the Fourth of July weekend in 2019.

And generally good weather across the U.S. helped prevent major messes this July 4 weekend.

The backstory: Some airlines took extraordinary preemptive measures to manage demand.

Delta issued an unusual waiver that made it easier for people to rebook their July 4 travel to less busy days.

American, meanwhile, appears to have dodged a potentially catastrophic bullet: A system error led to pilot and crew staffing shortages for thousands of planned July flights, though the airline says it fixed the problem with minimal schedule disruption.

Some U.S. lawmakers, including Vermont Sen. Bernie Sanders, are calling on Transportation Secretary Pete Buttigieg to penalize airlines for delays and cancellations.

Airline execs, including Delta CEO Ed Bastian, are in part blaming the FAA, arguing that an air traffic controller shortage is contributing to the ongoing problems.

But there's only so much the Feds can do here. Buttigieg can't unilaterally force people to work for the airlines and airports to solve staffing shortages, and he can't stop bad weather from causing cascading delays and cancellations across the air travel network.

He can, however, put his consultant hat back on and offer tips for frustrated flyers.

Be smart: Airports and airlines are also struggling in Europe, Australia and Canada due to staffing issues and worker strikes. 

Plus, the airlines' staffing shortages predate the pandemic. Here's a story I did on the pilot shortage back in 2016. 

💬 Alex's thought bubble: Lawmakers missed a once-in-a-lifetime opportunity to reform air travel when they bailed out carriers earlier in the pandemic without incentivizing better on-time performance.

Air travel hits pandemic record despite airline chaos

Delays were up, but not catastrophically so

Illustration of a long line of retractable stanchions forming the area for a very long queue.

This Independence Day weekend is set to be the second busiest for travel since 2000 with a record number of Americans planning to hit the road, according to AAA's holiday travel forecast.

The big picture: Historically high gas prices aren’t expected to stop more Americans from driving, and the holiday weekend road trip is still on for more than 52% of consumers surveyed by The Vacationer.

July 4th weekend flight cancellations fueling road trips

High gas prices aren't stopping Americans from hitting the road for the holiday weekend.

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