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On-demand valet service Luxe, which last year was valued at more than $100 million by investors like Hertz, has quietly "paused" its service in Los Angeles and Austin. This comes a couple of months after it shuttered service in Seattle, and as the San Francisco-based company works to rebut additional parking options.

As a result, it's laying off employees in those cities, as well as some employees who are part of its central operations, such as customer service reps, said co-founder and CEO Curtis Lee.

Why it matters: So-called "on-demand" companies exploded in popularity a few years ago, but many have since learned that it's no easy business. Several have shut down or significantly adjust their models, including some of Luxe's competitors.

The new plan: As Curtis tells it, Luxe trimmed down its city count to just San Francisco, New York, and Chicago because it doesn't want to manage too many cities as it rolls out its new parking options—valet stands and direct garage parking. When customers request a valet via the Luxe mobile app, they'll be given the option of its classic valet pickup, dropping it off at a stand closest to their destination, or driving it to a partner garage.

  • While Luxe isn't giving up on its classic valet service, concentrating valets in a few central locations will be easier and faster than coordinating dispatch to every customer's exact location. As for the garage option, while some locations may be staffed by a valet, it eliminates most labor costs.
  • The company has also just hired a new head of operations who was previously at Wal-Mart.

What about the money? Luxe has raised more than $75 million in funding, with $50 million of that in a round last year led by Hertz. According to Lee, the company still has "tens of millions of dollars in the bank."

  • Lee also tells Axios that its classic door-to-door service is "profitable," which he defined as making a profit when accounting for a city's own local costs (valets, local office, local managers and staff, etc.) but not including centralized costs like headquarters and marketing. As an overall company, Luxe is still not profitable.

Go deeper

Parkland shooting victims' families settle suit with school district

A makeshift memorial outside Marjory Stoneman Douglas High School in Parkland, Florida, on Feb. 14, 2020. Photo: Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images

Families and survivors of a 2018 mass shooting at a high school in Parkland, Fla., reached a $25 million settlement in their lawsuit against the Broward County school district Monday, per the South Florida SunSentinel.

Why it matters: A deal was reached in the suit over the massacre at Marjory Stoneman Douglas High after the school district won a Florida Supreme Court ruling that could have capped damages at $300,000 in total without approval from the state legislature, AP notes.

Texas Republicans pass new congressional maps in their favor

Photo: Matthew Busch/Bloomberg via Getty Images

The Texas House voted 84-59 late Monday to approve new congressional district maps that reduce the number of districts with Black and Hispanic majorities, per the Texas Tribune.

Why it matters: The legislation comes after recent census figures found Texas' growing diverse population doesn't bode well for Republicans, who then worked to protect incumbents with the redrawn maps.

2 hours ago - World

North Korea's military fires another ballistic missile into sea

A woman in Seoul, South Korea, walks past a television image if North Korean leader Kim Jong-un. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired at least one ballistic missile into the sea off its east coast on Tuesday, per multiple reports.

Why it matters: Pyongyang's latest in a series of recent missile launches happened hours after U.S. officials emphasized their commitment to restart negotiations on North Korea's nuclear weapons program, which have stalled since talks broke down during the Trump administration, AP notes.