Apr 29, 2020

Axios Login

Ina took yesterday off, so you've got me, Axios tech managing editor Scott Rosenberg, at the controls this morning.

  • Ina will be doing a Twitter Q&A today at 2pm ET on how the coronavirus is affecting the tech industry. Tweet here using #AskAxios and #AskAxiosIna. A number of other Axios writers are also taking part.
  • Also, Axios will be hosting a live virtual event Thursday on the impact of the coronavirus on modern work life, with Slack CEO Stewart Butterfield and Verizon CEO Hans Vestberg, along with Axios co-founder and CEO Jim VandeHei and business reporter Erica Pandey. The event is April 30 at 12:30pm ET. Register here.

Today's Login is 1,372 words, a 5-minute read.

1 big thing: The pandemic flattens the sharing economy

Illustration: Sarah Grillo/Axios

The "sharing economy" — as embodied by companies like Uber, Airbnb and WeWork — is in critical condition, thanks to the coronavirus pandemic.

Why it matters: Basic assumptions about the evolution of human behavior in the digital age are melting under the pressure of COVID-19, requiring us to recalibrate how we envision the tech-enabled future.

Driving the news:

The pandemic has brutally shut down these companies' fundamental bets.

  • Right now Americans simply aren't leaving home much, and when they do, they will drive in their own cars if that's an option. (They may still prefer ride-hailing to mass transit, or be left with no other option in places where transit routes have been drastically cut back.)
  • Minimal travel means little demand for short-term rentals. And thanks to work-from-home orders, there's little demand for coworking space.

The big picture: The sharing economy — an idealistic vision birthed and branded in the late 2000s, during the last economic crisis — held that Americans were moving beyond an ethos of acquiring and protecting stuff.

  • Instead, we would willingly share use and enjoyment of space, vehicles, and tools, saving money to buy memorable experiences and fulfilling leisure activities.
  • Software could make this possible by widely distributing access to information about the availability of those spaces, vehicles and tools, and by building reputation ratings and "trust proxies" to put us at ease with relying on strangers.
  • In the early days of the web, Americans got comfortable using their credit cards online and selling used appliances on eBay. Sharing-economy entrepreneurs aimed to extend that approach everywhere.
  • As a 2014 Wired cover story put it, "We are entrusting complete strangers with our most valuable possessions, our personal experiences — and our very lives. In the process, we are entering a new era of internet-enabled intimacy."

Yes, but: The companies that emerged to deploy this vision in American cities, driven by a startup ideology of "scaling fast" and enriching investors, turned it into something faster and nastier — a grinding gig economy with a flashy app front-end.

  • The billion-dollar sharing giants were all about squeezing new efficiencies out of existing human and material assets, and then trying to squeeze a profit from fees on the margins.
  • That was always a tough business proposition: Uber and Lyft, which are both now publicly traded, have never turned a profit.
  • Now, even if these firms bounce back in the post-lockdown world, they've lost all room to maneuver.

What's next: In some ways, the pandemic opens a door to the revival of the sharing economy's original, grassroots ideals of community cooperation and peer-to-peer trust.

  • There's a lot of flour, sugar and yeast passing from neighbor to neighbor these days, even if we're just leaving it on one another's doorsteps.
  • We may not rush back into shared spaces — but we've experienced a profound demonstration of interdependence.
2. AI takes on taxes

Photo: Courtesy of Salesforce

A team of researchers at Salesforce has been working to tap artificial intelligence to identify which tax rates would best achieve a balance of productivity and economic equality, Ina reports.

Why it matters: It's hard to do real-world experiments actually testing out changes in tax policy. Assuming the models work and can add complexity over time, AI could allow economists and regulators to test out lots of approaches to find one that best matches their desired outcome.

How it works:

  • Salesforce is using a technique known as reinforcement learning, the same basic approach that Google and others have used to teach computers to be masters at games like Chess and Go.
  • Salesforce's "AI Economist" uses a collection of virtual AI agents designed to simulate how real people might react to different taxes.
  • In the simulation, each AI agent earns money by collecting and trading resources and learns to maximize their happiness by adjusting their movement, trading and behavior.
  • At the same time the AI planner, or economist, learns to optimize taxes and subsidies to promote objectives like increased output and income equality.

"This is something you can't do in real world," Salesforce chief scientist Richard Socher said in an interview. "You cannot change your policies a million times.”

Background: Salesforce began the effort to show that the same technology that can teach computers to play games can also help address serious human challenges.

  • The project has been underway for about a year, but Salesforce decided to go public after it showed signs the approach is working.

Yes, but: The research is still in its early stages, operating against a limited number of variables.

  • "The situations aren't realistic enough right now," Socher said. "The simulations over next couple years need to get a lot more granular, specific and large scale."
3. Google beats the Street despite pandemic

Google parent company Alphabet reported a total revenue figure of $41.16 billion Tuesday, beating Wall Street expectations, Axios' Sara Fischer reports.

Yes, but: The company still reported a slowed advertising growth rate compared to last quarter, due to the decline of the ad market caused by the coronavirus. Google makes the vast majority of its total revenue from ads.

Why it matters: Investors were eager to see how well Google would fare this quarter, given that it's by far the largest advertising-powered company in the world.

  • Google's results signal some relief for the ad-based tech sector, although analysts still predict a very rocky road ahead.

Be smart: These first quarter revenues don't reflect a full quarter of economic impact from the virus crisis. Google and other companies didn't begin to experience major ad pullback until March, when stay-in-place orders began.

  • Google in particular has been hit hard by the reduction in ad spending by travel companies like Expedia and Booking Holdings (owner of booking.com and kayak.com).

Meanwhile: CEO Sundar Pichai told Google employees not to expect a return to the company's offices until June 1 at the earliest, and any return will be staggered.

  • Also, moving in on the success of Zoom, Google announced it would offer its Meet videoconference tool free to anyone with a Google account, for calls of any length for up to 100 users. All participants need Google accounts to join calls.
4. How Marc Benioff wrangled protective gear

In mid-March, the chancellor of the University of California-San Francisco, a leading medical school and hospital system, reached out to Salesforce CEO Marc Benioff for help obtaining the personal protective gear UC-SF's medical teams desperately needed.

Driving the news: As David Gelles tells the story in the New York Times, Benioff, a prodigious benefactor of hospitals in the area, mobilized a $25 million operation with the help of partners at FedEx, Walmart, Uber and Alibaba.

  • The effort has already delivered 15 million units of protective gear and is on track to obtain a total of 50 million for use in California, New York and other states.

Gelles writes:

  • "The relative ease with which Salesforce acquired so much protective gear stands in sharp contrast to the often chaotic government efforts."
  • "While states have had to compete against one another for scarce supplies and the strategic national stockpile of protective gear is depleted, Mr. Benioff and his team simply called up their business partners in China and started writing checks."

The project's participants dubbed the effort "Maskforce."

The big picture: Apple, Tesla, and many other firms have also organized efforts to find or manufacture protective gear.

5. Take Note

On Tap

  • Earnings reports today include results from Facebook and Microsoft, as well as Qualcomm, Spotify and eBay.

Trading Places


6. After you Login

More fun from the zoo as some geese in Philadelphia got to go visit the primates.