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The upside-down delivery app world
Good morning! This Thursday, Grubhub finds a buyer that isn't Uber, a TikTok clone flies too close to the sun, and Amazon takes a (small) stand on facial recognition.
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People Are Talking
Too many people tweet before they read, Twitter's Kayvon Beykpour said, so the company's testing a way to fix it:
- "It's easy for links/articles to go viral on Twitter. This can be powerful but sometimes dangerous, especially if people haven't read the content they're spreading. This feature (on Android for now) encourages people to read a linked article prior to Retweeting it."
Marc Benioff would like to dampen your hopes for office life going forward:
- "It'll be more sterile. It'll be more hospital-like. Things that people love, like gummy bears, huge jars of gummy bears everywhere, aren't going to be there."
In the post-COVID world, consumers will care more about sustainability than ever, Forerunner Ventures' Kirsten Green said:
- "That is just something that has come more clearly into focus over time. Perhaps people are recognizing it even more while the world has been operating a bit slower and there are reports of cleaner environments or more wildlife."
The Big Story
A new delivery giant is born
$7.3 billion. That's how much Grubhub was valued at by Just Eat Takeaway.com (which we'll just call JET because, honestly, that name) when it announced its plan to acquire the company yesterday. That means Uber's attempt at the acquisition was officially nixed, reportedly over antitrust concerns — and squabbling over said antitrust concerns. Grubhub skirts a regulatory headache by instead merging with JET, which doesn't yet have a foothold stateside.
The deal makes sense for another reason too, as Protocol's Shakeel Hashim writes:
- Like Grubhub, JET's primary focus is a marketplace-based model, where restaurants handle the actual delivery. Uber Eats, on the other hand, pays its own drivers — a business model that Grubhub executives famously said would never generate significant profits, before eventually trying it anyway.
- A big question now will be whether Grubhub continues to do its own deliveries — something that JET has also experimented with — or if it retreats to its once-successful marketplace-only model.
Even in saner times, the restaurant business is tough – and the delivery-app business model may be even tougher. And these are definitely not sane times. Let's just run a few numbers:
- 60% of San Francisco restaurants are losing money by staying open for takeout and delivery during COVID-19 restrictions, according to a new survey. Now more than ever, restaurant-owners are coming face-to-face with the true cost of delivery apps.
- 20-50% of full-service restaurants won't make it out of the pandemic at all, according to Anthony Anton, president and CEO of the Washington Hospitality Association.
- 80% of Grubhub's orders are generated by small-medium-sized businesses, Grubhub executives said in a letter to shareholders. You know, the ones that are quickly realizing they can't afford to keep using Grubhub, or won't be around to do so.
And let's not forget that delivery has been a money pit for … everyone so far:
- Uber loses about $3.36 on every Eats order, a study last year found. And that's despite taking 20-30% of the price of each order.
Best-case scenario? Delivery services are making life harder for restaurants. Worst-case, they're driving the restaurants – and themselves – straight out of business. But at least customers get to pay delivery and service fees that turn a $19 pizza into a $42 pizza!
- JET and Grubhub, which I'm assuming will end up known as Just Eat Takeaway.com Grubhub LLC Incorporated or something just as catchy, should both be better off for working together. But it's not clear that the food industry can sustain the delivery industry. And that's still a problem.
Amazon powers down its facial recognition tech
OK, it's officially a trend. First it was IBM, the Democrats and Boston. And now AWS has put a one-year moratorium on providing its Rekognition facial-recognition software to law enforcement.
- AWS said it's making the change because Congress might actually be ready to regulate the tech. "We hope this one-year moratorium might give Congress enough time to implement appropriate rules, and we stand ready to help if requested," the company said in a blog post.
Amazon's a huge player in the facial-recognition business. (Unlike, say, IBM.) Rekognition is popular with police forces across the country, Protocol's Emily Birnbaum and Issie Lapowsky write — even Amazon doesn't know how many PDs use it.
- But Amazon's not getting out of the business entirely: It'll keep working with other customers, just not police and other law enforcement. And its statement doesn't mention Ring, which has been working on its own facial-recognition tech.
- Fight for the Future's Evan Greer called the whole thing "a public relations stunt." But she, too, acknowledged the trend: "It's also a sign that facial recognition is increasingly politically toxic, which is a result of the incredible organizing happening on the ground right now."
I don't think Amazon will be the last company to make a move like this. But in case you're wondering if facial recognition's days are over? Clearview AI would like a word:
- "Clearview AI is also committed to the responsible use of its powerful technology and is used only for after-the-crime investigations to help identify criminal suspects," CEO Hoan Ton-That said. "It is not intended to be used as a surveillance tool relating to protests or under any other circumstance." So that should make everyone feel better!
The Transformation of Work Summit
Protocol's Transformation of Work Summit
How can tech help identify and match in-demand skills with job opportunity? Speakers include Future of Work Caucus co-chairs Representative Lisa Blunt Rochester (D-DE), Representative Bryan Steil (R-WI), CEO of Jobs for the Future Maria Flynn, and CEO of Colorado State University Global Dr. Becky Takeda-Tinker. Presented by Workday.
The fast rise and faster fall of a TikTok clone
TikTok is officially establishing its place on the Mount Olympus of social media — but you knew that already. (Personally, I've gotten really into Gardening TikTok, which is both oddly calming and the only reason any of my plants are still alive.) Anyway, with such power comes … copycats.
Zynn looked like it had a chance. It's another big video platform, funded by another deep-pocketed Chinese company, Kuaishou. And it had one clever trick: paying users to watch videos. It rode that idea all the way to the top of the App Store … and then crashed out of it.
- Google removed Zynn from the Play Store after Wired reported that the app was filled with videos reposted from other services, particularly TikTok.
- Apple told the BBC it's investigating the app, but as of now it's still #1 on the App Store. All the reviews are hilarious: Everybody knows it's just a copy of TikTok, but here use my referral code so we both get some Amazon gift cards before this all falls apart!
Josh Hawley, the Senate's unofficial Guy With Thoughts About Apps, wrote a letter to the FTC calling Zynn's business model "a textbook predatory-pricing scheme, one calculated to attain immediate market dominance for Zynn by driving competitors out of the market."
- The same could be said of TikTok, too. While it doesn't have the same business model, it does have virtually unlimited financing thanks to ByteDance, and the company has made clear that it's willing to spend in order to win in the U.S. market. And that makes a lot of officials nervous.
Number of the Day
That's how much a group of U.S. lawmakers want to spend on bringing semiconductor manufacturing to the United States. The CHIPS for America Act (the backronym is strong with this one) includes grant programs for new facilities, tax credits for equipment purchases, increased funding for R&D and more. The number is big but not surprising: The Trump administration has made clear that it thinks the U.S. chip industry must catch up with China, Taiwan, Korea and elsewhere, and sees the situation as a national security issue.
In Other News
- On Protocol: 250 Microsoft employees are calling for their employer to cancel police contracts and support defunding the Seattle PD — but will anything come of it? History says probably not.
- Amazon will offer small business credit to sellers on the platform. It's working with Goldman Sachs to grant credit lines of up to $1 million — because in case you hadn't noticed, the tech industry loves Goldman Sachs.
- The EU wants more details from tech platforms about how they're fighting coronavirus misinformation. Its new guidelines encourage Twitter, Instagram, YouTube and others to "report monthly on their actions to fight coronavirus related disinformation and to promote authoritative content."
- Bookmark this: Ars Technica has a very good Section 230 refresher — and as this fight gets bigger and more confusing, because 230 is not DMCA and nor is it any of the other 800 things people think it is, a refresher is a good thing.
- Developers are starting to test the newest version of Android, which makes a big bet that you're going to use your phone more to interact with the real world — paying for stuff, controlling other devices, and the like. It also contains more security settings, because everyone needs more stuff to absentmindedly tap "OK" on.
- There's a stock battle raging between Tesla and Nikola. Newly public Nikola has been spiking in the last week (despite having zero dollars in revenue, because the markets are crazy). But a memo from Elon Musk saying Tesla is all-hands-on-deck making its Semi sent Nikola down and Tesla up again. Now the short sellers, who have been after Tesla for years, are circling Nikola instead.
One More Thing
Angry Birds: Murder Mystery
True crime is the genre of the moment. The Netflix docs! The podcasts! The … cartoon games from the maker of Angry Birds? Sure. Rovio's new game, Small Town Murders, takes place in a town called Thornton Grove, and kicks off with a dead body and a plucky protagonist out to solve the crime. To solve the grisly mystery, you have to … do a bunch of Candy Crush-style puzzles. Look, it sounds dumb, but I downloaded the game an hour ago and had to tear myself away to come write this. Rovio might be onto something.
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