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June 7 2016 9:00 AM

Uber Really Needs to Make Its Drivers Happier. Will These App Updates Do the Trick?

This post originally appeared on Business Insider

New changes are coming to Uber that should make drivers happier — without raising fares for riders. 

The new programs, which should roll out in cities nationwide this month, are likely a gesture of goodwill toward drivers after the company lowered its prices earlier this year, Bloomberg reports. Uber decreased prices in several U.S. cities in January in response to a slowdown after the holidays. The fare cuts were meant to incentivize riders to spend more on the app, meaning drivers would make more money, but drivers weren't happy. 

Here are some of the new changes for drivers coming to the app:

  • Drivers will be able to pause incoming ride requests before finishing their shift rather than manually declining them
  • Riders in several cities will now be charged starting two minutes after their Uber arrives in order to compensate drivers who have to wait for their riders 
  • Drivers will now be able to search for cheaper gas prices through the app, much like Google's Waze navigation app, which is widely used by Uber drivers 
  • Drivers can now enter their destination, which will allow them to be set up with a rider who's headed in a similar direction. This is a feature already offered on Uber's competitor, Lyft, but will only be available in about a dozen U.S. cities
  • Active drivers in some cities will also be able to get a discount on their own Uber rides when they're not working.   

According to Harry Campbell, who writes a blog for rideshare drivers, these changes don't go far enough to address driver's discontent. Drivers are most concerned about higher fares and the option for riders to tip within the app, he told Bloomberg.

June 2 2016 4:29 PM

McDonald's Is Testing Out Fresh Burgers Instead of Frozen

This post originally appeared on Business Insider

McDonald's is quietly testing fresh, never-frozen beef patties. The test is small — limited to just 14 restaurants in Dallas — but it could have major implications for the future of the company, and an analyst at Nomura thinks investors are underestimating "just how seriously McDonald's is evaluating" a larger rollout.

"Should McDonald's move to fresh beef on a much more widespread basis, we believe that it would likely lead to multiple positives (such as better-tasting burgers and quicker cook times, which in turn could mean speedier customer service)," the analyst, Mark Kalinowski, wrote in a research note. "We think this has the potential to be a big, big deal."

Nomura has placed a "buy" rating on the company as a result. McDonald's CEO Steve Easterbrook said Wednesday that there wasn't currently a large enough supply of fresh beef to expand the test nationally but that the company could start expanding it gradually region by region.

"Would that supply be there right now? No it wouldn't," Easterbrook said at a conference in New York. "It doesn't mean we shouldn't start to expand it. You can go region by region ... and develop it that way. We are pretty good at solving operational supply chain issues when we have a good idea." He said a larger rollout wouldn't require any major new equipment or expenses for franchisees. The company just has a few small issues to work out through the test, such as finding the best system for storage and handling of the beef to avoid any cross-contamination of the fresh, uncooked meat with other food items.

"We are trying to figure out the best way to segregate equipment like spatulas and scrapers for the grill," he said. But if there's enough enthusiasm for the fresh beef patties among customers, a rapid rollout isn't out of the question. "When there is a ground swell of enthusiasm and the operators are aligned behind it and the company is helping support that, suppliers have stepped up in an unbelievable way to deliver both the equipment and also the ingredients," Easterbrook said. "We have shown how quick we can move when we have a good idea."

June 1 2016 2:59 PM

Forbes: Theranos CEO Elizabeth Holmes' Net Worth Has Plummeted From $4.5 Billion to Zero

This post originally appeared on Business Insider

Theranos CEO Elizabeth Holmes has a net worth of zero dollars,according to Forbes, the go-to publication for assessing the wealth of the world's billionaires.

Theranos, the troubled blood-testing startup, last month voided two years' worth of blood-test results from its flagship Edison machines. This is just the latest in a series of blows for the company, which began with a high-profile exposé from The Wall Street Journal last year that called the company's underlying technology into question.

How did Forbes arrive at the $0 number?

FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion. That gives the company credit for its intellectual property and the $724 million that it has raised, according to VC Experts, a venture capital research firm. It also represents a generous multiple of the company’s sales, which FORBES learned about from a person familiar with Theranos' finances.

Based on this, Forbes concluded that Holmes' 50% stake in Theranos was worth nothing. This is because she owns common stock and would get paid out after investors who own preferred shares, according to VC Experts. So even if Theranos were liquidated, she would be unlikely see any of that $800 million.

May 31 2016 4:05 PM

Uber and Lyft Could Have the Biggest Impact in the South

This post originally appeared on Business Insider

Southern US metro areas present the biggest opportunity for Uber and Lyft to change your life. In a big report out Tuesday morning, Morgan Stanley analysts Michael Zezas and Adam Jonas look at the impact the proliferation of services like Uber and Lyft could eventually have on municipalities — and municipal financing — across the US.

Among many arguments the report makes, the most interesting is that Southern US cities are ripe for the biggest disruption amid increasing adoption of ride-sharing services like Uber and Lyft. So instead of getting in your car and driving to work, or replicating the Northeast commuting experience of driving or walking to a train and heading into the city, more sprawling metros could enact large-scale, commuter-targeted versions of what is basically Uber Pool — Uber's "carpool" option where you set a pick-up and destination and your driver is able to make pick-ups and drop-offs along the way.

The potential candidates for this kind of investment and experiment, according to Morgan Stanley's list, include Southern metros like Birmingham, Alabama; Nashville, Tennessee; Houston, and Atlanta:

screen_shot_20160531_at_12.42.29_pm

Morgan Stanley

These cities, the firm writes, are more likely to see benefits from increasing investment in developing networks of ride-sharing services rather than more common infrastructure investments like commuter rail lines. They possess the right density and a relative lack of methods of commuting other than driving.

Morgan Stanley notes that for each dollar spent on highways, governments at the federal, state, and local levels spend about 40 cents on mass transit projects (read: railways), totaling about $65 billion each year.

But 75% of Americans drive themselves to work, meaning there's a clear gap between infrastructure funding and infrastructure use.

Not only is investing in infrastructure that improves the ride-sharing experience within a metro area likely more beneficial to existing resident habits than building commuter rail lines, there's also a chance for more economically efficient investments given the relatively lower cost of maintenance for roads compared to railways and airports:

screen_shot_20160531_at_1.17.32_pm

Morgan Stanley

Here's Morgan Stanley's hypothetical:

In this scenario, autonomous vehicles provided by shared mobility companies increase the usage of other transportation methods. Travelers, no longer having to worry about the 'last mile' after arriving at a major transportation hub, embrace 'just in time' pick-ups as shared mobility companies analyze demand and adjusted resources real time to transportation hubs for fast, cheap, and almost always there availability just as you arrive.
Cities that currently have little tangible mass transit infrastructure provide subsidized accounts for shared services to low income and disabled travelers, saving significant costs over running their own local systems but maintaining the positive social externalities that come with public transit.
With less need to fund traditional mass transit, capital is diverted to roadways, as states and cities revamp old roads or build new ones to keep up with the increase in autonomous vehicles and, over time, the need to integrate vehicle to infrastructure communication. Artery roads with automated intersections lead to less foot traffic, leading to fewer stops and storefronts along roads. Residential, shopping, and commercial districts become segregated and strategically placed destinations dictated by zoning.

So imagine a future metro area with hubs of walkable, dense residential and shopping districts connected by easily-traversed spokes full of on-demand, self-driving cars to bring you "off campus."

Another upshot is that Southern cities have the right weather for this kind of driving-intensive investment as snowfall is relatively rare compared to cities like New York, Boston, and Chicago (which all have fairly robust rail options).

"Our SHED metric suggests the urban south may be more conducive to integration of shared mobility into public transportation policy," the firm writes.

Morgan Stanley adds (emphasis mine):

Southern metropolitan areas tend to be dense enough to support the economics, but not too dense to the point that mass transit (i.e., rail) is a better option. An added benefit that is not captured in our metric is that the weather in these areas is conducive to shared mobility development. This is because of limited testing in snow and ice conditions. Commuters in these regions are also more reliant on cars, and cities offer expansive road networks.
In contrast, the New York-Newark-Jersey City, NY-NJ-PA MSA presents a more challenging case. In terms of size, density, and public transit utilization, no other area comes close. The region accounts for nearly two-thirds of the planned public transit infrastructure spending over the next five years. In that sense, we see traditional transit continuing to play a major role in New York City and northern New Jersey, regardless of how shared mobility develops there.

And thinking through this intuitively, the conclusion makes complete sense.

In New York, for example taking the train to work in many areas of the region is effectively theonly viable option for commuting transportation.

But in most other regions you get in a car and drive by yourself. Morgan Stanley illustrated this with a chart breaking out the counts of metro areas by number of people who drive to work alone:

screen_shot_20160531_at_12.49.14_pm

Morgan Stanley

May 27 2016 5:25 PM

The CEO of McDonald’s Says He Won’t Replace Workers With Robots

This post originally appeared on Business Insider

McDonald's isn't ready to swap workers for robots just yet. According to McDonald's CEO Steve Easterbrook, the fast-food chain won't replace workers with machines—even if restaurant operators have to pay the $15 hourly wage that protesters are demanding. "I don't see it being a risk to job elimination," Easterbrook said on Thursday at McDonald's annual meeting when asked if rising labor costs would force the chain to cut jobs, replacing workers with kiosks and "automatic pancake machines."

Instead, Easterbrook said, the company would look to automating food preparation, allowing more employees to work directly with guests and boosting customer service. "Ultimately we're in the service business, and we're competing with other opportunities for people to eat and drink out," says Easterbrook. "Frankly, we will always have an important human element."

The CEO's remarks come in response to many people—including a former McDonald's CEO—arguing that increasing minimum wage means the end of entry-level jobs at fast-food chains. "It's cheaper to buy a $35,000 robotic arm than it is to hire an employee who's inefficient making $15 an hour bagging french fries," former McDonald's USA CEO Ed Rensi said in an interview on Tuesday on the Fox Business Network's Mornings with Maria. "It's nonsense and it's very destructive and it's inflationary and it's going to cause a job loss across this country like you're not going to believe." Rensi served as McDonald's USA's president and chief executive from 1991 to 1997, and has spoken out extensively against increasing the minimum wage.

"I can assure you that a $15 minimum wage won't spell the end of the brand," Rensi wrote of McDonald's in Forbes in April. "However it will mean wiping out thousands of entry-level opportunities for people without many other options." Rensi isn't alone in this belief. "With government driving up the cost of labor, it's driving down the number of jobs," Andy Puzder, CEO of Carl's Jr. and Hardee's, told Business Insider. "You're going to see automation not just in airports and grocery stores, but in restaurants."

However, Easterbrook insists that, even as McDonald's explores automation, workers do not need to be concerned about losing their jobs if minimum wages increase. So far, his track record at McDonald's backs his argument. In the past year, McDonald's increased investment in employee wages and benefits has already had a significant impact on customer service—one of the most problematic parts of McDonald's business. According to Easterbrook, customer satisfaction scores were up 6 percent in the first quarter, compared to the same period last year.

Automation is an increasingly important aspect of the restaurant industry. However, if Easterbrook is correct, the rise of robots doesn't mean the end of fast-food jobs. It simply means business can become more efficient, as employees are more fully dedicated to improving customers' experiences—not just flipping burgers.

May 26 2016 1:34 PM

How This Beauty Startup Sells Products With 10,000-Person Wait Lists

This post originally appeared on Business Insider

Emily Weiss didn't set out to start a beauty company when she launched her career in editorial years ago. Today, though, Weiss is the CEO and founder of Glossier, a cult-status beauty brand that has had 10,000-person waiting lists for two of its products.  

The former art student and Vogue staffer was always interested, first and foremost, in storytelling and content. But she was bothered by her experience with beauty brands, which she felt were talking "at" her. Beauty shopping, she felt, lacked the context of real women and real experiences.

"There's this yearning to connect with other women," she said to Business Insider. So she started a blog in 2010, called Into the Gloss, where she candidly interviewed women—from celebrities like Kim Kardashian to makeup moguls like Bobbi Brown and models like Karlie Kloss—and highlighted their bathroom "top shelves" and daily routines.

The blog quickly became a popular site for beauty mavens. Even major women's magazines, Weiss noted, did not have the same level of commenting, which would reach well into the hundreds as women shared their experience of different skincare and makeup products, and swapped suggestions and support.

Today, the site has 1.5 million unique views each month. From there, it only made sense to pivot into the product world—to use the collected knowledge of her community to craft the products women were actually seeking.

Glossier (pronounced gloss-ee-ay) was born in 2014, with initial backing from Forerunner Capital, a women-led venture capital firm. Thrive Capital, previous investors in Warby Parker and Instagram, led the company's $8.4 million Series A funding round in November 2014. With only four products in the initial launch, it was a small-scale step into a big game. The global beauty market, after all, is worth upward of $250 billion.

Two main things set Glossier apart. The first is the brand identity. From the get-go, Weiss has been meticulous about maintaining a unified look and feel for all products, messaging, and marketing. "Brand is really, really important. It's kind of everything," Weiss said. As a creative—not a technical—founder, it's her zone. There's a signature shade of Glossier pink; there's a focus on images of diverse women with dewy skin and minimal makeup; there's a cheeky, millennial-facing voice. Packages come with playful Glossier stickers. 

The second thing is the preeminence of the digital community and the customer feedback loop. "There are a handful of beauty conglomerates, and it's difficult for them to innovate," Weiss said, given their size and their distance from consumers.

On the other hand, Glossier is a "two-way conversation," with the product team depending on the user community. In fact, Glossier invited about 100 of its top customers to be part of a group Slack channel. They exchange over 1,100 messages every week, Weiss said. Glossier's marketing, meanwhile, has been motivated by user-generated content, which Weiss said does "more than we ever could," as users post Instagrams and hashtag their beauty habits.

"Beauty has really gone online, because that's where the customer is," Weiss said. She's on her smartphone and on social media all day long; she's not spending time browsing through stores, but instead checking out YouTube beauty tutorials and Instagram snaps.

Diversity is a big part of their marketing campaigns, too. The result has been favorable reviews and beauty awards for products ranging from concealer to lip balm and moisturizer. Weiss referenced a minimal 1 percent return rate on products (they do not sell through any third parties currently, and do not plan on doing so any time soon).

Her biggest frustration? Not being able to keep up with demand. From those 10,000-person waitlists to the huge international demand that the company is not yet able to satisfy, delivering at scale has been the primary stumbling block. Financially, Weiss said, Glossier is doing just fine; they reforecasted their revenue goals twice already this year, based on month-over-month growth.

Weiss said they are trying to help women feel more comfortable in their own skins, instead of using makeup as a "mask." It's all about celebrating difference and individuality, not celebrating, well, celebrity. If that idea can take root, Weiss said, then Glossier is positioned to be as big a beauty brand as any of the major global players. "I hope that takes off, because that will mean something bigger than Glossier," she said. 

May 25 2016 7:48 PM

Google’s Plans for Self-Driving Cars Are Serious Enough That It’s Setting Up Shop Near Detroit

This post originally appeared on Business Insider

Google is building a new self-driving car research and development center near Detroit to be closer to current and future partners. The Novi, Michigan, space will help Google "collaborate more easily and access Michigan's top talent in vehicle development and engineering," according to a Google+ post.

The news comes not long after Google announced that it's working directly with an automaker for the first time through a partnership with Fiat Chrysler to make a fleet of self-driving minivans. Execs have said that Google doesn't intend on manufacturing its own self-driving car models, so planting a flag near the auto-industry capital of America makes a lot of sense as it pushes to get its technology out of testing and into the real world. The center will open later this year. 

Here's the full post:

May 24 2016 3:21 PM

Ads in Google Maps Are About to Get Pushier

This post originally appeared on Business Insider

Road trip time! You plug your destination into Google Maps and start cruising down your route when a purple pin appears, showing you the location of the nearest McDonald's and offering a few dollars off on a combo meal if you stop. "Add to your route," it prompts. Well, you were getting hungry... 

This is the new ad experience that Google is testing out in its Maps app to help businesses entice you into visiting their coffee shop, gas station, pharmacy, whatever. "A Promoted Pin for McDonalds might convince someone to stop to eat," Google ads VP Jerry Dischler explains. The company has had some form of advertising in Maps since 2010 but it's now building out its Promoted Pins to be much more prominent, and adding new features for advertisers, like letting them list special offers or a local product inventory search bar (so you can check if the Walgreens down the street has the right kind of contact solution before you actually go there).  

You'll also see more Promoted Pins when you make a search like "coffee shops near me." Although Google says that its biggest priority is making sure the ads are useful and unobtrusive, they'll be a good little reminder for users about why Google offers nearly all of its services for free: It's selling your eyeballs. Dischler says that, for now, Promoted Pins won't be personalized (meaning Google won't use your location history to suggest certain businesses) and if you're listening to navigational directions from your phone, the advertisements won't come on the audio.

Google is due to announce this next generation Maps ad at its annual Performance Summit on Tuesday. Google's big pitch to advertisers is that it's the best partner for the "mobile-first" world because its combination of search and maps data can show when its ads actually drive people into stores. 

That's actually been Google's pitch for a while, but now it's showing off proof of success: Since it introduced its "store visits" metric two years ago, advertisers have measured over 1 billion visits. (Google knows when people who've interacted with an ad actually followed up with a store visit provided they have their location history turned on—learn how to turn it on or off here).

"Mobile has been something that was going to happen or was happening, and this is the year that mobile has firmly happened," Sridhar Ramaswamy, SVP of ads and commerce, says. "There are are trillions of searches on Google every year and over half of those searches happen on mobile." You can read about the other ad updates Google is making here. 

May 18 2016 12:40 PM

iTunes Deleted Songs From This Man’s Music Collection—so Apple Engineers Paid Him a Home Visit

This post originally appeared on Business Insider.

Apple sent two engineers to a customer's house to troubleshoot after he wrote about how iTunes deleted swathes of his music collection, and his story subsequently went viral.

The Cupertino, California-based company is now rolling out an update to iTunes in an attempt to solve the issue.

James Pinkstone had detailed his frustrating experiences with Apple's music software in a blog post earlier this month titled "Apple Stole My Music. No, Seriously."

In it, he laid out how 122 gigabytes of music vanished from his library after he signed up for the subscription service Apple Music.

"iTunes evaluated my massive collection of Mp3s and WAV files, scanned Apple's database for what it considered matches, then removed the original files from my internal hard drive," he wrote. "REMOVED them. Deleted. If Apple Music saw a file it didn’t recognize—which came up often, since I'm a freelance composer and have many music files that I created myself—it would then download it to Apple's database, delete it from my hard drive, and serve it back to me when I wanted to listen, just like it would with my other music files it had deleted."

Pinkstone's story was subsequently picked up by the tech press, with opinion divided as to whether this was a flaw, or if he had—inadvertently—opted into this service and Apple Music was working as intended.

Apple has since said it was a bug, and it rolled out an update to iTunes that should address the issue. "In an extremely small number of cases users have reported that music files saved on their computer were removed without their permission," the company said in a statement provided to TechCrunch. "We're taking these reports seriously as we know how important music is to our customers and our teams are focused on identifying the cause. We have not been able to reproduce this issue, however, we're releasing an update to iTunes early next week which includes additional safeguards. If a user experiences this issue they should contact AppleCare."

To get to the bottom of exactly what went wrong, Apple sent two of its engineers to visit Pinkstone. He was given a special version of iTunes, he wrote in a blog post, "in the hopes that the deletion would again occur ... If something did go wrong ... this version of iTunes would document what happened in more detail than the consumer version could."

Ultimately, Apple didn't manage to reproduce the issue—as it says in its statement. As Pinkstone wrote:

After lunch, we spent hours troubleshooting, but the problem eluded us. This time, the files remained, which was just one of many confounding elements of my whole saga. The problem wasn't cut-and-dry, therefore has proven difficult to replicate. For example, one of the many confusing things about the initial file loss was that only most of my music files had disappeared. Most, but not all. To further muddle the issue, the missing—and remaining—files had little in common; some were WAV, others Mp3, others protected AAC files that I'd purchased when iTunes went through its 2003 through 2009 "controlling boyfriend" phase. Genre, size, and artist name varied greatly among the missing files, as did date added. There was no discernible pattern.

iTunes and Apple Music have been accused of accidentally deleting customers' music before—notably shortly after launch, when Apple blogger Jim Dalrymple had nearly 5,000 songs deleted. He got face time with Apple employees, too, in an attempt to fix it. Let's hope the most recent update from Apple fixes the issue for good.

May 17 2016 4:17 PM

Why Apple Is Suddenly Opening Its Wallet for China

This post originally appeared on Business Insider.

Apple is in the midst of a charm offensive in China. Facing unexpected scrutiny from the Chinese government, the American technology giant is redoubling its efforts to win the hearts of the Chinese authorities and consumers.

China has never mattered more to Apple—and it's willing to spend big bucks to prove it.

With the largest population in the world, it holds huge potential for Apple. After years of growth, the smartphone market is starting to slow amid an economic downturn—but it is still a vast market.

However, all is not well. Last quarter, amid Apple's first ever iPhone sales decline, its smartphone sales in the Greater China area dropped a nasty 26 percent.

Meanwhile the Chinese government, which has historically tolerated Apple's rise, is starting to take a dimmer view of the Cupertino company. In April, China forced the shutdown of Apple's iBooks and iTunes Movie stores in the country six months after their launch there.

A new report from The New York Times on Monday now asserts the Chinese government is increasing the number of security reviews that Apple—and other foreign tech companies—must undergo.

Some accuse the Chinese government of being motivated by protectionism. "In this particular case, the digital books and movies offered by Apple are considered a potential threat to the Chinese government’s ongoing campaign of keeping out Western liberal ideas,"Minxin Pei wrote for Forbes last month. "In addition, the notion that Apple could dominate China’s digital content market must also have offended Beijing’s protectionist instincts."

Whether the Chinese government's actions are motivated by protectionism or genuine security concerns, Apple can't afford to have its products restricted in one of its largest markets—especially at a time when broader questions are being raised about the company's future growth prospects.

So Apple is throwing money at the problem.

Dipping into its vast, vast reserves of cash, last week Apple made a rare $1 billion investment into the Chinese ride-hailing service Didi Chuxing—a bitter rival of Uber in China. Many took the funding as a peace offering on Apple's part. 

Sina Tech news agency reporter Jia Jinghua told the Financial Times that Apple CEO Tim Cook “is clearly keen to curry favor with Chinese authorities and with Chinese markets. He will take advantage of the latest investments into Didi to pay visits to key ministries."

Cook has also taken the opportunity to visit China in a publicized tour, posing for photos with Didi Chuxing president Jean Liu, and visiting app developers in the country.

The latest move from Apple: An update for music-making app GarageBand targeting the country that "celebrates Chinese music," including traditional instruments, Chinese musical loops, and language localization.

If its cash injections don't win over the Chinese authorities, then the sweet synthesized sounds of Chinese musical instruments might.

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