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Lyft riders tipped 8% more on average in 2017

Lyft drivers have earned more than $500 million in tips to date, Lyft announced today. Since fleshing out tip functionality last June to encourage higher tip amounts, tip averages increased by nearly 8 percent in 2017 compared to 2016.

While it took four years for Lyft to reach $100 million in tips for its drivers, more than half of all the tips were from 2017. Uber, which has been around longer than Lyft, rolled out tipping just last June. As of August, Uber hit $50 million in tips.

Lyft, of course, is not available in nearly as many markets as Uber. Lyft only operates in the U.S. and Canada, while Uber operates in the U.S., Canada, Central and South America, Europe, the Middle East, Africa, East Asia, South Asia, Southeast Asia, Australia and New Zealand. So, more continents and cities means more opportunities for tipping.

Lyft’s tipping update comes shortly after the company shed some light on how much drivers make on the ride-hailing platform. On an hourly basis, Lyft says it’s most certain about how much money drivers make once they’ve accepted and completed a ride (periods two and three). In this type of scenario, Lyft says median earnings are $29.47 per hour, nationwide. In Lyft’s top 25 markets, that’s $31.18 per hour.

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affordable housing

Shared housing startups are taking off

When young adults leave the parental nest, they often follow a predictable pattern. First, move in with roommates. Then graduate to a single or couple’s pad. After that comes the big purchase of a single-family home. A lawnmower might be next.

Looking at the new home construction industry, one would have good reason to presume those norms were holding steady. About two-thirds of new homes being built in the U.S. this year are single-family dwellings, complete with tidy yards and plentiful parking.

In startup-land, however, the presumptions about where housing demand is going looks a bit different. Home sharing is on the rise, along with more temporary lease options, high-touch service and smaller spaces in sought-after urban locations.

Seeking roommates and venture capital

Crunchbase News analysis of residential-focused real estate startups uncovered a raft of companies with a shared and temporary housing focus that have raised funding in the past year or so.

This isn’t a U.S.-specific phenomenon. Funded shared and short-term housing startups are cropping up across the globe, from China to Europe to Southeast Asia. For this article, however, we’ll focus on U.S. startups. In the chart below, we feature several that have raised recent rounds.

Notice any commonalities? Yes, the startups listed are all based in either New York or the San Francisco Bay Area, two metropolises associated with scarce, pricey housing. But while these two metro areas offer the bulk of startups’ living spaces, they’re also operating in other cities, including Los Angeles, Seattle and Pittsburgh.

From white picket fences to high-rise partitions

The early developers of the U.S. suburban planned communities of the 1950s and 60s weren’t just selling houses. They were selling a vision of the American Dream, complete with quarter-acre lawns, dishwashers and spacious garages.

By the same token, today’s shared housing startups are selling another vision. It’s not just about renting a room; it’s also about being part of a community, making friends and exploring a new city.

One of the slogans for HubHaus is “rent one of our rooms and find your tribe.” Founded less than three years ago, the company now manages about 80 houses in Los Angeles and the San Francisco Bay Area, matching up roommates and planning group events.

Starcity pitches itself as an antidote to loneliness. “Social isolation is a growing epidemic—we solve this problem by bringing people together to create meaningful connections,” the company homepage states.

The San Francisco company also positions its model as a partial solution to housing shortages as it promotes high-density living. It claims to increase living capacity by three times the normal apartment building.

Costs and benefits

Shared housing startups are generally operating in the most expensive U.S. housing markets, so it’s difficult to categorize their offerings as cheap. That said, the cost is typically lower than a private apartment.

Mostly, the aim seems to be providing something affordable for working professionals willing to accept a smaller private living space in exchange for a choice location, easy move-in and a ready-made social network.

At Starcity, residents pay $2,000 to $2,300 a month, all expenses included, depending on length of stay. At HomeShare, which converts two-bedroom luxury flats to three-bedrooms with partitions, monthly rents start at about $1,000 and go up for larger spaces.

Shared and temporary housing startups also purport to offer some savings through flexible-term leases, typically with minimum stays of one to three months. Plus, they’re typically furnished, with no need to set up Wi-Fi or pay power bills.

Looking ahead

While it’s too soon to pick winners in the latest crop of shared and temporary housing startups, it’s not far-fetched to envision the broad market as one that could eventually attract much larger investment and valuations. After all, Airbnb has ascended to a $30 billion private market value for its marketplace of vacation and short-term rentals. And housing shortages in major cities indicate there’s plenty of demand for non-Airbnb options.

While we’re focusing here on residential-focused startups, it’s also worth noting that the trend toward temporary, flexible, high-service models has already gained a lot of traction for commercial spaces. Highly funded startups in this niche include Industrious, a provider of flexible-term, high-end office spaces, Knotel, a provider of customized workplaces, and Breather, which provides meeting and work rooms on demand. Collectively, those three companies have raised about $300 million to date.

At first glance, it may seem shared housing startups are scaling up at an off time. The millennial generation (born roughly 1980 to 1994) can no longer be stereotyped as a massive band of young folks new to “adulting.” The average member of the generation is 28, and older millennials are mid-to-late thirties. Many even own lawnmowers.

No worries. Gen Z, the group born after 1995, is another huge generation. So even if millennials age out of shared housing, demographic forecasts indicate there will plenty of twenty-somethings to rent those partitioned-off rooms.

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Boosted Boards founders launch heavy-duty scooter renter Skip

All electric scooters are not created equal. I’ve found ones from Spin, Bird, and Lime to often be broken, shaky, or out of battery. But now the founders of Boosted Boards, which makes the steadiest and safest-feeling electric skateboards, are bringing their rugged hardware expertise to the scooter world. Today, they’re coming out of stealth with a supposedly stronger and longer-lasting dockless electric scooter rental startup called Skip. And the surprise is they’ll only operate where permitted unlike their backlashed competitors, with a deployment today in partnership with Washington D.C. and plans for San Francisco.

Formerly known by its Y Combinator codename Waybots, the company is exclusively announcing its funding and rebrand to Skip today on TechCrunch. The startup has raised a $6 million seed round led by Initialized Capital via Alexis Ohanian and Ronny Conway’s A Capital, with SV Angel joining in.

“We think the vehicle matters” Skip and former Boosted co-founder/CEO Sanjay Dastoor tells me. “It’s not the same as rideshare where two or more companies are all using the same car. There’s a big spectrum of quality in the base vehicles. A lot of these companies are buying off the shelf vehicles that are designed for personal ownership. I think these vehicles will need to be designed for a different level of use and upkeep.”

That’s why Skip is modifying bigger pre-made scooters to be more durable, and plans to build its own custom scooters. For the same $1 plus $0.15 per minute price as other services, you get a wider riding platform, full suspension, and head/tail/brake lights. The strategy is that if people feel safe and steady riding Skips, they’ll choose them over the competition. And while low-grade scooters might feel too unstable for the bike lane, leading to complaints about sidewalk riding, Skips are meant to feel secure enough to cruise next to cars.

With so much well-funded competition, Skip will have to hope customers really notice the difference. And its by-permit-only policy could constrain growth. But if riders and cities decide they want a more reliable scooter service, Skip could carve out a solid business while being a better citizen.

Trusting Your Life To A Startup

My Boosted Board was perhaps my favorite gadget ever. After a decade as an unpowered longboard rider, I tested its electric skateboard in 2012 and loved the smooth rides so much I bought onet of the first 10 of the Kickstarter. It felt like being able to effortlessly surf uphill. I tried many others and consistently found them to feel much more jerky, wobbly, and unpredictable. That’s not what you want when you’re riding a handle-less vehicle in traffic, and essentially betting your life on some startup’s hardware.

But then I crashed. The human body is not equipped for a 22mph meeting with the pavement. The board performed perfectly, I just hit a gravel patch at full-speed, shattered my ankle, and couldn’t walk for 5 months. In conclusion, even the safest electric skateboards are risky because at high speeds, the form factor’s small hard wheels are too vulnerable to obstructions, and you’ve got no handle to save you. I haven’t skated the two years since.

Yet that’s why I think Skip has a real opportunity. There’s demand for these vehicles. Skip says it sees seven rides per day per scooter. They’re a natural complement to more expensive Ubers that have to wade through traffic. But the whole industry will fall apart if everyone’s getting injured. You can absolutely feel the lack of stability and smoothness when riding a janky or half-broken scooter. I think consumers will choose the safer device if one’s available.

Skip To A New Startup

Skip co-founder and CEO Sanjay Dastoor

“We noticed that small personal portable electric vehicles weren’t only awesome alone” but as an option alongside ridesharing, ridepooling, and car ownership, says Dastoor. “The future of transportation is a combination of these.”

Boosted co-founder Matt Tran left the company two years ago, while Dastoor exited a year ago. They wanted to try an electric vehicle service model, but “Boosted wasn’t really the right place to do that, because the company is still focused on building great hardware for people to buy.” Tran was running marketing and also craved his engineering roots. So together with Mike Wadhera, a founding team member of Involver which sold to Oracle, they formed Waybots.

Last summer, the company tried out a docked scooter sharing model in SF, but didn’t see great results. When they got accepted to YC, like Boosted before it, they started experimenting with a dockless version. Meanwhile, Washington D.C. had opened a pilot program for permitted dockless bikeshare, and Waybots convinced the city to give it the greenlight too.

“We’re the first permitted [dockless electric scooter] system operating anywhere” Dastoor believes. “A lot of the story around dockless scooters has come from SF, and from companies that have launched without informing anyone or working with anyone.” That’s led SF to ban unpermitted dockless scooter rentals. “What we saw in DC was the opposite. We’re working with the cities to deploy, share data with them, and engage with the community, and we’ve seen none of the backlash that we’ve seen in SF.”

Designed To Deter Complaints

Beyond actually being permitted, that’s also because Skip has built the scooters to discourage a lot of the most annoying scooter behaviors. The Speedway Mini4 36V 21Ah scooters Skip modifies can get up to 30 miles at 10mph per charge, which means they’re less likely to have dead batteries by the afternoon like the useless vehicles-turned-paperweights from competitors that I commonly stumble across in SF.

The durable hardware is meant to need less service so you’re less likely to rent a broken, or worse, half-broken-but-I’m-late-so-I’ll-ride-it-anyway scooter. You can adjust the handlebar height, they go up to 18mph and dual-suspension flattens road bumps.

As for keeping Skips from getting strewn in the sidewalks and obstructing pedestrians, Dastoor claims his company’s vehicles have more precise location tracking than competitors. That could help it tell the edge of a build from the center of the walkway. Combined with requiring users to photograph the scooter standing upright, and hardware in the vechiles, Skip is hoping to force users to park them properly. “They have to have the intelligence in them to give info back to the city or back to the operator to make sure they operating correctly” Dastoor says.

Unfortunately, Skip hasn’t solved the lack of helmets problem. Dastoor tells me “We’ve been looking at a bunch of ways to improve access to helmets” but for now there’s no on-vehicle compartment for them and the company merely encourages users to wear them.

Personally, I think that’s crap. Sure, Citi Bike and other scooter companies don’t offer them either. But if these are meant to be serendipitously rented for short periods, it’s crazy to think anyone other than regular commuters will bring their own helmets. I think cities should demand them. And if they don’t, an inevitable scooter fatality that could have been prevented will make permitters more cautious. At least Skip says you have to be over 18 and plans to add ID verification for that soon.

“I don’t really have a comment about our unit economics” Dastoor sidestepped, but notes how much cheaper a $1.50 or $3 ride is than hailing a car. We’ll have to see if competition spurs a scooter price war. For now, though, the well-equipped Skips have led customers to “want to use it over and over.” Still, with Lime reportedly trying to raise $500 million and Bird recently closing $100 million as they race to invade the world, Skip is starting late with a much smaller piggybank.

Competition aside, Dastoor cites maintaining relationships with cities as the startup’s biggest threat. Luckily, he says it will soon announce some big-name talent with experience here. I expect it’s hired someone like former Uber policy chief David Plouffe who already has connections.

Scoot To The Future

Where the dockless vechicle rental market goes is a mystery. Maybe it turns into a fundraising war, with the most aggressive deployers locking up markets, and the losers vaporizing in giant money bonfires. Maybe the cities get fed up, kick out the unpermitted, and only issue approvals to those with the best glad-handing or the best safety. Maybe users get tons of options on price, quality, and availability to choose from.

But absent the bad behavior spurring backlash, many who try dockless electric scooter and bike rentals love them. With traffic-jammed city streets and scarce parking, we could use ways to get cars off the road.

Eventually, I think we’ll see a ton of short rideshare trips turn into scooter cruises. And at today’s super low price point, walking could turn into a luxury depending on how you value your time. Even at minimum wage, you might save money paying $1.75 for a five-minute, one-mile Skip rather than walking for 20. Dastoor concludes, “It becomes part of their transportation routine and I think anything that does that is around to stay.”

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Collaborative Consumption

Uber’s aerial taxi play

Uber’s flying taxis are taking off, as the transportation upstart looks for new ways to shorten trips made long because of distance or traffic congestion. Flying cars were once nearly the exclusive domain of tech aphorisms (“You promised us flying cars, but instead we have x.”), but now they are actually being put into gear in the form of electric vertical take-off and landing (eVTOL) vehicles. Over the last couple of days at the Uber Elevate summit in Los Angeles, the company further laid out its own ambitious plans to develop and commercially deploy air taxis by 2023.

Uber CEO Dara Khosrowshahi, who has been at the helm for less than one year, admitted he wasn’t initially 100 percent on board for Elevate, he said at the Uber Elevate Summit. It took a couple of sessions and some reviews of the math for him to be sold on it, he said.

“For me the aha moment came when I started understanding that Uber isn’t just about cars,” Khosrowshahi said. “Ultimately, where we want to go is about urban mobility and urban transport, and being a solution for the cities in which we operate.”

Uber Elevate is Uber’s all-encompassing term for its initiative to launch uberAIR, which is the its aerial electric ride-hailing service, as well as any other initiatives (think food delivery) that may benefit from air transport. Once Uber’s vision is fully implemented, Uber says the service will be cheaper than the cost of owning a car, on a per-passenger, per-mile basis, and autonomous. At launch, however, pilots will be required.

In the U.S., Uber is aiming to launch first in the Dallas-Fort Worth and Frisco, Texas, areas and LA. Last year, Uber said it would also aim to start testing in Dubai by 2020, but that’s no longer the case. Instead, Uber now has an open call out to interested international cities to describe the clear need for aerial transit, the enabling conditions of the city and local government commitment.

In order to launch uberAIR, Uber needs the actual vehicles, skyports for them to land on, as well as batteries. The company won’t be developing and producing its own vehicles. Instead, it’s relying entirely on its aerospace partners — some of which have been developing aircrafts for decades.

“There’s a lot that has to come together,” Khosrowshahi said about partnerships. “We absolutely know that we cannot make this happen ourselves.”

At the summit, Uber announced a new partnership with Karem to develop eVTOLs. Karem Aircraft, which has patented Optimum Speed Tiltroter technology for military and commercial applications, has been working with Uber for about a year to create the Butterfly concept. This type of vehicle is supposed to be a passenger-friendly adaptation of Karem’s core technology. And some of Uber’s previously announced partners also showed off what they’ve been working on over the past year. Embraer, for example, unveiled its first eVTOL concept.

At this point there are more than 70 companies working on eVTOLs for deployment in Uber’s air taxi network.

The company also needs skyports to enable people to board and exit these eVTOLs, which is where partners like Gannett Fleming and Corgan come in. On day two, these partners showed off their skyport designs as part of a skyport competition Uber ran.

Since Uber wants its offering to be all-electric from the start, it’s working with a number of battery partners. One of them is E-One Moli, a newly announced partner that will put its battery technology in the first eVTOL prototypes from Uber’s Elevate vehicle partners. With these batteries, uberAIR vehicles could travel up to 84 miles on a single charge, compared to just 60 miles. That also means Uber needs a way to charge these vehicles, which is where partners like ChargePoint come in.

Mega Skyport

Air traffic control

On day one of the summit, Uber Head of Aviation Eric Allison spoke about how certain skyports could handle hundreds or even thousands of landings per hour. In order to manage the skies and ensure uberAIR doesn’t simply replicate the horrendous traffic patterns we already have on the roads, Uber is working to develop systems that enable the ecosystem to function in what will be a more complex version of standard air traffic control, Allison told TechCrunch earlier in the day.

There are many ways to conceive of this, but one way is something Uber Director of Engineering for Airspace Systems Tom Prevot calls Dynamic Skylane Networks. He said you can think of them as a virtual network of lanes, overpasses, on-ramps and off-ramps in the sky that dynamically adjust to where the air traffic needs to flow.

But that’s a bit down the road. At the beginning of this process, Prevot said, Uber wants to work in parallel with what exists today and be “extremely cooperative, interoperable and transparent for safety and efficiency reasons. But we also need to protect, obviously, privacy information.”

He added that cybersecurity is a “first-class citizen and we need to bake that in from the beginning.”

Although Uber could theoretically create, own and control its own air traffic control system for eVTOLs, Uber says the intention is not to own it. Instead, the idea is to make it an open standard that other companies can work with, and therefore, enable interoperability.

“We don’t own airspace,” Holden said. “We’re just trying to make sure airspace is managed in an extremely safe and efficient way.”

To try to achieve this goal, Uber is working closely with the FAA and NASA. At the Summit, Uber announced it has signed a second space act agreement with NASA to model and simulate airspace requirements for urban air mobility applications. As part of the agreement, Uber will share its plans for implementing its air-based rideshare network.

Using data from Uber, NASA plans to simulate a small passenger-carrying aircraft flying through the Dallas-Fort Worth area. The idea is to identify potential safety issues in an already-crowded air traffic control system.

Simulation of 50 aircrafts in the Dallas-Fort Worth area

“We’re designing our flight paths essentially to stay out of the scheduled air carriers’ flight paths initially,” Prevot said at Elevate. “We do want to test some of these concepts of maybe flying in lanes and flying close to each other but in a very safe environment, initially.”

Regulating air taxis

All of these eVTOLs, of course, must comply with regulation from aviation authorities. At Elevate, FAA Acting Administrator Dan Elwell said he’s excited about everything that’s happening. But while Uber aims to start testing in 2020 and deploy commercially in 2023, all Elwell would say is, “We’ll see.”

“Everything is changing, but remember it’s changing within the construct that we’ve built, that we know,” Elwell said in a conversation with Uber Chief Product Officer Jeff Holden. “We have to adapt.” He added, whatever happens, the FAA is going to do this right. If you were to ask him what his reaction is to the idea that “it has to happen and this date is certain, my answer is, ‘well, we’ll see.’”

But Khosrowshahi said he’s confident in the 2020 testing timeframe. That’s because of the partners Uber has in place and the team on board, Khosrowshahi said.

“I think that’s something we can get to,” he said.

In tandem with ensuring uberAIR operates in ways that are safe and consistent with current FAA standards, sound regulation is key to community acceptance. For the purpose of uberAIR, Uber has tapped David Josephson, a noise and acoustics consultant at Josephson Engineering. At the Elevate summit, Josephson explained how urban air mobility noise will be different from the noise of a conventional aircraft. Part of that is due to the fact that airports are not located within city centers. With uberAIR, however, these skyports are going to be within city limits.

“We’ve decided to develop an entirely different set of metrics for this purpose,” Josephson said.

Those measurements entail looking at how many people are going to be affected by any given flight. More specifically, that means looking at how many people are going to be able to hear the noise emissions from the eVTOLs.

Aerial equity

Uber is ultimately presenting AIR as a way to increase access to transportation. In an ideal world, uberAIR would be able to reach neighborhoods that are traditionally underserved by transit agencies, Uber Head of Policy of Autonomous Vehicles and Urban Aviation Justin Erlich told me back in February. But in order to do that, Uber needs to remain conscious of the fact that it’s a goal it’s trying to achieve. That means ensuring the right policy infrastructure is in place and that’s where Erlich comes in.

We’re thinking about what this looks like for making things wheelchair accessible and so we’re having ongoing conversations with folks in that community,” Erlich said. “We’ll really need to be thoughtful long-term about where the routings are to make sure that we’re serving underserved communities in transit, and to make sure that this technology is made available to everybody.”

In addition to reducing the cost of aerial transit, it’s important to note where the skyports will be located and what areas they will serve, World Economic Forum Head of Drones and Tomorrows Airspace Timothy Reuter said at Elevate.

“One of the causes of inequality in this country is, it’s very difficult for people to live in low cost areas but get access to high wages,” Reuter said.

And as Uber continues to scale and move further into autonomy, it will be worth paying attention to who is going to be tapped to handle the more monotonous, low-wage jobs.

“What we bring to the table here,” Khosrowshahi said, “is building this to not be a service for the few but a service that is ultimately available for mass market.”

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