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September 20, 2018
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Uber

Uber’s complex relationship with diversity

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Since Dara Khosrowshahi came to Uber as CEO about a year ago, there has certainly been less drama, but drama remains. Over the last few months, there were reports of Uber COO Barney Harford making insensitive comments about women and racial minorities, as well as Uber’s now-former Chief People Officer Liane Hornsey making denigrating comments toward Uber’s global diversity and inclusion lead Bernard Coleman and Bozoma Saint John, the chief brand officer who left in June.

At TechCrunch Disrupt SF earlier this month, I sat down with both Khosrowshahi and Uber’s new, first-ever Chief Diversity Officer Bo Young Lee, who joined in March. Believe it or not, there are still bad actors at the company, so Uber still has work to do. What surprised me, however, was Khosrowshahi’s defense of Harford, not only saying that he’s “an incredible person” but that he’s also “one of the good people” as it relates to diversity and inclusion.

“This is an issue that everyone is fighting, and I will tell you Barney takes it personally,” Khosrowshahi told me. “And he is a champion and he will be a champion as it relates to these matters. He’s one of the good people.”

Lee, when I asked her if she agreed with Khosrowshahi, said at Disrupt, “absolutely, 100 percent.” Lee, on a call ahead of Disrupt, described the importance of internal diversity champions who find ways to bake diversity and inclusion into their everyday workflow. Onstage, Lee described how she had been aware of the allegations against Harford and had already been working with him around inclusion. In fact, she said, Harford had reached out to her, admitting that he knew there’s a lot to learn and that he’d like for her to help him.

Harford also wrote, in Khosrowshahi’s words, “a really heartfelt apology letter to the company,” but it’s still hard for me to get on board with the idea that Harford is one of the “good” ones. This is not to say people can’t be imperfect and can’t change — an idea Khosrowshahi made quite clear, and one that I generally believe as well — but I would just hope that there are some better “good” ones out there.

“I don’t think that a comment that might have been taken as insensitive and happened to report by large news organizations should mark a person,” Khosrowshahi said. “I don’t think that’s fair. And I’m sure I’ve said things that have been insensitive and you take that as a learning moment. And the question is, does a person want to change, does a person wants to improve? Does a person understand when they did something wrong, and then change behaviors? And I’ve known Barney for years and that’s why I stand 100 percent behind him.”

Khosrowshahi described how he’s also made mistakes, and how that doesn’t mean he should be marked by those mistakes. He went on to describe how at his last job, Expedia, he would usually grab a beer with “one of the guys and, because I was comfortable because it was you know, a person who looked like me, a person with whom I could be more casual and I could have a conversation.”

He added how these people got “access to me that was not fair, and that could have shown up in a New York Times article and that could have marked me,” he said. “That’s not who I am. You know, I learned, I corrected, I’m aware. And the question is, what do you do?”

A new chief in town

During my conversation with Khosrowshahi, we also chatted about the hiring of Lee as CDO, as opposed to promoting Coleman, and the fact that she doesn’t report directly to the CEO — despite the suggestions of former Attorney General Eric Holder. Though, it’s worth noting those suggestions were directed toward now-former Uber CEO Travis Kalanick.

Khosrowshahi said Lee is the right person for the job and he thinks it’ll become clear that she is the right person for the job. Regarding why Lee doesn’t report directly to Khosrowshahi and instead, to a yet-to-be-hired new chief people officer, he said, “diversity and inclusion have to be a core part of everything that the company does, has to be a core part of your people strategy.”

“And I want Bo and my chief people officer working together fundamentally not just on the diversity of the company, but also on the core culture,” he added. “Like, we’re really trying to shift the culture of the company going forward. So Bo is going to report into our chief people officer. And she and I more than monthly, are constantly having exchanges on how things are going. And I think that’s the optimal structure, which is open — open communication with me working directly with the CEO but part of the core strategy of the company because I do think that this is one of the things that we have to execute on.”

In conversation with Lee, she spoke about the task she has at hand, as well as some strategies she has implemented, and plans to implement in order to get Uber to where it needs to be. One of those initiatives involves creating a pipeline around Uber drivers, which consists of a couple million people around the world. Lee described to me how it would be “amazing to create a pipeline to hire some of those driver partners,” whether into customer service, community operations or “maybe there’s great tech talent in there that we don’t even know about.”

That’s an area where Lee is working with recruiters to better identify ways to source that talent. Lee is also working on ensuring Uber’s new cultural norms actually get baked into the company. Last November, Khosrowshahi introduced Uber’s new cultural norms, which include values like “We build globally, we live locally” and “We do the right thing. Period.” Before, Uber’s values were indisputably much more aggressive.

“You can put out new cultural norms, you can put out new cultural values but it’s not until those values are built into our systems, our performance management, our organizational design — the way that we even think about product design, you’re not going to see the full manifestation of it,” Lee said. “And as an organization is going through culture change, that can be very unmooring for people and that can actually make people feel very psychologically unsafe. And what I find at Uber right now is a lot of people who are trying to — within this culture that is shifting, that is changing for the better — trying to find their footing somewhere along those lines.”

Part of what’s hard right now, she said, is getting Uber employees to the point where they “feel like they can trust that the system will work.” Regarding the allegations about Harford, Lee said that she was aware of them and looking into them, but didn’t resolve them by the time the NYT piece came out.

“But I would say that when the news did break in that public way, I was, more than anything, just really sad about this because what it told me was that we still have a culture where people aren’t sure they can trust that things are going to get fixed and things are going to get done,” she said. “And so they felt that they needed to go outside to find remediation for some of that.”

Lee also told me, ahead of Disrupt, that she’s exploring the idea of what fewer levels of hierarchy at the company would look like.

“It’s hard to speculate what the changes would look like,” she said. “I ideally would love to see the number of levels possibly changing. More importantly, what I would love to see beyond levels, is the power distance between those levels decline.”

News Source = techcrunch.com

Uber fires up its own traffic estimates to fuel demand beyond cars

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If the whole map is red and it’s a short ride, maybe you’d prefer taking an Uber JUMP Bike instead of an UberX. Or at least if you do end up stuck bumper-to-bumper, the warning could make you less likely to get mad mid-ride and take it out on the driver’s rating.

This week TechCrunch spotted Uber overlaying blue, yellow, and red traffic condition bars on your route map before you hail. Responding to TechCrunch’s inquiry, Uber confirmed that traffic estimates have been quietly testing for riders on Android over the past few months and the pilot program recently expanded to a subset of iOS users. It’s already live for all drivers.

The congestion indicators are based on Uber’s own traffic information pulled from its historic trip data about 10 billion rides plus real-time data from its drivers’ phones, rather than estimates from Google that already power Uber’s maps.

If traffic estimates do roll out, they could make users more tolerant of longer ETAs and less likely to check a competing app since they’ll know their driver might take longer to pick them up because congestion is to blame rather than Uber’s algorithm. During the ride they might be more patient amidst the clogged streets.

Uber’s research into traffic in India

But most interestingly, seeing traffic conditions could help users choose when it’s time to take one of Uber’s non-car choices. They could sail past traffic in one of Uber’s new electric JUMP Bikes, or buy a public transportation ticket from inside Uber thanks to its new partnership with Masabi for access to New York’s MTA plus buses and trains in other cities. Cheaper and less labor intensive for Uber, these options make more sense to riders the more traffic there is. It’s to the company’s advantage to steer users towards the most satisfying mode of transportation, and traffic info could point them in the right direction.

Through a program called Uber Movement, the company began sharing its traffic data with city governments early last year. The goal was to give urban planners the proof they need to make their streets more efficient. Uber has long claimed that it can help reduce traffic by getting people into shared rides and eliminating circling in search of parking. But a new study showed that for each mile of personal driving Uber and Lyft eliminated, they added 2.8 miles of professional driving for an 180 percent increase in total traffic.

Uber is still learning whether users find traffic estimates helpful before it considers rolling them out permanently to everyone. Right now they only appear on unshared UberX, Black, XL, SUV, and Taxi routes before you hail to a small percentage of users. But Uber’s spokesperson verified that the company’s long-term goal is to be able to tell users that the cheapest way to get there is option X, the cheapest is option Y, and the most comfortable is option Z. Traffic estimates are key to that. And now that it’s had so many cars on the road for so long, it has the signals necessary to predict which streets will be smooth and which will be jammed at a given hour.

For years, Uber called itself a logistics company, not a ride sharing company. Most people gave it a knowing wink. Every Silicon Valley company tries to trump up its importance by claiming to conquer a higher level of abstraction. But with advent of personal transportation modes like on-demand bikes and scooters, Uber is poised to earn the title by getting us from point A to point B however we prefer.

News Source = techcrunch.com

Latin America is the next stage in the race for dominance in the ride-hailing market

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As the number of competitors in the ride-hailing industry dwindles, geographic expansion is emerging as the next proving ground to determine who will be the victor in the ride-hailing market.

The race for control of the industry, which is estimated by Goldman Sachs to grow eightfold to $285 billion by 2030, is escalating with China’s Didi Chuxing already surpassing Uber as the most valuable startup in the world. With a recent valuation of approximately $56 billion, compared to Uber’s $48 billion, Didi is posing a real threat to Uber’s operations and shows no signs of slowing down. Cementing its position as the top ride-hailing service in China, Didi is now turning its attention to another region of the world that is still filled with vast opportunities and not yet dominated by a single taxi alternative: Latin America.

While many ride-hailing and sharing services have already sprung up and faced regulation in cities across Latin America such as Mexico City, Montevideo, and São Paulo, the region still presents an enormous opportunity for the companies that can adapt and move fast enough.

The current opportunities in Latin America

Unlike many other regions of the world, Latin America is still very much reliant on traditional forms of public transportation such as buses, trains, and subway systems. What’s more, larger cities such as São Paulo, Mexico City, and Bogota simply cannot support any more vehicles on the road without an infrastructure overhaul. Large metro areas are already at or above maximum capacity during peak hours, making owning and commuting with a car more of a hassle than a luxury. As a result, many commuters across Latin America are putting less importance on owning a vehicle and opting to use alternative modes of transportation and on-demand services instead.

Beyond the rising demand for alternative transportation options, it’s also worth noting that Latin America is the world’s second-fastest-growing mobile market. In a region of approximately 640 million people, there are more than 200 million smartphone users. By 2020, predictions say that 63% of Latin America’s population will have access to the mobile Internet. Latin American smartphone users have quickly adopted global apps, such as Uber and Facebook. However, tech companies have yet to fully tap into the region’s potential.

Chilean taxi drivers demonstrate along Alameda Avenue against US on-demand ride service giant Uber, in Santiago, on July 10, 2017.
Uber smartphone app has faced stiff resistance from traditional taxi drivers the world over, as well as bans in some places over safety concerns and questions over legal issues, including taxes. (MARTIN BERNETTI/AFP/Getty Images)

The key players

Uber

According to a Dalia survey, Latin Americans with smartphones that live in urban areas are the most likely to have used a ride-hailing app or site. Overall, 45% have used an app, with Mexico taking the top position in the region at 58%.

Uber entered Latin America in 2013 and claims to have more than 36 million active users in the region, proving employment for more than a million drivers. The company quickly dominated Mexico, which is now its second-largest market after the U.S. In fact, up until recently Uber claimed a near monopoly on ride-sharing in Mexico with few competitors. Uber also has operations in more than 16 Latin American countries.

99 (formerly 99Taxis)

With an urban population of approximately 180 million, Brazil is the ultimate prize for ride-hailing and taxi companies with several services competing for market share. Most notably, 99 (formerly “99Taxis”) was able to gain momentum early on with exclusive services that extended beyond basic ride-hailing (such as its 99 TOP and 99 POP services) and better tools for its drivers.

With over 200,000 drivers and 14 million users, 99 attracted the attention of investors worldwide, including that of China’s Didi Chuxing. Didi invested $100 million into 99 in January 2018 before acquiring 99 entirely months later for nearly $1 billion to take on Uber in Latin America, shortly after it acquired Uber’s operations in China.

Easy Taxi

Rocket Internet -backed taxi booking service, Easy Taxi, started in Latin America in 2011, two years after Uber first started in San Francisco. The company provides an easy way to book a taxi and track it in real-time. Today, the company is owned by Maxi Mobility, which acquired the company from Rocket Internet in 2017 for an undisclosed amount. Maxi Mobility also owns Cabify, and operates across many Latin American markets, including Argentina, Mexico, Bolivia, Panama, Brazil, Peru, and Chile, in addition to a handful of markets elsewhere.

To solidify its position in the region, Easy Taxi merged with Colombian taxi-booking app Tappsi in 2015. Tappsi launched in Bogotá in 2012 and was doing quite well in the Colombian market. The merger allowed the companies to pool their resources just as other competitors, such as Uber, began entering the region.

Easy Taxi maintains impressive traction, raising more than $75 million to date. But as the ride-hailing battle in Latin America pushes forward, the company is rumored to be a likely investment or acquisition target for Uber, Didi, or the largest global investor in this space, Softbank.

Cabify

Cabify is a Spanish company that provides private vehicles for hire via its smartphone app. Although founded in Madrid, Cabify has always positioned itself as a Latin American company, investing heavily across the region. The company was able to gain a strong foothold due to some significant funding raised by its parent company, Maxi Mobility. In January 2018, Maxi Mobility raised another $160 million and said the funding would be used to accelerate both of its companies, Cabify and Easy Taxi, in the 130 cities where they operate throughout Spain, Portugal, and Latin America.

Cabify reported it has over 13 million users and grew its installed-base by 500% between 2016 and 2017, tripling its user base and fulfilling six times more trips in 2017.

Cabify competes directly with Uber, 99, and Easy Taxi in Brazil; however, it reportedly has around 40% market share in Sao Pãolo, one of the largest cities in all of Latin America.

Smaller players to watch

Beat (Formerly Taxibeat)

Beat is a profitable ride-hailing service founded in Athens, Greece that also operates in Peru. Beat is slowly expanding its operations across Latin America, though expansion appears to be limited to Chile for now.

As of January 2017, Beat had around 15,000 drivers and 800,000 customers in Peru.

Nekso

Toronto-based Nekso bet on the Latin American taxi-hailing market before its home market with a pilot launch in Venezuela in 2016. Nekso was able to gain acceptance from the taxi industries in Venezuela, Dominican Republic, Ecuador, and Panama with its slightly different approach to ride-hailing.

The company connects a network of 550+ licensed taxi companies with thousands of drivers and allows users to flag down a cab off the street and without using in-app requests. Nekso also uses artificial intelligence technology to offer drivers real-time updates on weather, events, and traffic data to predict areas of a city which may need more drivers. The company claims taxi drivers can spend up to two-thirds of their day looking for or waiting for riders and that Nekso technology helps drivers increase their daily rides by more than 25% percent.

At the end of 2017, Nekso boasted around 150,000 users and facilitated approximately 400,000 rides per month. Now, the company plans to make its debut in Canada as well as expand to more countries in South America, including Argentina, Colombia, Chile, and Peru.

Didi, 99, and the next phase

99’s new owner, Didi, which dominates the Asian market and was able to defeat Uber in China, has big plans for international expansion. Its acquisition of 99 reveals the potential it sees in Latin America but also adds to the complicated web of global ride-hailing services.

After Didi shut down and acquired Uber’s assets in China, it also bought a stake in Uber for $1 billion. Uber, Didi, and 99 are all backed by Softbank. However, everywhere outside of China, Didi and Uber are competing with each other. Didi’s full plans for 99 are not yet obvious, but the company has already set up an office in Mexico and begun poaching staff from Uber in Mexico.

With an infusion of capital, Latin America’s ride-hailing industry is multiplying. That said, companies that want to compete in the region will need to use an aggressive and strategic approach that can withstand the uniqueness of commuters and transportation options in the region. It’s only a matter of time until we see if these companies continue ramping up their operations for geographic domination, or if we see more and more partner up to advance their technologies and address other looming threats – such as bike sharing, scooter sharing, and even autonomous vehicles.

Two of the founders of 99, who sold their company to Didi, have already launched a dockless bike sharing startup called Yellow in Brazil and raised $9 million to grow its operations. No other scooter company has taken the plunge into Latin America yet besides Grin Scooters in Mexico City, but other larger cities such as Buenos Aires, Bogota, Santiago, and Lima would be ideal markets if the companies can figure out pricing as well as security and safety issues first.

Didi’s activity in Brazil and Mexico is sure to trigger a new wave of competition between existing ride-hailing players and create an even more tangled web of alliances and acquisitions. Whether or not these companies can adapt and move fast enough to rise to the top, and deal with the other looming alternative modes of transportation, remains to be seen.

News Source = techcrunch.com

Uber makes it easier to switch between rides, scooters, bikes and car rentals

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You may remember how Uber laid out its ambitions to become a multi-modal transportation company back in April with the announcement of Uber Rent, preceded by a $200 million acquisition of bike-share startup JUMP. Now, Uber is making it easier to access those modalities with the addition of Mode Switch, Uber CEO Dara Khosrowshahi announced at TechCrunch Disrupt San Francisco today.

The idea is to further hook people into the Uber app by offering a variety of transportation options, and ultimately have your phone replace your car.

Before, you can see how the options for rentals and bikes were much more hidden in the app.

Uber first partnered with JUMP in January to enable people to book bikes within the Uber app. Then, in July, Uber put some money behind its ambitions to get into scooters when it participated in a $335 million funding round in Lime. As part of the deal, Uber will add Lime’s electric scooters to its app.

Currently, Uber offers JUMP bikes in Austin, Denver, Sacramento, Chicago, New York City, Santa Cruz, Washington, D.C. and San Francisco. Uber has yet to launch scooters, although the company did submit a permit proposal to operate in San Francisco. That application was denied. Instead, Skip and Scoot received permits to operate in the city.

Uber Rent is a platform that taps into Getaround’s existing marketplace of cars that are available for instant rentals. Uber Rent, which will launch in San Francisco later this month, lets people book Getaround cars directly from the Uber app. Once Uber feels solid about the product market fit, it will expand the program nationally. Fun fact: Getaround won Disrupt NYC Battlefield back in 2011.

Uber, however, has yet to integrate public transit, which the company also announced in April. In partnership with Masabi, a mobile ticketing platform for public transit, the plan is to enable people to book and use transit tickets from within the Uber app.

Ultimately, it’s likely that Uber will simply add additional transit options to Mode Switch once it’s ready for launch.

News Source = techcrunch.com

With a $10 million round, Nigeria’s Paga plans global expansion

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Nigerian digital payments startup Paga is gearing up for an international expansion with $10 million in funding let by the Global Innovation Fund. 

The company is planning to release its payments product in Ethiopia, Mexico, and the Philippines—CEO Tayo Oviosu told TechCrunch at Disrupt San Francisco.

Paga looks to go head to head with regional and global payment players, such as PayPal, Alipay, and Safaricom’s M-Pesa, according to Oviosu.

“We are not only in a position to compete with them, we’re going beyond them,” he  said of Kenya’s M-Pesa mobile money product. “Our goal is to build a global payment ecosystem across many emerging markets.”

Founded in 2012, Paga has created a multi-channel network and platform to transfer money, pay-bills, and buy things digitally that’s already serving 9 million customers in Nigeria—including 6000 businesses. All of whom can drop into one of Paga’s 17,167 agents or transfer funds from one of Paga’s mobile apps.

Paga products work on iOS, Android, and basic USSD phones using a star, hashtag option. The company has remittance partnerships with the likes of Western Union and Moneytrans and allows for third-party integration of its app.

Paga has also built out considerable scale in home market Nigeria—which boasts the dual distinction as Africa’s most populous nation and largest economy.

Since inception, the startup has processed 57 million transactions worth $3.6 billion, according to Oviosu.

That’s no small feat given the country straddles the challenges and opportunities of growing digital payments. Only recently did Nigeria’s mobile and internet penetration break 50 percent and 40 percent of the country’s 196 million remain unbanked.

To bring more of Nigeria’s masses onto digital commerce, Paga recently launched a new money transfer-app that further simplifies the P2P payment process from mobile devices.

For nearly a decade, Kenya’s M-Pesa—which has 20 million active users and operates abroad—has dominated discussions of mobile money in Africa.

Paga and a growing field of operators are diversifying the continent’s payment playing field.

Fintech company Cellulant raised $47 million in 2019 on its business of processing $350 million in payment transactions across 33 African countries.

In Nigeria, payment infrastructure company Interswitch has expanded across borders and is pursuing an IPO. And Nigerian payment gateway startups Paystack and Flutterwave have digitized volumes of B2B transactions while gaining global investment.

So why does Paga—a Nigerian payments company—believe it can expand its digital payments business abroad?

“Why not us?,” said CEO Oviosu. “People sit in California and listen to Spotify that was developed in Sweden. And Uber started somewhere before going to different countries and figuring out local markets,” he added.

“The team behind this business has worked globally for some of the top tech names. This platform can stand shoulder to shoulder with any payments company built somewhere else,” he said.

On that platform, Oviosu underscores it has positioned itself as a partner, not a rival, to traditional banks. “Our ecosystem is not built to compete with you, it’s actually complimentary to you,” he said of the company’s positioning to big banks—enabling Paga to partner with seven banks in Nigeria.

Paga also sees potential to adapt its model to other regulatory and consumer environments. “We’ve built an infrastructure that rides across all mobile networks,” said Oviosu. “We’re not trying to be a bank. Paga wants to work with the banks and financial institutions to enable a billion people to access and use money,” he said.

As part of the $10 million round (which brings Paga’s total funding up to $35 million), Global Innovation Partners will take a board seat. Other round participants include Goodwell, Adlevo Capital, Omidyar Network, and Unreasonable Capital.

Paga will use the Series B2 to grow its core development team of 25 engineers across countries and continents. It will also continue its due diligence on global expansion—though no hard dates have been announced.

On revenues, Paga makes money on merchant payments, bank to bank transfers, and selling airtime and data. “As we roll out other services, we will build a model where we will make money on savings and lending,” said the company’s CEO.

As for profitability, Paga does not release financials, but reached profitability in 2018, according to Oviosu—something that was confirmed in the due diligence process with round investors.

On the possibility of beating Interswitch (or another venerable startup) to become Africa’s first big tech IPO, Oviosu plays that down. “For the next 3-5 years I see us staying private,” he said.

News Source = techcrunch.com

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