Today’s app-based or “gig” economy is frequently dressed up in talk about “modern innovation” and the “21st century of work.” This facade is a wolf in sheep’s clothing.
Precarious, contingent work is nothing new — we’ve always had jobs that are low-paying, insecure and dismissed as “unskilled.” Due to systemic racism and a historically exploitative economy, workers of color have always been, and continue to be, heavily concentrated in the most exploitative industries.
The only difference is that today, companies like Uber, DoorDash and Instacart claim they don’t have to play by the rules because they use digital apps to manage their workforce. Even as many of these tech giants remain unprofitable, they have been allowed for far too long to shirk responsibility for providing safe and just working conditions where workers can thrive on and off the job.
Even as many of these tech giants remain unprofitable, they have been allowed for far too long to shirk responsibility for providing safe and just working conditions where workers can thrive on and off the job.
Workers’ rights in the so-called gig economy are often positioned as a modern problem. But when we think about the problems faced by gig and app-based workers, who are predominantly people of color, we must learn from the past in order to move forward to a just economy.
The federal government has long failed to address widespread worker exploitation. Since the passage of the National Labor Relations Act, jobs like agricultural and domestic work, which were largely performed by workers of color, were carved out of labor rights and protections. The “independent contractors” of today, who are largely workers of color, fall into this same category of workers who have been excluded from labor laws. Combined, Black and Latinx workers make up less than 29% of the nation’s total workforce, but they comprise almost 42% of workers for app-based companies.
Gig companies argue that the drivers, delivery people, independent contractors and other workers who build their businesses, take direction from them and whose pay they set are millions of tiny businesses that do not need baseline benefits and protections. They do this in order to shield themselves from taking responsibility for their frontline workforce. Corporations then avoid paying basic costs like a minimum wage, healthcare, paid sick leave, compensation coverage and a litany of other essential benefits for their employees. For many workers, these conditions only serve to proliferate inequality nationwide and ultimately uphold a deeply flawed economy built upon worker exploitation and suffering.
App-based companies are the face of a larger, sinister trend. Over the last four decades, federal policies have greatly eroded the bargaining power of workers and concentrated more power in the hands of corporations and those who already have substantial wealth and power. This has perpetuated and worsened the racial wage and wealth gaps and contributed to the ever-increasing degradation of working conditions for too many.
It’s clear that, in order to build an economy that works for all people, “gig” and app-based companies cannot be allowed to exploit their workers under the guise of “innovation.” These companies claim their workers want to remain independent contractors, but what workers want is good pay, job security, flexibility and full rights under federal laws. This is a reasonable and just demand — and necessary to close generational gender and racial wealth gaps.
App-based companies are pouring significant resources into promoting government policies that prop up their worker exploitation model. Uber, Lyft, DoorDash Instacart and other app-based companies are loudly peddling misinformation in state legislatures, city councils and federal offices. Elected leaders at all levels need to recognize these policies for what they are — corporate efforts to rewrite the laws to benefit them — and reject the corporate interests behind the policies that carve out workers from universal protections.
Congress must also reject exclusions that lock people of color out of basic employment protections and pass legislation to extend protections to all workers, including app-based workers. The PRO Act is a great first step, which extends bargaining protections to workers who have been wrongly classified as “independent contractors” by their employers.
Across the country, app-based workers have organized to protect their health and safety and demand that their rights as workers be recognized and protected. Elected leaders cannot keep falling for corporate propaganda claiming a “21st-century” model. Work in the 21st century is still work; work that is organized on an app is still work.
We call on Congress to recognize the labor rights and protections of all workers and act boldly to ensure that app-based companies cannot block workers from equal rights in the name of “flexibility” and “innovation.”
Nearly exactly one month ago, digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others.
At the time, Loft was valued at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.
Now, today, São Paulo-based Loft has announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion. This means that the 3-year-old startup has increased its valuation by $700 million in a matter of weeks.
Baillie Gifford led the Series D-2 round, which also included participation from Tarsadia, Flight Deck, Caffeinated and others. Individuals also put money in the extension, including the founders of Better (Vishal Garg), GoPuff, Instacart, Kavak and Sweetgreen.
Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process.
Image courtesy of Loft
In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.
“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch at the time of the company’s last raise. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”
The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said.
“We have seen a continued acceleration in our market share growth, especially in São Paulo and Rio de Janeiro, the two markets we currently operate in,” he added. “We saw an opportunity to grow even faster with additional capital.”
Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”
While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.
The company’s revenues and GMV (gross merchandise value) “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”
Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.
In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.
In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.
This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.
Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.
We all know the COVID-19 pandemic has accelerated digital adoption in a number of areas, particularly in the financial services space. Within financial services, there are few spaces hotter than B2B payments.
With a $120 trillion market size, it’s no surprise that an increasing number of fintechs focused on digitizing payments have been attracting investor interest. The latest is Routable, which has nabbed $30 million in a Series B raise that included participation from a slew of high-profile angel investors.
Unlike most raises, Routable didn’t raise the capital from a bunch of VC firms. Sam Altman, CEO of OpenAI and former president of Y Combinator, and Jack Altman, CEO of Lattice, led the round. (The pair are brothers, in case you didn’t know.)
SoftBank-backed unicorn Flexport also participated, along with a number of angel investors, including Instacart co-founder Max Mullen, Airbnb co-founder Joe Gebbia, Box co-founder and CEO Aaron Levie, Salesforce founder and CEO Marc Benioff (who also started TIME Ventures), DoorDash’s Gokul Rajaram, early Stripe employee turned angel Lachy Groom and Behance founder Scott Belsky.
The Series B comes just over eight months after Routable came out of stealth with a $12 million Series A.
CEO Omri Mor and CTO Tom Harel founded Routable in 2017 after previously working at marketplaces and recognizing the need for better internal tools for scaling business payments. They went through a Y Combinator batch and embarked on a process of interviewing hundreds of CFOs and finance leaders.
The pair found that the majority of the business payment tools that were out there were built for large companies with a low volume of business payments.
“After running enough customer development we identified a huge scramble to solve high-volume business payments, and that’s what we double down on,” Mor told TechCrunch.
Routable’s mission is simple: to automate bill payment and invoicing processes (also known as accounts payables and accounts receivables), so that businesses can focus on scaling their core product offerings without worrying about payments.
“A business payment is more like moving a bill through Congress, where a consumer payment is more like a tweet,” Mor said. “We automate every step from purchase order to reconciliation and by extending an API, companies don’t have to build their own inner integration. We handle it, while helping them move their money faster.”
Since its August 2020 raise, Routable has seen its revenue grow by 380%, according to Mor. And last month alone, the company tripled its amount of new customers compared to the month prior. Customers include Snackpass, Ticketmaster and Re-Max, among others.
“We’ve been beating every quarter expectation for the past 18 months,” he told TechCrunch.
The company started out focused on the startup and SMB customer, but based on demand and feedback, is expanding into the enterprise space as well.
It has established integrations with QuickBooks, NetSuite and Xero and is looking to invest moving forward in integrating with Oracle, Microsoft Dynamics Workday and SAP.
“A lot of our investment moving forward is to be able to bring that same level of automation and ease of use that we do for SMB and mid-market customers to the enterprise world,” Mor told TechCrunch.
Lead investor Sam Altman is in favor of that approach, noting that the recent booms in the gig and creator economies are leading to a big spike in the volume of both payments and payees.
“With the addition of enterprise capabilities, we think this can lead to an enormous business,” he said.
The round brings Routable’s total raised to $46 million. The company has headquarters in San Francisco and Seattle with primarily a remote team.
Sam Altman also told me that he was drawn to Routable after having experienced the pain of high-volume business payments himself and working with many startup founders who had experienced the same problem.
He was also impressed with the company’s engineering-forward approach.
“They can offer the best service by being embedded in a company’s flow of funds instead of the usual approach of just being an interface for moving money,” Altman said.
With regard to the other investors, Mor said the decision to partner with founders of a number of prominent tech companies was intentional so that Routable could benefit from their “deep enterprise and high-growth experience.”
As mentioned above, the B2B payments space is white-hot. Earlier this year, Melio, which provides a platform for SMBs to pay other companies electronically using bank transfers, debit cards or credit — along with the option of cutting paper checks for recipients if that is what the recipients request — closed on $110 million in funding at a $1.3 billion valuation.
A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.
A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.
The company fixed the data spill, but has not yet alerted its customers.
Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles, and New York, where the company is headquartered.
TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses, and order details. Each record also had the user’s IP address of the device they used to place the order.
The data set also included the personal data and order details of company executives.
It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.
Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.
It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.
In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.
“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.
Know something, say something. Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using our SecureDrop. Learn more.
Google is announcing a handful of major updates to Google Maps today that range from bringing its Live View AR directions indoors to adding weather data to its maps, but the most tantalizing news — which in typical Google fashion doesn’t have an ETA just yet — is that Google plans to bring a vastly improved 3D layer to Google maps.
Using photogrammetry, the same technology that also allows Microsoft’s Flight Simulator to render large swaths of the world in detail, Google is also building a model of the world for its Maps service.
“We’re going to continue to improve that technology that helps us fuse together the billions of aerials, StreetView and satellite images that we have to really help us move from that flat 2D map to a more accurate 3D model than we’ve ever had. And be able to do that more quickly. And to bring more detail to it than we’ve ever been able to do before,” Dane Glasgow, Google’s VP for Geo Product Experience, said in a press event ahead of today’s announcement. He noted that this 3D layer will allow the company to visualize all its data in new and interesting ways.
How exactly this will play out in reality remains to be seen, but Glasgow showed off a new 3D route preview, for example, with all of the typically mapping data overlayed on top of the 3D map.
Glasgow also noted that this technology will allow Google to parse out small features like stoplights and building addresses, which in turn will result in better directions.
“We also think that the 3D imagery will allow us to visualize a lot of new information and data overlaid on top, you know, everything from helpful information like traffic or accidents, transit delays, crowdedness — there’s lots of potential here to bring new information,” he explained.
As for the more immediate future, Google announced a handful of new features today that are all going to roll out in the coming months. Indoor Live View is the flashiest of these. Google’s existing AR Live View walking directions currently only work outdoors, but thanks to some advances in its technology to recognize where exactly you are (even without a good GPS signal), the company is now able to bring this indoors. This feature is already live in some malls in the U.S. in Chicago, Long Island, Los Angeles, Newark, San Francisco, San Jose, and Seattle, but in the coming months, it’ll come to select airports, malls and transit stations in Tokyo and Zurich as well (just in time for vaccines to arrive and travel to — maybe — rebound). Because Google is able to locate you by comparing the images around you to its database, it can also tell what floor you are on and hence guide you to your gate at the Zurich airport, for example (though in my experience, there are few places with better signage than airports…).
Also new are layers for weather data (but not weather radar) and air quality in Google Maps. The weather layer will be available globally on Android and iOS in the coming months, with the air quality layer only launching for Australia, India and the U.S. at first.
Talking about air quality, Google Maps will also get a new eco-friendly routing option that lets you pick the driving route that produces the least CO2 (coming to Android and iOS later this year), and it will finally feature support for low emission zones, a feature of many a European City. Low emission zones on Google Maps will launch in June in Germany, France, Spain and the UK on Android and iOS. More countries will follow later.
And to bring this all together, Google will update its directions interface to show you all of the possible modes of transportations and routing options, prioritized based on your own preferences, as well as based on what’s popular in the city you are in (think he subway in NYC or bike-sharing in Portland).
Also new are more integrated options for curbside grocery pickups in partnership with Instacart and Albertsons, if that’s your thing.
And there you have it. As is so often the case with Google’s announcement, the most exciting new features the company showed off don’t have an ETA and may never launch, but until then you can hold yourself over by getting your weather forecasts on Google Maps.
LOT Network, the nonprofit that helps businesses of all sizes and across industries defend themselves against patent trolls by creating a shared pool of patents to immunize themselves against them, today announced that TikTik parent ByteDance is joining its group.
ByteDance has acquired its fair share of patents in recent years and is itself embroiled in a patent fight with its rival Triller. That’s not what joining the LOT Network is about, though. ByteDance is joining a group of companies here that includes the likes of IBM, the Coca-Cola Company, Cisco, Lyft, Microsoft, Oracle, Target, Tencent, Tesla, VW, Ford, Waymo, Xiaomi and Zelle. In total, the group now has more than 1,300 members.
As LOT CEO Ken Seddon told me, the six-year-old group had a record year in 2020, with 574 companies joining and bringing its set of immunized patents to over 3 million, including 14% of all patents issued in the U.S.
Among the core features of LOT, which only charges members who make more than $25 million in annual revenue, is that its members aren’t losing control over the patents they add to the pool. They can still buy and trade them as before, but if they decide to sell to what the industry calls a “patent assertion entity,” (PAE) that is, a patent troll, they automatically provide a free license to that patent to every other member of the group. This essentially turns LOT into what Seddon calls a “flu shot” against patent trolls (and one that’s free for startups).
“The conclusion that people are waking up to is, is that we’re basically like a herd, we’re herd immunization, effectively,” Seddon said. “And every time a company joins, people realize that the community of non-members shrinks by one. It’s like those that don’t have the vaccination shrinks — and they are, ‘wait a minute, that makes me a higher risk of getting sued. I’m a bigger target.’ And they’re like, ‘wait a minute, I don’t want to be the target.’ ”
ByteDance, he argues, is a good example for a company that can profit from membership in LOT. While you may think of patents as purely a sign of a company’s innovativeness, for corporate lawyers, they are also highly effective defense tools (that can be used aggressively as well, if needed). But it can take a small company years to build up a patent portfolio. But a fast-growing, successful company also becomes an obvious target for patent trolls.
“When you are a successful company, you naturally become a target,” Seddon said. “People become jealous and they become threatened by you. And they covet your money and your revenue and your success. One of the ways that companies can defend themselves and protect their innovation is through patents. Some companies grow so fast, they become so successful, that their revenue grows faster than they can grow their patent portfolio organically.” He cited Instacart, which acquired 250 patents from IBM earlier this month, and Airbnb, which was sued by IBM over patent infringement in early 2020 (the companies settled in December), as examples.
ByteDance, thanks to the success of TikTok, now finds itself in a situation where it, too, is likely to become a target of patent trolls. The company has started acquiring patents itself to grow its portfolio faster and now it is joining LOT to strengthen its protection there.
“[ByteDance] is being a visionary and trying to get ahead of the wave,” Seddon noted. “They are a successful global company that needs to develop a global IP strategy. Historically, PAEs were just a U.S. problem, but now ByteDance has to worry about PAEs being an issue in China and Europe as well. By joining LOT, they protect themselves and their investments from over 3 million patents should they ever fall into the hands of a PAE.”
Lynn Wu, director and chief IP Counsel, Global IP and Digital Licensing Strategy at ByteDance, agrees. “Innovation is core to the culture at ByteDance, and we believe it’s important to protect our diverse technical and creative community,” she said in today’s announcement. “As champions for the fair use of IP, we encourage other companies to help us make the industry safer by joining LOT Network. If we work together, we can protect the industry from exploitation and continue advancing innovation, which is key to the growth and success of the entire community.”
There’s another reason companies are so eager to join the group now, though, and that’s because these patent assertion entities, which had faded into the background a bit in the mid-to late-2010s, may be making a comeback. The core assumption here is a bit gloomy: Many companies seem to assume we’re in for an economic downturn. If we hit a recession, a lot of patent holders will start looking at their patent portfolios and start selling off some of their more valuable patents in order to stay afloat. Because beggars can’t be choosers, that often means they’ll sell to a patent troll if that troll is the highest bidder. Last year, a patent troll sued Uber using a patent sold by IBM, for example (and IBM gets a bit of a bad rap for this, but, hey, it’s business).
That’s what happened after the last recession — though it typically takes a few years for the effect to be felt. Nothing in the patent world moves quickly.
Now, when LOT members sell to a troll, that troll can’t sue other LOT members over it. Take IBM, for example, which joined LOT last year.
“People give IBM a lot of grief and criticism for selling to PAEs, but at least IBM is giving everybody a chance to get a free license,” Seddon told me. “IBM joined LOT last year and what IBM is effectively doing is saying to everybody, ‘look, I joined LOT.’ And they put all of their entire patent portfolio into LOT. And they’re saying to everybody, ‘look, I have the right to sell my patents to anybody I want, and I’m going to sell it to the highest bidder. And if I sell it to a patent troll and you don’t join LOT — and if you get sued by a troll, is that my fault or your fault? Because if you join LOT, you could have gotten a free license.’ ”