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Hyundai's Luxury SUV Mixes Mics and Math for a Silent Ride

By Eric Adams
The Genesis GV80 comes with noise-canceling tech to do away with the annoying hum of rolling rubber.

The 737 MAX Delay Is Just One of Boeing's Many Problems

By Sean Gallagher, Ars Technica
Issues inside the company aren't limited to its commercial airliner business—even the space and defense divisions are suffering. 

Feds Want to Rein In 'Emotional Service' Animals on Planes

By Aarian Marshall
The viral photos of mini-horses in cabin seats may be numbered, as the Transportation Department announces an effort to ground "Noah's Ark in the air."

Uber’s Shin-pei Tsay is coming to TC Sessions: Mobility

By Kirsten Korosec

Government and policy experts are  among the most important people in the future of transportation. Any company pursuing the shared scooters and bikes business, ride-hailing, on-demand shuttles and eventually autonomous vehicles has to have someone, or a team of people, who can work with cities.

Enter Shin-pein Tsay, the director of policy, cities and transportation at Uber . TechCrunch is excited to announced that Tsay will join us on stage at TC Sessions: Mobility, a one-day conference dedicated to the future of mobility and transportation.

If there’s one person who is at the center of this universe, it’s Tsay. In her current role at Uber, she leads a team of issues experts focused on what Uber calls a “sustainable multi-modal urban future.”

Tsay is also founder. Prior to Uber, she founded a social impact analysis company called Make Public. She was also the deputy executive director of TransitCenter, a national foundation focused on improving urban transportation. She also founded and directed the cities and transportation program under the Energy and Climate Program at the Carnegie Endowment for International Peace.

For the past four years, Shinpei has served as a commissioner for the City of New York Public Design Commission. She is on the board of the national non-profit In Our Backyard.

Stay tuned, we’ll have more speaker announcements in the coming weeks. In case you missed it, TechCrunch has already announced Ike co-founder and chief engineer Nancy Sun, Waymo’s head of trucking Boris Sofman and Trucks VC’s Reilly Brennan will be participating in TC Sessions: Mobility.

Don’t forget that $250 Early-Bird tickets are now on sale — save $100 on tickets before prices go up on April 9; book today.

Students, you can grab your tickets for just $50 here.

Uber’s self-driving unit starts mapping Washington, D.C. ahead of testing

By Kirsten Korosec

Uber Advanced Technologies Group will start mapping Washington, D.C., ahead of plans to begin testing its self-driving vehicles in the city this year.

Initially, there will be three Uber vehicles mapping the area, a company spokesperson said. These vehicles, which will be manually driven and have two trained employees inside, will collect sensor data using a top-mounted sensor wing equipped with cameras and a spinning lidar. The data will be used to build high-definition maps. The data will also be used for Uber’s virtual simulation and test track testing scenarios.

Uber intends to launch autonomous vehicles in Washington, D.C. before the end of 2020.

At least one other company is already testing self-driving cars in Washington, D.C. Ford announced in October 2018 plans to test its autonomous vehicles in Washington, D.C. Argo AI is developing the virtual driver system and high-definition maps designed for Ford’s self-driving vehicles.

Argo, which is backed by Ford and Volkswagen, started mapping the city in 2018. Testing was expected to begin in the first quarter of 2019.

Uber ATG has kept a low profile ever since one of its human-supervised test vehicles struck and killed a pedestrian in Tempe, Arizona in March 2018. The company halted its entire autonomous vehicle operation immediately following the incident.

Nine months later, Uber ATG resumed on-road testing of its self-driving vehicles in Pittsburgh, following a Pennsylvania Department of Transportation decision to authorize the company to put its autonomous vehicles on public roads. The company hasn’t resumed testing in other markets such as San Francisco.

Uber is collecting data and mapping in three other cities in Dallas, San Francisco and Toronto. In those cities, just like in Washington, D.C., Uber manually drives its test vehicles.

Uber spun out the self-driving car business in April 2019 after closing $1 billion in funding from Toyota, auto-parts maker Denso and SoftBank’s Vision Fund. The deal valued Uber ATG at $7.25 billion, at the time of the announcement. Under the deal, Toyota and Denso are providing $667 million, with the Vision Fund throwing in the remaining $333 million.

Waymo’s self-driving trucks and minivans are headed to New Mexico and Texas

By Kirsten Korosec

Waymo said Thursday it will begin mapping and eventually testing its autonomous long-haul trucks in Texas and parts of New Mexico, the latest sign that the Alphabet company is expanding beyond its core focus of launching a robotaxi business.

Waymo said in a tweet posted early Thursday it had picked these areas because they are “interesting and promising commercial routes.” Waymo also said it would “explore how the Waymo Driver” — the company’s branded self-driving system — could be used to “create new transportation solutions.”

Waymo plans to mostly focus on interstates because Texas has a particularly high freight volume, the company said. The program will begin with mapping conducted by Waymo’s Chrysler Pacifica minivans.

The mapping and eventual testing will occur on highways around Dallas, Houston and El Paso. In New Mexico, Waymo will focus on the southern most part of the state.

Interstate 10 will be a critical stretch of highway in both states — and one that is already a testbed for TuSimple, a self-driving trucking startup that has operations in Tucson and San Diego. TuSimple tests and carries freight along the Tucson to Phoenix corridor on I-10. The company also tests on I-10 in New Mexico and Texas.

This week, we’ll start driving our Chrysler Pacificas and long-haul trucks in Texas and New Mexico. These are interesting and promising commercial routes, and we’ll be using our vehicles to explore how the Waymo Driver might be able to create new transportation solutions. pic.twitter.com/uDqKDrGR9b

— Waymo (@Waymo) January 23, 2020

 

Waymo, which is best known for its pursuit of a robotaxi service, integrated its self-driving system into Class 8 trucks and began testing them in Arizona in August 2017. The company stopped testing its trucks on Arizona roads sometime later that year. The company brought back its truck testing to Arizona in May 2019.

Those early Arizona tests were aimed at gathering initial information about driving trucks in the region, while the new round of truck testing in Arizona marks a more advanced stage in the program’s development, Waymo said at the time.

Waymo has been testing its self-driving trucks in a handful of locations in the U.S., including Arizona, the San Francisco area and Atlanta. In 2018, the company announced plans to use its self-driving trucks to deliver freight bound for Google’s  data centers in Atlanta.

Indian bike rental startup Bounce raises $105M

By Manish Singh

Bounce, a Bangalore-based startup that operates over 20,000 electric and gasoline dockless bikes and scooters in nearly three dozen cities in India, said today it has raised $105 million in a new funding round as it explores sustainable ways to expand within the nation and build its own electric vehicles.

The new financing round, Series D, was co-led by existing investors Eduardo Saverin’s B Capital and Accel Partners, said the startup. The new round valued Bounce at a little over $500 million, up from about $200 million in June last year, a person familiar with the matter told TechCrunch.

TechCrunch reported in late November that Bounce was in advanced stages of talks to raise $150 million at over $500 million valuation. The new round pushes the startup’s total raise to $194 million.

Bounce, formerly known as Metro Bikes, allows customers to rent a scooter and pay as low as 1 Indian rupee (0.15 cents) for the first kilometer of the ride. The startup, which clocks 120,000 rides each day, allows users to leave the vehicle in any nearby docking station or partnered mom-and-pop store after the ride.

Bounce earlier deployed its own operations team in each city and flooded the market with its scooters, but in recent weeks it has started to explore a new strategy, said co-founder and chief executive Vivekananda Hallekere in an interview with TechCrunch.

“We realized that it was not the most efficient move to expand Bounce’s network on our own,” he said. The startup now works with mom-and-pop stores and local merchants in each city and they run their own operations.

Millions of mom-and-pop stores dot cities, towns and villages in India. In recent years, scores of startups and companies have started to work with them to address the last mile challenge. Amazon said earlier this month that it has partnered with over 20,000 mom-and-pop stores in the nation to use them to store and deliver packages.

To date, Bounce has replicated this model in six cities in India (including Vijayawada and Mangalore) and has partnered with over 250,000 shops and merchants. “We launch in the cities with our own vehicles, but overtime, these micro-entrepreneurs deploy their own bikes and scooters. They are still using our app, and are part of the Bounce platform, but they don’t have to be locked into our scooter ecosystem,” he explained.

The shift in strategy comes as Bounce looks to cut expenses and find a sustainable way to expand. “Otherwise, I would need a billion dollar of debt to launch a million vehicles in India,” he said. “We wanted a model that is scalable and profitable, and helps us create the most impact.”

Bounce is part of a small group of startups that is attempting to address a market that cab-hailing services Uber and Ola have been unable to tackle. The startup competes with Vogo, which is backed by Ola, and Yulu, which maintains a partnership with Uber.

Riding these bikes is more affordable than hailing a cab, and also two wheels are much faster in crowded traffic of urban cities than four. These bikes have also proven useful in other ways. Hallekere said female passengers access more than 30% of rides on Bounce — a figure that beats the industry estimates, because women feel much more safer with bikes, he said. “They don’t have to worry about how they would commute back from work,” he said.

Bounce is also working on building its own ecosystem of electric vehicles. The startup said it has already built a scooter with metal chassis that can survive for at least 200,000 kilometers. The idea is to build electric scooters that work best for shared mobility, something Hallekere said the ecosystem is currently missing.

“In our tests, we found that even if you threw this bike from the first floor of a building, nothing happens to it. It is also more tech-enabled, so it can tell when the second seat of the bike is in use and can bill users accordingly, for instance,” he explained. The startup plans to deploy these vehicles in the coming months.

Kabir Narang, a partner at B Capital, told TechCrunch in an interview that he sees great potential in the shared mobility future in India, and Bounce team’s passion and commitment to solving these challenges made it easy for them to place their “long-term” bet on the startup.

Inside Skip’s plan to appeal San Francisco’s scooter permit decision

By Megan Rose Dickey

Electric scooter operator Skip is gearing up to appeal San Francisco’s decision to not grant it a permit to operate in the city. When the city’s Municipal Transportation Agency (SFMTA) announced the permit grantees in September, it came as a surprise to Skip, which had previously received a permit to operate as part of the city’s pilot program.

Ahead of the appeal hearing last Thursday, TechCrunch caught up with Skip CEO Sanjay Dastoor to learn about the company’s game plan and why he thinks it can prevail in a battle that other electric scooter providers have lost.

Prior to the city’s decision last year to grant permits to Lime, Uber’s JUMP, Bird’s Scoot and Ford’s Spin, Skip was one of only two companies operating shared electric scooter services in San Francisco. Leading up to the new permitting application process, Skip said it had been working to ensure its electronic locks would be fully integrated by the beginning of the new permit period, Dastoor told TechCrunch. The company did this with guidance from the SFMTA, so when Skip was denied a permit, the team was caught off guard.

“It was a huge surprise,” Dastoor said. “We found out basically the same time as the press did that we didn’t get that permit, so it was pretty surprising to all of us.”

Boeing partners with Tactical Robotics to develop VTOL tech

By Darrell Etherington

Boeing has signed a new agreement with Israel-based Tactical Robotics, an exploratory deal that will see the two companies work together jointly on “developing, producing and marketing” aircraft with vertical take-off and landing (VTOL) capabilities based on Tactical Robotics’ “Fancraft” enclosed rotor technology.

Already, the Urban Aeronautics-owned Tactical Robotics has developed “Cormorant,” an autonomous flying car vehicle that has the footprint of roughly a Humvee, but that can take off and land vertically thanks to its Fancraft rotors. Unlike open rotors, these are placed inside ducts, which provide advantages both in terms of directing airflow and providing enhanced safety for anyone around the vehicle because they’re mostly covered. This new arrangement between the two companies will begin with exploring options for Cormorant in terms of production and deployment for potential applications, including disaster response.

The overall deal between Boeing and Tactical Robotics could be much broader-reaching, however, and includes development and exploration of both piloted and autonomous VTOL aircraft. This is yet another example of how the VTOL industry is heating up in terms of partnership, investments and productization.

Boom Supersonic partners with Flight Research to test its XB-1 supersonic aircraft

By Darrell Etherington

Supersonic aviation startup Boom is making progress on its XB-1 demonstrator aircraft, the airplane that will prove out its tech and pave the way for construction of its future production commercial supersonic passenger jets. The Denver-based startup has partnered with Flight Research, Inc., a company that specializes in flight testing and certification, as well as pilot training.

The XB-1 demonstrator aircraft will be tested with support from Flight Research, Inc., with Boom hoping to fly the aircraft over the Mojave desert in a stretch used for supersonic testing. As part of the deal, Flight Research will be providing Boom with a hanger at the Mojave Air and Space Port to fly from, and a T-38 talon supersonic trainer aircraft which will be used both to train the XB-1’s test pilots, and to trail the Boom aircraft for observation while it’s in flight.

Boom is in the process of building the XB-1, which will be used to test and refine the final design of Overture, the passenger commercial airliner it eventually hopes to build. Already, Boom says development of the subscale XB-1 has lead to improvements of the design elements it’s going to be using to construct Oveture. The flight controls system and engines on XB-1 are already fully complete, and the company is now working on finishing touches on the cockpit construction, with about half of the work still left to go on the fuselage, and a third of the construction of the wings still to be done. Its first flight is currently planned for sometime later this year.

Making Public Transit Fairer to Women Demands Way More Data

By Flavie Halais
Most transit systems aren't designed for women, who tend to run errands and care for children. But cities can’t fix a problem they don’t understand.

A Move to Make Auto-Safety Features Speak the Same Language

By Aarian Marshall
Super Cruise? Traffic Jam Assist? Autopilot? Translation for all of the above: Keep your eyes on the road\!

TechCrunch’s Top 10 investigative reports from 2019

By Josh Constine

Facebook spying on teens, Twitter accounts hijacked by terrorists, and sexual abuse imagery found on Bing and Giphy were amongst the ugly truths revealed by TechCrunch’s investigating reporting in 2019. The tech industry needs more watchdogs than ever as its size enlargens the impact of safety failures and the abuse of power. Whether through malice, naivety, or greed, there was plenty of wrongdoing to sniff out.

Led by our security expert Zack Whittaker, TechCrunch undertook more long-form investigations this year to tackle these growing issues. Our coverage of fundraises, product launches, and glamorous exits only tell half the story. As perhaps the biggest and longest running news outlet dedicated to startups (and the giants they become), we’re responsible for keeping these companies honest and pushing for a more ethical and transparent approach to technology.

If you have a tip potentially worthy of an investigation, contact TechCrunch at tips@techcrunch.com or by using our anonymous tip line’s form.

Image: Bryce Durbin/TechCrunch

Here are our top 10 investigations from 2019, and their impact:

Facebook pays teens to spy on their data

Josh Constine’s landmark investigation discovered that Facebook was paying teens and adults $20 in gift cards per month to install a VPN that sent Facebook all their sensitive mobile data for market research purposes. The laundry list of problems with Facebook Research included not informing 187,000 users the data would go to Facebook until they signed up for “Project Atlas”, not receiving proper parental consent for over 4300 minors, and threatening legal action if a user spoke publicly about the program. The program also abused Apple’s enterprise certificate program designed only for distribution of employee-only apps within companies to avoid the App Store review process.

The fallout was enormous. Lawmakers wrote angry letters to Facebook. TechCrunch soon discovered a similar market research program from Google called Screenwise Meter that the company promptly shut down. Apple punished both Google and Facebook by shutting down all their employee-only apps for a day, causing office disruptions since Facebookers couldn’t access their shuttle schedule or lunch menu. Facebook tried to claim the program was above board, but finally succumbed to the backlash and shut down Facebook Research and all paid data collection programs for users under 18. Most importantly, the investigation led Facebook to shut down its Onavo app, which offered a VPN but in reality sucked in tons of mobile usage data to figure out which competitors to copy. Onavo helped Facebook realize it should acquire messaging rival WhatsApp for $19 billion, and it’s now at the center of anti-trust investigations into the company. TechCrunch’s reporting weakened Facebook’s exploitative market surveillance, pitted tech’s giants against each other, and raised the bar for transparency and ethics in data collection.

Protecting The WannaCry Kill Switch

Zack Whittaker’s profile of the heroes who helped save the internet from the fast-spreading WannaCry ransomware reveals the precarious nature of cybersecurity. The gripping tale documenting Marcus Hutchins’ benevolent work establishing the WannaCry kill switch may have contributed to a judge’s decision to sentence him to just one year of supervised release instead of 10 years in prison for an unrelated charge of creating malware as a teenager.

The dangers of Elon Musk’s tunnel

TechCrunch contributor Mark Harris’ investigation discovered inadequate emergency exits and more problems with Elon Musk’s plan for his Boring Company to build a Washington D.C.-to-Baltimore tunnel. Consulting fire safety and tunnel engineering experts, Harris build a strong case for why state and local governments should be suspicious of technology disrupters cutting corners in public infrastructure.

Bing image search is full of child abuse

Josh Constine’s investigation exposed how Bing’s image search results both showed child sexual abuse imagery, but also suggested search terms to innocent users that would surface this illegal material. A tip led Constine to commission a report by anti-abuse startup AntiToxin (now L1ght), forcing Microsoft to commit to UK regulators that it would make significant changes to stop this from happening. However, a follow-up investigation by the New York Times citing TechCrunch’s report revealed Bing had made little progress.

Expelled despite exculpatory data

Zack Whittaker’s investigation surfaced contradictory evidence in a case of alleged grade tampering by Tufts student Tiffany Filler who was questionably expelled. The article casts significant doubt on the accusations, and that could help the student get a fair shot at future academic or professional endeavors.

Burned by an educational laptop

Natasha Lomas’ chronicle of troubles at educational computer hardware startup pi-top, including a device malfunction that injured a U.S. student. An internal email revealed the student had suffered a “a very nasty finger burn” from a pi-top 3 laptop designed to be disassembled. Reliability issues swelled and layoffs ensued. The report highlights how startups operating in the physical world, especially around sensitive populations like students, must make safety a top priority.

Giphy fails to block child abuse imagery

Sarah Perez and Zack Whittaker teamed up with child protection startup L1ght to expose Giphy’s negligence in blocking sexual abuse imagery. The report revealed how criminals used the site to share illegal imagery, which was then accidentally indexed by search engines. TechCrunch’s investigation demonstrated that it’s not just public tech giants who need to be more vigilant about their content.

Airbnb’s weakness on anti-discrimination

Megan Rose Dickey explored a botched case of discrimination policy enforcement by Airbnb when a blind and deaf traveler’s reservation was cancelled because they have a guide dog. Airbnb tried to just “educate” the host who was accused of discrimination instead of levying any real punishment until Dickey’s reporting pushed it to suspend them for a month. The investigation reveals the lengths Airbnb goes to in order to protect its money-generating hosts, and how policy problems could mar its IPO.

Expired emails let terrorists tweet propaganda

Zack Whittaker discovered that Islamic State propaganda was being spread through hijacked Twitter accounts. His investigation revealed that if the email address associated with a Twitter account expired, attackers could re-register it to gain access and then receive password resets sent from Twitter. The article revealed the savvy but not necessarily sophisticated ways terrorist groups are exploiting big tech’s security shortcomings, and identified a dangerous loophole for all sites to close.

Porn & gambling apps slip past Apple

Josh Constine found dozens of pornography and real-money gambling apps had broken Apple’s rules but avoided App Store review by abusing its enterprise certificate program — many based in China. The report revealed the weak and easily defrauded requirements to receive an enterprise certificate. Seven months later, Apple revealed a spike in porn and gambling app takedown requests from China. The investigation could push Apple to tighten its enterprise certificate policies, and proved the company has plenty of its own problems to handle despite CEO Tim Cook’s frequent jabs at the policies of other tech giants.

Bonus: HQ Trivia employees fired for trying to remove CEO

This Game Of Thrones-worthy tale was too intriguing to leave out, even if the impact was more of a warning to all startup executives. Josh Constine’s look inside gaming startup HQ Trivia revealed a saga of employee revolt in response to its CEO’s ineptitude and inaction as the company nose-dived. Employees who organized a petition to the board to remove the CEO were fired, leading to further talent departures and stagnation. The investigation served to remind startup executives that they are responsible to their employees, who can exert power through collective action or their exodus.

If you have a tip for Josh Constine, you can reach him via encrypted Signal or text at (585)750-5674, joshc at TechCrunch dot com, or through Twitter DMs

Cruise calls for a new way to determine commercial readiness of self-driving cars

By Kirsten Korosec

Cruise co-founder and CTO Kyle Vogt said Friday that disengagement reports released annually by California regulators are not a proxy for the commercial readiness or safety of self-driving cars.

Vogt, in a lengthy post on Medium, called for a new metric to determine whether an autonomous vehicle is ready for commercial deployment. The post suggests that the autonomous vehicle company, which had a valuation of $19 billion as of May, is already developing more comprehensive metrics.

The California Department of Motor Vehicles, which regulates the permits for autonomous vehicle testing on public roads in the state, requires companies to submit an annual report detailing “disengagements,” a term that means the number of times drivers have had to take control of a car. The DMV defines a disengagement as any time a test vehicle operating on public roads has switched from autonomous to manual mode for an immediate safety-related reason or due to a failure of the system. 

“It’s woefully inadequate for most uses beyond those of the DMV,” Vogt wrote. “The idea that disengagements give a meaningful signal about whether an AV is ready for commercial deployment is a myth.”

These disengagement reports will be released in a few weeks. Cruise did share some of its disengagement data, specifically the number of miles driven per disengagement event, between 2017 and 2019.

cruise disengagement data 2019

The so-called race to commercialize autonomous vehicles has involved a fair amount of theater, including demos. This lack of data has made it nearly impossible to determine if a company’s self-driving cars are safe enough or ready for the big and very real stage of shuttling people from Point A to Point B on city streets. Disengagement reports as flawed as they might be have been one of the only pieces of data that the public, and the media, have access to.

How safe is safe enough?

While that data might provide some insights, it doesn’t help answer the fundamental question for every AV developer planning to deploy robotaxis for the public: ‘how safe is safe enough?’

Vogt’s comments signal Cruise’s efforts to find a practical means of answering that question.

“But if we can’t use the disengagement rate to gauge commercial readiness, what can we use? Ultimately, I believe that in order for an AV operator to deploy AVs at scale in a ridesharing fleet, the general public and regulators deserve hard, empirical evidence that an AV has performance that is super-human (better than the average human driver) so that the deployment of the AV technology has a positive overall impact on automotive safety and public health.
This requires a) data on the true performance of human drivers and AVs in a given environment and b) an objective, apples-to-apples comparison with statistically significant results. We will deliver exactly that once our AVs are validated and ready for deployment. Expect to hear more from us about this very important topic soon.”

Competitors agree

Cruise is hardly the only company to question the disengagement reports, although this might be the most strongly worded and public call to date. Waymo told TechCrunch that it takes a similar view.

The reports have long been a source of angst among AV developers. The reports do provide information that can be useful to the public, such as number of vehicles on testing on public roads. But it’s hardly a complete picture of any company’s technology.

The reports are wildly different; each company provides varying amounts of information, all in different formats. There is also disagreement over what is and what is not a disengagement. For instance, this issue got more attention in 2018 when Jalopnik questioned an incident involving a Cruise vehicle. In that case, a driver took manual control of the wheel as it passed through an intersection, but it wasn’t reported as a disengagement. Cruise told Jalopnik at the time that said it didn’t meet the standard for California regulations.

The other issue is that disengagements don’t provide an “apples to apples” comparison of technology since these test vehicles operate in a variety of environments and conditions.

Disengagements also often rise and fall along with the scale of testing. Waymo, for instance, told TechCrunch that its disengagements will likely increase as it scales up its testing in California.

And finally, more companies are using simulation or virtual testing instead of sending fleets of cars on public roads to test every new software build. Aurora, another AV developer emphasizes its use of its virtual testing suite. The disengagement reports don’t include any of that data.

Vogt’s post also called out the industry for conducting carefully “curated demo routes that avoid urban areas with cyclists and pedestrians, constrain geofences and pickup/dropoff locations, and limit the kinds of maneuvers the AV will attempt during the ride.”

The shot could be interpreted as a shot at Waymo, which has recently conducted driverless demos on public streets in Chandler, Arizona with reporters. TechCrunch was one of the first to have a driverless ride last year. However, demos are common practice among many other self-driving vehicle startups, and are particularly popular around events like CES. Cruise has conducted at least one demo, which was with the press in 2017.

Vogt suggested that raw, unedited drive footage that “covers long stretches of driving in real world situations” is hard to fake and a more qualitative indicator of technology maturity.

A $100 Million Investment Pulls an EV Startup Out of Stealth Mode

By Alex Davies
Hyundai and Kia are backing Arrival, a startup British maker of electric delivery vans, a good use case for EVs.

How scooter charging startups want to make the industry more profitable

By Megan Rose Dickey

In an industry where unit economics are low, operators are seeking ways to improve margins while also maintaining fleet reliability and low prices for riders. Charging stations may be part of the solution. Already, there are a handful of companies, other than the operators themselves, looking to address this issue by deploying charging stations. The latest one that has come onto our radar is called Charge, which just launched charging hubs in Los Angeles for both bikes and scooters.

“Charge came from two investors of Lime who were noticing a trend in the several markets Lime was rolling out into,” Charge Global Head of Community Quemuel Arroyo told TechCrunch. “They saw the Achilles’ heel was the lack of charging infrastructure, and that infrastructure could allow scooters to be charged all day and would undo the litter and obstacles in the right of way that scooters have become in the world.”

Charge’s hubs, located on private properties, are designed to make it easier for gig workers to charge several scooters at once. Workers can reserve space at hubs for 24 hours at a time, with each secure bay supporting 18 scooters and each hub accommodating 72 scooters at a time. Once charged, workers can pick them up for redeployment.

“In addition to the solution of providing charge, we’re enhancing the experience for juicers,” Arroyo said.

Bird, Lime, Spin and other micromobility operators rely heavily on independent contractors to collect their scooters, charge them overnight and then redeploy them in the morning. That means scooter companies don’t have to use their own gas, labor and electricity in order to recharge these vehicles.

For gig workers who rely on charging scooters as a source of income, having a place to go other than their homes to charge a bunch of scooters at once is a major benefit. The catch, however, is that Charge costs $30 to charge while Bird and Lime, for example, offer a base pay of $3 to $5 for every charged and released scooter, but pay more depending on how difficult it is to locate.

Let’s use Spin, which pays $5 per scooter charged, as an example. If someone collects 15 scooters and brings them to a Charge hub, that worker will receive $75 from Spin for charging and redeploying the scooters, but will have to pay Charge $30. That’s a net profit of just $45.

“It’s not cheaper for them, but juicers say that instead of being able to charge 12 a night, they can charge 24 or more scooters per night,” Arroyo said. “That’s where we see an incremental increase for revenue for juicers themselves.”

Trying the calculation again with 24 scooters, the worker would pay Charge $30 and get $120 from Spin for a net profit of $90. That doesn’t seem all that great, but it could be depending on someone’s situation. Maybe one person only has enough space to charge five scooters at a time, so they would only be able to make $25 per night charging Spin scooters. If that same person can then charge 24 scooters a night, they still end up making a bit more by utilizing Charge. On top of that, they don’t have to crowd their living spaces and put themselves at risk of fire hazards.

Even though micromobility is a relatively young industry, there are already a number of startups specifically focused on charging micromobility vehicles. Collectively, they have raised more than $19 million in funding.

In addition to the hubs Charge has launched in Los Angeles, the company is also in talks with the city of Paris to deploy smart charging stations on sidewalks, which can accommodate up to 12 scooters.

“We’ve gotten an exclusive contract with the city, where the mayor says her streets are compromised and they can’t continue to allow scooter takeover of pedestrian space,” Arroyo said.

In this type of model, riders would be able to rent and return vehicles using the docks. This model is more similar to that of Swiftmile, which is working with the city of Austin to deploy 10 public-use sidewalk stations. That comes out to 80 parking slips per station. The company hopes to do this by the end of the year. With this type of model, charging companies charge operators based on usage.

swiftmile scooter charging

Swiftmile’s guerilla marketing at SXSW

Swiftmile, for example, charges the operators by the minute, but not to exceed a certain amount, depending on the market. Initially, the docking system will be open to all operators in order to show them how it works and how beneficial it can be. After a certain period of time, Swiftmile will only charge its customers’ scooters. Swiftmile has also partnered with Spin to create branded charging hubs exclusively for Spin scooters.

“Cities and local officials have expressed ample concern about scooter clutter, and Spin has led the way in solving that problem, with the goal of making micromobility a true and sustainable solution for people to get around,” Spin CEO and co-founder Derrick Ko told TechCrunch. “We’ve heavily invested in our charging and parking solution — Spin Hubs — and have expanded our offerings, such as incentivizing riders to park in designated drop zones or at a Hub.”

Perch Mobility is another competitor in this space, which says it’s “built by chargers for chargers.” Perch, which also operates in Los Angeles, offers three types of products: the pod, the tri-pod and the suite. All three offer unlimited charging for a fixed price, ranging from $25 per night for charging 14 scooters and $45 per night to charge 21 scooters at a time.

Using Spin again as an example, a worker paying $25 a night to charge 14 scooters would earn $70 from Spin, resulting in a net income of $45.

“We are focused on providing our users both sustainable incomes and community sustainability,” Perch Mobility CEO Tom Schreiber told TechCrunch. “We serve all parts of a community, including lower-income areas.”

Perch Mobility gets workers more money, but Charge says its systems are better for the environment, as they utilize lithium-ion green battery power.

“We’re confident we have a completely green, environmentally sound asset that really helps introduce a missing parameter to make micromobility more successful,” Arroyo said.

If I were a charger, I’d surely continue to care about the environment, but I’d probably be more interested in making the most money.

*This story has been updated to clarify Charge’s pricing structure.

Marijuana delivery giant Eaze may go up in smoke

By Ingrid Lunden

The first cannabis startup to raise big money in Silicon Valley is in danger of burning out. TechCrunch has learned that pot delivery middleman Eaze has seen unannounced layoffs, and its depleted cash reserves threaten its ability to make payroll or settle its AWS bill. Eaze was forced to raise a bridge round to keep the lights on as it prepares to attempt major pivot to ‘touching the plant’ by selling its own marijuana brands through its own depots.

If Eaze fails, it could highlight serious growing pains amid the ‘green rush’ of startups into the marijuana business.

Eaze, the startup backed by some $166 million in funding that once positioned itself as the “Uber of pot” — a marketplace selling pot and other cannabis products from dispensaries and delivering it to customers — has recently closed a $15 million bridge round, according to multiple source. The fund was meant to keep the lights on as Eaze struggles to raise its next round of funding amid problems with making decent margins on its current business model, lawsuits, payment processing issues, and internal disorganization.

 

An Eaze spokesperson confirmed that the company is low on cash. Sources tell us that the company, which laid off some 30 people last summer, is preparing another round of cuts in the meantime. The spokesperson refused to discuss personnel issues but noted that there have been layoffs at many late stage startups as investors want to see companies cut costs and become more efficient.

From what we understand, Eaze is currently trying to raise a $35 million Series D round according to its pitch deck. The $15 million bridge round came from unnamed current investors. (Previous backers of the company include 500 Startups, DCM Ventures, Slow Ventures, Great Oaks, FJ Labs, the Winklevoss brothers, and a number of others.) Originally, Eaze had tried to raise a $50 million Series D, but the investor that was looking at the deal, Athos Capital, is said to have walked away at the eleventh hour.

Eaze is going into the fundraising with an enterprise value of $388 million, according to company documents reviewed by TechCrunch. It’s not clear what valuation it’s aiming for in the next round.

An Eaze spokesperson declined to discuss fundraising efforts but told TechCrunch, “The company is going through a very important transition right now, moving to becoming a plant-touching company through acquisitions of former retail partners that will hopefully allow us to more efficiently run the business and continue to provide good service to customers.

Desperate to grow margins

The news comes as Eaze is hoping to pull off a “verticalization” pivot, moving beyond online storefront and delivery of third-party products (rolled joints, flower, vaping products and edibles) and into sourcing, branding and dispensing the product directly. Instead of just moving other company’s marijuana brands between third-party dispensaries and customers, it wants to sell its own in-house brands through its own delivery depots to earn a higher margin. With a number of other cannabis companies struggling, the hope is that it will be able to acquire brands in areas like marijuana flower, pre-rolled joints, vaporizer cartridges, or edibles at low prices.

An Eaze spokesperson confirmed that the company plans to announce the pivot in the coming days, telling TechCrunch that it’s “a pretty significant change from provider of services to operating in that fashion but also operating a depot directly ourselves.”

The startup is already making moves in this direction, and is in the process of acquiring some of the assets of a bankrupt cannabis business out of Canada called Dionymed — which had initially been a partner of Eaze’s, then became a competitor, and then sued it over payment disputes, before finally selling part of its business. These assets are said to include Oakland dispensary Hometown Heart, which it acquired in an all-share transaction (“Eaze effectively bought the lawsuit,” is how one source described the sale). This will become Eaze’s first owned delivery depot.

In a recent presentation deck that Eaze has been using when pitching to investors — which has been obtained by TechCrunch — the company describes itself as the largest direct-to-consumer cannabis retailer in California. It has completed more than 5 million deliveries, served 600,000 customers and tallied up an average transaction value of $85. 

To date, Eaze has only expanded to one other state beyond California, Oregon. Its aim is to add five more states this year, and another three in 2021. But the company appears to have expected more states to legalize recreational marijuana sooner, which would have provided geographic expansion. Eaze seems to have overextended itself too early in hopes of capturing market share as soon as it became available.

An employee at the company tells us that on a good day Eaze can bring in between $800,000 and $1 million in net revenue, which sounds great, except that this is total merchandise value, before any cuts to suppliers and others are made. Eaze makes only a fraction of that amount, one reason why it’s now looking to verticatlize into more of a primary role in the ecosystem. And that’s before considering all of the costs associated with running the business. 

Eaze is suffering from a problem rampant in the marijuana industry: a lack of working capital. Since banks often won’t issue working capital loans to weed-related business, deliverers like Eaze can experience delays in paying back vendors. A source says late payments have pushed some brands to stop selling through Eaze.

Another drain on its finances have been its marketing efforts. A source said out-of-home ads (billboards and the like) allegedly were a significant expense at one point. It has to compete with other pot purchasing options like visiting retail stores in person, using dispensaries’ in-house delivery services, or buying via startups like Meadow that act as aggregated online points of sale for multiple dispensaries.

Indeed, Eaze claims that its pivot into verticalization will bring it $204 million in revenues on gross transactions of $300 million. It notes in the presentation that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in ‘private label’ products and has more depot control.

Selling weed isn’t eazy

The poor margins are only one of the problems with Eaze’s current business model, which the company admits in its presentation have led to an inconsistent customer experience and poor customer affinity with its brand — especially in the face of competition from a number of other delivery businesses.  

Playing on the on-demand, delivery-of-everything theme, it connected with two customer bases. First, existing cannabis consumers already using some form of delivery service for their supply; and a newer, more mainstream audience with disposable income that had become more interested in cannabis-related products but might feel less comfortable walking into a dispensary, or buying from a black market dealer.

It is not the only startup that has been chasing that audience. Other competitors in the wider market for cannabis discovery, distribution and sales include Weedmaps, Puffy, Blackbird, Chill (a brand from Dionymed that it founded after ending its earlier relationship with Eaze), and Meadow, with the wider industry estimated to be worth some $11.9 billion in 2018 and projected to grow to $63 billion by 2025.

Eaze was founded on the premise that the gradual decriminalisation of pot — first making it legal to buy for medicinal use, and gradually for recreational use — would spread across the US and make the consumption of cannabis-related products much more ubiquitous, presenting a big opportunity for Eaze and other startups like it. 

It found a willing audience among consumers, but also tech workers in the Bay Area, a tight market for recruitment. 

“I was excited for the opportunity to join the cannabis industry,” one source said. “It has for the most part has gotten a bad rap, and I saw Eaze’s mission as a noble thing, and the team seemed like good people.”

Eaze CEO Ro Choy

That impression was not to last. The company, this employee was told when joining, had plenty of funding with more on the way. The newer funding never materialised, and as Eaze sought to figure out the best way forward, the company cycled through different ideas and leadership: former Yammer executive Keith McCarty, who cofounded the company with Roie Edery (both are now founders at another Cannabis startup, Wayv), left, and the CEO role was given to another ex-Yammer executive, Jim Patterson, who was then replaced by Ro Choy, who is the current CEO. 

“I personally lost trust in the ability to execute on some of the vision once I got there,” the ex-employee said. “I thought that on one hand a picture was painted that wasn’t the truth. As we got closer and as I’d been there longer and we had issues with funding, the story around why we were having issues kept changing.” Several sources familiar with its business performance and culture referred to Eaze as a “shitshow”.

No ‘Push For Kush’

The quick shifts in strategy were a recurring pattern that started well before the company got tight financial straits. 

One employee recalled an acquisition Eaze made several years ago of a startup called Push for Pizza. Founded by five young friends in Brooklyn, Push for Pizza had gone viral over a simple concept: you set up your favourite pizza order in the app, and when you want it, you pushed a single button to order it. (Does that sound silly? Don’t forget, this was also the era of Yo, which was either a low point for innovation, or a high point for cynicism when it came to average consumer intelligence… maybe both.)

Eaze’s idea, the employee said, was to take the basics of Push for Pizza and turn it into a weed app, Push for Kush. In it, customers could craft their favourite mix and, at the touch of a button, order it, lowering the procurement barrier even more.

The company was very excited about the deal and the prospect of the new app. They planned a big campaign to spread the word, and held an internal event to excite staff about the new app and business line. 

“They had even made a movie of some kind that they showed us, featuring a caricature of Jim” — the CEO at a the time — “hanging out of the sunroof of a limo.” (I’ve been able to find the opening segment of this video online, and the Twitter and Instagram accounts that had been created for Push for Kush, but no more than that.)

Then just one week later, the whole plan was scrapped, and the founders of Push for Pizza fired. “It was just brushed under the carpet,” the former employee said. “No one could get anything out of management about what had happened.”

Something had happened, though: the company had been taking payments by card when it made the acquisition, but the process was never stable and by then it had recently gone back to the cash-only model. Push for Kush by cash was less appealing. “They didn’t think it would work,” the person said, adding that this was the normal course of business at the startup. “Big initiatives would just die in favor of pushing out whatever new thing was on the product team’s radar.” 

Eaze’s spokesperson confirmed that “we did acquire Push For Pizza . . but ultimately didn’t choose to pursue [launching Push For Kush].”

Payments were a recurring issue for the startup. Eaze started out taking payments only in cash — but as the business grew, that became increasingly problematic. The company found itself kicked off the credit card networks and was stuck with a less traceable, more open to error (and theft) cash-only model at a time when one employee estimated it was bringing in between $800,000 and $1 million per day in sales. 

Eventually, it moved to cards, but not smoothly: Visa specifically did not want Eaze on its platform. Eaze found a workaround, employees say, but it was never above board, which became the subject of the lawsuit between Eaze and Dionymed. Currently the company appear to only take payments via debit cards, ACH transfer, and cash, not credit card.

Another incident sheds light on how the company viewed and handled security issues. 

Can Eaze rise from the ashes?

At one point, employees allegedly discovered that Eaze was essentially storing all of its customer data — including users’ signatures and other personal information — in an Azure bucket that was not secured, meaning that if anyone was nosing around, it could be easily discovered and exploited.

The vulnerability was brought to the company’s attention. It was something that was up to product to fix, but the job was pushed down the list. It ultimately took seven months to patch this up. “I just kept seeing things with all these huge holes in them, just not ready for prime time,” one ex-employee said of the state of products. “No one was listening to engineers, and no one seemed to be looking for viable products.” Eaze’s spokesperson confirms a vulnerability was discovered but claims it was promptly resolved.

Today, the issue is a more pressing financial one: the company is running out of money. Employees have been told the company may not make its next payroll, and AWS will shut down its servers in two days if it doesn’t pay up. 

Eaze’s spokesperson tried to remain optimistic while admitting the dire situation the company faces. “Eaze is going to continue doing everything we can to support customers and the overall legal cannabis industry. We’re excited about the future and acknowledge the challenges that the entire community is facing.”

As medicinal and recreational marijuana access became legal in some states in the latter 2010s, entrepreneurs and investors flocked to the market. They saw an opportunity to capitalize on the end of a major prohibition — a once in a lifetime event. But high government taxes, enduring black markets, intense competition, and a lack of financial infrastructure willing to deal with any legal haziness have caused major setbacks.

While the pot business might sound chill, operations like Eaze depend on coordinating high-stress logistics with thin margins and little room for error. Plenty of food delivery startups from Sprig to Munchery went under after running into similar struggles, and at least banks and payment processors would work with them. With the odds stacked against it, Eaze has a tough road ahead.

Bolt raises €50M in venture debt from the EU to expand its ride-hailing business

By Ingrid Lunden

Bolt, the billion-dollar startup out of Estonia that’s building a ride-hailing, scooter and food delivery business across Europe and Africa, has picked up a tranche of funding in its bid to take on Uber and the rest in the world of on-demand transportation.

The company has picked up €50 million (about $56 million) from the European Investment Bank to continue developing its technology and safety features, as well as to expand newer areas of its business, such as food delivery and personal transport like e-scooters.

With this latest money, Bolt has raised more than €250 million in funding since opening for business in 2013, and as of its last equity round in July 2019 (when it raised $67 million), it was valued at over $1 billion, which Bolt has confirmed to me remains the valuation here.

Bolt further said that its service now has more than 30 million users in 150 cities and 35 countries and is profitable in two-thirds of its markets.

The timing of the last equity round, and the company’s ambitious growth plans, could well mean it will be raising more equity funding again soon. Bolt’s existing backers include the Chinese ride-hailing giant Didi, Creandum, G Squared and Daimler (which owns a ride-hailing competitor, Free Now — formerly called MyTaxi).

“Bolt is a good example of European excellence in tech and innovation. As you say, to stand still is to go backwards, and Bolt is never standing still,” said EIB’s vice president, Alexander Stubb, in a statement. “The Bank is very happy to support the company in improving its services, as well as allowing it to branch out into new service fields. In other words, we’re fully on board!”

The EIB is the nonprofit, long-term lending arm of the European Union, and this financing in the form of a quasi-equity facility.

Also known as venture debt, the financing is structured as a loan, where repayment terms are based on a percentage of future revenue streams, and ownership is not diluted. The funding is backed in turn by the European Fund for Strategic Investments, as part of a bigger strategy to boost investment in promising companies, and specifically riskier startups, in the tech industry. It expects to make and spur some €458.8 billion in investments across 1 million startups and SMEs as part of this plan.

Opting for a “quasi-equity” loan instead of a straight equity or debt investment is attractive to Bolt for a couple of reasons. One is the fact that the funding comes without ownership dilution. Two is the endorsement and support of the EU itself, in a market category where tech disruptors have been known to run afoul of regulators and lawmakers, in part because of the ubiquity and nature of the transportation/mobility industry.

“Mobility is one of the areas where Europe will really benefit from a local champion who shares the values of European consumers and regulators,” said Martin Villig, the co-founder of Bolt (whose brother Markus is the CEO), in a statement. “Therefore, we are thrilled to have the European Investment Bank join the ranks of Bolt’s backers as this enables us to move faster towards serving many more people in Europe.”

(Butting heads with authorities is something that Bolt is no stranger to: It tried to enter the lucrative London taxi market through a backdoor to bypass the waiting time to get a license. It really didn’t work, and the company had to wait another 21 months to come to London doing it by the book. In its first six months of operation in London, the company has picked up 1.5 million customers.)

While private VCs account for the majority of startup funding, backing from government groups is an interesting and strategic route for tech companies that are making waves in large industries that sit adjacent to technology. Before it was acquired by PayPal, IZettle also picked up a round of funding from the EIB specifically to invest in its AI R&D. Navya, the self-driving bus and shuttle startup, has also raised money from the EIB in the past, as has MariaDB.

One of the big issues with on-demand transportation companies has been their safety record, a huge area of focus given the potential scale and ubiquity of a transportation or mobility service. Indeed, this is at the center of Uber’s latest scuffle in Europe, where London’s transport regulator has rejected a license renewal for the company over concerns about Uber’s safety record. (Uber is appealing; while it does, it’s business as usual.)

So it’s no surprise that with this funding, Bolt says that it will be specifically using the money to develop technology to “improve the safety, reliability and sustainability of its services while maintaining the high efficiency of the company’s operations.”

Bolt is one of a group of companies that have been hatched out of Estonia, which has worked to position itself as a leader in Europe’s tech industry as part of its own economic regeneration in the decades after existing as part of the Soviet Union (it formally left in 1990). The EIB has invested around €830 million in Estonian projects in the last five years.

“Estonia is as the forefront of digital transformation in Europe,” said Paolo Gentiloni, European Commissioner for the Economy, in a statement. “I am proud that Europe, through the Investment Plan, supports Estonian platform Bolt’s research and development strategy to create innovative and safe services that will enhance urban mobility.”

Joby Aviation raises $590 million led by Toyota to launch an electric air taxi service

By Darrell Etherington

Joby Aviation has raised a $590 million Series C round of funding, including $394 million from lead investor Toyota Motor Corporation, the company announced today. Joby is in the process of developing an electric air taxi service, which will make use of in-house developed electric vertical take-off and landing (eVTOL) aircraft that will in part benefit from strategic partner Toyota’s vehicle manufacturing experience.

This brings the total number of funding in Joby Aviation to $720 million, and its list of investors includes Intel Capital, JetBlue Technology Ventures, Toyota AI Ventures and more. Alongside this new round of funding, Joby gains a new board member: Toyota Motor Corporation EVP Shigeki Tomoyama.

Founded in 2009, Joby Aviation is based in Santa Cruz, California. The company was founded by JoeBen Bevirt, who also founded consumer photo and electronics accessory maker Joby. Its proprietary aircraft is a piloted eVTOL, which can fly at up to 200 miles per hour for a total distance of over 150 miles on a single charge. Because it uses an electric drivetrain and multi rotor design, Joby Aviation says it’s “100 times quieter than conventional aircraft during takeoff and landing, and near-silent when flying overhead.”

These benefits make eVTOL craft prime candidates for developing urban aerial transportation networks, and a number of companies, including Joby as well as China’s EHang, Airbus and more are all working on this type of craft for use in this kind of city-based short-hop transit for both people and cargo.

The sizeable investment made by Toyota in this round is a considerable bet for the automaker on the future of air transportation. In a press release detailing the round, Toyota President and CEO Akio Toyoda indicated that the company is serious about eVTOLs and air transport in general.

“Air transportation has been a long-term goal for Toyota, and while we continue our work in the automobile business, this agreement sets our sights to the sky,” Toyoda is quoted as saying. “As we take up the challenge of air transportation together with Joby, an innovator in the emerging eVTOL space, we tap the potential to revolutionize future transportation and life. Through this new and exciting endeavor, we hope to deliver freedom of movement and enjoyment to customers everywhere, on land, and now, in the sky.”

Joby Aviation believes that it can achieve significant cost benefits vs. traditional helicopters for short aerial flights, eventually lowering costs through maximizing utilization and fuel savings to the point where it can be “accessible to everyone.” To date, Joby has completed sub-scale testing on its aircraft design, and begun full flight tests of production prototypes, along with beginning the certification process for its aircraft with the Federal Aviation Administration (FAA) at the end of 2018.

Mobileye takes aim at Waymo

By Kirsten Korosec

Mobileye has built a multi-billion-dollar business supplying automakers with computer vision technology that powers advanced driver assistance systems. It’s a business that last year generated nearly $1 billion in sales for the company. Today, 54 million vehicles on the road are using Mobileye’s computer vision technology.

In 2018, the company made what many considered a bold and risky move when it expanded its focus beyond being a mere supplier to becoming a robotaxi operator. The upshot: Mobileye wants to compete directly with the likes of Waymo and other big players aiming to deploy commercial robotaxi services.

TechCrunch sat down with Amnon Shashua, Mobileye’s president and CEO and Intel senior vice president, to find out why and how — yep, acquisitions are in the future — the company will hit its mark.

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