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Daily Crunch: Uber and Lyft defeated again in court

By Anthony Ha

A California court weighs in as Prop. 22 looms, Google removes popular apps over data collection practices and the Senate subpoenas Jack Dorsey and Mark Zuckerberg. This is your Daily Crunch for October 23, 2020.

The big story: Uber and Lyft defeated again in court

A California appeals court ruled that yes, a new state law applies to Uber and Lyft drivers, meaning that they must be classified as employees, rather than independent contractors. The judge ruled that contrary to the rideshare companies’ arguments, any financial harm does not “rise to the level of irreparable harm.”

However, the decision will not take effect for 30 days — suggesting that the real determining factor will be Proposition 22, a statewide ballot measure backed by Uber and Lyft that would keep drivers as contractors while guaranteeing things like minimum compensation and healthcare subsidies.

“This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” a Lyft spokesperson told TechCrunch.

The tech giants

Google removes 3 Android apps for children, with 20M+ downloads between them, over data collection violations — Researchers at the International Digital Accountability Council found that a trio of popular and seemingly innocent-looking apps aimed at younger users were violating Google’s data collection policies.

Huawei reports slowing growth as its operations ‘face significant challenges’ — The full impact of U.S. trade restrictions hasn’t been realized yet, because the government has granted Huawei several waivers.

Senate subpoenas could force Zuckerberg and Dorsey to testify on New York Post controversy — The Senate Judiciary Committee voted in favor of issuing subpoenas for Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey.

Startups, funding and venture capital

Quibi says it will shut down in early December — A newly published support page on the Quibi site says streaming will end “on or about December 1, 2020.”

mmhmm, Phil Libin’s new startup, acquires Memix to add enhanced filters to its video presentation toolkit — Memix has built a series of filters you can apply to videos to change the lighting, the details in the background or across the whole screen.

Nordic challenger bank Lunar raises €40M Series C, plans to enter the ‘buy now, pay later’ space — Lunar started out as a personal finance manager app but acquired a full banking license in 2019.

Advice and analysis from Extra Crunch

Here’s how fast a few dozen startups grew in Q3 2020 — This is as close to private company earnings reports as we can manage.

The short, strange life of Quibi — Everything you need to know about the Quibi story, all in one place.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

France rebrands contact-tracing app in an effort to boost downloads — France’s contact-tracing app has been updated and is now called TousAntiCovid, which means “everyone against Covid.”

Representatives propose bill limiting presidential internet ‘kill switch’ — The bill would limit the president’s ability to shut down the internet at will.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

CA appeals court upholds ruling that Uber and Lyft must classify drivers as employees

By Megan Rose Dickey

Uber and Lyft must classify their drivers as employees, an appellate court ruled yesterday evening. However, the decision will be stayed for 30 days after the court issues the remittitur, which has not happened yet. That means depending on how ballot measure Proposition 22 goes, this case may not end up being the deciding factor in how Lyft and Uber classify their drivers in California.

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling today, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”

Additionally, there is nothing in the preliminary injunction, according to the judge, that would prevent Uber and Lyft from offering flexibility and independence to their drivers. Lastly, the judge said Uber and Lyft have had plenty of time to transition their drivers from independent contractors to employees, given that the key case in passing AB 5, the gig worker bill that spurred this lawsuit, was decided in 2018.

“This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” Lyft spokesperson Julie Wood said in a statement to TechCrunch.

Prop 22 is a ballot measure in California that seeks to keep rideshare drivers and delivery workers classified as independent contractors. The measure, if passed, would make drivers and delivery workers for said companies exempt from a new state law that classifies them as W-2 employees. If passed, app-based transportation and delivery workers would be entitled to things like minimum compensation and healthcare subsidies based on engaged driving time.

Meanwhile, Lyft says it’s exploring all of its legal options, which may include appealing to the California Supreme Court. Uber, similarly, is considering its appeal options.

“Today’s ruling means that if the voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state,” an Uber spokesperson told TechCrunch. “We’re considering our appeal options, but the stakes couldn’t be higher for drivers—72% of whom support Prop 22—and for the California economy, where millions of people are jobless and another 158,000 just sought unemployment support this week.”

The judge’s decision comes after California Superior Court Judge Ethan Schulman granted a preliminary injunction in August to force Uber and Lyft to reclassify its drivers as employees. Uber and Lyft appealed the decision, but the appeals court has now affirmed the decision from the lower court.

The lawsuit was brought forth by California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco in May. They argued Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. Then, in June, the plaintiffs filed a preliminary injunction seeking the court to force Uber and Lyft to reclassify their drivers. In August, Judge Schulman granted it.

“While this legal victory today is directed at two companies, this fight is far broader,” Gig Workers Rising said in a statement. “This is about the future of work in this country. This is about securing good jobs with real benefits for generations to come. If Uber and Lyft are successful in passing Prop. 22 and undo the will of the people, they will inspire countless other corporations to adapt their business models and misclassify workers in order to further enrich the wealthy few at the expense of their workforce.”

Uber drivers sue company alleging coercive Prop 22 advertising

By Megan Rose Dickey

Uber is facing a class-action lawsuit over Proposition 22 that alleges the company is illegally coercing its drivers to support the ballot measure that seeks to keep workers classified as independent contractors. The suit was brought forth by two Uber drivers, Benjamin Valdez and Hector Castellanos, as well as two California nonprofit organizations, Worksafe and Chinese Progressive Association.

“Let’s be absolutely clear,” David Lowe, an attorney for the plaintiffs, said in a statement. “Uber’s threats and constant barrage of Prop 22 propaganda on an app the drivers must use to do their work have one purpose: to coerce the drivers to support Uber’s political battle to strip them of workplace protections.”

In the suit, provided by The New York Times reporter Kate Conger, the plaintiffs argue Uber has encouraged its drivers and delivery workers to support Prop 22 via the company’s driver-scheduling app.

“Uber’s solicitations have the purpose and effect of causing drivers to fear retaliation by Uber if they do not support Uber’s political preference and may induce many drivers to falsely state that they support being deprived of the rights that California law guarantees to statutory ’employees,’ ” the suit states.

This group says it also plans to file legal claims against Uber, Lyft, Instacart and DoorDash with the California Labor Commissioner.

“This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts,” Uber spokesperson Matt Kallman said in a statement to TechCrunch. “It can’t distract from the truth: that the vast majority of drivers support Prop 22, and have for months, because they know it will improve their lives and protect the way they prefer to work.”

Prop 22 is the most-funded campaign in California’s history. To date, the Yes on 22 side has put north of $185 million into the initiative. Uber, Lyft and DoorDash are the biggest contributors on the yes side. Meanwhile, the No on 22 campaign has contributed $12,166,063.

Mixtape Podcast: Proposition 22 and the labor divide

By Henry Pickavet

California’s Proposition 22 is the most funded and perhaps one of the most contentious ballot measures in the state’s history.

To date, the Yes on 22 side has put north of $185 million into the initiative. The proposition, funded by Uber, Lyft, DoorDash, Instacart and Postmates, would ensure workers remain independent contractors. A Prop 22 defeat would reconfigure fully how gig-working companies classify their workers.

On the first episode of Season 3 of Mixtape, we talked to two gig workers, one on each side of the proposition.

Vanessa Bain is an Instacart shopper who is opposed to Proposition 22. Earlier this year, she co-founded Gig Workers Collective, a nonprofit to fight for fair pay and better treatment for gig workers.

She says the future of labor is at stake.

“I would argue the future of our democracy as well. The reality is that it establishes a dangerous precedent to allow companies to write their own labor laws,” Bain continues. “There’s an obvious conflict of interest there … This policy was created to unilaterally benefit companies at the detriment of workers.”

Surprising exactly no one, Doug Mead, an Uber Eats and Postmates driver who lives in Palm Springs and sits squarely in the Yes on 22 camp, feels differently.

“It’s really the government — their intent to remove a person’s control over how they want to be compensated. And that to me just makes no sense whatsoever,” Mead told us. “I should be in control of how I want to be compensated and by who.”

Uber, which was one of the three original companies (along with Lyft and DoorDash) to fund the proposition with $30 million, would see its business model change drastically if the proposition is defeated.

Earlier this month, Megan spoke with Shin-pei Tsay, Uber’s director of policy, cities and transportation, about a number of topics, including Proposition 22. She says she understands the dilemma that drivers grapple with on both sides but ultimately believes that the flexibility drivers currently have is worth protecting.

“But it isn’t perfect,” Tsay says. “We should be supporting workers more than the existing system enables currently, and so this is sort of a middle way of, you know, protecting that flexibility but also offering some benefits.”

The benefits Tsay is referring to is the 120% of minimum wage, 30 cents per engaged mile and healthcare subsidies dependent upon the number of hours worked if Prop 22 passes.

And if it doesn’t pass? Or if the company is forced to devise some magical hybrid classification that benefits all drivers, whether they want to be full employees or independent contractors?

“I think it’d be really challenging in our analysis. Essentially, we would have to start to ensure that there’s coverage, to ensure that there’s the necessary number of drivers to meet demand. There would be this forecasting that needs to happen — we would only be able to offer a certain number of jobs to meet that demand, because people will be working in set amounts of time.”

Tsay says that the matter at hand is to make the situation better rather than trying to “tinker around with two kinds of imperfect definitions.”

“This is something that a lot of companies have to look at. And what we’re trying, what we’re going up against is [that the] current system in place is very binary. And so I think it has to be, again, in partnership with cities, with states, with the federal government — we have to solve this together. This is not something that we just can come up with. And I don’t think the private sector should just come up with it on its own.”

Both Bain and Mead are also thinking about the potential impact the proposition will have on the future of labor outside of your Ubers and Lyfts. They both invoked Starbucks of all places and for very different reasons.

“I understand the other side’s point of view in terms of, there are apparently some drivers out there who don’t feel like they’re making enough money,” Mead told us. “But they’re asking for things, to me, that are just ridiculous. They want to get paid for waiting for a ride? Really? Who gets paid to wait on a job?

“If I’m a barista at Starbucks, there are going to be times when there are no customers in the store. However, I’m also taking that time to present the product that’s being sold to the customers, to set up the displays in the stores, to help clean the store. So I’m still working, even if there’s no customers. Now all of that work has already been done, and there are still no customers. Guess what? The manager is going to send me home. They’re not going to allow me to stay there while there’s nothing to do. So I’m not going to get paid to wait. Why should I get paid to wait now as an independent contractor? That makes zero sense to me.”

Bain uses the same example but in a drastically different way. And one that takes the labor movement head on.

“I have no doubt that … if Prop 22 were to succeed, we would see similar types of maneuvers from companies like Starbucks or Walmart, where we’re gonna end up with piece rate work in all of the service industry. Where we’re going to be paid per transaction that we bring up if we’re a cashier. Or we’re going to be paid per latte that we craft, if we’re a barista.

“If all it takes is putting the hiring process and the bossing into an app on your phone to rewrite labor laws, every company on the planet is going to be doing that. There’s so much more, unfortunately, at stake here than just Uber and Lyft and ride share and grocery delivery and how you’re going to get your DoorDash orders. Literally the future of labor is at stake.”

Lyft will soon let riders pay for rides with Venmo

By Matt Burns

Lyft riders will soon have the option for paying and splitting fares using Venmo, the company said in a blog posting this morning. Venmo joins Lyft’s other payment methods of PayPal, credit cards, debit cards, Lyft Cash and more.

To enable the payment method, users need to authorize Venmo in the Lyft app.

Lyft says this feature is rolling out this month and will be available across its network in the coming weeks.

This feature comes to Lyft several years after first hitting Uber in 2018. Through Venmo users are able to create a financial social network of sorts where users share transactions including ridesharing charges. For services like Uber and Lyft, this unlocks a new form of marketing where users note their ridesharing service of choice. And, in theory, if your closest friends use a particular service for rides, you’re more likely to follow in kind.

Splitting fares happens in the Venmo app. After the ride is complete, users need to find and select the Lyft transaction in their Venmo payment feed. From there the Venmo user can select the person they want to split the charge. However, Lyft offers a native fare splitting service that does not require Venmo.

Prop 22 opponents say Yes on 22 should not be able to mail flyers as nonprofit

By Megan Rose Dickey

Opponents of California’s Proposition 22, the measure that seeks to continue classifying rideshare drivers and delivery workers as independent contractors, filed a complaint this morning with the United States Postal Service. The No on 22 campaign alleges the Yes side is not eligible for a nonprofit postal status and is asking USPS to revoke its permit.

It’s much cheaper to send campaign mailers as a nonprofit organization. For example, sending between 1 – 200,000 small mailers to every door normally costs $0.302 per piece. As a nonprofit, that costs $0.226 per piece, according to USPS. To be clear, the Yes on 22 campaign confirmed it was formed as a nonprofit organization under IRS section 501(c)(4), which pertains to social welfare organizations. But the No on 22 side says USPS erred in approving the Yes on 22 campaign.

“The Yes on 22 nonprofit permit was unlawfully issued,” a lawyer for No on 22 wrote to USPS Postmaster General Louis DeJoy. “[…] This misuse of the nonprofit permit coming from a corporate backed $200 million campaign is unprecedented and should be remedied by the Postal Service immediately.”

According to USPS, any organization that wants to send mail as a nonprofit must first be authorized by the postal service as being eligible. Those that are eligible for nonprofit privileges, according to USPS, include “some political committees” but not “certain political organizations.” The political committees that may qualify for nonprofit prices regardless of nonprofit status, according to USPS, are the national or state committees of a political party, and the Democratic or Republican congressional or senatorial campaign committees.

“Campaign committees participating in ballot measure advocacy routinely form themselves as non-profits under section 501(c)(4) of the Internal Revenue Code, as the No on 22 lawyers know well,” Yes on 22 campaign spokesperson Geoff Vetter told TechCrunch. “Furthermore, the IRS granted Yes on 22’s nonprofit status. As a 501(c)(4) organization, Yes on 22 is eligible for the appropriate nonprofit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster. Moreover, pursuant to USPS Customer Support Ruling 128 – the USPS has a long-term policy in place of allowing the ballot measure committee of a duly authorized nonprofit to mail under the nonprofit’s authorization. The above is true for many ballot measure campaigns, and as stated, like all entities, our applications were reviewed and approved by both the IRS and the USPS.”

To date, the Yes on 22 campaign has contributed $185,096,892 to its cause. The Yes on 22 committee consists of companies like Uber, Lyft, Instacart and DoorDash, as well as drivers, small businesses and public safety and community organizations. The bulk of its funding has come from Uber, Lyft and DoorDash. In comparison, No on 22 has contributed $12,166,063.

“It’s outrageous but not surprising that the app companies that are going to the mat to keep shortchanging workers would shamelessly rip off the postal service,” No on Prop 22 spokesperson Mike Roth said in a statement. “This is just more evidence of the kind of greed we are dealing with from these companies who are spending $186 million in their selfish quest to buy themselves a new law but refused to buy their workers PPE in a pandemic.”

TechCrunch has reached out to USPS and will update this story if we hear back.

Talking SPACs with investor Bradley Tusk

By Connie Loizos

Bradley Tusk has become known in recent years for being involved in what’s about to get hot, from his early days advising Uber, to writing one of the first checks to the insurance startup Lemonade, to pushing forward the idea that we should be using the smart devices in our pockets to vote.

Indeed, because he’s often at the vanguard, it wasn’t hugely surprising when Tusk, like a growing number of other investors, formed a $300 million SPAC or special acquisition company, one that he and a partner plan to use to target a business in the leisure, gaming, or hospitality industry, according to a regulatory filing.

Because Tusk — a former political operative who ran the successful third mayoral campaign for Mike Bloomberg —  seems adept at seeing around corners, we called him up late last week to ask whether SPACs are here to stay, how a Biden administration might impact the startup investing landscape, and how worried (or not) big tech should be about this election. You can hear the full conversation here. Owing to length, we are featuring solely the part of our conversation that centered on SPACs.

TC: Lemonade went public this summer and its shares, priced at $29, now trade at $70. 

BT: They are down today last I checked. When you only check once in a blue moon, you’re like, ‘Hey, look at how great this is,’ whereas if, like me, you check me every day, you’re like, ‘It lost 4%, where’s my money?’

We got really lucky; Lemonade was our second deal that we did out of our first fund, and the fact that it IPO’d within four years of the company’s founding is pretty amazing.

TC: Is it amazing? I wonder what it says about the common complaint that the traditional IPO process is bad — is it just an excuse?

BT: [CEO] Daniel Schrieber was very clear that he and [cofounder] Shai Wininger had a strategy from day one to go public as quickly as they possibly could, because in his view, an IPO is supposed to represent kind of the the beginning. It’s the ‘Okay, we’ve proven that there’s product market fit, we’ve proven that there’s customer demand; now let’s see what we can really do with this thing.’ And it’s supposed to be about hope and promise and future and excitement. And if you’ve been a private company for 10 years, and you’re worth tens of billions of dollars and your growth is already starting to flatten out a little bit, it’s just much less exciting for public investors.

The question now for everyone in our business is what happens with Airbnb in a few weeks or whenever they are [staging an IPO]. Will that pixie dust be there, or will they have been around so long that the market is kind of indifferent?

TC: Is that why we’re seeing so many SPACs? Some of that pixie dust is gone. No one knows when the IPO window might shut. Let’s get some of these companies out into the public market while we still can?

BT: No, I don’t I don’t think so. I think SPACs have become a way to raise a lot of money very quickly. It took me two years to raise $37 million for my first venture fund, and three months was the entire process for me to raise $300 million for my SPAC. So it’s a mechanism that is highly efficient and right now is so popular with public market investors that there is just a lot of opportunity, and people are grabbing it. In fact, now you’re hearing about people who are planning SPACs having to pull [them] back because there’s a ton of competition right now.

At the end of the day, the fundamentals still rule. If you take a really bad company public through a SPAC, maybe the excitement of the SPAC gets you an early pop. But if the company has neither good unit economics nor high growth, there’s no real reason to believe it will be successful. And especially for the people in the SPAC, where they have to hold on to it for a little while, by the time the lockup ends, the world has probably figured out that this is not the greatest IPO of all time. You can’t put lipstick on a pig.

TC: You say you raised the SPAC very quickly. How is the investor profile different than that of a typical venture fund investor?

BT:  The investors for this SPAC — at least when I did the roadshow, and I think I did 28 meetings over a couple of days — is mainly hedge funds and people who don’t really invest in venture at all, so there was no overlap between my [venture fund] LP base and the people who invested in our SPAC that I’m aware of. These are public market investors who are used to moving very quickly. There’s a lot more liquidity in a SPAC. We have two years to acquire something, but ultimately, it’s a public property, so investors can come in and out as they see fit.

TC: So it’s mostly hedge funds that are getting paid management fees to deploy their capital in this comparatively safe way and that are getting interest on the money invested, too, while it’s sitting around in a trust while [the SPAC managers] look for a target company.

BT: Why it kind of does make sense for [them to back] VCs is they are basically making the bet to say: does this person running the SPAC have enough deal flow, enough of a public profile, enough going on that they are going to come across the right target? And venture investors in many ways fit that profile because we just look at so many companies before deploying capital.

TC: Do you have to demonstrate some kind of public markets expertise in order to convince some of these investors that you know what it takes to take a company public and grow it in the public markets?

BT: I guess. We raised the money, so I guess I passed the test. But I did spend a little under two years on Wall Street; I created the lottery privatization group of Lehman Brothers. And my partner [in the SPAC], Christian Goode, has a lot of experience with big gaming companies. But overall, I think that if you are a venture investor with a ton of deal flow and a good track record but very little or no public market experience, I don’t know that that would disqualify you from being able to rate a SPAC.

Cloud Foundry coalesces around Kubernetes

By Frederic Lardinois

In a normal year, the Cloud Foundry project would be hosting its annual European Summit in Dublin this week. But this is 2020, so it’s a virtual event. This year, however, has been a bit of a transformative year for the open-source Platform-as-a-Service project — in more ways than one. With Cloud Foundry executive director Abby Kearns leaving earlier this year, the organizations’ former CTO Chip Childers stepped into the role. Maybe just as importantly, though, the project’s move to Kubernetes as its container orchestration tool of choice — and a renewed focus on the Cloud Foundry developer experience — is now starting to bear fruit.

“In April, I took over the job. I said: ‘Listen, our community has a new North Star. It’s to go take the Cloud Foundry developer experience and get that thing re-platformed onto Kubernetes . No more delay, no more diversity of thought here. It’s time to make the move,’ ” Childers said (with a chuckle). “And here we are. It’s October, we have our ecosystem aligned, we have major project releases that are fulfilling that vision. And we’ve got a community that’s very energized around it continuing the work of progressing this integration with a bunch of cloud-native projects.”

Developers who use Cloud Foundry, Childers argued, love it, but the project now has an opportunity to show a wider range of potential use that it can offer a smoother developer experience on top of virtually any Kubernetes cluster.

One of the projects that is working on making this happen — and which hit its 1.0 release today, is cf-for-k8s. Traditionally, getting up and running with Cloud Foundry was a heavy lift — and something that most companies left to third-party vendors to handle. This new project, which launched in April, allows developers to spin up a relatively light-weight Cloud Foundry distribution on top of a Kubernetes cluster — using projects like Istio and Fluentd, in addition to Kubernetes — and to do so within minutes.

“It comes along with the whole process of reimagining our architecture to pull in other projects a lot more aggressively and allows us to get to feature parity [with the classic VM-focused Cloud Foundry experience] using a lot more complementary open-source projects,” Childers said about the larger role of this project in the overall ecosystem. “That lets our community focus less on building the underlying plumbing and [spend] more time thinking about how to speed up innovation and the developer experience.”

This wouldn’t be open source if there wasn’t another project that does something quite similar — at least at first glance. That’s KubeCF, which hit its 2.5 launch today. This is an open-source distribution of the Cloud Foundry Application Runtime that, as Childers explained, is meant for production use and that was originally meant to provide existing users a bridge onto the Kubernetes bandwagon. Over time, these two projects will likely merge. “Everyone’s collaborating on what this shared vision looks like. They’re just, they’re just two different distributions that handle the different use cases today,” Childers explained.

After six months in his new position, Childers noted that he’s seeing a lot of energy in the community right now. The job is hard, he said, when there’s unhealthy disagreement, but right now, what he’s seeing is “a beautiful harmony of agreement.”

Robin.io launches a free version of its cloud-native Kubernetes storage solution

By Frederic Lardinois

Robin.io, a cloud-native application and data management solution with enterprise customers like USAA, Sabre, SAP, Palo Alto Networks and Rakuten Mobile, today announced the launch of its new free(-mium) version of its service, in addition to a major update to the core of its tool.

Robin .io promises that it brings cloud-native data management capabilities to containerized applications with support for standard operations like backup and recovery, snapshots, rollbacks and more. It does all of that while offering bare-metal performance and support for all major clouds. The service is essentially agnostic to the actual database being used and offers support for the likes of PostgreSQL, MySQL, MongoDB, Redis, MariaDB, Cassandra, Elasticsearch and others.

Image Credits: Robin.io

“Robin Cloud Native Storage works with any workload on any Kubernetes-based platform and on any cloud,” said Robin founder and CEO Partha Seetala. “With capabilities for storing, taking snapshots, backing up, cloning, migrating and securing data — all with the simplest of commands — Robin Cloud Native Storage offers developers and DevOps teams a super simple yet highly performant tool for quickly deploying and managing their enterprise workloads on Kubernetes.”

The new free version lets teams manage up to 5 nodes and 5TB of storage. The promise here is that this a free-for-life offering and the company obviously expects that it allows enterprises to get a feel for the service and then upgrade to its paid enterprise plans over time.

Talking about those enterprise plans, the company also today announced that it is moving to a consumption-based pricing plan, starting at $0.42 per node-hour (though it also offers annual subscriptions). The enterprise plan includes 24×7 support and doesn’t limit the number of nodes or storage capacity.

Among the new features to Robin’s core storage service are data management support for Helm Charts (where Helm is the Kubernetes package manager), the ability to specify where exactly the data should reside (which is mostly meant to keep it close to the compute resources) and affinity policies that ensure availability for stateful applications that rely on distributed databases and data platforms.

Late-stage deals made Q3 2020 a standout VC quarter for US-based startups

By Alex Wilhelm

Remember back in March when the VC game was done for the year, checkbooks were snapping shut and startup layoffs led the headlines? So much for all that. Q3’s venture capital numbers are in and they are anything but weak.

In retrospect, the Q2 VC slowdown looks more like a short-lived recharge ahead of a big push in Q3 than anything existential. We can see this today through the lens of data concerning what happened after June concluded and we moved into Q3.

According to data from PitchBook (data source) and CBInsights (data source), there was a lot to like about the third quarter if you were a U.S.-based startup.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


I want to dig into the data and pull out most important data points for you. We’ll get you informed and out the door in around 900 words.

If you want a more global look at the venture capital world in Q3, don’t worry. We’re doing that tomorrow right here at The Exchange. Ready? This should be both fun and informative. Let’s go!

A massive third quarter

To get a clear look at the U.S. venture capital market, we’ll start from the top down. So, the biggest numbers first, followed by increasingly narrow slices of data so we can drill down into smaller startups.

First, the top-line numbers:

  • How much money was raised by U.S.-based startups in Q3 2020? $36.5 billion, according to CBInsights, $37.8 billion according to PitchBook. Those numbers are effectively the same for purposes. CBInsights calls the number a seven-quarter high, up 22% from the Q3 2019 number and 30% from the Q2 2020 result. PitchBook agrees that Q3 2020 was strong, but has its count just under Q2 2020’s own.
  • How many deals was that money spread between? CBInsights counts 1,461 VC deals in Q3 2020 for U.S.-based startups. Per its numbers, that figure is up 1% from Q2 2020 and down 11% from Q3 2019. PitchBook, in contrast, counts 2,990 total deals, inclusive of rounds that it expects to be added as information about the quarter fills in. That tally “held steady” compared to Q3 2019, per the company.

What to make of all this information? Simple: Q3 2020 U.S.-based startup venture capital dollar volume was very strong, with deal counts coming in slightly weaker.

This means that we saw fewer, larger deals in the quarter on average, right? Let’s see:

Temporal raises $18.75M for its microservices orchestration platform

By Frederic Lardinois

Temporal, a Seattle-based startup that is building an open-source, stateful microservices orchestration platform, today announced that it has raised an $18.75 million Series A round led by Sequoia Capital. Existing investors Addition Ventures and Amplify Partners also joined, together with new investor Madrona Venture Group. With this, the company has now raised a total of $25.5 million.

Founded by Maxim Fateev (CEO) and Samar Abbas (CTO), who created the open-source Cadence orchestration engine during their time at Uber, Temporal aims to make it easier for developers and operators to run microservices in production. Current users include the likes of Box and Snap.

“Before microservices, coding applications was much simpler,” Temporal’s Fateev told me. “Resources were always located in the same place — the monolith server with a single DB — which meant developers didn’t have to codify a bunch of guessing about where things were. Microservices, on the other hand, are highly distributed, which means developers need to coordinate changes across a number of servers in different physical locations.”

Those servers could go down at any time, so engineers often spend a lot of time building custom reliability code to make calls to these services. As Fateev argues, that’s table stakes and doesn’t help these developers create something that builds real business value. Temporal gives these developers access to a set of what the team calls ‘reliability primitives’ that handle these use cases. “This means developers spend far more time writing differentiated code for their business and end up with a more reliable application than they could have built themselves,” said Fateev.

Temporal’s target use is virtually any developer who works with microservices — and wants them to be reliable. Because of this, the company’s tool — despite offering a read-only web-based user interface for administering and monitoring the system — isn’t the main focus here. The company also doesn’t have any plans to create a no-code/low-code workflow builder, Fateev tells me. However, since it is open-source, quite a few Temporal users build their own solutions on top of it.

The company itself plans to offer a cloud-based Temporal-as-a-Service offering soon. Interestingly, Fateev tells me that the team isn’t looking at offering enterprise support or licensing in the near future, though. “After spending a lot of time thinking it over, we decided a hosted offering was best for the open-source community and long term growth of the business,” he said.

Unsurprisingly, the company plans to use the new funding to improve its existing tool and build out this cloud service, with plans to launch it into general availability next year. At the same time, the team plans to say true to its open-source roots and host events and provide more resources to its community.

“Temporal enables Snapchat to focus on building the business logic of a robust asynchronous API system without requiring a complex state management infrastructure,” said Steven Sun, Snap Tech Lead, Staff Software Engineer. “This has improved the efficiency of launching our services for the Snapchat community.”

Uber is hiring hundreds of engineers in India to cut costs

By Manish Singh

Uber said on Thursday it is working to hire 225 engineers in India, strengthening its tech team in the key overseas market months after it eliminated thousands of jobs globally.

The ride-hailing firm, which competes with Ola in India, said today it has hired Manikandan Thangarathnam, who spent nearly 13 years as a director of engineering at Amazon, to lead the company’s rider and platform engineering teams in Bangalore. (Last month, Uber announced it would hire 140 engineers in India. Today it said it was in the process of hiring an additional 85 engineers.)

The move comes as several high-profile engineers have left Uber India in recent months to join Google and Amazon among other tech giants. A senior engineer, who recently left Uber, told TechCrunch that many of his peers had lost confidence in Uber’s future prospects in the country.

Uber said its tech expansion plans in India were in line with its vision to make mobility and delivery “more accessible” and becoming the “backbone” of transportation in thousands of cities across the globe.

The company recently also hired Jayaram Valliyur as a senior director to lead its global finance technology team. Prior to this role, Jayaram, too, worked at Amazon, where he spent 14 years.

In July, news outlet The Information described Uber chief executive Dara Khosrowshahi’s plan to move engineering roles to India as a cost saving measure. The report said Khosrowshahi’s plan had sparked internal debates.

Thuan Pham, Uber’s longtime chief technology officer, who left the company earlier this year, reportedly cautioned that hiring more engineers so quickly in India would “require accepting lower-quality candidates.”

Uber and Ola both claim to be the No. 1 ride-hailing service in India. But Rajeev Misra, the chief of SoftBank Vision Fund which is a common investor in both the companies, said last month that Ola maintained a “small lead” over Uber in India.

Menlo Ventures just closed its fifteenth early-stage fund with $500 million

By Connie Loizos

Menlo Ventures, the 44-year-old venture firm with offices in Menlo Park and San Francisco, is taking the wraps of its fifteenth early-stage fund today, a vehicle it closed with $500 million in capital commitments.

It’s the same amount that Menlo announced last year for a growth-stage fund, the second in the firm’s history.

We talked with managing director Venky Ganesan earlier this week about the new fund. It will not, notably, include longtime Menlo managing director Mark Siegel, who joined the firm 24 years ago after a business development stint at Netscape, and who — like peers Bill Gurley of Benchmark and Todd Chaffee of IVP — is now making room for some of the firm’s more recent additions.

Ganesan also said that Menlo, which invests in consumer, enterprise, frontier tech, and healthcare startups, might index a bit more on health-related bets, which is unsurprising but also interesting in an historical context.

Gilead Sciences was actually incubated at Menlo back in 1987, but the firm dropped its life sciences practice for roughly 20 years before resuscitating it in 2017, hiring Greg Yap as a partner to lead related investments. At the time, Yap’s mandate was to invest roughly 15% of the firm’s last, $450 million, early-stage fund into tech-driven life sciences, but Ganesan can imagine that even more of its new fund will be poured into tech-driven health and medical startups.

As for check sizes, Ganesan said that Menlo will continue to do the occasional seed round but that it’s far more focused on Series A and B deals, writing initial checks of between $8 million to $15 million at the Series A for a targeted 20% of each startup, and checks beginning at $12 million to $14 million at the Series B stage. (Its later-stage fund makes the bigger bets beyond that.)

Menlo has long counted Washington State as its anchor tenant, and this fund is no different, having secured a $125 million commitment from its investment board.

A newer investor, says Ganesan, is the State of New Mexico Investment Council, which is one of three new investors in the fund — all of which were introduced to Menlo through other investors, and all of which agreed to back the firm via Zoom.

Given the firm’s recent exits, institutional interest in the new fund isn’t surprising. Menlo led Uber’s Series B round back in 2011, and according to the firm, even before Uber’s IPO last year, Menlo had already earned $973 million — or a 93x return — on its $10.5 million investment by selling nearly half of its Uber stock to a syndicate led by SoftBank.

Another big win for the firm has been Roku, which makes a variety of digital media players for video streaming and went public in 2017. At the time, its shares traded at around $15 each; today its shares trade at $233 apiece.

Meanwhile, Menlo has active portfolio companies that also appear poised to produce returns for its investors. The consignment company Poshmark said late last month that it has confidentially submitted to securities regulators a draft registration statement for its IPO, for example. And Chime, a start-up that delivers banking services through mobile phone, closed a round of funding last month that valued the company at $14.5 billion.

Lead Edge Capital just closed on $950 million from a whopping 500 investors

By Connie Loizos

Lead Edge Capital, a software-focused venture firm with one office in New York and another in California, was founded just 11 years ago. Yet it’s already managing $3  billion in assets through a process that founder Mitchell Green half-kiddingly refers to as “rinse and repeat.”

As he describes its model, Lead Edge raises money from wealthy, networked individuals, then it claws its way into companies, helps them, turns them into valuable references, and when those companies sell or go public, the firm raises more money from people who like the firm’s returns.

It sounds simple but it isn’t, says Green, who cut his teeth as an associate at Bessemer Venture Partners and at a Tiger Fund-affiliate called Eastern Advisors. Managing 500 investors, which is now the case, is “harder than it looks.”

That’s true even with two partners: Brian Neider, who first crossed paths with Green at Bessemer, and Nimay Mehta, who joined the firm in 2011. That’s true despite a dozen employees who Green says are “zero to five years out of college” and cold-call companies all day,

It’s a lot of work, even with four investors who are also operating partners and who, in that capacity, sometimes serve as board members on behalf of Lead Edge. These are former eBay president Lorrie Norrington, former Netsuite CFO Ron Gill, former Dell CFO Jim Schneider, and former Dell president Paul Bell. (“If you’ve already got a couple of VCs on your board,” says Green, “I think the company gets more benefit from putting operators on the board.”)

Not that anyone is complaining. On the contrary, Lead Edge has been having a very good run, which explains how its fund sizes have so quickly ballooned, from a $52 million debut vehicle to a $138 million fund, a $290 million fund, a $520 million vehicle, and now a $950 million fifth fund. (Lead Edge also spins up special purpose vehicles on the side one to two times a year when it wants an especially big bite of a certain company.)

Some of its largest returns by dollars have come via Alibaba’s IPO, Spotify’s IPO, and the sale of Duo Security to Cisco, companies on which it made big bets. Green has said the firm invested $300 million into Alibaba in the years leading up to its IPO; more than $150 million into Spotify in the years leading up to its IPO; and more than $90 million into Duo.

This year is proving fortuitous to Lead Edge’s backers, too, including thanks to the recent direct listing of Asana and the sale of Signal Sciences to Fastly.

That’s saying nothing about the Alibaba affiliate ANT Group, into which Lead Edge has poured $160 million over the years and that’s now expected to become the world’s largest IPO (although the offering has been delayed for now by China’s securities regulator).

Given these wins, it’s maybe it’s not so surprising that the firm’s investor base would continue to build on itself, and in the process turn into a highly competitive advantage for the firm, according to Green.

Indeed, when asked how Lead Edge differentiates itself from other growth-stage investors, he cites the firm’s pool of backers, which includes former Xerox CEO Anne Mulcahy, former Charles Schwab CEO David Pottruck, and former ESPN CEO Steve Bornstein, among the hundreds of other individuals who’ve written checks to Lead Edge that range from $250,000 to $50 million.

While he won’t say who some of the biggest of those investors are in terms of dollars committed, he has no qualms in crediting them collectively with the firm’s success — or going out of his way to keep them happy. Last night, for example, he played host to some of them at his Southern California home. He doesn’t seem to mind it.

“People want us for our LP network,” says Green. “That’s what we’re known for, 100%.”

Kroger, one of America’s largest grocery chains, experiments with ghost kitchens and delivery in the Midwest

By Jonathan Shieber

The Kroger Co., one of the biggest grocery chains in the Midwest is dipping its toe into on-demand delivery and the ghost kitchen craze through a partnership with an Indianapolis-based startup, ClusterTruck.

Supermarkets would seem to be logical places to site the kinds of ghost kitchens that have caught investor’s eye over the past few years and it wouldn’t be the first time that business models from startup companies bubbled up into large national brands, who are better positioned to capitalize on the trends.

Think about the various meal prep kits that launched and raised millions of dollars before being taken over or copied by big retail groceries. Meal prep kits are everywhere in the grocery store these days and supermarkets have had hot food counters dating back decades at least.

Through the partnership with ClusterTruck, Kroger is expanding on a pilot conducted last year, where the grocer set aside 1,000 square feet at participating stores in Carmel and Indianapolis, Indiana and Columbus, Ohio for ClusterTruck staff to cook meals for delivery and in-store pickup.

“Kroger remains focused on providing our customers with fresh food and experiences enabled by industry-leading insights and transformative technology,” said Dan De La  Rosa, Kroger’s group vice president of fresh merchandising, in a statement. “The new on-premise  kitchen, in partnership with ClusterTruck, is an innovation that streamlines ordering,  preparation and delivery, supporting Kroger as we meet the sustained customer demand for quick, fresh restaurant-quality meals, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including  mealtime.” 

The idea, according to Kroger, is to continue to capitalize on the shift to digital deliveries and sales. In the second quarter of the year, the company said it saw over 100% growth in its digital sales.

Ghost kitchens (or cloud kitchens) caught investors’ attention when Uber co-founder and former chief executive Travis Kalanick raised over a hundred million dollars to make the idea his next big bet after Uber. Interest and investment into the model, which sees companies offer food prep and storage spaces for would-be food truck and delivery entrepreneurs, soared. Kalanick’s CloudKitchens have gone on to raise several hundreds of millions of dollars and spawned competitors like the Pasadena, Calif.-based company Kitchen United.

Not everyone is convinced that the dark kitchen or cloud kitchen trend is all that it’s made out to be. My colleagues at TechCrunch have taken the idea to task for its reliance on some WeWork -ian assumptions around margins.

But if anything could make the model go, it’s the combination of existing infrastructure and digital efficiencies. That’s likely what Kroger is hoping to leverage.

It’s an interesting experiment at least and one worth tracking.

Here’s the curtain raise on the Sight Tech Global agenda

By Ned Desmond

The goal of Sight Tech Global, a virtual, global event on December 2-3, 2020, is to gather the world’s top experts who are applying advanced technologies, notably AI, to the future of accessibility and assistive tech for people who are blind or visually impaired.

Today we’re excited to roll out most of the agenda. There are another half-dozen sessions and breakouts still to come, notably sessions on AI bias and civil rights. What we’ve discovered over the many weeks of research and conversation is a consistent, strong interest on the part of researchers, technologists and product and design thinkers to convene and talk over the future — its promises, challenges and even threats.

We’re delighted to have top-level talent from virtually every leading technology company, many research universities and some startups ready for fireside chats and small panel discussions with expert moderators. Some sessions will take questions from our audience as well.

When the event dates are closer, we will add dates and times to each of these sessions as well as announce additional speakers. Register today to get a free pass and please browse the first edition of the Sight Tech Global agenda below.

Seeing AI: Where does Microsoft’s blockbuster app go from here?

With ever more powerful computer and data resources available in the cloud, Microsoft’s Seeing AI mobile app is destined to become a steadily better ally for anyone with vision challenges. Co-founder Saqib Shaikh leads the engineering team that’s charting the app’s cloud-enabled future.

Saqib Shaikh, co-founder of Seeing AI, Microsoft
Moderator: Devin Coldewey, TechCrunch

The future according to OrCam

As AI-based computer vision, voice recognition and natural language processing race ahead, the engineering challenge is to design devices that can perceive the physical world and communicate that information in a timely manner. Amnon Shashua’s OrCam MyEye is the most sophisticated effort yet to merge those technologies in a seamless experience on a dedicated device.

Amnon Shashua, co-founder of OrCam and Mobileye
Moderator: Matthew Panzarino, TechCrunch

Accessibility from the wheels up: The Waymo self-driving taxi

If people who are blind or visually impaired find Uber and Lyft liberating, imagine how they will feel summoning a self-driving ride from an app on their mobile phones. But wait, how exactly will they locate the cars and what happens when they climb in? Presenter Clem Wright is responsible for the self-driving taxi’s accessibility, and he will be joined by leadership from two organizations closely involved in that effort: The Lighthouse for the Blind SF and the Foundation for Blind Children.

Clem Wright, Accessibility product manager, Waymo
/> Marc Ashton, CEO, Foundation for Blind Children
Bryan Bashin, CEO, Lighthouse for the Blind
Moderator: Kirsten Korosec, TechCrunch

Our AI future is already here

Whether it’s Alexa, Tesla or Facebook, AI is already deeply embedded in our daily lives. Few understand that better than Dr. Kai-Fu Lee, a scientist who developed the first speaker-independent, continuous speech recognition system as a Ph.D. student at Carnegie Mellon, led Google in China and held senior roles at Microsoft and Apple. Today, Dr. Lee runs Sinovation Ventures, a $2 billion fund based in China, is president of the Sinovation’s Artificial Intelligence Institute and has 50 million followers on social media.

Dr. Kai-Fu Lee, chairman and CEO, Sinovation Ventures
/> Moderator: Ned Desmond, Sight Tech Global

The future of AT devices and the companies that make them

Dedicated devices versus accessible platforms? Victor Reader Stream versus iPhones and Alexa? How will AT companies take advantage of a world with cloud data and edge computational power, AI algorithms and more demanding customers than ever? Humanware, eSight and APH are already looking far into that future.

Gilles Pepin, CEO, Humanware
Greg Stilson, head of Global Innovation, APH
Charles Lim, CTO, eSight
Moderator: Betsy Beaumon, CEO, Benetech

If the Jetsons had screen readers, would they be using keyboard commands?

The screen reader is arguably the most consequential digital technology ever for people who are blind or visually impaired. At the same time, screen readers depend on a dizzying array of keyboard commands, and — when it comes to reading websites in a browser — they struggle with the ugly reality of poor website accessibility. New technologies may lead the way to better outcomes.

Glen Gordon, Software fellow, Vispero; architect, JAWS
James Teh, Accessibility engineer, Mozilla; co-founder, NVDA
Léonie Watson, director, TetraLogical
Moderator: Matt King, Accessibility technical program manager, Facebook

Alexa, what is your future?

When Alexa launched six years ago, no one imagined that the voice assistant would reach into millions of daily lives and become a huge convenience for people who are blind or visually impaired. This fall, Alexa introduced personalization and conversational capabilities that are a step-change toward more human-like home companionship. Amazon’s Josh Miele and Anne Toth will discuss the impact on accessibility as Alexa becomes more capable.

Anne Toth, director, Alexa Trust at Amazon
Josh Miele, principal accessibility researcher, Lab126 at Amazon
/> Moderator: Devin Coldewey, TechCrunch

Augmented reality and perception: What’s the best way to get the message across?

It’s one thing for an AI-based system to “know” when it’s time to turn left, who came through the door or how far away the couch is: It’s quite another to convey that information in a timely fashion with minimal distraction. Researchers are making use of haptics, visual augmented reality (AR), sound and language to figure out the right solutions.

Amos Miller, Product strategist, Microsoft AI and Research
Ashley Tuan, VP Medical Devices, Mojo Vision
Sile O’Modhrain, associate professor, Performing Arts Technology, University of Michigan
Moderator: Nick Giudice, professor of Spatial Informatics, University of Maine

Wayfinding: Finding the mark

Map apps on mobile phones are miraculous tools accessible via voice output, but mainstream apps don’t announce the detailed location information (which people who are blind or visually impaired really want), especially inside buildings and in public transportation settings. Efforts in the U.S. and U.K. are improving accessible navigation.

Tim Murdoch, founder and CEO, Waymap
Nick Giudice, professor of Spatial Informatics, University of Maine
Moderator: Mike May, chief evangelist, GoodMaps

Computer vision, AI and accessibility: What’s missing from this picture?

For an AI to interpret the visual world on behalf of people who are blind or visually impaired, the AI needs to know what it’s looking at, and no less important, that it’s looking at the right thing. Mainstream computer vision databases don’t do that well — yet.

Danna Gurari, assistant professor and director of the Image and Video Computing Group, University of Texas
Patrick Clary, product manager, AI and accessibility, Google
/> Moderator: Roberto Manduchi, professor CS and Engineering, UC Santa Cruz

Keep an out for more sessions and breakouts later this month. In the meantime, registration is open. Get your pass today!

Sight Tech Global is eager to hear from potential sponsors. We’re grateful to current sponsors Amazon, Ford, Google, Microsoft, Mojo Vision, Waymo, Wells Fargo and Humanware. All sponsorship revenues go to the nonprofit Vista Center for the Blind and Visually Impaired, which has been serving the Silicon Valley area for 75 years.

Special thanks to the Sight Tech Global advisors — Tech Matters Jim Fruchterman, UC Santa Cruz’s Roberto Manduchi, Verizon Media’s Larry Goldberg, Facebook’s Matt King and Be My Eyes’ Will Butler — who are playing an invaluable role on this project.

Final week to score $50 student passes to TC Sessions: Mobility 2020

By Alexandra Ames

Class is about to be in session, students. If you’re passionate about mobility and transportation tech and hungry to learn from the visionaries, makers and investors who are building the future today, don’t miss out on TC Sessions: Mobility 2020 on October 6-7.

We support you, the next generation of mobility tech leaders, so take advantage of our $50 student pass — a $145 savings. But don’t delay. The price increases on October 5.

TC Sessions: Mobility 2020 offers two days packed with 1:1 interviews and panel discussions with the people at the top of game — the leaders, movers and shakers who continue to push beyond what seems possible. You won’t just hear from them, you’ll engage with them during a series of Q&A breakout sessions.

Whether you’re focused on micromobility, connected data, EVs or regulatory trends, you’ll find it — and much more — across the main stage, breakout sessions and sponsored sessions. Here’s a taste of what to expect. Be sure to study the event agenda and start strategizing your schedule now.

Driving the Mobility Revolution with Connected Car Data: Bret Scott, Wejo VP, discusses the future of mobility and how connected car data impacts the world of autonomous, electric and shared cars.

Software is Revolutionizing the Driver Experience and Driving Mass Electrification: Software in EVs enables a shift from buying a car to investing in an experience. ChargePoint CEO, Pasquale Romano discusses how it’s driving adoption, revolutionizing behavior and keeping up with demand.

Uber’s City Footprint: Uber touches many aspects of the transportation ecosystem — autonomous vehicles, food delivery, trucking and traditional ride-hailing. Director of Policy, Cities & Transportation, Shin-pei Tsay discusses Uber’s place in cities and how she navigates various regulatory frameworks.

This virtual conference draws a global audience and thousands of attendees. Talk about the perfect place to build your network — an essential part of any successful career. Find that dream internship or exciting employment opportunities and explore more than 40 early-stage mobility startups in the expo area.

Take advantage of CrunchMatch, our free AI-enhanced networking platform. It’s an easy-to-use tool to find and connect with the people who can help you advance your startup aspirations. Stay focused and organized as you schedule 1:1 meetings, meet founders, pitch investors, discuss your resume and otherwise impress the pants off influential people.

Class is in session on October 6-7. Join your community, dazzle the experts and build a firm foundation for your future at TC Sessions: Mobility 2020. Purchase your student pass before the price increases on October 5 and save a chunk of cash.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.

Uber wins latest London licence appeal — but renewal is only for 18 months

By Natasha Lomas

Uber has won its appeal against having its licence to operate withdrawn in London.

In today’s judgement the court decided it was satisfied with process improvements made by the ride-hailing company, including around its communication with the city’s transport regulator.

The new licence comes with 21 conditions, jointly suggested to the Magistrate by Uber and TfL, according to an industry source.

It wasn’t immediately clear from the judgement how long Uber would be granted a licence for — with the judge wanting to hear more evidence before taking a decision. But it’s since emerged the licence has been renewed for 18 months — considerably shorter than the five-year renewal it had applied for back in 2017.

“Uber does not have a perfect record but it has been an improving picture,” the judge said, adding: “I am satisfied that they are doing what a reasonable business in their sector could be expected to do, perhaps even more.”

The ride-sharing giant has faced a multi-year battle to have its licence reinstated after Transport for London, the city’s transport regulator, took the shock decision not to issue a renewal in 2017 — citing safety concerns and deeming Uber not “fit and proper” to hold a private hire operator licence.

It went on to win a provisional appeal back in 2018 — when a UK court granted it a 15-month licence to give it time to continue working on meeting TfL’s requirements. However last November the regulator once again denied a full licence renewal — raising a range of new safety issues.

Despite that Uber has been able to continue operating in London throughout the appeals process — albeit, with ongoing uncertainty over the future of its licence. Now it will be hoping this is in the past.

In the appeal, Uber’s key argument was it is now “fit and proper” to hold a licence — claiming it’s listened to the regulator’s concerns and learnt from errors, making major changes to address issues related to passenger safety.

For example Uber pointed to improvements in its governance and document review systems, including a freeze on drivers who had not taken a trip for an extended period; real-time driver ID verification; and new scrutiny teams and processes; as well as the launch of ‘Programme Zero’ — which aims to prevent all breaches of licence conditions.

It also argued system flaws were not widespread — claiming only 24 of the 45,000 drivers using the app had exploited its system to its knowledge.

It also argued it now cooperates effectively and proactively with TfL and police forces, denying it conceals any failures. Furthermore, it claimed denying its licence would have a “profound effect” on groups at risk of street harassment — such as women and ethnic minorities, as well as disabled people.

It’s certainly fair to say the Uber of 2020 has travelled some distance from the company whose toxic internal culture included developing proprietary software to try to thwart regulatory oversight and eventually led to a major change of guard of its senior management.

However it’s interesting the court took the step of considering what length of licence Uber should receive — so while it’s a win for Uber, there are still some watchful caveats.

Offering commentary on today’s ruling, Anna McCaffrey, a senior counsel for the law firm Taylor Wessing, highlighted this element of the judgement. “The Magistrates Court agreed that Uber had made improvements and addressed TfL safety concerns. However, the fact that the length of extension is up for debate, rather than securing Uber’s preferred five year licence, demonstrates that Uber will have to work hard to continue to prove to TfL and the Court that it has really changed. If not, Uber is likely to find itself back in Court facing the same battle next year,” she noted in a statement.

She also pointed out that a decision is still pending from the Supreme Court to “finally settle” the question as to whether Uber’s drivers are workers or self-employed — another long-running legal saga for Uber in the UK.

The company is also now facing fresh legal challenges related to its algorithmic management of drivers. So there’s still plenty of work for its lawyers.

The App Drivers and Couriers Union (ADCU), meanwhile, offered a cautious welcome of the court’s decision to grant Uber’s licence renewal — given how many of its members are picking up jobs via its platform.

However the union also called for the mayor of London to break up what it dubbed Uber’s “monopoly” by imposing limits on the numbers of drivers who can register on its platform. In a statement, ADCU president, Yaseen Aslam, argued: “The reduced scale will give both Uber and Transport for London the breathing space necessary to ensure all compliance obligations -– including worker rights — are met in future.”

Update 1: Uber has now sent this statement — attributed to Jamie Heywood, regional general manager for Northern & Eastern Europe: “This decision is a recognition of Uber’s commitment to safety and we will continue to work constructively with TfL. There is nothing more important than the safety of the people who use the Uber app as we work together to keep London moving.”

Update 2: TfL has also sent a response. A spokesperson told us: “We note the Court has found that Uber is now fit and proper to hold a private hire operator’s licence in London. As a result of our decision in November last year Uber has implemented a number of changes to improve passenger safety and address the issues we identified. This 18 month licence with a number of conditions allows us to closely monitor Uber’s adherence to the regulations and to swiftly take action if they fail to meet the required standards.”

Postmates cuts losses in Q2 as it heads towards tie-up with Uber

By Danny Crichton

Popular food delivery service Postmates is in the process of merging with Uber in a blockbuster $2.65 billion deal that would see it join forces with its food delivery competitor, Uber Eats. The deal remains under antitrust scrutiny, and has not yet been approved for closing. The deal is expected to close in the first half of 2021.

However, a new SEC filing posted after hours this Friday gives us a glimpse on how Postmates is faring in the new world of global pandemics and sit-in dining closures across the United States.

Postmates posted a loss of just $32.2 million in Q2, compared to a loss of $73 million in Q1, nearly cutting its cash burning in half. That compares to Uber Eats’ results, which showed a loss of $286 million in the first quarter of 2020 and a loss of $232 million in the second quarter — an improvement of roughly 20%, according to Uber’s most recent financial reports.

Altogether, Postmates lost $105.2 million in the first half of 2020, compared to a loss of $239.0 million in the same period of 2019.

Uber through its filing today also disclosed the cap table for Postmates in full detail for the first time. On a fully-diluted basis, the largest shareholder in Postmates is Tiger Global, which owns 27.2% of the company. Following up is Founders Fund with 11.4%, Spark Capital with 6.9%, and GPI capital with 5.3%. At Uber’s $2.65 billion all-stock deal, that nets Tiger Global roughly $720 million and Founders Fund roughly $302 million, not including some stock preferences and dividends that certain owners of the company hold.

While the companies continue to go through the antitrust review process at the federal level, the companies also face legal pressures in their own backyards. Uber noted in its filing today that it and Postmates face headwinds due to California’s AB5 bill, which is designed to give additional employment protections to freelance workers. However, the company notes that such litigation “may not, in and of itself, give rise to a right of either party to terminate the transaction.”

How the NSA is disrupting foreign hackers targeting COVID-19 vaccine research

By Zack Whittaker

The headlines aren’t always kind to the National Security Agency, a spy agency that operates almost entirely in the shadows. But a year ago, the NSA launched its new Cybersecurity Directorate, which in the past year has emerged as one of the more visible divisions of the spy agency.

At its core, the directorate focuses on defending and securing critical national security systems that the government uses for its sensitive and classified communications. But the directorate has become best known for sharing some of the more emerging, large-scale cyber threats from foreign hackers. In the past year the directorate has warned against attacks targeting secure boot features in most modern computers, and doxxed a malware operation linked to Russian intelligence. By going public, NSA aims to make it harder for foreign hackers to reuse their tools and techniques, while helping to defend critical systems at home.

But six months after the directorate started its work, COVID-19 was declared a pandemic and large swathes of the world — and the U.S. — went into lockdown, prompting hackers to shift gears and change tactics.

“The threat landscape has changed,” Anne Neuberger, NSA’s director of cybersecurity, told TechCrunch at Disrupt 2020. “We’ve moved to telework, we move to new infrastructure, and we’ve watched cyber adversaries move to take advantage of that as well,” she said.

Publicly, the NSA advised on which videoconferencing and collaboration software was secure, and warned about the risks associated with virtual private networks, of which usage boomed after lockdowns began.

But behind the scenes, the NSA is working with federal partners to help protect the efforts to produce and distribute a vaccine for COVID-19, a feat that the U.S. government called Operation Warp Speed. News of NSA’s involvement in the operation was first reported by Cyberscoop. As the world races to develop a working COVID-19 vaccine, which experts say is the only long-term way to end the pandemic, NSA and its U.K. and Canadian partners went public with another Russian intelligence operation aimed at targeting COVID-19 research.

“We’re part of a partnership across the U.S. government, we each have different roles,” said Neuberger. “The role we play as part of ‘Team America for Cyber’ is working to understand foreign actors, who are they, who are seeking to steal COVID-19 vaccine information — or more importantly, disrupt vaccine information or shake confidence in a given vaccine.”

Neuberger said that protecting the pharma companies developing a vaccine is just one part of the massive supply chain operation that goes into getting a vaccine out to millions of Americans. Ensuring the cybersecurity of the government agencies tasked with approving a vaccine is also a top priority.

Here are more takeaways from the talk, and you can watch the interview in full (embedded above).

Why TikTok is a national security threat

TikTok is just days away from an app store ban, after the Trump administration earlier this year accused the Chinese-owned company of posing a threat to national security. But the government has been less than forthcoming about what specific risks the video sharing app poses, only alleging that the app could be compelled to spy for China. Beijing has long been accused of cyberattacks against the U.S., including the massive breach of classified government employee files from the Office of Personnel Management in 2014.

Neuberger said that the “scope and scale” of TikTok’s app’s data collection makes it easier for Chinese spies to answer “all kinds of different intelligence questions” on U.S. nationals. Neuberger conceded that U.S. tech companies like Facebook and Google also collect large amounts of user data. But that there are “greater concerns on how [China] in particular could use all that information collected against populations other than its own,” she said.

NSA is privately disclosing security bugs to companies

The NSA is trying to be more open about the vulnerabilities it finds and discloses, Neuberger said. She told TechCrunch that the agency has shared a “number” of vulnerabilities with private companies this year, but “those companies did not want to give attribution.”

One exception was earlier this year when Microsoft confirmed NSA had found and privately reported a major cryptographic flaw in Windows 10, which could have allowed hackers to run malware masquerading as a legitimate file. The bug was so dangerous that NSA reported the vulnerability to Microsoft, which patched the bug.

Only two years earlier, the spy agency was criticized for finding and using a Windows vulnerability to conduct surveillance instead of alerting Microsoft to the flaw. The exploit was later leaked and was used to infect thousands of computers with the WannaCry ransomware, causing millions of dollars’ worth of damage.

As a spy agency, NSA exploits flaws and vulnerabilities in software to gather intelligence on the enemy. It has to run through a process called the Vulnerabilities Equities Process, which allows the government to retain bugs that it can use for spying.

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