Elon Musk and the Dilemma of the NewCo Industrialist


Photo of Elon Musk: Getty Images

Today’s Top Stories

Meet the New Boss: Is Elon Musk just shuffling money (or lack of money) from one pocket to another?

Facebook’s Role in the Gawker Mess: It’s time for Mark Zuckerberg to address what one of his board members has done.

Uber Pays Less Than You Might Think: New documents show what its drivers really make.

These Six Companies May Well Change the World. NewCo’s founder and editor in chief says we should be rooting for them.

Austin’s “Zombie Apocalypse” of Drunk People: What happens when Uber skips town

How To Fix the World: Ethan Zuckerman of MIT shows why technology is key–but not nearly enough.

Meet the New Boss. The same week that presumptive presidential nominee Donald Trump reported moving $1 million from his campaign to various personal and business accounts (USA Today), Elon Musk announced plans for one of his companies, Tesla, to buy another, SolarCity (Slate). There are elements of financial engineering, vertical integration, and the appearance of nepotism in this potential move, and it’s earning Musk a thumbs-down nearly everywhere. Here’s analyst Ben Thompson: “Tesla already bleeds cash and has huge execution risk, but just bought a company that bleeds even more cash and has basically zero synergies.” And then there are the markets, which rewarded Musk’s idea with a 10 percent drop in Tesla stock. Musk is known as a gambler and a visionary. This move is certainly risky, but the vision isn’t quite as clear.

Facebook’s Role in the Gawker Mess. Billionaire tech investor Peter Thiel was able to bankrupt Gawker by secretly funding Hulk Hogan’s libel lawsuit, and the smart day-after analyses are arriving. In You Won’t Be Able to Sue The Next Gawker (Medium), Cody Brown captures the dangers of Thiel’s move, starting with Silicon Valley’s quite un-Silicon Valley support of Thiel to the likelihood that the next generation of tech-industry muckraker will be “more like WikiLeaks.” Brown’s calls on Thiel to give up the suit, but that’s unlikely–the Chapter 11 papers have been filed already even if Gawker prevails on appeal. More intriguing is his plea for Mark Zuckerberg, who recently confirmed that Thiel’s spot on Facebook’s board is safe, to speak up on an issue–speech–that is crucial to the future of his business and his industry.

Uber Pays Less Than You Might Think. It doesn’t accept the idea that its drivers are employees, so Uber treats its drivers as a category of customers: folks they lease cars to and so on. New data and documents obtained by BuzzFeed suggest that those drivers may be wondering where the value is. According to BuzzFeed’s analysis, Uber drivers in three markets were not doing well after expenses: $13.17 per hour in Denver, $10.75 per hour in Houston, and $8.77 per hour in Detroit. Those are much lower rates than have been suggested in the past, and a mere 27 cents per hour more than the legal minimum wage in Detroit.

These Six Companies May Well Change the World. We Should Be Rooting for Them. In his weekly column, NewCo’s founder and editor in chief shows how, in their second acts, founders of six “Total NewCos” are reaching for far more than a payday. It’s a powerful rethinking of what entrepreneurs can and should do.

Austin’s “Zombie Apocalypse” of Drunk People. Uber drivers may not make a living wage, but what happens when Uber is no longer available in a community (Vocativ)? Austin voted to regulate ride-sharing services in May, which led Uber and Lyft to leave town. That meant an estimated 10,000 drivers lost their work, leaving Austin as a city with nearly a million people and only 900 licensed taxis. The first weekend without the service is described as a “zombie apocalypse of drunk people.” Patchwork operations like a “request a ride” group on Facebook and second-tier apps and services are trying to fill the gap, often with far less consumer protections than either taxis or rides services. Uber’s heavy-handed tactics during the election campaign and its overnight departure alienated many people, but the unarticulated theme of this report is that almost everyone would welcome back the company in a second, assuming it’s willing to follow the rules.

How To Fix the World. A recent essay on prison reform was notably dumb and tin-eared, centered on the idea that a mix of Soylent and Oculus Rift would be an ideal way to improve life for prisoners, and the Internet is piling on author Shane Snow for replacing physical isolation with the virtual kind. Most of the critiques are kneejerk, but Ethan Zuckerman of MIT uses Snow’s piece as an opportunity to think about how smart, well-meaning people can address social problems in ways that make the world better (Medium). Zuckerman offers examples of how identifying the right problem to be solved is really hard, and identifying a solution that doesn’t merely shift the problem can be even harder. He shows the pros and limitations of Evgeny Morozov’s critique of “solutionism,” too. Best of all, he traces how technology, while providing necessary tools to solve our biggest problems, isn’t nearly enough: “The key is to understand technology’s role as a lever of change in conjunction with complementary levers.” We can’t fix the world without technology, but we can’t do it with technology alone.

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