What happens to Uber’s drivers when the car drives itself? Do they just collect unemployment? CEO Travis Kalanick argues that Uber’s demand for human beings, far from evaporating, will only increase — they’ll be needed to take people where the autonomous cars can’t go, and to service the self-driving fleet (Business Insider). Meanwhile, a legal fight over the status of Uber’s drivers is entering a new phase in California, where a federal judge threw out a proposed $100 million settlement between Uber and its contractors (Quartz). That could be good news for the drivers, who are suing to be reclassified as Uber employees. (Such a change would win them benefits but potentially wreck Uber’s business model, which depends on freeing the company from owning a huge fleet and supporting a vast workforce.) Alternately, Uber could now just walk away from the settlement negotiations and gamble on winning an appeals court ruling to throw out the whole suit (Bloomberg).
To see where Uber is heading, hail a ride in Pittsburgh. Before the end of the month in that city, Uber’s souped-up Volvo SUVs will be randomly assigned to customers summoning cars on their phones (Bloomberg). And the trips will be free. For now, though, the autonomy part is still in beta; each test car comes with a backup driver at the wheel. Uber also acquired Otto, a self-driving truck startup in San Francisco founded by exiles from Google’s autonomous-car program. With Google/Alphabet, old-line auto giants like Ford and GM, NewCos like Tesla and Uber, and wild-cards like Apple all racing down the self-driving road, it’s getting crowded out there. That increases the likelihood of crack-ups along the way. It also suggests this market is neither a mirage nor a bubble.
Feds get out of the private prison business. The Justice Department announced it will phase out its use of privately operated jails (The Washington Post). The department concluded that the private-sector prisons don’t save money, don’t deliver better services, and aren’t as safe as those run by the government. The move affects only a small number of facilities, since most American prisoners are in state facilities, which aren’t covered by the change. But it represents another sign that the U.S. is finally rethinking the “private is better than public” reflex that has shaped so much of its public policy since the Reagan era.
That private prison story is also a media story. One reason private prisons are in trouble: Mother Jones published an extraordinary investigative report earlier this year, in which the nonprofit progressive magazine sent an undercover reporter to work as a guard for four months in a privately-operated prison. Founders and funders in the growing public-interest media sector always hope to measure the impact of their work, and that turns out to be awfully difficult, but this is one case where the impact stands out in boldface. As Mother Jones’ leadership breaks it down, the lengthy investigation cost the magazine $350,000 — and brought in maybe $5000 in ad revenue. Foundation money helps the publication bridge that gap. But journalism desperately needs more sustainable models. The Mother Jones editors’ letter is a fundraising pitch, but it’s also a useful act of management transparency — and a valuable walk-through of the media-biz minefield we’ve collectively built.
Old-line companies are writing billion-dollar checks for startups. Used to be, the only companies that spent billions to acquire nimble newcomers were in tech. They were either buying out competitive interlopers, locking up engineering or management talent, or adding some spiffy patents to their portfolios. As recent deals like GM’s purchase of Cruise Automation and Unilever’s acquisition of Dollar Shave Club suggest, however, today’s billion-dollar buyer’s club is increasingly dominated by BigCos with lengthy pedigrees. Alex Taussig runs some numbers in TechCrunch and concludes that Fortune 500 giants are going to ramp up these deals further to try to boost growth and inject more digital savvy into their operations. That’s tough work for these big organizations, but it looks like they have no choice but to try.
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