Amazon Leads Tech's Takeover of America

Source: WSJ: US Business
Amazon Leads Tech’s Takeover of America

Why does a phone maker get into banking transactions? Why does a social network build a virtual-reality headset? Why does an online retailer buy a grocery chain?

Amazon.com Inc.’s just-announced $13.7 billion bid to acquire Whole Foods Market Inc. is just the most extreme example of a larger, more consequential phenomenon: America’s biggest tech companies are spreading their tentacles, pushing into complementary businesses in a play to sustain growth as they saturate the market for their existing goods. Led by…



As Uber Leaders Step Aside, Arianna Huffington’s Influence Grows

Source: NY Times: Business
As Uber Leaders Step Aside, Arianna Huffington’s Influence Grows

SAN FRANCISCO — In April, Wan Ling Martello, the head of Nestlé in Asia, found herself seated across from Arianna Huffington, an Uber director and a founder of The Huffington Post, at the Union Square Cafe in Manhattan.

Over dinner, the two women — who had met just a few months earlier — chatted about a food recall that Ms. Martello had handled. As Ms. Martello described her salvage and recovery efforts, she said, Ms. Huffington began listening more closely. Ms. Huffington then wondered aloud whether Ms. Martello would be interested in helping Uber, which was dealing with a string of scandals, before whipping out her phone to call people at the ride-hailing company.

Less than two months later, Ms. Martello had joined the board.

“I did not expect to be asked about Uber at that dinner, and I don’t think it was on Arianna’s agenda,” she said. It was only their second meeting. “The whole meeting was casual: Let’s just hang out.’”

Recruiting Ms. Martello is the sort of swift, behind-the-scenes power play that has propelled Ms. Huffington to become Uber’s most influential independent board member. In the 14 months since she joined the board, Ms. Huffington has acted as the public voice addressing the company’s workplace scandals, talked to employees and helped woo executives. She has also become one of the closest confidantes to Travis Kalanick, Uber’s chief executive.

Ms. Huffington’s influence at Uber is growing while the company is dealing with a vacuum of leadership. As Uber tackles the fallout from investigations into its corporate culture, including allegations of sexual harassment and questions over its management, Mr. Kalanick has taken an indefinite leave of absence and left management to a committee of executives. The board is also in flux with the resignation of David Bonderman, a partner at the private equity firm TPG, after he made a sexist comment in response to her at an Uber meeting.

It now falls to Ms. Huffington, Ms. Martello and Bill Gurley, another board member and a partner at the venture capital firm Benchmark, to complete some of the urgent tasks at Uber, like vetting candidates for a chief operating officer. Prospects include David Cush, the former chief executive of Virgin America, according to two people with knowledge of the talks, who asked not to be identified because the proceedings were confidential. Mr. Cush did not immediately return a request for comment.

Ms. Huffington’s role has caused some discomfort. Some Uber executives have grown wary of her close ties with Mr. Kalanick, according to three employees close to executive deliberations. (Ms. Huffington recently visited the hospital where Mr. Kalanick’s father, who was injured in a boating accident, was staying, according to two people with knowledge of the event.) Four former Huffington Post employees also raised an eyebrow at Ms. Huffington’s ability to swoop in and quickly win people over.

Others praised her effectiveness. “She sows the seeds of trust and makes you feel her interests are aligned with yours,” said Fred Harman, a partner at Oak Investment Partners, which invested in The Huffington Post. “When you get down to making decisions, you can focus on how persuasive she is.”

In an interview, Ms. Huffington, 66, said: “Knowing how to deal with crises without being overwhelmed — keeping one’s head while people all around are losing theirs — is the most important leadership quality. In times of crisis, people often overreact and move into very dark places where they have a hard time seeing their way out.”

Interactive Feature | How Uber’s Brash Approach Is Beginning to Backfire The company, with its co-founder Travis Kalanick, is known for its brash, aggressive approach. That approach has taken a toll.

Uber declined to comment for this article.

Ms. Huffington’s rise at Uber is the latest chapter in a life marked by dramatic career shifts that included political pundit, media mogul and corporate fixer. Born Ariadne-Anna Stasinopoulous, she grew up in modest circumstances in Greece and England, attended Cambridge University on a scholarship and became the first foreigner to be president of the Cambridge Union debating society.

She moved to New York City in 1980 and wrote best-selling biographies of Pablo Picasso and Maria Callas. In 1986, she married the oil scion Michael Huffington, whom she helped vault into national politics. Ann Getty, the socialite who had introduced the Huffingtons, was the matron of honor. The publisher Mort Zuckerman, her former boyfriend, was an usher.

After divorcing Mr. Huffington in 1997, Ms. Huffington became known for switching allegiances from Newt Gingrich and the Republican Party to the world of left-wing satire. She became a household name in 2005 with the founding of The Huffington Post, an online publication, with the venture capitalist Kenneth Lerer and Jonah Peretti, who later went on to create BuzzFeed.

Even though Ms. Huffington did not have a traditional media background, Mr. Peretti said, her ability to bring together politicians, businesspeople and celebrities was crucial. “We wanted to bring those worlds online, and she was the perfect person to do it,” he said.

In 2011, Ms. Huffington drove The Huffington Post’s sale to AOL for $315 million. She had struck up a fast friendship with Tim Armstrong, the chief executive of AOL, at the end of 2010. By January, they were negotiating acquisition details at Davos. The deal was announced in February.

Some Huffington Post board members wanted to take the company public, but Ms. Huffington was “persuasive in convincing the board that a bird in the hand at a compelling valuation was the better path,” said Mr. Harman, who was on the board.

A year later, Ms. Huffington met Mr. Kalanick at a technology conference in Munich, and the two bonded over Uber’s potential to solve big urban problems. “I was interested in not just what Uber had achieved, but in its future,” said Ms. Huffington, who later founded Thrive Global, a health and wellness business, in 2016.

She was soon advising Mr. Kalanick. When Uber announced last year that Ms. Huffington had joined the board, it released a video that featured a softer side of Mr. Kalanick and a warm, maternal voice-over from Ms. Huffington.

“Her guidance has been invaluable to me personally over the years, and I know that in this new role she’ll help take Uber to the next level,” Mr. Kalanick said in the announcement.

They have sometimes disagreed, as they did when Ms. Huffington backed the board’s desire to put Emil Michael on leave, according to two people with knowledge of that discussion. Through a spokesman, Mr. Kalanick declined to comment for this article.

More recently, Ms. Huffington has been steadfast in supporting Mr. Kalanick even as other allegiances have frayed — notably his relationship with Mr. Bonderman, who had grown more concerned about Uber’s management quality, according to one person familiar with the board’s conversations. TPG declined to comment.

At an Uber staff meeting on Tuesday, Ms. Huffington spoke about how having one woman on a board often led to more women joining.

“Actually, what it shows is that it’s much more likely to be more talking,” Mr. Bonderman responded.

Ms. Huffington declined to discuss board dynamics but said Mr. Bonderman’s resignation, just hours after the gaffe, was “a huge statement about how willing the company is to live by new cultural values.”

Ms. Huffington has been particularly effective in bringing more women into Uber’s leadership, including Ms. Martello.

In January, Ms. Huffington also approached Bozoma A. Saint John, an Apple executive, at a private dinner for marketers at the giant technology conference, CES, in Las Vegas. Conversation gave way to selfies, and Ms. Saint John invited Ms. Huffington to her birthday party. For that occasion, Ms. Huffington brought Ms. Saint John a special bed for her phone — sold by Thrive Global — to be kept in another room while she slept.

In March, Ms. Huffington broached the topic of Uber to Ms. Saint John. Mr. Kalanick, she said, was on a journey of self-improvement. As they talked about how to tell a different, more human story about what Uber had to offer, Ms. Huffington had an epiphany. “She said, ‘Why don’t you tell Travis these things yourself?’” Ms. Saint John said.

Ms. Huffington arranged for the two to meet in April at her home in Brentwood, Calif., where they spoke for nearly eight hours. After Ms. Saint John left Apple last month, she knew there was only one place she wanted to work. She joined Uber in the newly created role of chief brand officer.

“Arianna gave me all of the problems at Uber straight, no chaser,” Ms. Saint John said. “It’s the magic of what makes her so believable.”



Amazon to Buy Whole Foods for $13.7 Billion

Source: WSJ: US Business
Amazon to Buy Whole Foods for .7 Billion

Amazon.com Inc. said on Friday it would buy Whole Foods Market Inc. for $13.7 billion, including debt, instantly transforming the online giant into a major player in the bricks-and-mortar retail sector it has spent years upending.

The acquisition, Amazon’s largest by far, gives it a network of more than 460 stores that could serve as beachheads for in-store pickup and its distribution network. It would make Amazon an overnight heavyweight in the all-important grocery business, a major spending segment in which it has…



Whole Foods Deal Shows Amazon’s Prodigious Tolerance for Risk

Source: NY Times: Business
Whole Foods Deal Shows Amazon’s Prodigious Tolerance for Risk

Joke all you want about drone-delivered kale and arugula. Amazon’s $13.4 billion bet to take on the $800 billion grocery business in the United States by acquiring Whole Foods fits perfectly into the retailer’s business model.

Unlike almost any other chief executive, Amazon’s founder, Jeff Bezos, has built his company by embracing risk, ignoring obvious moves and imagining what customers want next — even before they know it.

Key to that strategy is his approach to failure. While other companies dread making colossal mistakes, Mr. Bezos seems just not to care. Losing millions of dollars for some reason doesn’t sting. Only success counts. That breeds a fiercely experimental culture that is disrupting entertainment, technology and, especially, retail.

Mr. Bezos is one of the few chief executives who joke about how much money they’ve lost.

“I’ve made billions of dollars of failures,” Mr. Bezos said at a 2014 conference, adding that it would be like “a root canal with no anesthesia” if he listed them.

There was the Fire phone, for instance, which was touted as being crucial to Amazon’s future. It was one of the biggest bombs since New Coke. At one point, Amazon cut its price to 99 cents. That did not help.

Interactive Feature | Amazon Is Trying to Do (and Sell) Everything The company’s $13.4 billion deal for Whole Foods is the latest signal of Amazon’s ambitions to have a hold on nearly every facet our lives — like the computer servers that power our favorite websites and the food we eat.

For any other company, this would have been a humiliating experience with severe repercussions. Wall Street did not blink, even when Amazon wrote off $170 million related to the device.

“If you’re going to take bold bets, they’re going to be experiments,” Mr. Bezos explained. “And if they’re experiments, you don’t know ahead of time if they’re going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”

It is an approach baked into the company since the beginning — and one that is difficult, if not impossible, for competitors to emulate. Consider how Amazon Web Services began as a small internal cloud computing project to help Amazon’s core business. Then the company started selling excess cloud capacity to other companies.

Before Google and Microsoft realized it, Amazon had created a high-margin multibillion-dollar business that was encroaching on their turf. They are still struggling to catch up.

If the cloud computing business just grew, Amazon Prime was a bold bet from the beginning, the equivalent of an all-you-can-eat buffet for shoppers: Pay an annual fee and all shipping costs for the year are covered. Amazon’s shipping expenses ballooned, but revenue soared so much that no one minded.

“When you have such a long-term perspective that you think in decades instead of quarters, it allows you to do things and take risks that other companies believe would not be in their best interests,” said Colin Sebastian, an analyst with the investment firm Robert W. Baird & Company.

Amazon began, for those too young to remember, as a discount internet bookseller in 1995. In the headiness of the late-1990s dot-com boom, it became the symbol of how this new invention called the World Wide Web was going to change everything. Then, like many of the leading dot-com companies, it blew up. The world wasn’t quite ready for Amazon. It came very close to going under.

Mr. Bezos redoubled his focus on customers, largely closed the company off to the media and got to work doing some serious experiments. Amazon developed, for instance, the Kindle e-reader, which for a time seemed likely to kill off physical books entirely.

One thing the retailer did not do was make much money. In its two decades as a public company, Amazon has had a cumulative profit of $5.7 billion. For a company with a market value of nearly $500 billion, this is negligible. Walmart, which has a market value half that of Amazon, made a profit of $14 billion in 2016 alone.

Huge profits at Amazon were always put aside so the company could invest more. This has tended to drive both skeptics — there are still a few, even now — and competitors crazy. “Did Amazon Just Jump the Shark?” was the headline on an article on the investing website Seeking Alpha on Friday.

But the tens of millions of customers do not care whether Amazon is hugely profitable. They care if it is making their lives easier or better.

“Jeff Bezos is making shopping great,” said Chris Kubica, an e-book consultant and software developer who watches Amazon closely. “He’s made me come to expect better from every checkout counter. Oh, I can scan my entire shopping cart full of groceries in one go, without stopping, as I roll into the parking lot? Yes, please. Where do I park?”

After the company’s disastrous foray with the Fire Phone, Amazon could have done what many other also-rans in smartphones do and keep putting out devices that most people ignore in favor of Apple and Samsung devices. Instead, in 2014 it released Echo, a speaker that looks like a small poster tube. The Alexa intelligent assistant, which runs on it, can play music and tell jokes, and now Google, Apple and Microsoft are copying it.

“Bezos is ahead of the game, always,” said Sunder Kekre, a professor at the Tepper School of Business at Carnegie Mellon University. “Be it drones or Amazon Go” — a grab-and-go shopping experiment that eschews human cashiers — “he is able to craft smart business strategies and position Amazon quite distinctly from competitors.”

As Amazon pushes on with its ceaseless experimenting, however, it risks being seen as less of a cute disrupter of the old and as more of a menace. It has hired many workers for its warehouses, but it is also betting heavily on automation. Amazon Go, after all, is an attempt to drain the labor out of shopping.

“Amazon runs the risk of becoming too big,” Mr. Kekre said.

Some Amazon critics would like the Whole Foods deal to be the trigger for reining in the company. The Institute for Local Self-Reliance, a frequent foe of Amazon, noted that the company is “rapidly monopolizing online retail” and that both Prime and Echo “are strategies for locking in consumers and ensuring they don’t shop anywhere else.” Amazon declined to comment for this article.

Where will it all end? Mr. Kubica has thought about this. Amazon can be understood as a decades-long effort to shorten the time between “I want it” and “I have it” into as brief a period as possible. The logical end of this would be the something Mr. Kubica jestingly called Amazon Imp, short for “implant” and also “impulse,” Mr. Kubica said. It would be a chip inserted under the skin.

“The imp would sense your impulses and desires,” Mr. Kubica wrote in an email, “and then either virtually fulfill them by stimulating your brain (for a modest payment to Amazon, of course) or it would make a box full of goodies for you appear on your doorstep (for a larger fee, of course).”

Every desire fulfilled. “I am sure that Amazon even now is building it,” Mr. Kubica said.



Airbnb Tries to Behave More Like a Hotel

Source: NY Times: Business
Airbnb Tries to Behave More Like a Hotel

DENVER — For nine years, Jill Bishop enjoyed the camaraderie of renting out her spare bedroom on Airbnb.

Guests hung out on her comfy sofas. They dined together. They shared her bathroom, which was filled with half-empty shampoo bottles and an array of lotions.

Then, things changed.

Airbnb urged Ms. Bishop to make the bathroom look more like a hotel. New local regulations governing Airbnb meant she had to start collecting city lodging taxes, which made her feel awkward when she had to ask guests for money. And Airbnb began conditioning her to host people who are just looking for a place to sleep — not a home to share.

When one of those travelers finally arrived last year, it jarred her. “He told me that he just uses Airbnb as an alternative to hotels and that he doesn’t really want to talk to his hosts,” said Ms. Bishop, 63, who lives in a single-story ranch house in the North Park Hill neighborhood of Denver. “He really did just come in and sit in his room, with the door closed, while I sat in the living room.”

Airbnb — the sharing-economy start-up born with a crash-on-my-couch informality — is now trying to professionalize its more than two million “hosts” around the world.

In just nine years, the company has built a global hospitality brand on the backs of homeowners like Ms. Bishop. The company’s valuation has skyrocketed to more than $30 billion. Yet to expand further, Airbnb must attract travelers who prefer the predictability of hotels to the quirky array of spare rooms, empty homes and even the occasional yurt that Airbnb has long touted as its backbone.

Travelers accustomed to hotels have come to expect that they can automatically book an Airbnb without having to ask first for the owner’s permission — something that has long been a fixture of the hotel booking process. They want to know that their reservation is firm. They expect fresh linens and privacy. They also anticipate that hosts will act like hotel staff members, meaning they will be courteous and blend into the background.

As a result, Airbnb’s hosts have had to deal with more rules, fees and guidelines. Many have taken on responsibilities that would be handled at the front desk of a hotel, such as explaining (and sometimes collecting) an expanding list of fees and taxes. They are grappling with new tools that let travelers instantly book Airbnbs, much like a hotel reservation system. Airbnb has also introduced recommendations around cancellations and check-in times that mirror those of hotels, and it allows guests to hide listings that ignore that guidance.

Airbnb cannot force homeowners who use its site to adopt its tools and policies; they are not full-time employees. But interviews with more than two dozen hosts showed that many felt pressured to comply. The lesson, Ms. Bishop said, is that Airbnb wants her spare bedroom to be more like a Hilton or a Hyatt, and for her to act like a mini-hotelier.

“Airbnb was so life-enriching for me,” she said. “Now I’m less in touch with how life-enriching it was and more in touch with the hassle.”

Driving the changes is Airbnb’s chief executive, Brian Chesky, who has said the company ultimately wants to go into many different fields — perhaps even “one day redefine how we fly.” To get there, Airbnb needs to provide guests with a reliable experience. That has been a challenge, given the idiosyncrasies of hosts.

Vina Ayers, a graphic designer, experienced the pitfalls when she stayed with her husband and friends at an Airbnb in upstate New York in 2015. She said the group became alarmed when they arrived at the rental home and found the house had an odd and offensive odor. On their last morning there, they were confronted by strangers who believed the owner of the home had stolen their dog. Those strangers followed Ms. Ayers to a nearby restaurant. Eventually, the police intervened.

“I would never use Airbnb again and have since deleted my account,” she said.

A spokesman for Airbnb said in a statement: “Our initial response to this matter didn’t come close to meeting the high standards we set for ourselves. While this host hasn’t had a guest since 2015, we have formally suspended this account while we investigate, and we will take appropriate action.”

Airbnb’s shift has divided its host community. Some are embracing the changes around instant booking and appealing to business travelers. Mark Scheel, 42, a software engineer who runs a monthly meetup for Airbnb hosts in Denver, began renting out his ski condo on Airbnb five years ago. He just bought a second vacation condo because the first was occupied by Airbnb guests all the time.

“The changes that added more rigidity have also led to a better guest experience, which makes them happier and brings in more business for me,” Mr. Scheel said.

Other hosts are less comfortable with the added layers and new tools. “The Airbnb guys started the business as a way to make money to pay rent, with airbeds and cereal,” said John Garber, a host in Denver who has rented out an apartment on Airbnb since August 2016. “Now they do a lot of nudging to get you to do what they might call best practices. It’s a little nanny state.”

Chip Conley, Airbnb’s former global head of hospitality and strategy, who remains an adviser, said the company continued “to keep a good relationship with hosts, and they’re consistently happy.” On behalf of Airbnb, he cited data showing that over half of all hosts today are willing to recommend being a host, about the same as in 2014.

Airbnb has acknowledged that hosting can be a great deal of work, as it did this month when it made its website easier for hosts to use. The company also said it would include hosts in one board meeting a year, giving them more say in the company.

Standard Amenities

The consistency of a guest’s experience is a major issue that Airbnb wants to solve. That is because it bothers even some of the company’s big fans.

Consider Alex Tibbetts, 46, a marketer who lives in San Francisco and who began regularly using Airbnb in 2013 for work travel. While she likes the service and is trying to book an Airbnb for her family of four in Sydney, Australia, later this year, Ms. Tibbetts doesn’t fully trust that Airbnb’s hosts will behave reliably. As a result, she prefers listings where she does not have to interact with hosts once she arrives.

“The big downside of using Airbnb instead of a hotel is the risk, because of the potential lack of consistency,” she said. “When an Airbnb is bad, it’s really bad.”

Airbnb began tackling the predictability of its guest experience early on by providing a rating system, so people could read about Airbnbs from other travelers. In 2009, the company created a special designation called superhosts for those who could be depended upon to provide a strong guest experience. The program today includes hosts who average nearly one booking a month, do not cancel reservations, respond quickly to inquiries and have high ratings.

In 2010, Airbnb introduced Instant Book, a tool that lets travelers reserve rooms immediately, instead of asking hosts directly for a room and then waiting for their approval. Guests wanted a mechanism for speedier booking, but hosts were wary of giving up control over whom they allowed into their homes. (The company later hoped that the tool could also make it harder for hosts to discriminate against travelers.)

A year later, Airbnb hired Mr. Conley, the founder of Joie de Vivre Hotels, a boutique hotel chain, for the newly created role of global head of hospitality and strategy. His job, in part, was to teach hospitality to hosts.

Mr. Conley quickly began making changes. Among them: He helped create hospitality standards around cleanliness, communication and cancellations. He rolled out a mobile app so hosts could respond faster to guests.

In 2015, Airbnb also introduced a surge pricing tool, which lowers and raises room rates based on demand, much like a hotel. Over the past few years, the company has experimented with setting default cancellation policies and check-in and checkout times. Hosts who didn’t want to participate could opt out.

Some of Mr. Conley’s ideas have not come to fruition, like a full-service cleaning operation and a transportation service. But the standardization of a guest’s experience was in motion. All hosts were asked to confirm they had smoke and carbon monoxide detectors in 2014. (The company has since said the devices are not mandatory.)

A year later, hosts could earn badges for having “business travel ready” listings, which must have standard amenities like a hair dryer and Wi-Fi. Hosts cannot cancel such listings within seven days of the reservation date.

The changes made it clear that Airbnb was “taking a page from the hotel industry,” said Jan Freitag, a senior vice president at the lodging research group STR.

Yet even as Airbnb has pushed hosts to be more hotel-like, it has not given them the same control over their businesses as a hotel. John Wong, an Airbnb host in Ottawa, who rents out a condo on the site, experienced this firsthand this year.

After some guests had a party in Mr. Wong’s condo, they refused to cover the cost of smoke and water damage. While a hotel would have had a guest’s credit card on file and been able to charge the customer, Mr. Wong did not have that backup. He turned to Airbnb for help, and the company did little, he said.

After The New York Times contacted Airbnb about the incident, the company began paying Mr. Wong for property damages. “We’ve grown fast,” Airbnb said in a statement, “and we haven’t always been perfect.”

Mr. Wong said his overall experience with Airbnb was positive, but “there needs to be a better process to hold problematic guests accountable, rather than relying on the media to help intervene.”

Meantime, Airbnb has diversified its offerings by branching into tours and restaurant reservations. Mr. Chesky has said that these new services may someday account for more than half of the company’s revenue. All of those may turn Airbnb into a full-service, online travel agency like Orbitz, making hosts a smaller part of the picture.

A Growing Burden

For more than 20 years, Ms. Bishop taught English as a second language. In 2003, after separating from her husband, she moved to North Park Hill, which was close to the dance school of her daughter, who was a teenager at the time. To make the new house her own, she decorated it with portraits and still lifes by local artists.

Ms. Bishop heard about Airbnb, which was then called AirbedAndBreakfast, in 2008. At the time, Denver was bracing for 80,000 people to descend on the city for the Democratic National Convention. With hotels unable to accommodate all the travelers, AirbedAndBreakfast was looking for people willing to host convention attendees in their homes. Ms. Bishop signed up as user No. 933.

She immediately liked hosting. Visitors napped in her living room and ate at her table surrounded by family photographs, paperwork, stray mail and recycling items. She befriended guests who, in turn, later hosted her in Italy and Germany.

“People like it here because of how comfortable and at home they feel,” Ms. Bishop said. In short order, she became a superhost.

The company, by that time renamed Airbnb, sent flowers when Ms. Bishop hosted her 200th guest, and another time when she helped find alternative lodging for a man who was caught in a blizzard several towns away. In 2015, while waiting to speak at an event in Paris for Airbnb hosts, she met Joe Gebbia, one of the company’s founders. He recognized her from her listing and thanked her for being an early host when so few others were willing to do it.

In 2012, she decided that she was making enough money from Airbnb to retire early from teaching. She was booked all the time, and she enjoyed meeting travelers like the Ikrams, a Pakistani family of three who recently stayed with her. While the Ikrams initially seemed apprehensive about being in close quarters with a woman who was divorced, by their third day they offered to host her in Pakistan, even though she was unsure about the safety in the country.

“The father changed his mind about me, and I realized I had preconceived notions I didn’t think I had about Pakistan,” Ms. Bishop said.

Then hosting became more complicated. City officials in Denver, which has about 3,500 Airbnb listings, made it clear last year that they planned to regulate the short-term rental market. Ms. Bishop volunteered to meet with officials to help influence the legislation, essentially acting as an unpaid lobbyist.

Denver ultimately passed rules that required Airbnb hosts like Ms. Bishop to buy a short-term rental license and individually collect and remit lodging taxes. Airbnb said it soon hopes to collect and remit municipal taxes in Denver, as it does in most cities.

Ms. Bishop said she sometimes felt burned out by the complexities of hosting. In a hotel, some employees clean up after guests, while others handle concierge services and make conversation with visitors, while yet another group deals with regulators and bookkeeping. She was doing all of those tasks.

“Sometimes I joke that my job is washing sheets and towels,” she said. “But the right conversation with a guest makes it enriching again.”

This spring, Ms. Bishop received a gift from Airbnb, a copy of a new book called “The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions … and Created Plenty of Controversy.”

Ms. Bishop said she was too busy preparing her spare room for guests, attending host meetups and doing other activities to read the book. But now she no longer knows where the copy is. It has, she said, gotten lost somewhere in her house.



Bits: Farhad’s, Mike’s and Cade’s Week in Tech: More Uber, With a Dash of Amazon

Source: NY Times: Business
Bits: Farhad’s, Mike’s and Cade’s Week in Tech: More Uber, With a Dash of Amazon

Bits

By FARHAD MANJOO, MIKE ISAAC and CADE METZ

Each Saturday, Farhad Manjoo and Mike Isaac, technology reporters at The New York Times, review the week’s news, offering analysis and maybe a joke or two about the most important developments in the tech industry. This week, Farhad and Mike also talked with Cade Metz, who just joined The Times as a technology reporter.

Farhad: Hello, Mike! There’s a lot going on in the world, but can I just say: How great is it that the Warriors won the N.B.A. championship and proved, once and for all, that the Bay Area is the best? California4Eva! Anyway, how are you?

Mike: Ahoy, Farhad! I don’t care about sports, so I won’t pretend to now for the sake of exchanging pleasantries.

You know what I do care about? Artificial intelligence. No, I’m not referring to your intellect, Farhad. I’m making a quick segue into introducing our newest addition to the tech team, Cade Metz. He just joined us.

Cade: Yes, I am the first A.I. reporter ever at The Times. I’m a bot trained from reams of data detailing the behavior of some Silicon Valley hack during his five years at Wired magazine, incluing al thos typos. So when I insult you and Farhad on Twitter, don’t take it personally. That’s just the way I was built.

O.K., that’s not true. I’m not a bot. I’m just some hack who covers A.I. The truth is: A.I. is a long way from mimicking the behavior of a Times reporter. I hope.

Mike: Elon Musk was right. We are all doomed.

Farhad: Great, let’s chat about tech news. So the big thing this week was Uber, more Uber and still more Uber, with a little bit of Amazon and Whole Foods thrown in. But we’ll get to all that in a bit. Let’s start with other stuff.

Facebook said that it would begin to explain to the public how it tackles “hard questions” that arise out of its service — things like how Facebook affects democracies, or whether and how kids should use it. In its first such effort, the company detailed how it’s using artificial intelligence to fight the spread of terrorists online.

I have to say, I was really impressed with this whole exercise. I think tech companies have long been too reluctant to talk about the potential dangers of their technology. It’s great that Facebook — after, of course, a lot of questions and prodding arising out of its role in the election — is taking these issues seriously. But Cade, you’re our resident A.I. expert, so could you explain what exactly Facebook is doing, and whether it’ll work?

Cade: Well, the people who wrote that blog post are policy folks, not engineers. They’re using the term A.I. in the broadest of ways (like so many people these days). In most cases, they use A.I. to mean technology, as opposed to human involvement.

Some of the stuff they talk about, like identifying an image known to be related to terrorism, will work well. But other stuff, like the experimental system that seeks to identify online conversation and other natural language that points to terrorism, won’t work really well for years. (Hint: experimental is a key word). That kind of thing requires A.I. that is still very much under development.

The other key bit is where they say: “A.I. can’t catch everything.” That’s an understatement. When it comes to catching unwanted behavior on Facebook— whether it’s someone planning an act of terrorism or spreading fake news — Zuckerberg and company still need help from real live humans who see this stuff as it happens. That means Facebook users who can flag questionable content with a click, and it means the many contractors hired to review what has been flagged and remove what needs to be removed. This is stuff is very hard, and it will continue to be very hard until A.I. gets a lot better.

All that said, I agree with you, Farhad. Hard stuff should be taken seriously.

Farhad: This week, Silicon Valley also celebrated the life of Charles Thacker. Cade, you’re a kind of Valley historian, aren’t you? What can you tell us about Thacker?

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Cade: If you use a computer or a smartphone or the internet, you should read our obituary of Thacker. He is one of just a handful of people who designed the fundamental technologies that drive everything we do online.

In Thacker’s case, he was among the researchers at Xerox’s Palo Alto Research Lab in the 1970s who built the Alto, the machine with the graphical user interface that spawned the Macs and the PCs and, eventually, the smartphones that are such a big part of our everyday lives. Plus, he helped design Ethernet, the networking technology that linked the Altos together — and now links all the machines in your office, not to mention the thousands of machines inside the giant data centers that feed all the internet apps you use.

Think of it like this: When Steve Jobs died, he deserved avalanche of tributes that arrived from across the globe, and Thacker deserves much the same.

Farhad: Now let’s get to Uber. Months after a former employee, Susan Fowler, detailed incidents of sexual harassment and rampant misogyny at the company, the company announced a huge set of reforms to its culture and workplace practices. Also, Travis Kalanick, the C.E.O. and basically the embodiment of Uber, said he would be taking a leave of absence.

These are huge changes. I’m not sure if people who don’t follow the tech industry get this — a few months ago, it was unimaginable that Kalanick, who has overwhelming control of the company, could ever be pressured to step away. And if Uber actually follows through on its plan to remake its culture, it will operate like a completely different company.

But that’s what makes me so skeptical of this plan. Can a $70 billion company really change so radically?

Mike: My official assessment: I have no clue.

To be honest, a lot of this seems to hinge on the personality of Travis, who is famously aggressive and obsessive. And while he’s said he’s taking time off right now, I do wonder whether that will hold true — especially since Uber is undergoing its most prolonged set of crises, um, ever.

I think companywide DNA, instilled and fostered by the founders, is seriously difficult to change. Just ask Twitter.

That said, we should give Uber a chance — just like it is giving peace a chance! — and see what the company looks like six months to a year from now.

Cade: However all this shakes out, one thing is clear: Uber will continue to dominate the ride-hailing market for years to come. Its lead is just too big. But the slightly more distant future is driverless cars, and the scandals — among other things — have really hurt the company’s effort to make headway in this area. The question for me is whether Uber can still compete in this race to A.I. But, well, I’m an A.I. reporter.

Mike: Indeed you are, robot Cade. And now to get as far away from A.I. as possible — what do you think of Amazon’s purchase of Whole Foods?

Cade: Actually there is an A.I. angle. As we point out in our piece about Amazon’s deal to acquire Whole Foods, this is part of a major pivot into brick-and-mortar stores. Among other things, Amazon is experimenting with systems that will let you automatically pay for your groceries as you walk out of a store with them — A.I. is everywhere! And somewhere down the line, Whole Foods can feed those efforts to streamline the way we buy stuff in person. But this can also feed the company’s larger mission to sell stuff online.

What Amazon is good at is building enormous supply chains and physical infrastructure (warehouses, trucks, planes, even drones) that provide ways of delivering goods to your door much quicker than competitors can. By the same token, Whole Foods puts more Amazon groceries closer to you. Those stores aren’t just stores. They’re part of the supply chain.

Mike: This Whole Foods talk is making me hungry. Thanks for joining us, Cade. Until next week.



Popularity Contest: Trump Is Offering Populism, Minus the Free Candy

Source: NY Times: Business
Popularity Contest: Trump Is Offering Populism, Minus the Free Candy

The thing about populism is it usually involves doing things that are popular.

This is something that European nationalists and Latin American strongmen have long known. When they come to power, they aim to deliver concrete benefits to their supporters, even at the cost of their nations’ long-term fiscal health.

President Trump has delivered on some of the things he promised supporters on the campaign trail: He has appointed a conservative Supreme Court justice; begun more aggressive enforcement of immigration laws; and directed his appointees to slash regulations on fossil fuel and other industries. But in terms of spending, Mr. Trump has embraced the austere preferences of congressional Republicans, even when that approach has contradicted his campaign promises.

To see the tension, consider an alternate history of the Trump administration: one in which the president embraced the lessons of right-wing populists from abroad.

It’s Jan. 21, and Mr. Trump is newly sworn in. Shrugging off the snark from liberals on Twitter about the size of his inauguration crowds, he directs his staff to go to work on the Make America Great Again Act of 2017.

They dust off the policy white paper that the campaign staff issued months earlier, and spend their time on Capitol Hill trying to cobble together a coalition to pass a bill aimed at helping the people who put Mr. Trump in the White House.

The bill has lots of money to fight the opioid epidemic and to invest in communities left behind by the modern economy. There is money to prop up troubled health insurance markets, so that Mr. Trump can say he has replaced Obamacare with something better. There are a trillion dollars for public infrastructure — not some complex tax credit that favors revenue-generating projects in affluent areas, but the brute force of government dollars to build roads and bridges in every corner of the nation.

Each project, of course, will have a big sign crediting the Make America Great Again Act with a big photo of Mr. Trump flashing a thumbs up.

To help keep conservatives and business interests on board with all that spending, the bill loosens environmental laws and bank regulations, among other policy goodies that make C.E.O.s’ hearts flutter. But it wouldn’t achieve a filibuster-proof majority in the Senate unless packaged with those aforementioned goodies that appeal to Democrats. Maybe it could increase the minimum wage, but also include a tax credit for companies that hire American workers to offset the cost to businesses.

The government would pay for it all with higher deficits. Free candy for everyone! The cost — in the form of higher interest rates and perhaps inflation — would come later. It’s the kind of bill that anti-spending conservatives would complain about, and die-hard anti-Trump liberals would resist. Cobbling together a coalition to pass it may not be easy, but a savvy deal maker could plausibly attract enough bipartisan support to make it law — and in the process maybe build trust for further deal making down the road.

My MAGA Act is hypothetical, but in the weeks after the election, the idea that Mr. Trump would emulate European and Latin American populists — who are often staunch defenders of social welfare programs and enthusiasts of showy public works projects — seemed plausible.

Mr. Trump has often been compared to the right-wing Latin American populists who, like him, have used machismo, opposition to elites and personal grandiosity (“I alone can fix it,” as Mr. Trump said) to win elections. His nationalist, anti-immigration “America First” message also resembles that of European nationalists.

Juan Perón, the president of Argentina from the mid-1940s to the mid-1950s and again briefly in the 1970s, is among the most famous of the Latin American populists and one whose personality has been compared to Mr. Trump’s. But while Perón had an authoritarian approach, his policies included a universal public pension and universal access to health care. He spent lavishly on public works projects.

Juan Perón, the Argentine president from 1946 to 1955, knew how to be popular.

El Dia De La Plata / Agence France-Presse — Getty Images

More recently, Rafael Correa, the president of Ecuador from 2007 until last month, who came to office on an anti-elite wave and shared with Mr. Trump a predilection for tweeting insults at his enemies, spent public funds abundantly on schools, poverty, health clinics and highways.

Right-wing parties in Europe often exhibit antagonism to immigration, but position themselves as defenders of public spending domestically. The National Front in France, for example, which recently lost the presidential election, was calling for lowering the retirement age and increasing welfare benefits to go along with its message opposing immigration and the European Union.

The “let them have candy” approach isn’t necessarily sound policy. In a 1991 economics paper, Rudiger Dornbusch of M.I.T. and Sebastian Edwards of U.C.L.A. showed how the populist movements of Latin America had often generated a disastrous boom-bust cycle.

“Again and again, and in country after country, policy makers have embraced economic programs that rely heavily on the use of expansive fiscal and credit policies and overvalued currency to accelerate growth and redistribute income,” wrote Mr. Dornbusch and Mr. Edwards in “The Macroeconomics of Populism in Latin America.” “After a short period of economic growth and recovery, bottlenecks develop provoking unsustainable macroeconomic pressures that, at the end, result in the plummeting of real wages and severe balance of payment difficulties. The final outcome of these experiments has generally been galloping inflation, crisis and the collapse of the economic system.”

Based on the early policy moves of the Trump administration, spending too much on goodies for his working-class supporters isn’t something Americans need to fear. He has chosen a very different path — even when following through would be more consistent with his campaign promises.

During the campaign, Mr. Trump promised not to cut Social Security, Medicare or Medicaid. As president, his budget would cut the Social Security disability insurance program and Medicaid.

His first major legislative effort was a health care bill that would cause 23 million people to lose coverage, according to the Congressional Budget Office’s estimate, while cutting taxes for the affluent. It would hit older Americans, who disproportionately voted for Mr. Trump, particularly hard in the form of higher health insurance costs. The bill, which is being revised by the Senate, is deeply unpopular, according to public opinion polls.

Despite the president’s talk of a bold $1 trillion infrastructure plan, there is not yet an actual legislative proposal, and the approach the administration has described relies heavily on tax credits to encourage private investment. That tends to limit the scope of any projects to those that can generate revenue to pay off investors.

On taxes there is also no legislative proposal yet, and the bullet points the administration has released imply much bigger advantages for corporations and the highest earners than for middle-class Americans.

On opioid addiction and other problems facing some of the troubled communities that heavily favored Mr. Trump at the voting booth, the most visible thing the administration has done is appoint a task force. His budget would slash regional development funds, through the Appalachian Regional Commission and the Delta Regional Authority, for example, both of which benefit areas that voted overwhelmingly for Mr. Trump.

On top of it all, Mr. Trump has set a political tone that makes it harder to change course and find bipartisan support for something like the MAGA Act later. Instead of putting Democrats in a jam by proposing something broadly popular, the president has made it easy for them to be united in opposition.

Essentially, for all of Mr. Trump’s populist rhetoric, he has outsourced his domestic policy agenda to the austere, spending-averse congressional Republicans.

It’s hard to know how much of this reflects the president’s actual policy preferences versus the ideology of the people he has surrounded himself with, and how much of it is simply the path of least resistance. Letting House Speaker Paul Ryan and the Senate majority leader, Mitch McConnell, set the domestic policy agenda is easier than doing it yourself.

But given the choices the Trump administration has made, the president’s sub-40-percent public approval ratings are understandable. It may be a tautology to say that doing popular things will make a politician more popular, but it’s one the president may just want to remember.



PeabodyEnergy Fights Lawsuit Over Protesters' Arrest

Source: WSJ: US Business
PeabodyEnergy Fights Lawsuit Over Protesters’ Arrest

Peabody Energy Corp. is fighting accusations it colluded with police in the unlawful arrest of two protesters who took a photo with coal miners and their “Peabody Abandons Miners” banner at its 2013 shareholder meeting in Wyoming.

The allegation brought by Thomas Asprey, 60, and Leslie Glustrom, 62, is the basis of a civil lawsuit that, along with a handful of other legal actions against Peabody, has been on hold since the coal…