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Airbnb has well and truly disrupted the world of travel accommodation, changing the conversation not just around how people discover and book places to stay, but what they expect when they get there, and what they expect to pay. Today, one of the startups riding that wave is announcing a significant round of funding to fuel its own contribution to the marketplace.

Domio, a startup that designs and then rents out apart-hotels with kitchens and other full-home experiences, has raised $100 million ($50 million in equity and $50 million in debt) to expand its business in the U.S. and globally to 25 markets by next year, up from 12 today. Its target customers are millennials traveling in groups or families swayed by the size and scope of the accommodation — typically five times bigger than the average hotel room — as well as the price, which is on average 25% cheaper than a hotel room.

The Series B, which actually closed in August of this year, was led by GGV Capital, with participation from Eldridge Industries, 3L Capital, Tribeca Venture Partners, SoftBank NY, Tenaya Capital and Upper90. Upper90 also led the debt round, which will be used to lease and set up new properties.

Domio is not disclosing its valuation, but Jay Roberts, the founder and CEO, said in an interview that it’s a “huge upround” and around 50x the valuation it had in its seed round and that the company has tripled its revenues in the last year. Prior to this, Domio had only raised around $17 million, according to data from PitchBook.

For some comparisons, Sonder — another company that rents out serviced apartments to the kind of travelers who have a taste for boutique hotels — earlier this year raised $225 million at a valuation north of $1 billion. Others like Guesty, which are building platforms for others to list and manage their apartments on platforms like Airbnb, recently raised $35 million with a valuation likely in the range of $180 million to $200 million. Airbnb is estimated to be valued around $31 billion.

Domio plays in an interesting corner of the market. For starters, it focuses its accommodations at many of the same demographics as Airbnb. But where Airbnb offers a veritable hodgepodge of rooms and homes — some are people’s homes, some are vacation places, some never had and never will have a private occupant, and across all those the range of quality varies wildly — Domio offers predictability and consistency with its (possibly more anodyne) inventory.

“We are competing with amateur hosts on Airbnb,” said Roberts, who previously worked in real estate investment banking. “This is the next step, a modern brand, the next Marriott but with a more tech-powered brain and operating model.” These are not to be confused with something like Hilton’s Homewood Suites, Roberts stressed to me. He referred to Homewood as “a soulless hotel chain.”

“Domio is the anti-hotel chain,” he added.

Roberts is also quick to describe how Domio is not a real estate company as much as it is a tech-powered business. For starters, it uses quant-style algorithms that it’s built in-house to identify regions where it wants to build out its business, basing it not just on what consumers are searching for, but also weather patterns, economic indicators and other factors. After identifying a city or other location, it works on securing properties.

It typically sets up its accommodations in newer or completely new buildings, where developers — at least up to now — are not usually constructing with short-term rentals in mind. Instead, they are considering an option like Domio as an alternative to selling as condominiums or apartments, something that might come up if they are sensing that there is a softening in the market. “We typically have 75%-78% occupancy,” Roberts said. He added that hotels on average have occupancy rates in the high 60% nationally.

As Domio lengthens its track record — its 12 U.S. markets include Miami, Los Angeles, Philadelphia and Phoenix — Roberts says that they’re getting a more select seat at the table in conversations.

“Investors are starting to go out to buy properties on our behalf and lease them to us,” he said. This gives the startup a much more favorable rate and terms on those deals. “The next step is that Domio will manage these directly.” The most recent property it signed, he noted, includes a Whole Foods at the ground level, and a gym.

Using technology to identify where to grow is not the only area where tech plays a role. Roberts said that the company is now working on an app — yet to be released — that will be the epicenter of how guests interact to book places and manage their experience once there.

“Everything you can do by speaking to a human in a traditional hotel you will be able to do with the Domio app,” he said. That will include ordering room service, getting more towels, booking experiences and getting restaurant recommendations. “You can book your Uber through the Domio app, or sync your Spotify account to play music in the apartment.

And there are plans to extend the retail experience using the app. Roberts says it will be a “shoppable” experience where, if you like a sofa or piece of art in the place where you’re staying, you can order it for your own home. You can even order the same wallpaper that’s been designed to decorate Domio apartments.

Ripe for the booking

Although Airbnb has grown to be nearly as ubiquitous as hotels (and perhaps even more prominent, depending on who you are talking to), the wider travel and accommodation market is still ripe for the taking, estimated to reach $171 billion by 2023 and the highest growth sector in the travel industry.

“Airbnb has taught us that hotels are not the only place to stay,” said Hans Tung, GGV’s managing partner. “Domio is capitalizing on the global shift in short-term travel and the consumer demand for branded experiences. From my travels around the world, there is a large, underserved audience — millennials, families, business teams — who prefer the combined benefits of an apartment and hotel in a single branded experience.”

I mentioned to Roberts that the leasing model reminded me a little of WeWork, which itself does not own the property it curates and turns into office space for its tenants. (The SoftBank investor connection is interesting in that regard.) Roberts was very quick to say that it’s not the same kind of business, even if both are based around leased property re-rented out to tenants.

“One of the things we liked about Domio is that is very capital-efficient,” said Tung, “focusing on the model and payback period. The short-term nature of customer stays and the combination of experience/price required to maintain loyal customers are natural enforcers of efficient unit economics.”

“For GGV, Domio stands out in two ways,” he continued. “First, CEO Jay Roberts and the Domio team’s emphasis on execution is impressive, with expansion into 12 cities in just three years. They have the right combination of vision, speed and agility. Domio’s model can readily tap into the global opportunity as they have ambition to scale to new markets. The global travel and tourism spend is $2.8 trillion with 5 billion annual tourists. Global travelers like having the flexibility and convenience of both an apartment and hotel — with Domio they can have both.”

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1. Uber has again been denied licence renewal in London over safety risks

With Uber’s two-month license extension in London coming to an end, the company has once again been denied a full renewal by the city’s transport regulator — which said that it had found a “pattern of failures” that put “passenger safety and security at risk.”

This doesn’t mean the company has to halt London operations immediately. Instead, Uber says it will appeal the decision, and it will be able to continue operating in the city during the appeals process.

2. eBay to sell ticket marketplace StubHub to viagogo for $4.05 billion

The deal will merge StubHub’s U.S.-based marketplace with viagogo, which serves a worldwide audience as a ticket marketplace in Europe, Asia, Australia and Latin America.

3. More than 1 million T-Mobile customers exposed by breach

A T-Mobile representative told us that the attack was discovered in early November and shut down “immediately.” But if you’re a T-Mobile customer, it may be a good idea to change your password and check up on your account details.

4. Scribd raises $58M for subscription e-books and audiobooks

At the beginning of this year, the company — known for a Netflix-style, e-book and audiobook subscription — announced that it had more than 1 million paying subscribers. It also said it’s been profitable since 2017.

5. HP rejects Xerox again, but leaves door open for negotiation

In a letter released this morning, the HP board of directors summarily rejected Xerox’s latest takeover offer, saying it significantly undervalues the company. At the same time, it left the door open for further negotiation.

6. Inside Prosus Ventures’ $4.5 billion bet on India

TechCrunch spoke with Larry Illg and Ashutosh Sharma of Prosus Ventures (currently in the midst of a takeover attempt of British food delivery startup Just Eat) to understand how significant food tech is for the investment firm and the bets it is making in India. (Extra Crunch membership required.)

7. This week’s TechCrunch podcasts

This week’s Equity skips the normal news roundup for an interview Poshmark CEO Manish Chandra and investor James Currier. And over at Original Content, we review Netflix’s first music competition show “Rhythm + Flow.”

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Truecaller, an app that helps users screen strangers and robocallers, will soon allow users in India, its largest market, to borrow up to a few hundred dollars.

The crediting option will be the fourth feature the nine-year-old app adds to its service in the last two years. So far it has added to the service the ability to text, record phone calls and mobile payment features, some of which are only available to users in India. Of the 140 million daily active users of Truecaller, 100 million live in India.

The story of the ever-growing ambition of Truecaller illustrates an interesting phase in India’s internet market that is seeing a number of companies mold their single-functioning app into multi-functioning so-called super apps.

Inspired by China

This may sound familiar. Truecaller and others are trying to replicate Tencent’s playbook. The Chinese tech giant’s WeChat, an app that began life as a messaging service, has become a one-stop solution for a range of features — gaming, payments, social commerce and publishing platform — in recent years.

WeChat has become such a dominant player in the Chinese internet ecosystem that it is effectively serving as an operating system and getting away with it. The service maintains its own “app store” that hosts mini apps. This has put it at odds with Apple, though the iPhone-maker has little choice but to make peace with it.

For all its dominance in China, WeChat has struggled to gain traction in India and elsewhere. But its model today is prominently on display in other markets. Grab and Go-Jek in Southeast Asian markets are best known for their ride-hailing services, but have begun to offer a range of other features, including food delivery, entertainment, digital payments, financial services and healthcare.

The proliferation of low-cost smartphones and mobile data in India, thanks in part to Google and Facebook, has helped tens of millions of Indians come online in recent years, with mobile the dominant platform. The number of internet users has already exceeded 500 million in India, up from some 350 million in mid-2015. According to some estimates, India may have north of 625 million users by year-end.

This has fueled the global image of India, which is both the fastest growing internet and smartphone market. Naturally, local apps in India, and those from international firms that operate here, are beginning to replicate WeChat’s model.

Founder and chief executive officer (CEO) of Paytm Vijay Shekhar Sharma speaks during the launch of Paytm payments Bank at a function in New Delhi on November 28, 2017 (AFP PHOTO / SAJJAD HUSSAIN)

Leading that pack is Paytm, the popular homegrown mobile wallet service that’s valued at $18 billion and has been heavily backed by Alibaba, the e-commerce giant that rivals Tencent and crucially missed the mobile messaging wave in China.

Commanding attention

In recent years, the Paytm app has taken a leaf from China with additions that include the ability to text merchants; book movie, flight and train tickets; and buy shoes, books and just about anything from its e-commerce arm Paytm Mall . It also has added a number of mini games to the app. The company said earlier this month that more than 30 million users are engaging with its games.

Why bother with diversifying your app’s offering? Well, for Vijay Shekhar Sharma, founder and CEO of Paytm, the question is why shouldn’t you? If your app serves a certain number of transactions (or engagements) in a day, you have a good shot at disrupting many businesses that generate fewer transactions, he told TechCrunch in an interview.

At the end of the day, companies want to garner as much attention of a user as they can, said Jayanth Kolla, founder and partner of research and advisory firm Convergence Catalyst.

“This is similar to how cable networks such as Fox and Star have built various channels with a wide range of programming to create enough hooks for users to stick around,” Kolla said.

“The agenda for these apps is to hold people’s attention and monopolize a user’s activities on their mobile devices,” he added, explaining that higher engagement in an app translates to higher revenue from advertising.

Paytm’s Sharma agrees. “Payment is the moat. You can offer a range of things including content, entertainment, lifestyle, commerce and financial services around it,” he told TechCrunch. “Now that’s a business model… payment itself can’t make you money.”

Big companies follow suit

Other businesses have taken note. Flipkart -owned payment app PhonePe, which claims to have 150 million active users, today hosts a number of mini apps. Some of those include services for ride-hailing service Ola, hotel booking service Oyo and travel booking service MakeMyTrip.

Paytm (the first two images from left) and PhonePe offer a range of services that are integrated into their payments apps

What works for PhonePe is that its core business — payments — has amassed enough users, Himanshu Gupta, former associate director of marketing and growth for WeChat in India, told TechCrunch. He added that unlike e-commerce giant Snapdeal, which attempted to offer similar offerings back in the day, PhonePe has tighter integration with other services, and is built using modern architecture that gives users almost native app experiences inside mini apps.

When you talk about strategy for Flipkart, the homegrown e-commerce giant acquired by Walmart last year for a cool $16 billion, chances are arch rival Amazon is also hatching similar plans, and that’s indeed the case for super apps.

In India, Amazon offers its customers a range of payment features such as the ability to pay phone bills and cable subscription through its Amazon Pay service. The company last year acquired Indian startup Tapzo, an app that offers integration with popular services such as Uber, Ola, Swiggy and Zomato, to boost Pay’s business in the nation.

Another U.S. giant, Microsoft, is also aboard the super train. The Redmond-based company has added a slew of new features to SMS Organizer, an app born out of its Microsoft Garage initiative in India. What began as a texting app that can screen spam messages and help users keep track of important SMSs recently partnered with education board CBSE in India to deliver exam results of 10th and 12th grade students.

This year, the SMS Organizer app added an option to track live train schedules through a partnership with Indian Railways, and there’s support for speech-to-text. It also offers personalized discount coupons from a range of companies, giving users an incentive to check the app more often.

Like in other markets, Google and Facebook hold a dominant position in India. More than 95% of smartphones sold in India run the Android operating system. There is no viable local — or otherwise — alternative to Search, Gmail and YouTube, which counts India as its fastest growing market. But Google hasn’t necessarily made any push to significantly expand the scope of any of its offerings in India.

India is the biggest market for WhatsApp, and Facebook’s marquee app too has more than 250 million users in the nation. WhatsApp launched a pilot payments program in India in early 2018, but is yet to get clearance from the government for a nationwide rollout. (It isn’t happening for at least another two months, a person familiar with the matter said.) In the meanwhile, Facebook appears to be hatching a WeChatization of Messenger, albeit that app is not so big in India.

Ride-hailing service Ola too, like Grab and Go-Jek, plans to add financial services such as credit to the platform this year, a source familiar with the company’s plans told TechCrunch.

“We have an abundance of data about our users. We know how much money they spend on rides, how often they frequent the city and how often they order from restaurants. It makes perfect sense to give them these valued-added features,” the person said. Ola has already branched out of transport after it acquired food delivery startup Foodpanda in late 2017, but it hasn’t yet made major waves in financial services despite giving its Ola Money service its own dedicated app.

The company positioned Ola Money as a super app, expanded its features through acquisition and tie ups with other players and offered discounts and cashbacks. But it remains behind Paytm, PhonePe and Google Pay, all of which are also offering discounts to customers.

Integrated entertainment

Super apps indeed come in all shapes and sizes, beyond core services like payment and transportation — the strategy is showing up in apps and services that entertain India’s internet population.

MX Player, a video playback app with more than 175 million users in India that was acquired by Times Internet for some $140 million last year, has big ambitions. Last year, it introduced a video streaming service to bolster its app to grow beyond merely being a repository. It has already commissioned the production of several original shows.

In recent months, it has also integrated Gaana, the largest local music streaming app that is also owned by Times Internet. Now its parent company, which rivals Google and Facebook on some fronts, is planning to add mini games to MX Player, a person familiar with the matter said, to give it additional reach and appeal.

Some of these apps, especially those that have amassed tens of millions of users, have a real shot at diversifying their offerings, analyst Kolla said. There is a bar of entry, though. A huge user base that engages with a product on a daily basis is a must for any company if it is to explore chasing the super app status, he added.

Indeed, there are examples of companies that had the vision to see the benefits of super apps but simply couldn’t muster the requisite user base. As mentioned, Snapdeal tried and failed at expanding its app’s offerings. Messaging service Hike, which was valued at more than $1 billion two years ago and includes WeChat parent Tencent among its investors, added games and other features to its app, but ultimately saw poor engagement. Its new strategy is the reverse: to break its app into multiple pieces.

“In 2019, we continue to double down on both social and content but we’re going to do it with an evolved approach. We’re going to do it across multiple apps. That means, in 2019 we’re going to go from building a super app that encompasses everything, to Multiple Apps solving one thing really well. Yes, we’re unbundling Hike,” Kavin Mittal, founder and CEO of Hike, wrote in an update published earlier this year.

It remains unclear how users are responding to the new features on their favorite apps. Some signs suggest, however, that at least some users are embracing the additional features. Truecaller said it is seeing tens of thousands of users try the payment feature for the first time each day. It’s also being used to send 3 billion texts a month.

And Reliance Jio, of course

Regardless, the race is still on, and there are big horses waiting to enter to add further competition.

Reliance Jio, a subsidiary of conglomerate Reliance Industry that is owned by India’s richest man, Mukesh Ambani, is planning to introduce a super app that will host more than 100 features, according to a person familiar with the matter. Local media first reported the development.

It will be fascinating to see how that works out. Reliance Jio, which almost single-handedly disrupted the telecom industry in India with its low-cost data plans and free voice calls, has amassed tens of millions of users on the bouquet of apps that it offers at no additional cost to Jio subscribers.

Beyond that diverse selection of homespun apps, Reliance has also taken an M&A-based approach to assemble the pieces of its super app strategy.

It bought music streaming service Saavn last year and quickly integrated it with its own music app JioMusic. Last month, it acquired Haptik, a startup that develops “conversational” platforms and virtual assistants, in a deal worth more than $100 million. It already has the user bases required. JioTV, an app that offers access to over 500 TV channels; and JioNews, an app that additionally offers hundreds of magazines and newspapers, routinely appear among the top apps in Google Play Store.

India’s super app revolution is in its early days, but the trend is surely one to keep an eye on as the country moves into its next chapter of internet usage.

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A new feature rolling out to Uber drivers offers a semi-customized look at their “journey” with the company. On the face of it, the video is similar to the sort offered up by Facebook on the occasion of anniversaries. Here, it pairs a driver’s stats with jaunty music and animation, highlighting how long they’ve been driving and when they started with the service.

The video pulls other journey metrics that it’s already begun sharing with riders through the app, including fun stats like the number of sunrises and sunsets they’ve “driven through,” the total of five-star trips and the longest streak of five-star trips.

Uber shared the feature with drivers, who can opt into making it visible in the app. Doing so will show passengers on a prompt upon the driver’s arrival to provide additional insight of the person with whom they’ll be sharing a car. A number of drivers have also begun to share the feature through social media like Twitter, which can be easily accessed with a search.

The feature appears to have arrived for many over the weekend, rolling out to all drivers and Uber Eats partners globally who have made more than 100 trips. It arrives in the wake of the company’s (admittedly underwhelming) IPO. It also also debuts in the face of last week’s strikes by taxi worker advocacy groups protesting the company’s role in the growing gig economy.

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As I’m sure everyone reading this knows, female-founded businesses receive just over 2 percent of venture capital on an annual basis. Most of those checks are written to early-stage startups. It’s extremely difficult for female founders to garner late-stage support, let alone cash $100 million checks.

Maybe that’s finally changing. This week, not one but two female-founded and led companies, Glossier and Rent The Runway, raised nine-figure rounds and cemented their status as unicorn companies. According to PitchBook data from 2018, there are only about 15 unicorn startups with female founders. Though I’m sure that number has increased in the last year, you get the point: There are hundreds of privately held billion-dollar companies and shockingly few of those have women founders (even fewer have female CEOs)…

Moving on…

YC Demo Days

I spent a good part of the week at San Francisco’s Pier 48 in a room full of vest-wearing investors. We listened to some 200 YC companies make their 120-second pitch and though it was a bit of a whirlwind, there were definitely some standouts. ICYMI: We wrote about each and every company that pitched on day 1 and day 2. If you’re looking for the inside scoop on the companies that forwent demo day and raised rounds, or were acquired, before hitting the stage, we’ve got that too.

IPO corner

Lyft: This week, Lyft set the terms for its highly-anticipated initial public offering, expected to be completed next week. The company will charge between $62 and $68 per share, raising more than $2 billion at a valuation of ~$23 billion. We previously reported its initial market cap would be around $18.5 billion, but that was before we knew that Lyft’s IPO was already oversubscribed. Here’s a little more background on the Lyft IPO for those interested.

Uber: The global ride-hailing business flew a little more under the radar this week than last week, but still managed to grab a few headlines. The company has decided to sell its stock on the New York Stock Exchange, which is the least surprising IPO development of 2019, considering its key U.S. competitor, Lyft, has been working with the Nasdaq on its IPO. Uber is expected to unveil its S-1 in April.

Ben Silbermann, co-founder and CEO of Pinterest, at TechCrunch Disrupt SF 2017.

Pinterest: Pinterest, the nearly decade-old visual search engine, unveiled its S-1 on Friday, one of the final steps ahead of its NYSE IPO, expected in April. The $12.3 billion company, which will trade under the ticker symbol “PINS,” posted revenue of $755.9 million in the year ending December 31, 2018, up from $472.8 million in 2017. It has roughly doubled its monthly active user count since early 2016, hitting 265 million last year. The company’s net loss, meanwhile, shrank to $62.9 million in 2018 from $130 million in 2017.

Zoom: Not necessarily the buzziest of companies, but its S-1 filing, published Friday, stands out for one important reason: Zoom is profitable! I know, what insanity! Anyway, the startup is going public on the Nasdaq as soon as next month after raising about $150 million in venture capital funding. The full deets are here.

Seed money

General Catalyst, a well-known venture capital firm, is diving more seriously into the business of funding seed-stage business. The firm, which has investments in Warby Parker, Oscar and Stripe, announced earlier this week its plan to invest at least $25 million each year in nascent teams.

Deal of the week

Earlier this week, Opendoor, the SoftBank -backed real estate startup, filed paperwork to raise even more money. According to TechCrunch’s Ingrid Lunden, the business is planning to raise up to $200 million at a valuation of roughly $3.7 billion. It’s possible this is a Series E extension; after all, the company raised its $400 million Series E only six months ago. Backers of OpenDoor include the usual suspects: Andreessen Horowitz, Coatue, General Atlantic, GV, Initialized Capital, Khosla Ventures, NEA and Norwest Venture Partners.

Startup capital

Backstage Capital founder and managing partner Arlan Hamilton, center.


Axios’ Dan Primack and Kia Kokalitcheva published a report this week revealing Backstage Capital hadn’t raised its debut fund in total. Backstage founder Arlan Hamilton was quick to point out that she had been honest about the challenges of fundraising during various speaking engagements, and even on the Gimlet “Startup” podcast, which featured her in its latest season. A Twitter debate ensued and later, Hamilton announced she was stepping down as CEO of Backstage Studio, the operations arm of the venture fund, to focus on raising capital and amplifying founders. TechCrunch’s Megan Rose Dickey has the full story.

Pro rata rights

This week, TechCrunch’s Connie Loizos revisited a long-held debate: Pro rata rights, or the right of an earlier investor in a company to maintain the percentage that he or she (or their venture firm) owns as that company matures and takes on more funding. Here’s why pro rata rights matter (at least, to VCs).


If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about Glossier, Rent The Runway and YC Demo Days. Then, in a special Equity Shot, we unpack the numbers behind the Pinterest and Zoom IPO filings.

Want more TechCrunch newsletters? Sign up here.

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Cargo, the startup that helps ridesharing drivers earn money by bringing the convenience store into their vehicles, has raised $22 million in a Series A round led by Founders Fund.

Additional investment came from Coatue Management, Aquiline Technology Growth and a number of  high-profile entertainment, gaming and technology executives that include Zynga founder Mark Pincus, Twitch’s former CSO Colin Carrier, media investor Vivi Nevo, former NBA commissioner David Stern, Def Jam Records CEO Paul Rosenberg, Steve Aoki, Maria Shriver and Patrick and Christina Schwarzenegger.

To date, Cargo has raised $30 million in venture funding. As part of this latest round, Founders Fund partner Cyan Banister is joining the board.

Cargo provides qualified ridesharing drivers with free boxes filled with the kinds of goods you might find in a convenience store, including snacks and phone chargers. Riders can use Cargo’s mobile web menu on their smartphones (without downloading an app) to buy what they need. Cargo has previously partnered with Kellogg’s, Starbucks and Mars Wrigley Confectionery — companies looking for ways to market their goods to consumers.

“In just a few years, ridesharing has evolved from a niche service to an indispensable element of our global transportation system,” Banister said in a statement. “Founders Fund is excited to support Cargo in driving the next evolution: a better on-trip experience for riders and new revenue generating opportunities for drivers.” 

The round follows Cargo’s partnership with Uber and an international licensing deal with Grab. The company, which was founded in 2017, has activated more than 12,000 drivers across 10 cities.

Cargo says it will use the capital to scale its business in the U.S. and internationally. It’s also working on new digital services — a development Banister eludes to — that will improve users on-trip experience. The strategic investments from gaming and entertainment executives is designed to help Cargo develop those digital services for riders.

“Our default behavior in an Uber is to shop, play games and listen to music on our phone. Riders have ordered more than two million products and today transact with us every five seconds,” Cargo founder and CEO Jeff Cripe said in a statement. “We brought riders instant commerce, now we’ll help them discover and enjoy games, music, and entertainment on one in-car platform.”

Existing Cargo investors participating in the round include CRCM Ventures, Rosecliff Ventures, Kellogg’s eighteen94 capital, RiverPark Ventures, and former Uber executives including Chief Business Officer Emil Michael, New York City General Manager Josh Mohrer and former West Coast General Manager William Barnes.

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Taxi app service tight-lipped on Travis Kalanic leave of absence as it responds to accusations of culture of harassment

Ubers board of directors has adopted a series of recommendations about the companys corporate culture from former US attorney general Eric Holder, but it was silent late on Sunday on whether it would approve a leave of absence for the taxi-hailing app services embattled CEO.

A spokesman confirmed that the board met Holder and Tammy Albarrn, both partners with Covington & Burling LLP, a law firm hired to investigate complaints of widespread sexual harassment and other deep-seeded cultural problems at Uber.

Board members voted unanimously to adopt all of the firms recommendations, which were to be released to employees on Tuesday, the spokesman said.

He would not comment on any further actions taken by the board, including whether it discussed the future of the CEO, Travis Kalanick. Multiple media outlets reported on Sunday that the board was considering a leave of absence for Kalanick.

Uber has been rocked by accusations that its management has fostered a workplace environment where harassment, discrimination and bullying are left unchecked.

Uber announced last week that it fired 20 employees for harassment problems after a separate investigation by a different law firm.

Under Kalanick, Uber has shaken up the taxi industry in hundreds of cities and turned the San Francisco-based company into the worlds most valuable startup. Ubers valuation has climbed to nearly $70bn (55bn).

However, Kalanick has acknowledged his management style needs improvement. The 40-year-old CEO said earlier this year he needed to fundamentally change and grow up.

In February, former Uber engineer Susan Fowler wrote on a blog that she had been propositioned by her boss in a series of messages on her first day of work and that superiors ignored her complaints. Uber set up a hotline for complaints after that and hired the law firm of Perkins Coie to investigate.

That firm checked into 215 complaints, with 57 still under investigation.

Uber has been plagued by more than sexual harassment complaints in recent months. It has been threatened by boycotts, sued and subject to a federal investigation that it used a fake version of its app to thwart authorities looking into whether it was breaking local laws.

Kalanick lost his temper earlier this year in an argument with an Uber driver who was complaining about pay, with Kalanicks profanity-laced comments caught on video.

Travis Kalanick argues with his Uber driver

In a March conference call with reporters following that incident, board member Arianna Huffington expressed confidence that Kalanick would evolve into a better leader. But Huffington, a founder of Huffington Post, suggested time might be running out.

Hes a scrappy entrepreneur, she said during the call, but one who needed to bring changes in himself and in the way he leads.

The board meeting follows a personal tragedy for Kalanick. His mother was killed in late May after the boat she and her husband were riding in hit a rock. Kalanicks father suffered moderate injuries.

The Wall Street Journal reported on Sunday that the chief business officer, Emil Michael, was planning to resign as soon as Monday.

The company has faced high turnover in its top ranks. In March, Ubers president, Jeff Jones, resigned after less than a year on the job. He said his beliefs and approach to leadership were inconsistent with those of the company.

In addition to firing 20 employees, Uber said on Tuesday it was hiring an Apple marketing executive, Bozoma Saint John, to help improve its tarnished brand. Saint John was most recently head of global consumer marketing for Apple Music and iTunes.

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How James Bond, an abusive Parisian cabbie, and one mans frustration with going out in San Francisco led to a transport revolution

The whole thing might not have happened without Bond James Bond. It was mid-2008, the Canadian entrepreneur Garrett Camp had just sold his first company, the website discovery engine StumbleUpon, to eBay for $75m. Now he was living large, enjoying San Franciscos nightlife, and when relaxing at his apartment in the citys South Park neighbourhood, he occasionally popped in the DVD of Daniel Craigs first Bond movie, Casino Royale.

Camp loved the movie, but something specific in it got him thinking. Thirty minutes into the film, Bond is driving his silver Ford Mondeo in the Bahamas on the trail of his adversary, Le Chiffre, when he glances down at his Sony Ericsson phone. Its brazen product placement and by todays standards the phone seems comically outdated. But at the time, what Bond saw on his phone startled Camp: a graphical icon of the Mondeo moving on a map toward his destination. The image stuck in his head and to understand why, you need to know more about the restless, inventive mind of Garrett Camp.

Camp was born in Calgary, Canada, and spent his early childhood playing sports, learning the electric guitar and asking lots of questions. Eventually, his curiosity settled on the world of personal computers. An uncle gave the family an early model Macintosh, from the days of floppy disks and point-and-click adventure games, and Camp spent hours on it during the frigid winters, toying with early computer graphics and writing basic programs.

By the time Camp graduated from high school, his parents had a three-storey home that included a comfortable office and a computer room in the basement. There wasnt much reason to leave, he says. He enrolled at the nearby University of Calgary, saved money by living at home and spent the next few years there (aside from one year in Montreal, interning at a company called Nortel Networks). He got his undergraduate degree in 2001 and stayed at the university to pursue a master of science, finally leaving his comfortable nest after he turned 22 to move into a campus apartment with classmates.

Camp met Geoff Smith, who would become his StumbleUpon co-founder, through one of his childhood friends and they started the site as a way for users to share and find interesting things on the internet without having to search for them on Google. By the time Camp finished his degree in 2005, StumbleUpon was starting to show promise. Camp and Smith met an angel investor that year who convinced them to move to San Francisco to raise capital. Over the next 12 months, the number of users on StumbleUpon grew from 500,000 to 2 million.

With the trauma of the first dot-com bust fading and the scent of opportunity again wafting across Silicon Valley, offers for StumbleUpon started pouring in. In May 2007, eBay bought StumbleUpon for $75m, turning it into one of the early successes of what became known as Web 2.0, the movement in which companies such as Flickr and Facebook mined the social connections among internet users. For Camp, it seemed the highest possible level of success in Silicon Valley and it was, by any reasonable standard until the one that he achieved next.

Uber co-founder Garrett Camp. Photograph: Rob Kim/Getty Images

Camp continued to work at eBay after the sale and he was now young, wealthy and single, with a taste for getting out of the house. This is when he ran headlong into San Franciscos feeble taxi industry.

For decades, San Francisco had kept the number of taxi licences capped at about 1,500. Licences in the city were relatively inexpensive and couldnt be resold and owners could keep the permit as long as they liked if they logged a minimum number of hours on the road every year. So new permits usually became available only when drivers died and anyone who applied for one had to wait years to receive it. Stories abounded about a driver waiting for three decades to get a licence, only to die soon after.

The system guaranteed a healthy availability of passengers for the taxi companies even during slow times and ensured that full-time drivers could earn a living wage. But demand for cars greatly exceeded supply and so taxi service in San Francisco famously sucked. Trying to hail a cab in the outer neighbourhoods near the ocean, or even downtown on a weekend night, was an exercise in futility. Getting a cab to take you to the airport was a stomach-churning gamble that could easily result in a missed flight.

Attempts to improve the situation were fruitless, since the fleets and their drivers were adamant about limiting competition. Over the years, whenever the mayor or the citys board of supervisors tried to increase the number of permits, angry drivers would fill city council chambers or surround city hall, causing havoc.

After the eBay acquisition, Camp splurged out on a red Mercedes-Benz C-Class sports car, but the vehicle sat in his garage. He hadnt driven much in Calgary and at college he preferred to take public transport. Driving in San Francisco was too stressful, he says. I didnt want to park the car on the street and I didnt want people to break into it. Just logistically, it was much harder to drive.

So the citys sad taxi situation seriously cramped his new lifestyle. Since he couldnt reliably hail a cab on the street, he began putting the yellow cab dispatch numbers in his phones speed dial. Even that was frustrating. I would call and they wouldnt show up and while I was waiting on the street, two or three other cabs would go by, he says. Then Id call them back and they wouldnt even remember that I called before. I remember being late for first or second dates. I could start getting ready 20 minutes early and still Id end up being 30 minutes late.

The sparkling city by the bay beckoned, but Camp had no reliable way to answer its call. Habitually restless and frustrated by inefficiencies, he came up with his first attempt at a solution: he would call all the yellow taxi companies when he needed a cab. Then he would take the first one that arrived.

Not surprisingly, the cab fleets didnt like that tactic. Though impossible to confirm, Camp believes his mobile phone was blacklisted by the San Francisco taxi companies. They wouldnt take my calls, he says. I was banned from the cab system.

Then Camp got a girlfriend: a smart, beautiful television producer named Melody McCloskey. The relationship posed a new set of transport hurdles: McCloskey lived a few miles away from Camp, in Pacific Heights. Meeting anywhere was a hassle and Camp often wanted to get together somewhere out at night.

To solve these challenges, Camp started to experiment with the citys gypsy cab fleet the unmarked black sedans that would approach prospective passengers on the street and flash their headlights to solicit a fare. Most San Franciscans, particularly women, would stay away from these unmarked cars, fearing for their safety or worried by the ambiguity of a cab without a running meter. But Camp found that a majority of the cars were clean and that many of the drivers were friendly. The biggest problem for these drivers was filling in the dead time between rides, when they tended to wait outside hotels. So Camp started collecting the phone numbers of town-car drivers. At one point, I had 10 to 15 numbers in my phone of the best black-car drivers in San Francisco, he says.

Then he started gaming the system further: texting a favourite driver hours before he needed him and telling him to meet him at a restaurant or bar at an appointed time. On another night, he rented a town car and driver for himself and a group of friends for an entire evening. It was an indulgence that cost $1,000 and zooming around the city at the end of the night dropping everyone off was a pain.

And that is when the futuristic image from Casino Royale popped into Camps head. Suddenly, he was obsessed with a new notion. He frequently talked with McCloskey about the idea of an on-demand car service and vehicles that passengers could track via a map on their phones. At one point that year, Camp scrawled the word ber into a Moleskine notebook that he kept to jot down new ideas and logos for companies and brands. Isnt that pronounced Yoober? she asked him.

I dont care. It looks cool, he said.

McCloskey recalls that Camp wanted it to be one word and a description of excellence and that his musings on the word, its sound and meaning, were incessant. What an uber coffee that was, hed say randomly after drinking a cup. It means great things! It means greatness!

Cab drivers wait to be processed at Ubers London driver service centre. Photograph: Felix Clay for the Guardian

Camp says he contemplated calling this new service berCab or BestCab and finally settled on just UberCab, losing the umlaut. (He registered the domain name in August 2008.) McCloskey loved Camps endless examination of new ideas but wasnt so sure she believed in this particular one. Sure, cabs are terrible, she said. But you are only in the cab for eight minutes! Why does itmatter?

But Camp was certain that he wanted such a service. He also knew that the iPhone and its new app store, which Apple introduced over the summer of 2008, were going to finally make the futuristic vision in Casino Royale practical. Not only could you chart the location of an object on a map, but since the earliest models of the phone had an accelerometer, you could also tell if the car was moving or not. That meant that an iPhone could function like a taximeter and be used to charge passengers by the minute or the mile.

He talked it over that year with many of his friends. The author and investor Tim Ferriss first brainstormed with Camp about the then-unnamed Uber at a bar in the Mission District. He thought it was a great idea, then forgot all about it. A month or two later, he got a call from Camp and when they started talking about Uber again, Ferriss was shocked. Camp, he says, had done an incredibly deep dive into the flaws of black cars and a kind of lost utility, the downtime of black cars and taxis. It was clear that he was probably already in the top 1% of market analysts who have looked at the space.

The idea behind Uber was crystallising in Camps mind.

Both the passenger and the driver could have an app on their phones. The passenger could have a credit card on file and wouldnt have to travel with any pesky cash. I bounced the idea off of everyone, Camp says. All these ideas kept building and building.

The original idea was to buy cars, then share the fleet among his friends who were using the app. But Camp says that was only a starting point and that even back then he was considering the potential to use such a system to co-ordinate not just black taxis but eco-friendly Priuses and even yellow cabs.

I always thought it could become a more efficient cab system, particularly in San Francisco, he says. He wasnt sure it would work outside the city, though. If he could get it to work in just 100 cities, he reasoned, it could be big enough for a company that generated about $100m a year in service fees.

By the autumn, Camp had more free time to work on Uber, since he and McCloskey had broken up, though they remained friends, and he was going less frequently into StumbleUpon. He recalls spending his weekends getting coffee, cruising the web and doing research into the transport industry and then going out with friends at night.

On 17 November 2008, he registered UberCab as a limited liability company in California. Soon after, hungry for some basic market research, he sent an email to Ferriss, saying: My goal is to be at a go or no-go decision by 1 December and to be live with five cars in January.

In December, on the way to LeWeb, a high-profile annual technology conference in Paris, Camp stopped in New York. There he met Oscar Salazar, a friend and fellow graduate student from the University of Calgary. Salazar was a skilled engineer from Colima, Mexico. He got his masters in electrical engineering in Canada and his PhD in France, then moved to New York.

During this time, he kept in touch with Camp and they reunited that December at a delicatessen in lower Manhattan. Camp pitched UberCab to Salazar and asked him to lead the development of the prototype.

I have this idea. In San Francisco its hard to get a taxi. I want to buy five Mercedes, Camp said, taking out his phone and showing him a picture of a Mercedes-Benz S550, a high-end coupe that sold for about 80,000. Im going to buy the cars with some friends and were going to share drivers and the cost of parking. He showed mock-ups of iPhone screens demonstrating how cars would move on maps and how passengers might see a town car coming toward them.

Salazar had experienced his own troubles hailing cabs in Mexico, Canada and France and remembers telling Camp: I dont know if this is a billion-dollar company, but its definitely a billion-dollar idea. Since Salazar was in the US on a student visa, he couldnt receive payment in cash for the job. Instead, he received equity in the fledgling startup. His stake is now worth hundreds of millions of dollars.

Its way more than I deserved. Its more than any human deserves, he told me over breakfast at a New York cafe in 2015. UberCab was officially in development, and so Camp left for Paris and the LeWeb conference, where he was meeting McCloskey and a close friend and fellow entrepreneur Travis Kalanick.

Every company creates its own origin myth. Its a useful tool for expressing the companys values to employees and the world and for simplifying and massaging history to give due credit to the people who made the most important contributions when it all started. Ubers official story begins here in Paris, when Camp and Kalanick famously visited the Eiffel Tower on a night after LeWeb and, looking out over the city of light, decided to take on an entrenched taxi industry that they felt was more interested in blocking competition than serving customers.

We actually came up with the idea at LeWeb in 2008, Kalanick would say five years later at the same conference, citing the challenges of getting a cab in Paris. We went back to San Francisco and we created a very simple, straightforward [way] to us at the time, to push a button and get a ride. We wanted it to be a classy ride.

Uber instruction video

Like all mythologies, it is not really true. The story gets misrepresented a lot, Camp sighs. The whole LeWeb thing. Im OK with it, as long as its directionally correct.

Camp had previously discussed the Uber idea with Kalanick, as he had with other friends. At the time, Kalanick was enthusiastic about Camps notion for a smartphone-based town-car-sharing service but only mildly interested in getting involved. He had just sold a previous startup, the streaming-video company Red Swoosh, to a much larger competitor, Akamai, and was in the middle of what he later called his burnout phase, travelling through Europe, Thailand, Argentina and Brazil, and sizing up different career options. Travis thought it was interesting but he was in this mode, Camp says. He had just left Akamai and was travelling a lot and angel investing. He wasnt ready to go back in.

In Paris, they all stayed at a lavish apartment that Kalanick had found on the website VRBO. Camp was talking endlessly that week about Uber, but Kalanick had his own startup idea, which, considering everything that subsequently happened, was ironic: he was envisioning a company that would operate a global network of luxurious lodgings, identically furnished and separated into different classes, which could be leased via the internet. Frequent business travellers could subscribe to this network, rent places and pay for them seamlessly. He called this business idea Pad Pass. It was sort of a cross between a home experience and a hotel experience, Kalanick later told me. I was trying to bring those two together. Camp recalled it too. Travis had hacked out a whole Airbnb-like system that we were considering starting, he said. Uber was my idea; that was his idea.

McCloskey remembers that Kalanick had reached the same conclusions as the founders of Airbnb. The internet could allow travellers to find luxurious yet cheap accommodations while also offering a far more interesting travelling experience.

Nevertheless, the conversation that week in Paris gradually came to focus more on Uber than Pad Pass. Camp was convinced that the right way to start the business was to buy those top-line Mercedes. Kalanick strongly disagreed, arguing that it was folly to own the cars and more efficient just to distributethemobile app to drivers.

McCloskey remembers one dinner at a restaurant in Paris where the debate raged over the best way to run an on-demand network of town cars. The restaurant was elegant, with expensive wine, light music and a sophisticated French clientele. Apparently there was also paper over the tablecloth because Camp and Kalanick spent the entire meal scrawling their estimates for things such as fixed costs and maximum vehicle utility rates.

On a separate night in Paris, the group went for drinks in the Champs-lyses and then to an elegant late-night dinner that included wine and foie gras. At 2am, somewhat intoxicated after a night of revelry, they hailed a cab on the street.

Apparently they were speaking too boisterously, because halfway through the ride home, the driver started yelling at them. McCloskey was sitting in the middle of the backseat and, at 5ft 10in tall, shed had to prop her high heels on the cushion between the two front seats.

The driver cursed at them in French and threatened to kick them out of the car if they didnt quieten down and if McCloskey didnt move her feet. She spoke French and translated; Kalanick reacted furiously and suggested they get out of the car.

The experience seemed to harden their resolve. It definitely lit a fire, McCloskey says. When you are put in a situation where you feel like theres an injustice, that pisses Travis off more than anything. He couldnt get over it. People shouldnt have to sit in urine-filled cabs after a wonderful night and be yelled at.

That cantankerous Paris cab driver may have left an indelible mark on transport history. By the time they got back to San Francisco, Kalanick was ready to get more involved, at least as an adviser, and Camp was ready to listen to him. A few weeks into 2009, after a trip to Washington DC to see Barack Obamas first inauguration as president, Camp called Kalanick. He was about to lease parking spaces in a garage near his home in San Francisco for the fleet of Mercedes he was still determined to buy. Kalanick counselled him against it one last time: Dude, dude! You dont want to dothat!

Camp finally gave in and ended the ongoing debate; he never signed the lease and never purchased the cars. Instead of buying a dozen flashy Mercedes, Camp, along with Kalanick, would pitch the app to owners and drivers of limousines.

Kalanick would brag a few years later, in one of our first interviews: Garrett brought the classy and I brought the efficiency. We dont own cars and we dont hire drivers. We work with companies and individuals who do that. Its very straightforward. I want to push a button and get a ride. Thats what its about.

Edited extract from The Upstarts by Brad Stone published by Bantam Press (20)

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Criticisms of companies conduct are usually met with the refrain of dont buy their products, then but we are more than our wallets and complaining works

Whenever I write or talk about some companys terrible conduct, practices or terms of service, the first response I get, inevitably, is dont buy their products, then.

In May, it was the way Applecontrols which apps we can download which suppresses political speech. The company refused to put Liyla and the Shadows of War a game about a childs life in Palestine in its app store because, the company said, games couldnt have political overtones. The overwhelming response from the peanut gallery was that people who dont like Apples policies shouldnt buy Apples phones.

This misses the point entirely: once you buy something, its yours. Its not Apples phone, its your phone which Apple made. Moreover, the company repeatedly petitioned the US Copyright Office to ensure that unlocking a phone to play third-party apps was a felony, punishable by five years in prison and a $500,000 fine.

When people raised a stink about Apples poor editorial judgment, the company reversed its position, which proves my point. If you like the iPhone, but you dont like Apples conduct, then complaining is a valid strategy to get the phone you want without the objectionable conduct.

Spending money is not your only power as a citizen; you are more than just a wallet. . Even in the most orthodox form of market economics, you have a role to play apart from spending or not spending. Complaining effectively makes a difference sometimes.

But complaints are also where activism starts, not where it ends. Take City Park Apartments in Salt Lake City, Utah, which recently stuck notices onits tenants doors ordering them to friend the buildings management company on Facebook or face eviction. Those people complained, to be sure, but if theyre smart, theyll also start talking to lawyers. The housing market has rules. Some of those rules allow landlords to evict tenants who make life bad for their neighbours or fail to pay their rent. Other rules allow tenants to sue their landlords over unreasonable conditions on tenancy. The tenants of City Park Apartments can and should take their idiot landlords to the cleaners.

Sometimes the things companies do are arguably legal, but still wrong.
Uber said its arms-length arrangement with its drivers relieved it of any duty to ensure that the drivers complied with the Americans With Disabilities Act. The extent to which Uber is responsible for its drivers is still very much a live issue, so the claim that dogs and drivers werent Ubers problem was at least credible. Nevertheless, organizations representing disabled people sued Uber, winning a settlement and a guarantee of a change in drivers conduct, because even if the law didnt force the company to ensure its drivers didnt discriminate against disabled people, it should. Blind people have the right to be treated equitably by companies, and not just the right to take their business elsewhere.

Whenever a complaint comes up about electronic media games, ebooks, music, movies and the ways their publishers restrict playback on devices, the dont buy it then squad starts telling you to take your business elsewhere.

Copyright is a deal between the people and rightsholders. Rightsholders get a copyright an expansive, long-enduring right to control most copying, display, adaptation and performance when they create something new and fix it in a tangible medium. All the rights not set out in copyright remain in the publics hands. That means you cant sell a book with a license agreement that says, By buying this book whose copyright expires next week, you agree that you will behave as though the copyright expires in the year 2100. You cant say, By buying this book, you agree to vote for Donald Trump, or You agree not to let black people or Jews or women read it.

You the person reading that book, playing that game, listening to that music have rights over that work beyond the right to buy or not buy it. You are more than just your wallet.

You have the right to enjoy the media you buy, even when you travel abroad. You have the right to be private in your enjoyment of that media. You have the right to engage in every activity the law doesnt prohibit.

When those rights are taken away, you have been wronged. You are still wronged, even when you stop buying from the company that wronged you and thats if you have the choice to find a new supplier; if its your ISP whos doing the bad stuff, chances are there arent any better ISPs you can switch to. You have options, like contacting a government agency such as the Office of Fair Trading and the Federal Trade Commission, or consumer rights organisation like Which? in the UK and Consumers Union in the USA. You have the option of contacting a lawyer.

More than the right: you have the duty. Because there are other people behind you, unaware that the company theyre about to buy from is going to treat them badly. Your noisy complaint, your official complaint or your lawsuit might be the thing that rescues the next person who comes along. Certainly the reason your toaster didnt burn down your house this morning, the reason your car didnt explode the last time you got in a parking lot fender-bender, the reason your doctor isnt advising you to administer radium to your kids is that people before you decided that merely taking their business elsewhere wasnt good enough.

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