How WeWork Hopes to Make Money, How Uber Hopes to Evade the Contracting Law, and How an App Can Make You a Better Spouse

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WORK/LIFE BALANCE

Want to be a better spouse? There are apps that can help: “The most universal of the apps I tried was Monaru—Irish for ‘manufacturing’—a full-service AI assistant that examines your life and closest relationships, and then sends you tips to engage in these relationships more smartly and considerately ($20/month, monaru.io). For instance, if your girlfriend is a coffee fiend, it might clue you in about a new espresso bar opening near her place and prod you to feed her passion by taking her there.

“Before you can start using Monaru’s trusty robots, however, you first must talk to a real human team member about the 15-20 most important people in your life. During my call, we chatted about my wife’s appreciation for shared time—evening walks, traveling and communal cooking—as well as my mom’s love of Scandinavian murder mysteries. The latter disclosure triggered a message from Monaru that week suggesting I pick mom up a copy of Jo Nesbo’s ‘The Bat’ in advance of my next visit with her. ‘We’re building the automation as we go,’ said co-founder Patrick Finlay, explaining how they mix human and computer intelligence by cultivating a bank of suggestions that surface per each user’s criteria, but are reviewed by humans before being sent along.”

SILICON VALLEY

How exactly does WeWork make money? It doesn’t, actually, but it does have a plan: “So is WeWork’s business model just a ‘house of cards’ fueled by ‘Silicon Valley pixie dust,’ as critics have claimed? Or do millions of square feet of office space, hundreds of thousands of members, and an ever-expanding repository of data add up to more than the sum of its parts? Ahead of WeWork’s impending IPO, we dove into the company’s S-1 filing to look at its overall business model, its revenues from its startup and enterprise co-working businesses, and its costs in order to evaluate how WeWork’s business works today—and how it might work in the future.

“On the surface, WeWork’s business looks like a relatively conventional real estate play. Across its more than 550 locations, everyone from solo entrepreneurs to large, enterprise companies can rent out everything from a desk to a private floor. But WeWork is different from your average real estate company—and is valued differently from one—because of the unique way it delivers value to both tenants and landlords. WeWork gives its tenants something that is ordinarily hard to find: a flexible space, on-demand, with short-term leases (in some cases, even on a month-to-month basis). This solves a problem that plagues fast-growing startups especially: the process of finding a new office space, moving in, signing a long-term lease, remodeling the space, and moving out to start it all over again somewhere else. … 

“WeWork’s business model is designed—if it works as intended—to be a flywheel, generating over time better outcomes for tenants, landlords, and for WeWork itself. Driving the compounding momentum are three key elements: space optimization, value-added services, and data.”

INTELLECTUAL PROPERTY

LeBron James won’t get his trademark for Taco Tuesday “but according to James’ team, he still accomplished the outcome he wanted from the application in the first place. The US Patent and Trademark Office on Wednesday refused the application filed by James’ company LBJ Trademarks, explaining that ‘Taco Tuesday’ is ‘a commonplace term.’ A spokesman for James told ESPN’s Dave McMenamin that the application was filed ‘to ensure LeBron cannot be sued for any use of ‘Taco Tuesday.’” 

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

Spotify has acquired Soundbetter, a music marketplace company that lets artists, producers and musicians to connect on specific projects. “SoundBetter is not being shut down with the acquisition: a spokesperson confirmed to TechCrunch that it will be business as usual as Spotify and the startup work on integrating SoundBetter’s services with Spotify for Artists, which currently offers musicians and others analytics on Spotify tracks and other services to help market themselves.”

VENTURE CAPITAL 

Akeneo, an operator of a product information management platform, raised $46 million in a Series C round.

Lacework, a provider of a cloud security platform, raised $42 million in a Series C round.

GiGstreem, a provider of internet and managed network services, raised $10 million in a Series B round.

MARKETING

NBC-owned local TV stations will be measuring ad-campaigns by using impressions instead of standard ratings points: “Local TV and radio are the last forms of media to still rely on traditional ratings points to measure the effectiveness of an ad campaign. Nearly every other type of media uses the cost per impression (CPM) to measure an ad’s effectiveness. … Most local TV stations have websites and apps that distribute content on multiple platforms besides live, linear broadcast, but an antiquated ratings system has made it hard for them to sell against any kind of digital viewership. Broadly, by switching from ratings to impression-based measurement, media buyers can target more people. That’s because there are a number of areas that are too small to create a ratings point, so agencies couldn’t target long-tail TV audiences in more remote communities.”  

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REGULATION 

The air ambulance industry could see a slew of regulations to temper high-priced bills: “Congress has included air ambulances in its effort to crack down on surprise medical bills, and the industry is fighting to avoid this regulation. Air ambulances used to be owned and operated by hospitals, which sometimes took financial losses on their helicopter programs. But that changed when investors saw a profit opportunity and began buying the ambulance services from hospitals. They then billed patients directly for rides. By the numbers: Between 2007 and 2016, the average price charged by one air ambulance company for a transport rose from $13,000 to $50,000. … 

“People in rural areas are hit the hardest. While some of these transports are necessary and life-saving, many others could be avoided, [Marty] Makary writes. Of the more than half a million ambulance flights a year, 80 percent aren’t emergencies, but rather more like routine transfers. To grow their business, companies began paying paramedics, nurses and doctors to become advisers with ‘informal agreements’ to promote the company to emergency personnel and other providers.”

The Trump administration announced a major rollback of Obama-era clean-water protections: “The rollback of the 2015 measure, known as the Waters of the United States rule, adds to a lengthy list of environmental rules that the administration has worked to weaken or undo over the past two and a half years. Those efforts have focused heavily on eliminating restrictions on fossil fuel pollution, including coal-fired power plants, automobile tailpipes and methane emissions, but have also touched on asbestos and chemical hazards like pesticides. An immediate effect of the clean water repeal is that polluters will no longer need a permit to discharge potentially harmful substances into many streams and wetlands. But the measure, which is expected to take effect in a matter of weeks, has implications far beyond the pollution that will now be allowed to flow freely into waterways.”

Los Angeles’s first marijuana-centered restaurant needed to become two businesses in order to follow state law: “Current regulations in California don’t allow cannabis consumption lounges to sell food or beverages on the premises. That leaves Lowell Farms and the seven other businesses that secured cannabis consumption lounge licenses in West Hollywood with an awkward dilemma. The licenses specifically allow smoking and vaping, but not direct sales of cannabis-infused food or drinks, which takes away a potentially significant income-generator. Lowell Farms needed a way to sell prepared food and drinks to customers who were partaking in smoking or vaping cannabis. So Lowell did what any enterprising business would do, performing creative workarounds to stay within the law.

“Customers likely won’t even notice Lowell’s dual business model, minus a few details. Lowell’s team simply shifted operations and re-zoned the business to appeal to smokers and non-smokers alike. The entire space now has three different sections on a 20,000 square foot lot, which includes: A 1,600 square-foot cafe where diners cannot consume cannabis, but can order food and non-alcoholic beverages. A 2,500 square-foot indoor lounge that allows cannabis smoking, vaping, and edible consumption. An 1,800 square-foot outdoor garden where cannabis edibles, vaping and smoking cannabis are allowed.”

Here’s how Uber hopes to evade the new California contractor law: “Uber has reason to be worried about the new law, which is awaiting the signature of Governor Gavin Newsom. Analysts with Barclays have estimated that the law would cost Uber $3,625 per California driver, or about $500 million a year. A former Uber executive told The Information that the company’s costs would rise by 20 percent if it were forced to reclassify its workers worldwide. The company reported a $5 billion loss last quarter. Uber Chief Legal Officer Tony West acknowledged that the new test is stringent, but argued that Uber would not have to reclassify its drivers when the law takes effect in January 2020. ‘Just because the test is hard doesn’t mean we will not be able to pass it,’ West said Wednesday.

“West said proving that Uber drivers are performing work ‘outside the usual course’ of the company’s business will be its highest legal hurdle. But in a blog post, the lawyer pointed to one place the company has been able to pass the test: Vermont, where Department of Labor officials wrote in a 2017 bulletin that the ‘usual course of [Uber]’s business is the provision of a technology platform to its drivers, in exchange for a service fee.’ In other words: Uber’s customers are drivers, not riders. Uber just builds the platform that connects independent business owners with a client base.”

This will likely confirm what you’ve always thought about doing business in France: “A court in France has ruled that a man who died from a heart attack after having sex during a business trip had suffered a work-related accident and that his employer was liable. The man, who was identified in court documents only as Xavier, traveled in 2013 to the Loiret region in central France as a security technician for the rail engineering company TSO. After work one night, he had sex with a woman at her house before returning to his hotel. He later died from a heart attack said to have been linked to the encounter.

“A health insurance fund decided that the death resulted from a work-related accident, but TSO appealed, saying that the employee had interrupted his work trip for an adulterous relationship and had therefore acted outside the company’s purview. The Court of Appeal in Paris upheld the insurance fund’s decision in a ruling released in May … Like that of other countries, French law considers any accident that happens on a business trip to be work-related, even if the activity is not closely related to the employee’s mission.”

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com

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