The Arrival of ‘Peak Car,’ the Impact of ‘Consumer Shaming,’ and a World Famous Steakhouse Gets Eviscerated

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THE ECONOMY

“Peak car” may be holding back the economy: “At this week’s biennial Tokyo Motor Show, Toyota Motor Corp.’s booth didn’t feature any cars its customers can buy. Instead, the company showcased a mobile service that gives you a health checkup, with the slogan: ‘The star of the Toyota booth isn’t a car—the stars are people.’ There’s a good reason Toyota is shifting focus from individual cars: The global auto market is shrinking. World-wide sales fell in 2018, are expected to drop again this year, and Moody’s Investors Service projects another decline in 2020.

“Some forecasters think this is mostly a temporary result of a troubled global environment. But structural headwinds may be more important. … In the US, car sales peaked in 2016; in the European Union, in 2000; and in Japan, in 1990. Emerging markets were supposed to pick up the slack, but they too show signs of plateauing: Sales in the last 12 months are down 12 percent from mid-2018 in China and 14 percent in India. ‘Peak car,’ loosely defined as a world with all the cars it needs, may be approaching.”

MANUFACTURING

Thanks to US trade wars, the Midwest is entering a manufacturing crisis amid a booming economy: “Sachin Shivaram, the chief executive of Wisconsin Aluminum Foundry, started to worry this summer when orders for his brake housings and conveyor belt motors first grew scarce. Within weeks, what began as mild concern snowballed into a business drought that has seen bookings plunge by 40 percent. In August, Shivaram, 38, reluctantly laid off two dozen workers, hoping to recall them when the outlook improved. It hasn’t. ‘Things are not good. We didn’t anticipate this level of deterioration,’ he said. ‘Orders are down across the board.’

“The sudden slump at this 110-year-old company illustrates the economic erosion that is challenging President Trump’s signature promise to restore a lost era of American manufacturing greatness. … The president’s tariffs on China, Canada, Mexico and the European Union—and those trading partners’ retaliation against the United States—are sapping manufacturers’ strength, economists said. Through August, Wisconsin companies’ exports to China of $822 million were 25 percent less than in the same period in 2018, according to the Census Bureau. … ‘It feels like we’re just caught in the bad part of the economy,’ [Shivaram] said. ‘Are we going to have a recession? It feels like we are in one now.’”

CUSTOMER SERVICE

One of the most famous steakhouses in America gets a blistering review from Pete Wells of The New York Times: “Diners who walk in the door eager to hand over literal piles of money aren’t greeted; they’re processed. A host with a clipboard looks for the name, or writes it down and quotes a waiting time. There is almost always a wait, with or without a reservation, and there is almost always a long line of supplicants against the wall. A kind word or reassuring smile from somebody on staff would help the time pass. The smile never comes. The Department of Motor Vehicles is a block party compared with the line at Peter Luger. … Was the Caesar salad always so drippy, the croutons always straight out of a bag, the grated cheese always so white and rubbery? I know there was a time the German fried potatoes were brown and crunchy, because I eagerly ate them each time I went. Now they are mushy, dingy, gray and sometimes cold. I look forward to them the way I look forward to finding a new, irregularly shaped mole. …

“The restaurant will always have its loyalists. They will laugh away the prices, the $16.95 sliced tomatoes that taste like 1979, the $229.80 porterhouse for four. They will say that nobody goes to Luger for the sole, nobody goes to Luger for the wine, nobody goes to Luger for the salad, nobody goes to Luger for the service. The list goes on, and gets harder to swallow, until you start to wonder who really needs to go to Peter Luger, and start to think the answer is nobody.”

IMMIGRATION

A taco truck serves lunch to ICE employees and gets caught in the political crossfire:

“It seemed like a standard request for the Lloyd taco truck, a local favorite in Buffalo. Last week, a building on the outskirts of the city asked the truck to park outside around midday so its employees could have Mexican food for lunch. But the building in Batavia, NY, was a federal detention center run by Immigration and Customs Enforcement, and the hungry workers were mostly ICE employees. 

“Within hours, the small business, which serves ‘Tricked Out Nachos’ and an ‘El Camino Bowl,’ was plunged into the crosshairs of the rancorous national debate over immigration. Lloyd, which operates four taco trucks in the area, was hit with a barrage of criticism from immigration advocates and left-leaning Buffalo residents, who accused the small business of collaborating with ICE. … ‘We serve all communities, we go to all neighborhoods, we are not political. Why would we be?’ one of Lloyd’s owners, Pete Cimino, said at a news conference on Monday. ‘How can any business choose sides in our politically divided country and ever hope to succeed?’”

MARKETING 

Spotify is looking to get more free users to convert to its Premium service by, oddly enough, offering the non-payers more free perks: “The idea behind the move is that giving those listeners a taste of what they can get on premium will lead to buy-in, something the company emphasized with the release of the new features last year. The latest premium user numbers signal that Spotify’s broader marketing strategy may be working. Last year, Spotify made a significant change to the way its free tier operates by allowing non-paying users to listen to select playlists without ads and giving them a data-saving mode. It also tested adding unlimited skips to ad-supported accounts. As of Q3 2019, Spotify had 113 million premium subscribers out of its total 248 million monthly active users, according to its latest earnings report. That’s a 31 percent increase year-over-year.” 

STARTUPS

AI startup Alice is trying out a new a way to oust board members who harass or discriminate: “Wednesday, Alice announced that it has raised an A round, led by Silicon Valley Bank Financial Group, with some unusual terms: … a unique provision to oust any investor who discriminates or harasses on the basis of gender, gender expression, or race. The legal language is contained in the voting agreement, which is typically put in place with a company’s first stock financing. ‘They agree whom they’re going to put on the board, and how they’ll vote their shares in certain instances,’ says Deborah Carrillo, counsel … who worked on the deal. ‘What’s unique about this is the specific reference to sexual and racial discrimination.’ With this language, the board agrees in advance to vote their shares to oust any director who harasses or discriminates.”

RETAIL

Two of the country’s biggest retailers, Walmart and Target, view robots differently: “Walmart, the country’s largest retailer and private employer, expects to add self-driving robots that scrub floors to 1,860 of its more-than 4,700 US stores by February. It will also add robots that scan shelf inventory at 350 stores and bots at 1,700 stores that automatically scan boxes as they come off delivery trucks and sort them by department onto conveyer belts. Walmart’s 178,000-square-foot supercenters are expensive to operate, especially as more shoppers shift online. The company is adding robots to help it increase worker productivity and control costs. Walmart has around one million hourly workers in its stores. … 

“But Target CEO Brian Cornell said Wednesday his chain will not bring on the type of robots Walmart has deployed in stores. ‘You won’t see robots in Target stores anytime soon. We really think, even in today’s environment, where people are talking about AI and robotics and different elements of technology, the human touch still really matters,’ Cornell said. Target announced it would spend an extra $50 million in payroll hours during the holidays. Carl Benedikt Frey, fellow at the Oxford Martin School at Oxford University and author of The Technology Trap: Capital, Labor and Power in the Age of Automation, said it makes less economic sense for Target to invest in robots than Walmart because it has fewer workers and smaller stores. More than 80 percent of Target’s stores are under 170,000-square-feet.”

VENTURE CAPITAL

Tactile Mobility, a provider of a device sensing platform, raised $9 million in a Later Stage VC round.

Tiqets, a developer of a ticketing platform, raised $59.54 million in a Series C round.

Fountain, a developer of hiring automation software for hourly workers designed to simplify workforce management and hiring, raised $23 million in a Series B round.

GIG ECONOMY

There is a market for people who drive around town and charge e-scooters: “Mr. and Mrs. Cabezas are among Lime’s army of ‘juicers’: independent contractors who sign up to charge scooters through the same app that riders use to rent them. Out on their mission, Mr. Cabezas scanned the scooter’s QR code with his wife’s phone and loaded the Lime in the van. Then they were off to the next one, two blocks away in an alley. And another, around the corner in a public park. They picked up 16 scooters in an hour to charge at home, earning $67. San Francisco-based Lime hires about 60,000 freelance juicers in the 100 markets where it operates. The company pays $3 to $10 per scooter that is retrieved, recharged and then released in ‘deployment zones’ of its choosing.” 

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SUSTAINABILITY

The CEO of H&M says ‘consumer shaming’ threatens to produce terrible fallout: “Karl-Johan Persson is a key figure in the $2.5 trillion fashion industry that has come under increasing scrutiny amid concerns about pollution and workers’ rights in the developing economies that have tended to do the bulk of the manufacturing. The United Nations Economic Commission for Europe says part of the problem is that consumers have been gripped by an ‘era of fast fashion’ that has led to an ‘environmental and social emergency.’ The clothing industry is responsible for about 10 percent of global greenhouse gas emissions and consumes more energy than aviation and shipping combined, according to the UN.

“Persson says that ‘the climate issue is incredibly important. It’s a huge threat and we all need to take it seriously—politicians, companies, individuals. At the same time, the elimination of poverty is a goal that’s at least as important. We must reduce the environmental impact. At the same time we must also continue to create jobs, get better healthcare and all the things that come with economic growth.’”

SILICON VALLEY

Retailers in Silicon Valley are running out of black turtlenecks, and it could be because so many people are dressing up for Halloween as Elizabeth Holmes: “The black turtleneck has long been an icon in Silicon Valley, first for its association with the Apple cofounder Steve Jobs and more recently as the look of Elizabeth Holmes—the infamous co-founder and CEO of Theranos, the Silicon Valley-based blood-testing startup that was once valued at $9 billion before shutting down amid accusations of fraud.

 “Most of the photos you’ll find online of Holmes show her in an all-black ensemble, with the same black long-sleeve turtleneck, often with a vest or suit jacket over it. Holmes readily volunteered in interviews that her self-described ‘uniform’—as well as her office furniture and perchance for secretiveness—was borrowed from Jobs, her idol. … The look is both distinctive and easy to replicate, making it the ideal Halloween costume. Multiple outlets have offered their suggestions for how to dress like Holmes for Halloween. Turtleneck-clad Holmes lookalikes can be found on Instagram and across social media from Halloween celebrations this month.”

And that’s what’s ahead.

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