Rishi Taparia - Issue #80
This week we go into Uber’s second largest business, Amex’s extremely smart partnership with WeWork, BB&T and Suntrust merge to create the 6th largest bank in the US, Volkswagen partners with Tesla to charge EVs, Jeff Bezos blogs and more. Enjoy!
Commerce
Uber’s Secret Gold Mine: How Uber Eats Is Turning Into A Billion-Dollar Business To Rival Grubhub
This in depth look at Uber Eats is well worth a read. I’ve talked before about how Uber Eats is a massive driver (pun intended) of business for the formerly ride-hailing only company. In June of last year Uber Eats was on track to do $6bn in bookings. Now the food ordering service is projected to make up to 10% of total Uber revenue this year having captured almost 25% of the market and likely to overtake market leader Grubhub over the next year. Impressive results, and they couldn’t have come at a better time for Uber as it prepares for its IPO. Competition remains stiff with DoorDash having recently raised $250m and Postmates having filed for IPO after raising $100m in January, but Eats is certainly well on its way to being the dominant force in food delivery.
Amazon Competition May Affect 3PLs More Than Parcel Carriers
Consumer expectations about the last mile experience has fundamentally shifted the goal posts for retailers everywhere. Excellence in logistics and supply chain is driving increased reliance on companies like FedEx and UPS, both having posted great recent earnings. Amazon, in typical Amazon fashion, isn’t satisfied and taking matters into their own hands. Not only have they recently been awarded a patent for package pickup on public busses, with “a fleet of 4,000 trailers (some reports indicate up to 7,500 trailers) for transport between warehouses and fulfillment centers” they are ensuring the can own the delivery windows and shorten delivery times.
E-commerce makes up 7% of the U.S. third-party logistics market, and Armstrong points out that “Amazon is acting increasingly like a 3PL.” It estimates Amazon is acting like a 3PL for 12% of all business-to-consumer e-commerce shipments. Third-party sellers on Amazon’s marketplace represent more than half of all units sold through Amazon, and about half of those sellers use the company’s Fulfillment by Amazon program.
Apple's head of retail Angela Ahrendts is leaving after 5 years
So, last week I shared the great piece on Apple’s head of retail, Angela Ahrendts, and how she’s reinventing the company’s already dominant B&M business. Well, it turns out not for much longer. Apple’s head of retail and online stores, Angela Ahrendts, is leaving the company in April after five years in her role. ¯\_(ツ)_/¯
FinTech
You Can Now Sign Up for the Amex Business Platinum’s WeWork Benefit
Well done to the BD/partnership teams at both Amex and WeWork. This week Amex announced a partnership with the We Company (I still haven’t quite gotten used to that) that allows Amex Business Platinum cardholders a year’s worth of complimentary membership to WeWork. As a cardholder you’ll be able to reserve a seat at any one of WeWork’s 300+ global locations. Clearly aimed at startups, it’s huge incentive for business card holders to opt for Amex - at $595 it’s a steal compared to how much you’d pay for a desk at a coworking space or trying to finagle your way into a friend’s office - and a great way to meet WeWork and hopefully convert into a regular member. Smart moves for both sides.
BB&T to Buy SunTrust in Biggest Bank Merger in Decade
Something is in the water for financial institutions investment bankers these days. After a monster Fiserv-First Data merger, this week saw the largest bank merger since the financial crisis with BB&T agreed to buy SunTrust, turning the combined bank (which is going through a rebrand - thank you!) into the 6th largest in the country by assets. Like the FiserData merger, the apparent bet here is a combination will allow them to keep up with bigger rivals in the arms race for new technology.
The banks said the deal will allow more investment in technology while cutting more than 10 percent of combined total expenses through eliminating duplicate branches and digital systems. The company will create an “Innovation and Technology Center” in its new headquarters, and the statement on the deal used the words technology, digital and innovation more than a dozen times.
Sure. An Innovation and Technology Center, that’s going to solve your problems.
Chinese bank’s software chief jailed after finding way to withdraw US$1m in ‘free’ cash from ATMs
File this one under “Office Space 2”. A senior programmer at Huaxia Bank in China found a loophole in the system which detected cash withdrawals made around midnight each day were not being recorded. He discovered the loophole in 2016, and with a few scripts began withdrawing small amounts every day at midnight to ‘test the vulnerability’ and see if alerts were triggered. Through the course of a year he withdrew the equivalent of almost $1m USD. Upon being 'caught’ he returned it all which apparently satisfied the bank (despite he having used some of it to invest in the stock market). However, once regulators found out they weren’t so kind. Milton is now is heading for a 10 year jail term.
Technology
Volkswagen will use Tesla battery packs in some of its US charging stations
Electrifying transportation is a critical element in the battle against climate change, with almost 30% of greenhouse gas being a result of transport. As more EVs come on the road, the infrastructure to support them - charging stations - also have to be built out. This leads to a critical question for automakers - build or partner? Volkswagen has chosen hybrid model. Their Electrify America program announced this week they are buying and installing Tesla Powerpacks to help during peak charging times.
Spotify’s Podcast Aggregation Play
Podcasting is big business (as proven in China). Spotify agrees. The company acquired Gimlet Media, a podcast producer and network, for around $230 million as well as Anchor, a startup that makes it easier for people to record and distribute their own podcasts. This is worth a read.
Random Tidbits
No thank you, Mr. Pecker – Jeff Bezos
The National Enquirer came after Jeff Bezos. Jeff Bezos said, “Oh hell no.” If you haven’t already, this blog post from the world’s richest man is a must read.
Manhattan Population Explorer
A pretty cool visualization of Manhattan and its population densities during the week. Tremendous use of technology and data.
Let Children Get Bored Again
But boredom is something to experience rather than hastily swipe away. And not as some kind of cruel Victorian conditioning, recommended because it’s awful and toughens you up. Despite the lesson most adults learned growing up — boredom is for boring people — boredom is useful. It’s good for you.
Quote I’m thinking about: “Every new beginning comes from some other beginning’s end.” —Seneca