Rishi Taparia - Issue #92
This week we look at Walmart fighting back against Amazon with next day delivery of its own, an artfully narrated defense of the tech industry, the $1.2 trillion cost of climate change, the con that trapped thousands of NYC taxi drivers and more. Enjoy!
Commerce and Fintech
Walmart announces next-day delivery, firing back at Amazon
A few weeks ago Amazon announced it would be ‘morphing’ Prime into free next day shipping instead of two-day shipping. We talked here about how this would apply pressure on competitors, who undoubtedly would be better prepared to respond than they were in 2005 when Amazon first announced Prime. Well, challenge accepted, at least at Walmart. Walmart announced that 200,000 items from their website would be available for next day shipping to customers. The rollout of next-day delivery will begin in Phoenix, Las Vegas and Southern California this week, before reaching 75% of the country by the end of the year.
Citigroup Ties Up With India’s Digital Paytm for Card Launch
In payments, ubiquity trumps novelty every single time. Paytm just tried to make acceptance more ubiquitous. Paytm is partnering with Citigroup to launch the mobile-payments app best known for QR code payments in India‘s first physical credit card. While card penetration is still low in India relative to other developing countries, it’s use is growing faster than QR code payments.
Millennials Are Helping to Sound the Credit Card Alarm
Despite a growing GDP and low unemployment, all is not well with the US economy. Young Americans have fallen seriously behind on their payments, adding to angst about the true health of U.S. consumers, with charge-off rates in Q1'19 being the highest in 7 years (charge-offs being the number of loans lenders believe will never get paid off). Second, young Americans are increasingly behind on their card payments, with over 8% of outstanding card debt for 18-29 year olds being over 90 days delinquent, almost 50% higher than it was at the end of 2013.
Technology
Why I (Still) Love Tech: In Defense of a Difficult Industry
An artfully narrated defense of technology, an industry that is experiencing more influence, power and scrutiny than every before. Technology is just another human creation—like religion or government or sports or money. It’s not perfect, and it never will be. But it’s still a miracle.
Breaking down Alibaba's global ambitions
Alibaba continues to execute on its global strategy as part of its aspirations to become a global business, reporting solid earnings this week. The company’s approach is a reasonably straightforward two pronged approach. First, make Alibaba the “gateway to China” - provide international businesses the ability to access Chinese consumers through Tmall. Second, enter emerging markets via building or buying/investing in the dominant ecommerce marketplace and acquire those customers.
New Retail, as Alibaba phrases it, is the company’s strategy to “digitize the entire retail value chain,” meaning small- and medium-sized brands, physical stores and local and international sellers all have access to the same data and digital infrastructure that Alibaba uses to operate its e-commerce marketplace, Tmall. That’s served as the backbone of its international expansion.
As AmEx Scoops Up Resy, A Look At Its History Of Acquisitions
This week AmEx announced its acquisition of restaurant reservation startup Resy. Resy, which had raised $45m to date from investors including Lerer Hippeau, Airbnb, and Slow Ventures, built a people get seats at high and medium end restaurants (similar to an Opentable, Yelp Bookings etc.) A somewhat unsurprising purchase given the partnership these two built last year, but interesting to see Amex continue to go deeper into software and technology tools for customers that go beyond payments.
AmEx has been on a buying spree as of late. In March, we reported on its purchase of LoungeBuddy, a former partner which helped travelers with reviews of various airport lounge areas. Also this year AmEx picked up Pocket Concierge, a firm that we wrote “helps book in-demand restaurants and is similar to OpenTable” at the time.
Climate and Energy
Investors face $1.2T in costs from climate change inaction
According to a new United Nations report surveying institutional investors in 11 countries, “inaction on climate change could cost the world’s top companies $1.2 trillion over the next 15 years.” The report discusses broad impact to varying sectors, geographies, financial instruments and supply chains. TL;DR - everything will be impacted by climate.
Illinois might start charging $1,000 per year to own an electric vehicle: 'It's outrageous'
Legislation in Springfield to hike the gas tax would also raise the annual fee for electric vehicles from $17.50 to $1,000, a nearly 50-fold increase. Apparently trying to generate revenue from EVs to counter the idea that “electric vehicles don’t provide the state with any gas tax revenue”, this legislation smells more than a little bit fishy.
How Google saved over 6 million pounds of food waste in its cafés
Google makes over 200,000 meals a day in their offices, one of the many benefits it offers to employees. Five years ago, Google starting measuring the quantity and value of food being tossed at its facilities. With over 1/3 of the food produced globally getting thrown out, wasted food is a major problem. Google’s still got a long way to go, but it’s a lesson in how focusing on a problem can bring obvious but important solutions, in this case things like shallower pans toward the end of lunch, cooking in batches and monitoring consumption and smaller plates to help people watch how much they eat.
Random Tidbits
‘They Were Conned’: How Reckless Loans Devastated a Generation of Taxi Drivers
This two part expose by the Times (part two can be found here) brings to light the con that thousands of immigrants, with hopes of owning a New York taxi, were caught in. Trapped in reckless loans made by bankers making huge profits, this is a well researched and devastating story with an unfortunately recurring theme: all too often those taken the most advantage of are the less fortunate, those most in need, new to the country and thus different, lacking in English proficiency, searching for their version of the American dream. If you read one thing, read this piece.
A Nobel Prize-winning psychologist says most people don’t really want to be happy
Daniel Kahneman, the granddaddy of behavioral economics and human decisioning has a theory about human happiness. He doesn’t think people actually want to be happy. Instead, people are more likely to choose satisfaction—the long-term feeling that comes with achieving your goals. In an interview with Tyler Cohen, he says “Altogether, I don’t think that people maximize happiness in that sense…this doesn’t seem to be what people want to do. They actually want to maximize their satisfaction with themselves and with their lives. And that leads in completely different directions than the maximization of happiness.”
The US $100 bill
A fun look at the history of the hundred dollar bill, currently the most widely circulated note (despite the push to go cashless!) Some fun facts:
2: Non-presidents currently featured on US bills—Ben Franklin on the $100 and Alexander Hamilton on the $10
1997: Year “Been Around the World/It’s All About the Benjamins” by Puff Daddy (as he was then known) charted #1
14.2 cents: Cost to produce a single $100 bill
15 years: Typical lifespan of a $100 bill
2.5: Times longer Canada’s polymer $100 bill is supposed to last, compared to cotton-linen paper
$46 million: Size of the Federal Reserve’s contract with Crane & Co., the company that makes currency laced with security features
75%: Proportion of the $100 bill that is cotton. The rest is linen.
Quote I’ve been thinking about: “True belonging doesn’t require you to change who you are; it requires you to be who you are.” - Brené Brown