Today Crunch News, News Updates, Tech News
- San Francisco’s shelter-in-place order does not apply to gig workers
- Staff angered as Charter prohibits working from home despite spread of coronavirus
- Former Coinbase exec is now down with OCC (the Office of the Comptroller of the Currency)
- Regal is closing all theaters ‘until further notice’ over COVID-19 fears
- Rocket Lab to acquire satellite hardware maker Sinclair Interplanetary
- Peloton stock spikes as the at-home fitness company finds potential customers stuck at home
- Amazon CEO Jeff Bezos has been in regular contact with the White House on coronavirus pandemic
- NBCUniversal will break the theatrical window to release ‘The Invisible Man’ and other movies on-demand
- Lawmakers look to bridge ‘homework gap’ with subsidized Wi-Fi hotspots for students
- You can ask to skip your Apple Card payment for March, Apple tells customers
- All major indices take a hit as COVID-19 pandemic continues
- In retrospect, Disney’s CEO switch was a decisive act of crisis management
- Amazon is looking to hire 100,000 employees to keep up with demand
- President says Senate to revise House aid bill to ‘make it fair for everybody’
- White House says to avoid gatherings of 10 or more, Trump suggests US coronavirus pandemic could last until August
- How Uber, Lyft, Seamless and more are addressing taxed gig economy workers
- Bay Area counties announce lockdown through April 7
- To slow coronavirus spread, EU countries and Russia join the list of countries officially closing their borders to all but essential travel
- Uber Eats waives delivery fees for independent restaurants during COVID-19 pandemic
- Travel savings tool Service shuts down, citing COVID-19 downturn
Posted: 16 Mar 2020 04:23 PM PDT
Earlier today, San Francisco Mayor London Breed announced a shelter-in-place order in an attempt to slow the spread of COVID-19. The order legally requires people to stay home as much as possible unless it’s essential that they leave to do things like go to the grocery store, buy gas or go to the pharmacy. So, no more going out to restaurants, gyms or nightclubs. Residents can, however, still order food for delivery from restaurants, as well as take Uber and Lyft rides, but “only for essential travel.”
That means workers for Postmates, Instacart, DoorDash, and UberEats are still on the hook for delivering food to people, and rideshare drivers transporting passengers are at risk of contracting the virus.
As some gig workers have advocated since the beginning of the year, it’s time for California to fully enforce gig worker protections law AB 5 to ensure all of these workers have access to paid sick leave, disability, family leave and unemployment insurance. Recently, Gig Workers Rising sent a letter to California Gov. Gavin Newsom and other state officials, asking them to step in and protect workers during this pandemic.
“We are demanding that state officials protect gig workers during the coronavirus pandemic by fully enforcing AB5 and ensuring workers have access to benefits like paid sick leave, disability, family leave and unemployment insurance,” rideshare driver and Gig Workers Rising member Steve Gregg wrote in the letter. “Over the next weeks and months, these actions will be the difference between who gets to live, who gets to keep their housing, who gets to eat, and who doesn't.”
Gig economy companies have begun taking steps to help gig workers. Uber, for example, set up funds to support drivers who are infected or placed in quarantine by a public health authority. Instacart introduced a sick pay policy for in-store shoppers and extended pay for all shoppers, including independent contractors, who are affected by COVID-19. Similarly, Postmates has started offering two weeks of paid sick leave for people who test positive for the virus.
While these companies are able to subside some financial worries, these workers are still left without disability, family leave and unemployment insurance. Some workers are also without health insurance. Sure, these companies are not forcing people to keep driving and delivering food for them, but many people need the income in order to pay their rent or mortgages, and support their families.
“Sickness is not an option for me because not working is not an option,” rideshare driver and Gig Workers Rising member Edan A. said in a statement last week. “If I do get sick, I will have to continue to work or I will lose my ability to exist – it’s not just income. Before the coronavirus outbreak, I managed to pay my bills on a monthly basis, with no room for error. Here are the things at risk: paying rent, my car payment, my health insurance, and of course food. If I have to stop working without any safety net I would lose all of these things.”
Posted: 16 Mar 2020 04:14 PM PDT
An engineer from Charter, one of the largest phone and internet providers in the U.S., sent an email blast to a senior vice president and hundreds of engineers on Friday.
In the email, Nick Wheeler, a video operations engineer based in Denver, criticized his employer for not allowing its staff to work from home despite ongoing efforts to lock down vast swathes of the U.S. to combat the coronavirus pandemic.
The email was short. “I do not understand why we are still coming into the office as the COVID-19 pandemic surges around us,” he wrote.
“The CDC guidelines are clear. The CDPHE guidelines are clear. The WHO guidelines are clear. The science of social distancing is real. We have the complete ability to do our jobs entirely from home,” he wrote, reeling off the advice from several state and federal government departments and international health organizations. “Coming into the office now is pointlessly reckless. It’s also socially irresponsible. Charter, like the rest of us, should do what is necessary to help reduce the spread of coronavirus. Social distancing has a real slowing effect on the virus — that means lives can be saved.
“A hazard condition isn’t acceptable for the infrastructure beyond the short-term. Why is it acceptable for our health?” wrote Wheeler.
Hours later, he was no longer an employee.
Just a few minutes after Wheeler sent the email, he was summoned to a vice president’s office to a conference call with human resources. In a call with TechCrunch, Wheeler said his email was described as “irresponsible” and “inciting fear.” He said it was to understand why Charter had not implemented a work-from-home policy after the coronavirus outbreak was upgraded to a pandemic.
Wheeler said he was given an ultimatum. Either he could work from the office or take sick leave. Staff are not allowed to work from home, he was told. Wheeler offered his resignation, but was sent home instead and asked to think about his decision until Monday.
Later in the day, he received a call from work. Charter accepted his resignation, effective immediately.
Although Charter — and others — have pledged not to charge late fees or terminate its services to customers during the pandemic, employees are internally expressing frustration that their health and safety appear not to be a priority.
Wheeler is going on the record because he said it was unacceptable that Charter is, unlike other companies, not employing a work-from-home strategy in an effort to combat the spread of COVID-19.
Just on Monday, the San Francisco Bay Area was put on lockdown, and both New York and Denver — where Wheeler lives — announced the closure of bars and restaurants and the banning of public gatherings of more than 50 people to limit the virus’s spread. Shortly after, the White House said it is advising against gatherings of 10 people or more, and that Americans should continue to practice social distancing.
“If I can understand and do this at a human level, Charter should be able to do it at a larger level,” he said.
Cameron Blanchard, a spokesperson for Charter, said the company does not “discuss individual employee circumstances.” In a broader statement, Charter said it’s “continuing our normal operations” but that it’s “reviewing our business continuity plans daily as conditions are changing rapidly."
Charter finds itself largely alone in mandating employees to work from its offices as its rivals push ahead with advising staff to work from home where possible.
AT&T said in its guidance that it’s asking employees “who are in jobs that can be done from home should do so until further notice.” Verizon, which owns TechCrunch, also said it’s encouraging employees to work remotely. Comcast is reportedly testing a number of work-from-home scenarios.
TechCrunch spoke to several Charter employees, who we are not naming as they fear retribution from the company. The employees said they had seen Wheeler’s email. One described the email as speaking what was already a “bubbling of concern” among employees.
The employees said that Charter’s leadership has long disallowed working from home, and that management decides on a case-by-case basis and only when they’ve seen a doctor’s note. The employees said that in absence of a work-from-home policy, employees are expected to burn through their sick leave.
Staff are given a week of sick leave a year, which accrues over time, but current government guidance is to self-quarantine for two weeks after symptoms subside, meaning some staff would have to take a portion of unpaid sick leave.
But Charter has shown little sign of backing down. In an all-staff email sent Saturday and seen by TechCrunch, Charter’s chief executive Tom Rutledge doubled down on the policy.
“You may have heard that some companies are instituting broad remote working policies for some of their employees. While we are preparing for that possibility by geography, Charter is not doing the same today,” said Rutledge. “We provide critical communications services and we believe our approach to supporting front line employees is the right way for us to operate at this time to continue to deliver those important services to our customers.”
The email said that the 15% of its employees who perform back office work and management are expected to continue coming into the offices.
“Stay home if you are sick, or caring for someone who is sick, but continue to report to your usual work location if you are not,” the email said. “While some back office and management functions can be performed remotely, they are more effective from the office,” said Rutledge.
One of the employees we spoke to described the email as “tone-deaf.”
The employees said two or three staff had been tested for coronavirus, according to internal emails from Charter’s human resources, but that their test results had not been disclosed, compounding their fears about having to continue to go into the office.
Wheeler is not alone in his concerns. At least two other emails allegedly sent by employees, which were posted anonymously to Reddit but TechCrunch is unable to verify their authenticity, criticized Charter for putting its employees “under harm and risk.”
One of the employees we spoke to agreed. “There’s no reason why the backend staff can’t be working from home,” they said.
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Posted: 16 Mar 2020 03:56 PM PDT
In the role, Brooks will help the OCC in its mission of chartering, regulating and supervising national banks and federal savings associations, along with federal branches and agencies of foreign banks.
Specifically, the chief operating officer is involved with oversight of banking supervision policy, large bank supervision, midsize and community bank supervision, the office of innovation, supervision system and analytical support and systemic risk identification support and specialty supervision.
Nowhere in that word-salad does it mention bitcoin, but it’s likely that cryptocurrencies will be one area where Brooks will spend at least some of his time, given his previous job and areas of expertise.
“Brian Brooks is a strong leader with extensive experience in the financial services sector,” said Treasury Secretary Steven T. Mnuchin, in a statement. “I look forward to working with him to ensure the stability of our financial system and its ability to foster greater economic growth for the benefit of all Americans.”
Brooks served as the chief legal officer for Coinbase since September 2018, and previously served as executive vice president, general counsel and corporate secretary of Fannie Mae.
Posted: 16 Mar 2020 03:24 PM PDT
Three days after announcing plans to reduce theater attendance by 50%, Regal Cinemas announced that it will be closing all theater locations, effective March 17. The company announced the news via social media, noting that "All theatres will remain closed until further notice."
The dramatic shift comes amid declining attendance over fears of the rapid spread of COVID-19. It also follows moves by a number of cities and states that have blocked large gatherings and all non-essential travel in order to encourage "social distancing." The move was no doubt as much an attempt to protect public health as it is recognition that staying open simple isn't feasible at the moment.
Regal currently operates 549 theaters, comprising 7,211 screens spread out over 42 States, American Samoa, the District of Columbia, Guam and Saipan, according to its site. The company has not announced whether it has any plans to help compensate employees, nor how it will handle users with an Unlimited Pass.
AMC last week announced its own reduced operations. We reached out to the company to see if it had any plans for a full shutdown amid all of the recent news. We'll update when we hear something back.
Movie studios, meanwhile, are reconsidering their approach for films set for a theatrical release. Notably, NBCUniversal announced that it would be releasing films like “The Hunt,” “The Invisible Man” and “Emma” through on-demand services, in addition to theaters.
Posted: 16 Mar 2020 02:45 PM PDT
Rocket Lab is acquiring Sinclair Interplanetary, a manufacturer of spacecraft hardware based in Toronto that has provided hardware for more than 90 satellites sent to orbit to date, including for Astro Digital, BlackSky, ALE and Rocket Lab itself. Sinclair also worked on The Planetary Society’s LightSail 2, which is an experimental spacecraft developed by a nonprofit organization to demonstrate in-space propulsion using only the energy generated by the light of the Sun.
The acquisition will help bolster Rocket Lab’s own satellite division, which is responsible for making its Photon spacecraft line, introduced by the company last year. Photon is an extension of Rocket Lab’s available suite of mission services, which provides clients with small satellite ambitions to bring their own payload and have Rocket Lab handle the design, build and launch of their spacecraft.
Meanwhile, Sinclair will continue to offer its services to its customers, and Rocket Lab says it will even “bring additional resources to grow Sinclair’s already strong merchant spacecraft components business.” That means that clients like Kepler Communication, which is using Sinclair reaction wheels in its own constellation of small communications satellites, which it is launching to provide IoT communications.
Sinclair benefits from Rocket Lab’s resources, and Rocket Lab benefits by having one of the most trusted and experienced hardware component providers in the small satellite industry as an in-house advantage of using its satellite platform. It’s a win-win, and a smart union that should boost the business of both parties.
Posted: 16 Mar 2020 02:32 PM PDT
As governments across the country weigh whether to push non-essential public venues like gyms to close, more people are searching out expensive gear from Peloton .
The public markets are obviously seeing some pretty substantial swings in recent days, but newly public Peloton is proving more aptly positioned than other tech stocks. Today, the exercise brand saw a nearly 13% spike on the back of a market where stocks cratered across the board. The Nasdaq dropped just over 12% today by comparison.
While trends toward social responsibility pushes more people to stay home as public institutions close temporarily, companies that are optimized for at-home experiences are unsurprisingly going to be seeing some growth during the next several months. The challenge will, of course, be to combat externalities while maintaining growth rates as the rest of the market — hopefully — recovers.
In an effort to onboard more customers, the company announced Monday that it was extending the free trial period of the company’s app from 30 days to 90 days in the U.S., U.K. and Canada. While many of the company’s live classes require their quite expensive hardware, the company also offers on-demand classes for exercises like yoga, cardio and meditation. Notably the company is maintaining the 30 day trial for its actual bike hardware.
Peloton has seen negative impacts as well; the company has shuttered its retail showrooms through the end of the month and announced they were closing their live studios to the public. Live classes from the New York showroom were halted the first half of the week and scheduled to resume on Thursday.
Posted: 16 Mar 2020 02:04 PM PDT
During a White House briefing on Monday detailing new recommendations regarding public health from the administration’s coronavirus task force and the CDC, President Trump was asked by a member of the press corps about reports that the White House is in “daily” contact with Amazon CEO Jeff Bezos regarding the COVID-19 epidemic.
Trump’s answer wasn’t exactly a clear confirmation, but did seem to indicate that the Amazon founder and chief executive has been working with the White House in some capacity as the situation develops. Upon request for clarification, an Amazon spokesperson confirmed to TechCrunch that “Jeff Bezos has been in contact with the White House” regarding the coronavirus epidemic.
“Well I’ve heard that’s true,” Trump said during the briefing. “I don’t know that for a fact. But I know that some of my people have, as I understand it, been dealing with them or with him. And that’s nice. We’ve had tremendous support from a lot of people that can help, and I believe he was one of them.”
Last week, Fox Business first reported that the White House would be meeting with large tech companies in an effort to help coordinate efforts to contain the virus, and that those meetings would include Facebook, Google, Amazon, Twitter, Apple and Microsoft.
It’s still not clear in what capacity Bezos is working with the White House on the coronavirus pandemic, but Amazon is clearly feeling the impact of the global virus outbreak, including a surge in demand that’s led to it seek to hire 100,000 additional employees for warehouse and delivery in the U.S.
Posted: 16 Mar 2020 02:01 PM PDT
In other words, it’s eliminating the theatrical window — the period between the time you can watch a movie in theaters and when you can watch in the comfort of your home. (Netflix has been unwilling to abide by this window, which is why the major theater chains weren’t showing “The Irishman” or “Marriage Story.”)
This is in response to the COVID-19 pandemic, which has led many theaters to close or operate at reduced capacity, and forced some communities to adopt more extreme modes of social distancing. As a result, this past weekend, the domestic box office hit its lowest point in at least 20 years.
The release dates of a number of big films — including “Mulan,” “No Time to Die” and Universal’s “Fast & Furious 9” — have already been pushed back, but that doesn’t help films that are already in theaters. And it sounds like Universal has decided that it doesn’t make sense to push back its entire slate.
The first films to fall under the policy are “The Hunt,” “The Invisible Man” (which is very good) and “Emma,” which are currently in theaters, and which will launch on-demand this Friday. Next up is “Trolls World Tour,” which will be available in theaters and on-demand on April 10.
To be clear, this doesn’t mean you’ll be able to watch these movies on a subscription service like Netflix or Disney+ (where “Frozen 2” was released ahead of schedule this weekend) — the announcement doesn’t mention NBCUniversal’s planned Peacock streaming service at all.
Instead, it means that the studio will be releasing its films to a variety of on-demand marketplaces like iTunes and Amazon, at a suggested price of $19.99. That might seem like a lot to pay for a 48-hour rental (rather than a purchase), but it’s downright affordable compared to the $50 rentals that a startup called the Screening Room tried pitch a few years ago.
"Universal Pictures has a broad and diverse range of movies with 2020 being no exception,” said NBCUniversal Jeff Shell in a statement. “Rather than delaying these films or releasing them into a challenged distribution landscape, we wanted to provide an option for people to view these titles in the home that is both accessible and affordable.”
While Universal’s strategy could be set aside once the current crisis ends, there are also broader questions about how the pandemic will affect the theatrical movie business.
In fact, Rich Greenfield of research firm LightShed Partners recently told The New York Times that this will “hit the accelerator” on the shift to streaming and that “most of the global exhibition business will be in bankruptcy by the end of the year.”
Posted: 16 Mar 2020 01:57 PM PDT
Schools around the country are closing, and while some universities are able to switch to online classes, that’s not really an option for K-12 students, many of whom lack the necessary equipment or connection at home to do so. Legislators and the FCC are hoping to fix at least part of the problem with an emergency distribution of Wi-Fi hotspots to needy students.
In a letter to FCC Chairman Ajit Pai, a group of Democratic and Independent lawmakers led by Senator Ed Markey (D-MA) urged the agency to use funds earmarked for education to immediately help kids who lack the connectivity they need.
“The coronavirus pandemic has shone a bright light on the ‘homework gap’ experienced by 12 million students in this country who do not have internet access at home and are unable to complete their homework,” they write. “We believe that the FCC can use its emergency powers… to provide home wireless service to existing school devices and hotspots for students who lack internet access at home.”
Many schools and libraries have devices like Wi-Fi hotspots and other internet-enabled devices available for loan or rental, but the demand and attendant costs could be very high if they hand them out for use as students’ main source of connectivity. The suggestion by Markey and the others is to cover these costs to get these resources distributed as quickly and simply as possible.
The issue is that the funds to do so are locked up in what’s called the E-Rate program, which is an internet connection subsidy meted out to schools and libraries, and isn’t really intended for this kind of short-term use. But as the letter says, the legislators believe it is within the FCC’s powers to override the day-to-day E-Rate rules and dedicate some of the $2 billion left in its budget to this purpose.
They’re not just speculating wildly, either — many of these senators are part of the FCC’s oversight committee, and Sen. Markey is actually the person who created the E-Rate program to begin with back in the ’90s. With this kind of assurance, the FCC may find itself with a free hand to address the crisis in the way they describe.
“This swift, immediate action would help ensure that all students can remotely continue their education during the current public health emergency,” the group writes. “We call on you to use the FCC's emergency powers to narrow the homework gap during this crisis, and we look forward to finding a long-term solution when the coronavirus subsides.”
Commissioner Jessica Rosenworcel supports the approach, tweeting earlier today that “The FCC can fix this #homeworkgap with a program for schools to loan out wifi hotspots. It needs to do it now.”
The letter was co-signed by Senators Dick Durbin (D-IL), Chris Van Hollen (D-MD), Tammy Baldwin (D-WI), Kamala Harris (D-CA), Kirsten Gillibrand (D-NY), Jack Reed (D-RI), Catherine Cortez Masto (D-NV), Patty Murray (D-WA), Mazie Hirono (D-HI), Ron Wyden (D-OR), Elizabeth Warren (D-MA), Angus S. King, Jr. (I-ME) and Margaret Wood Hassan (D-NH).
Posted: 16 Mar 2020 01:42 PM PDT
Apple and Goldman Sachs will allow Apple Card holders to skip their March payment without incurring interest by signing up for a Customer Assistance Program, Apple is informing its customers. Existing cardholders were alerted to the option via an email sent out over the weekend, which explains that, in light of the challenges posed by the COVID-19 situation, some customers may have trouble making their usual payment.
“Apple Card is committed to helping you lead a healthier financial life,” the email said.
To join the Customer Assistance Program, Apple Card customers can either click the link in the email (here) or message or call an Apple support rep directly through the Apple Wallet app.
The process of joining the program via iMessage is fairly simple. After clicking the link, an automated message responds: “We understand how difficult this could be for you, and we want to help.”
You’re then directed to connect with Goldman Sachs to continue enrollment.
After clicking on the link that’s sent, you receive a second automated iMessage text that explains what the Customer Assistance Program offers — specifically, a way to skip a payment without incurring interest. It then asks if you’d like to join.
Once you request to join, Apple says you can expect to receive a confirmation email in the next few days when your enrollment is complete. No further action is needed.
Though the sign-up process is straightforward — and even easier through iMessage than having to place a call — it’s harder to get questions about the program answered via iMessage chat. In a test, we asked the Apple chatbot a question, and it said: “Let me get you to an Apple Specialist at Goldman Sachs.” That was over an hour ago, as of the time of writing, and no support rep has yet to answer.
Getting personal support via the provided phone number (1-877-255-5923) was much easier, despite what one rep described as a “surge” in call volumes. After you’re informed of the option to join the program via the automated phone system, you can opt to press 2 to connect to a support rep directly. Surprisingly, there was little hold time as of this afternoon — a rep answered almost right away.
We understand the program doesn’t have any sort of limit in terms of the balance on your card at the time you’re requesting a waiver. But reps couldn’t provide any information as to how asking for a waiver would impact your credit report or score. During natural disasters, however, there’s a process for lenders to flag customers who have been affected so non-payments won’t negatively damage their credit. (Apple confirmed customer accounts will be reported as current.)
Reps also couldn’t say if the program would continue into April, as that’s not something that’s been decided yet.
Apple Card isn’t the only card waiving payments.
Citi said earlier this month it had assistance programs in place for customers, including credit-line increases and collection forbearance. PNC Bank, Capital One, Bank of America, Chase, Discover, U.S. Bank, Wells Fargo, Fifth Third and others also recently alerted customers about their respective offers to help during the coronavirus outbreak.
Amex told us it’s helping customers, too, when asked.
“American Express is ready to assist our customers having financial difficulties due to the effects of COVID-19. They can reach our Customer Care Professionals anytime by calling the number on the back of their card or through our digital servicing channels — online chat or the Amex app,” a spokesperson said. The company said it would work with customers individually on things like waiving late fees, return check fees and interest charges.
“We have several financial hardship programs offering a range of short-term to long-term assistance,” they added.
According to NerdWallet’s guide to protecting your finances during the coronavirus outbreak, several other lenders and credit card issuers may be working with customers on an individual basis, too.
“Besides working with customers on a one-on-one basis, some banks are making some changes across the board. Citi, for example, began waiving a number of fees on March 9 (for 30 days), including bank account monthly service fees and penalties on early CD withdrawals,” a NerdWallet spokesperson noted. “Take advantage of these offerings if you need help, because they can take some of the burden off your plate and give you time to regroup and create a plan for yourself going forward,” they said.
Posted: 16 Mar 2020 01:40 PM PDT
All major indices fell sharply Monday as the COVID-19 pandemic continued its spread, prompting airlines to slash capacity and state and local officials to close schools and businesses like restaurants and bars.
Stocks accelerated their fall in the waning minutes before the markets closed Monday as Wall Street reacted to a White House press conference with President Donald Trump, National Institutes of Allergy and Infectious Diseases head Anthony Fauci, and Deborah Birx, the coronavirus response coordinator for the White House coronavirus task force.
The task force recommended people limit the size of gatherings to fewer than 10 people and that non-essential businesses close for at least the next 15 days, but hinted that this could last into July.
The Dow Jones and the S&P 500 suffered their worst percentage drop since 1987. The Nasdaq fell more than 12% and the Russell 2000 index of small caps fell 14.3%.
All industries were hit on Monday with double-digit percentage losses, including real estate, energy, financial, technology and travel.
At the close, markets were down:
The markets had a rough start in the morning. After the Federal Reserve cut its interest rates to near zero at the urging of the president, all of the indexes posted major losses, and for the third time in the past two weeks, the Dow hit its emergency circuit breaker as the market opened; the S&P also halted trades.
Even as equities fell, Trump tried to ease concerns, noting that the government was committed to backing industries like the airlines and that the stock market would eventually rebound.
“Once this virus is gone I think that you’re going to have a stock market like nobody has ever seen before,” Trump said in a press conference prior to the market close Monday.
Wall Street did provide a boost to airlines in response to the government’s decision to support airlines. American Airlines saw shares close up 11% to $15.92.
“It’s not their fault, in fact they were having a record season,” Trump said when asked if the government should back the airlines industry. “We’re going to be backing the airlines.”
Posted: 16 Mar 2020 01:32 PM PDT
Disney surprised the media industry on February 25 when it announced that longtime CEO Bob Iger had replaced himself with executive Bob Chapek. The abruptness of the news and the choice of successor, combined with the company’s explanation that it was a long-planned transition, didn’t seem to add up.
It now makes more sense. It appears evident in hindsight that Iger saw the dire financial impact of the coronavirus sooner than other American chief executives and took decisive action. The most important task of Disney’s CEO for the next two years will be rescuing Disney, not growing it. Iger made a point to end his 15-year reign on a high note. Chapek was put in charge as the Magic Kingdom’s wartime leader.
Disney’s stock multiplied from $30-40 per share during 2011 to $148 this past December, capped with a phenomenal launch of its Disney+ subscription video streaming service. Then from January 2 to February 25, as the virus impacted China and Disney shut down its Shanghai and Hong Kong theme parks, the stock slid from $148 to $128. Between February 25, the day of Iger’s announcement, and this morning, the stock dropped a further 29% to $92. That’s a 38% plummet in the company’s valuation in 10 weeks.
As head of the company’s Parks, Experiences, & Products division, Chapek represents the old-school businesses of Disney. These business lines sustained healthy growth through last year, but Iger had spent the last couple of years emphasizing that Disney’s future sits with its subscription video streaming services (Disney+, Hulu, ESPN+, Hotstar) overseen by Kevin Mayer, who previously spearheaded the company’s incredibly successful M&A strategy (including acquisitions of Pixar, Marvel and Lucasfilm).
With Disney managing the impact of the crisis on its parks in China beginning in January, Iger likely foresaw the global spread of coronavirus and the economic damage sooner than most other American chief executives. Disney will be hit hard.
While it is a powerhouse in the media industry, roughly 34% of Disney’s revenue (and 28% of its operating income) comes from its parks, cruises and resorts. The cruises and parks could be shuttered for months, and health-weary consumers dealing with an economic downturn will be slow to return to them or to the company’s hotels.
With cinemas closed or sparsely filled, potentially even into the summer months (peak season for cinemas), the global box office will be much smaller this year. That means a substantial revenue decrease for Disney’s Studio Entertainment division (16% of revenue and 19% of operating income), which accounts for one-third, or $11 billion, of the entire box office market.
The largest division of Disney by revenue (41%) and operating income (42%) is its TV networks. While hundreds of millions of people staying home will increase viewership in the short term — notwithstanding ESPN, given major sports leagues paused or canceled their seasons — TV advertising revenue shrinks during market downturns as brands reduce their marketing budgets.
After launching in November, the Disney+ streaming service hit 28 million subscribers in January. People staying home with their families during the coronavirus crisis should be a boost to its subscriptions, particularly with children home from school, but the venture isn’t close to profitability (2024 has been its goal for that).
Disney+ is a long-term investment that’s currently draining cash from a company where cash is about to get much tighter. Disney’s streaming division had losses of $740 million and $693 million during the last two quarters and estimated its investment in original content for Disney+ would run $1-2 billion annually. That ongoing investment could be undermined by reduced profits from its other divisions.
The fundamentals of Disney as a business have been strong, but it is in a rough position as a global health crisis and an almost certain global recession take the wind out of its sails. This starts a new era for the company’s leadership, and it made sense for Iger, who planned to step down in 2021 anyway, to end his tenure on a high note in February — capped with the book tour for his memoir and release of his MasterClass course — while putting the man who oversees the most threatened part of the company in charge of leading the response.
Streaming services remain the heart of Disney’s long-term future, so it remains critical they continue to thrive under highly capable leadership while the CEO focuses on rescuing the established businesses that provide the company’s income in the present. Mayer may well have his chance at the CEO role when the rest of the company stabilizes again in the future, but Chapek made the most sense as the commander holding Disney together in this crisis.
Posted: 16 Mar 2020 01:30 PM PDT
Workers in its U.S. fulfillment centers will also get an extra $2 per hour through the end of April. Currently, Amazon pays $15 per hour for entry-level jobs in its fulfillment centers. In addition, the company will also temporarily increase pay by £2 per hour in the U.K. and approximately €2 per hour in many EU countries. In total, Amazon expects to spend about $350 million in increased compensation across the U.S., Europe and Canada.
“As the COVID-19 pandemic continues, Amazon and our network of partners are helping communities around the world in a way that very few can—delivering critical supplies directly to the doorsteps of people who need them,” writes Dave Clark, Amazon’s senior VP of Worldwide Operations. “Getting a priority item to your doorstep is vital as communities practice social-distancing, particularly for the elderly and others with underlying health issues. We are seeing a significant increase in demand, which means our labor needs are unprecedented for this time of year.”
During this current crisis, as people are urged to stay at home as much as they can, demand for delivery is obviously at an all-time high. Amazon’s logistics operation is already straining under the current demand and often unable to offer same-day deliveries (or even any deliveries in the next couple of days) through Amazon Prime and Fresh in many places in the United States. At the same time, Amazon has also started running out of some household staples, including toilet paper and other daily necessities, as people prepare to stay at home for a prolonged period of time.
Just last week, Amazon also said it would provide up to two weeks of pay to all Amazon employees diagnosed with COVID-19, and established a relief fund of $25 million to help its independent delivery service partners and drivers.
In today’s press briefing, President Trump also noted that Jeff Bezos has offered his help, though it’s unclear in what capacity.
Posted: 16 Mar 2020 01:30 PM PDT
In a press conference on Monday, President Donald Trump indicated that the Senate is set to revisit an aid package designed to respond to the economic and social stresses caused by the novel coronavirus outbreak.
“We're looking at that through the Senate,” the president said when asked about potential changes to the House bill.
The bill, which was approved by the House of Representatives early Saturday morning after nearly a full day of negotiations with the White House, included expanded funding for coronavirus testing and aid for American workers whose livelihoods were impacted by the economic fallout caused by the response to the spread of COVID-19.
The bill included an expansion of healthcare benefits, social assistance programs for food and medical coverage, and a provision for paid time off for workers impacted by the disease’s spread — but the provision only covered small and medium-sized businesses.
Critics pointed out that the bill left a huge swath of the American workforce without assurances that they would be able to take time off if they, or a family member or loved one, became ill.
It seems that the Senate will now take up the bill to expand assistance, according to a statement from the president.
“They're working together very well with the House,” President Trump said. “They're working to only enhance it and make it better and make it fair for everybody.”
Posted: 16 Mar 2020 01:29 PM PDT
The White House held another press briefing on Monday to provide an update on its response to the continued coronavirus pandemic in the U.S. President Trump opened by identifying new guidelines in place to mitigate and slow the spread of COVID-19. These include advice to begin homeschooling kids wherever possible, as well as avoiding gathering in groups of more than 10 people. The administration is also advising avoiding discretionary travel, as well as eating at bars, restaurants and food courts.
These measures, arrived at by Trump’s coronavirus task force, are meant to apply for at least the next 15 days — though in response to a question from the press corps about how long the president imagines the coronavirus situation lasting, he suggested that it could last until “July or August” or “even longer.” That’s a very different tune from when, at a campaign rally in late February, he referred to the coronavirus as a “hoax” employed by the Democrats.
The recommendations also clarify that not only should individuals stay away from bars and restaurants (and to use drive-through, pick-up or delivery instead), in states where there is evidence of COVID-19 transmission, they further recommend that restaurants and bars actually be closed by their owners and operators. These guidelines also say that anyone who feels sick should stay home and contact their medical provider, and that when one member of a household has tested positive, the entire household should quarantine at home to prevent transmission.
Additional guidelines include the existing advice for washing hands, “especially after touching any frequently used item or surface;” avoiding touching your face; sneezing or coughing into a tissue or your elbow; and disinfecting items and surfaces that you use frequently.
Physician and coronavirus task force member Dr. Deborah Birx said it is “the millennials that are going to lead us through this,” in her remarks, noting that they’re relying on young people to follow this advice especially in order to avoid transmission to more vulnerable members of the population.
Vice President Mike Pence said that “this guidance for the next 15 days is what our experts say is the best opportunity we have to lower the infection rate over the entire course of the coronavirus.”
Posted: 16 Mar 2020 01:16 PM PDT
The ongoing COVID-19 crisis is going to prove a major test of the gig economy. Already an ever-increasingly important part of our daily lives, grocery and food delivery services along with ride-hailing apps are going to play a fundamental role in helping individuals enact government-recommended social distancing.
More often than not, however, these workers get short shrift. Many times those who drive our cars and deliver our food do so with little pay and long hours. As for healthcare, well, that's a distant dream for many.
This situation is only going to worsen many of these issues, and there's a very real fear that the United States' inability to provide the working class with a legitimate social safety net will only incentivize workers to continue to do their job while sick, further exacerbating the spread of the novel coronavirus, in spite of restrictions on gatherings and other attempts to increase social distancing.
Things are changing quickly and will continue to do so. This situation is, in many respects, unprecedented in recent memory. Curbing the impact of COVID-19 and supporting the workers whose job it is to help support those of us who have the job flexibility and financial capabilities to stay at home will require flexibility and creativity on behalf of policy makers. We've reached out to a number of those companies whose job it is to ensure the safety and well-being of a team of freelancers.
The service is among those that have introduced a contactless delivery option, letting users choose from one of three methods:
"We have also taken steps to educate our restaurants, stores and delivery personnel on the importance of these instructions to ensure that your food is brought to you in the safest way possible," the site writes.
In a comment offered to TechCrunch, Lyft says it's "monitoring the…situation closely." Here's the full statementL:
Postmates recently added “non-contact” deliveries to its list of app options. The service launched a Relief Fund aimed at helping shoulder medical expenses for impacted delivery people. It also is offering up to two weeks of paid sick leave for those who test positive for COVID-19.
Seamless notes that dine-in has grown upwards of 75% (a number that will no doubt only increase). As such, it will be deferring commission fees to independent restaurants impacted by the crisis. It also is offering of a "contact-free" delivery option.
“For the safety of you and our drivers, drivers will call/text when they arrive and drop off your order on the doorstep, in the lobby or other area designated by you.” This option is now available on the website and latest version of the app.
In a blog post titled "Supporting you during the Coronavirus," Uber laid out next steps over the weekend. The top-level item is financial assistance to drivers who are infected and placed in quarantine by a public health authority. Assistance will be provided for up to 14 days.
"Every eligible driver in the U.S. will receive a minimum payment of $50, even if they have only done one trip," Uber writes. "The minimum payment will differ by country."
Like others, Uber Eats is offering a contactless option. The service is also providing some financial assistance to delivery people and providing more than 300,000 free meals to first responders in the U.S. and Canada.
In Europe, Deliveroo and Glovo introduced contactless options last week.
Posted: 16 Mar 2020 01:14 PM PDT
Six Bay Area counties — San Francisco, Santa Clara, San Mateo, Marin, Contra Costa and Alameda — announced a "shelter in place" order. The lockdown, unveiled at a press conference earlier, starts at 12:01 AM Tuesday. It's not a full lockdown, but it's quite sweeping and strict nonetheless, as Northern California attempts to curb the exponential spread of COVID-19.
"There is no need to panic,” San Francisco Mayor London Breed said in a press conference today, continuing a plea for cooler heads amid the pandemic.
The order will be in place through April 7. Breed added that the date could be adjusted, based on how things play out. “It could be amended to be lengthened or shortened,” she explained, “depending on advice from our public health members.” The team aims to prioritize three elements during the crisis: reducing community spread through social distancing, protecting vulnerable populations and protecting healthcare workers and first responders.
Per the SF Chronicle, the included communities total more than 6.7 million people. The move follows previous city and state-wide bans on gatherings of more than 250 people, but takes a far more aggressive approach, banning travel via "foot, bicycle, scooter, automobile or public transit" that is deemed non-essential.
Exclusions include healthcare, purchasing "essential" supplies and aiding friends and family who require support. There's also an exception for non-Bay Area residents looking to return home. Both airports and public transit will remain open under limited operation for essential travel, while requiring people to maintain a six-foot "social distancing."
Services like police, fire and garbage pickup will remain throughout the lockdown. Police Chief Bill Scott noted that the police department isn’t looking to enforce the rules, but appeared to apply that it is willing to do so, if needed. There will also be an exception for “operation of the government agencies and provide for the health, safety and welfare of the public.”
Grocery stores, banks, pharmacies and gas stations will remain open to help residents pick up essential supplies. Breed added that “there is no need to rush out and do these things.” Bars and gyms will shut down, however, while restaurants will only be open for takeout. Food delivery will be active, as well.
An exemption will also be provided for the large homeless population that resides in the Bay Area, though the city is recommending they seek lodging at a local shelter. Last week San Francisco announced a plan to deploy RVs across the city to quarantine homeless residents infected by the virus.
Posted: 16 Mar 2020 12:39 PM PDT
One of the defining characteristics of the European Union has been its strong policy of taking an open approach when it comes to borders in the region: the EU may be a collection of individual countries, but it works as one, and so when you travel from one to the other as an EU citizen, you can move as freely as you do within your own country. Now, in the wake of the novel coronavirus pandemic, all that is changing. Today the EU announced new measures to limit movement between borders within the EU, with the restrictions initially covering 30 days.
After that, Russia, which shares a border with various countries in the EU, also announced its own border closure.
We have already had a number of border closures within the EU and the wider region — in keeping with the global response to movement, and specifically in response to outbreaks that started earlier (for example, Italy has had travel restrictions in place for weeks at this point). The aim with today’s announcement — laid out in a press briefing — however, is to bring about a more coordinated approach across the region.
“Our measures to contain the Coronavirus outbreak will be effective only if we coordinate on the European level,” said EU president Ursula von der Leyen in a statement. She added that the travel ban does not extend to everyone: emergency medical professionals and other essential goods and services will continue to move across borders, as will citizens of the respective countries coming home, and those making their way home through a country. “We have to take exceptional measures to protect the health of our citizens. But let’s make sure goods and essential services continue to flow in our internal market. This is the only way to prevent shortages of medical equipment or food. It’s not only an economic issue: our single market is a key instrument of European solidarity. I am in discussion with all Member States so that we confront this challenge together, as a Union."
Russia, meanwhile, had closed off borders with specific countries such as Iran (which has been one of the worst-hit countries globally) and Poland, and now it is closing off its border to all international travel until the beginning of May (for now), with the exception of Russian nationals, airline professionals, diplomats and a few other specific categories.
Border closures are coming into effect the world over in an effort to stem the infection rate of the novel coronavirus, with the U.K. yesterday announcing more restrictions on travel, and Canada raising its walls earlier today. (The U.K. is not included in the EU measures, given its exit from the European Union; but it has followed suit regardless on its own steam and via its own policies.)
Many of these measures are coming in the wake of a serious curtailment of travel anyway — a trend that has had a severe impact already on airlines and other companies in the travel and tourism industries.
The impact on tech in Europe (and indeed, globally) has been a palpable chilling effect. Apart from the direct hit that travel, tourism and related startups are feeling, overall it has meant a drastic wave of event cancellations, and restrictions on meetings and overall activities. There has, of course, remained a commitment to continue business as usual, or at least try to, and that will hopefully be a reality in the medium term, even if for now, it’s wheels down, wheels down.
Posted: 16 Mar 2020 12:23 PM PDT
Uber Eats said Monday it will waive delivery fees for all orders from independently owned restaurants on the app as the COVID-19 pandemic continues to spread and causes cities to shutter all non-essential businesses.
Restaurants throughout the U.S. are facing economic headwinds as city and state officials take steps to stop the spread of COVID-19, a disease caused by novel coronavirus. Denver Mayor Michael Hancock ordered Monday the closure of all restaurants and bars except for delivery and carryout service for the next two months. Los Angeles Mayor Eric Garcetti ordered all restaurants in the city to close, except for delivery and takeout, until at least March 31. New York City has directed all bars and restaurants to close. Restaurants in NYC can still deliver food.
There are more than 100,000 local restaurants on the Uber Eats app, according to the company.
“As more people stay home, local restaurants need your business more than ever. That's why we're waiving the Delivery Fee for all orders from every independent restaurant on Uber Eats—more than 100,000 local restaurants on the app,” the company said in an email Monday morning.
Customers can find the independent restaurants by looking for the EAT LOCAL banner in the app. Delivery Fees will be automatically waived on all applicable orders.
Uber Eats is also taking precautions to limit the spread of COVID-19, including the option of contactless deliveries, and is working to provide drivers with sanitation materials. The company added that “as always, your food items aren't touched once they've been packed by the restaurant.”
Uber Eats said it will support its delivery people and drivers with financial assistance in the event of a COVID-19 diagnosis or exposure that prevents them from working, and is committing more than 300,000 free meals on Uber Eats to healthcare workers and first responders in the U.S. and Canada.
Posted: 16 Mar 2020 12:17 PM PDT
The company, which launched in 2015, says it faced a fundraising round that collapsed two weeks ago and was in the middle of an acquisition that collapsed on Friday. It cites the current economic downturn and COVID-19 as the reason for both of these events.
Service will shut down later this week, on Friday, March 20. It’ll try to refund subscribers (pending its cash position), route all pending claims directly to existing users and delete all personal information from its customers within the next 30 days.
It’s worth noting that Service founder and CEO Michael Schneider also notes that since it was founded, the company never turned a profit, even though it recovered more than $4,000,000 for its customers.
“Despite partnerships with major brands such as KAYAK and Microsoft, we have never turned a profit, despite a focus on revenue growth and cost cutting through software automation,” Schneider writes. “We were in the middle of a fundraise when it collapsed two weeks ago, and then we were in the middle of an acquisition that collapsed last Friday due to everything going on with COVID-19 and the economy.”
With the current downturn in travel, we’ll likely see more travel startups collapse. Margins are notoriously low in this business and a lot of companies depend on what is essentially affiliate marketing revenue. As the travel industry is currently in a tailspin, that source of revenue is quickly dwindling for this class of startups.
Service had raised a total of $5.1 million since it was founded. Investors include Founders Fund, which led its seed round, as well as Menlo Ventures, Maveron, Xfund, Flight Ventures and others. The company last raised a convertible note last September.
“I remain proud of what we accomplished over the last nearly five years, and I'm grateful to our investors, employees, and customers for all their support. While I regret not succeeding in building a sustainable long term business, I am proud that we tried, and that we made people’s lives a bit easier around customer service,” writes Schneider.
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