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Gig Economy, Doordash, Algos


#382
Tools Of The Trade

Published:

Apr 10, 2021


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Posted In:

Gig Economy, Doordash, Algos

Published:

Apr 10, 2021


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Gig-economy platforms are getting a little bit of their WSB (reminder: WallStreetBets) moment with humans vs. the algos (read: delivery-fee algorithms).

The movement titled #DeclineNow is a 40,000-person online forum presenting itself as a new form of labor activism tailored for the gig economy. Its main objective is to convince Doordash drivers - or dashers - to decline low-paying gigs and thereby train the corporate algorithm to pay workers better. Its proponents insist it’s already working. One of the founders of #DeclineNow says he rejects about 99% of the jobs he’s offered, only accepting the highest-paying ones.

But there are reasons to doubt whether using a company’s own software systems against it is a strategy that can prove effective for a sustained period of time. After all, Doordash encourages workers to accept at least 70% of deliveries, which awards them “Top Dasher” status. On #DeclineNow, though, low acceptance rates are a badge of honor. The Deliveroo IPO was marred with driver protests in London.

Gig-economy workers and freelancers represent close to 40% of the US workforce and are likely to continue growing. As more than 150m globally slipped down the economic ladder in 2020, the first pullback in almost three decades, it is likely many of these jobs will be permanently displaced by automation or likely to come back in the form of gig-economy work.

Other platforms are proactively embedding financial tools for their users, with Clubhouse announcing creator payments and Patreon’s tripling in valuation in less than 6 months (they take a 5-12% fee from creators for payments and other services).

While humans vs. machines will likely be a centennial topic - these creator/gig-economy platforms are coming up to friction points to make it work for everyone. While Doordash plans on introducing new tools like credit cards for their drivers, if they move too slowly, they risk the reputational blow - as some on the #DeclineNow forum are calling the app, “Tony’s Casino,” a reference to the CEO.

Portfolio News


MoneyLion to empower members to buy, sell and earn cryptocurrencies via strategic investment in Zero Hash - MoneyLion announced that it will introduce new capabilities enabling members to buy, sell and earn digital currencies. This includes a strategic investment the company has made in Zero Hash, the leading, regulated digital asset settlement provider. The strategic investment in Zero Hash provides MoneyLion the ability to power its cryptocurrency offering as part of its all-in-one digital financial platform and gives the company an ownership stake in the leading cryptocurrency liquidity and settlement infrastructure for digital and traditional banking and brokerage providers. Read more

NYDIG raises $100m from strategic partners; launches global insurance solutions business - NYDIG announced it had raised $100m of additional growth capital from strategic partners including property and casualty (P&C)-focused insurers Starr Insurance, Liberty Mutual Insurance, and other P&C insurers, joining NYDIG's existing life insurance and annuity-focused strategic partners New York Life and MassMutual. NYDIG also announced that Mike Sapnar, CEO of TransRe, one of the world's largest reinsurers, would be joining as Global Head of Insurance Solutions. While overseeing all of NYDIG's insurance activities, Mike will focus on accelerating bitcoin-driven innovation in the global property and casualty (P&C) industry. Read more

Altimeter leads Plaid’s $425m Series D aimed at reinvestment into digital finance - After its plan to merge with credit card network Visa was called off in January, Plaid is moving on. Namely, its largest fundraise to date: the San Francisco-based company, which enables companies to create their own financial services applications without investing in a team of engineers, announced a $425m Series D round of funding. Altimeter Capital led the round and was joined by new investors Silver Lake Partners and Ribbit Capital, as well as existing investors, including Andreessen Horowitz, Index Ventures, Kleiner Perkins, New Enterprise Associates, Spark Capital and Thrive Capital. Read more

Bloomberg Radio - A 6 min chat with MoneyLion's CEO - MoneyLion Founder and CEO Dee Choubey reacts to JPMorgan CEO Jamie Dimon’s comments on fintech, and why customers are flocking to banking apps. Read more

Tools Of The Trade


DoorDash drivers game algorithm to increase pay - Dave Levy and Nikos Kanelopoulos are trying to beat the algorithm. The two DoorDash drivers—Dashers, as the company calls them—are trying to persuade their peers to turn down the lowest-paying deliveries so the automated system for matching jobs with drivers will respond by raising pay rates. Their main tool is #DeclineNow, a 40,000-person online forum that provides a view into a type of labor activism tailored for the gig economy. Read more

Instacart and DoorDash plan to launch their own credit cards - Both Instacart and DoorDash have benefited from the surging popularity of at-home delivery for groceries and meals. They are betting that at least some of the increased demand will remain after the pandemic ends and hoping that the cards will stoke customer loyalty and attract new users. Banks, for their part, see these new partnerships as a way to diversify beyond travel rewards cards, which fell out of favor with some consumers when the coronavirus pandemic brought travel almost to a standstill. Read more

Clubhouse partners with Stripe to let you send money directly to creators by tapping on their profile - All users can donate money to creators via "Clubhouse Payments," the company wrote in a blog post on Sunday. Not all creators can receive payments yet — Clubhouse said it's starting with a "small test group." Creators will get all of the money a user sends, but users will be charged a card-processing fee by Stripe. Read more

Signal adds a payments feature—with a privacy-focused cryptocurrency - Signal plans to announce that it's rolling out the ability for some of its users to send money to one another within its fast-growing encrypted communications network. To do so, it has integrated support for the cryptocurrency MobileCoin, a form of digital cash designed to work efficiently on mobile devices while protecting users' privacy and even their anonymity. Read more

Industry News


Coinbase posts blowout Q1 profit of $730-$800m, days before public listing - Coinbase announced its 2021 first quarter earnings on Tuesday, revealing that the crypto giant made a profit of between $730m and $800m on revenue of approximately $1.8b. The results amounted to a blockbuster quarter for Coinbase, eclipsing its performance for the entire previous year. Read more

Yellen to urge global minimum company tax to stop venue-hopping - Yellen’s comments are part of an effort to prevent companies from seeking locations with lower taxes as the administration seeks higher levies on American firms to help pay for a $2.25t infrastructure program. Yellen will say the U.S. is working with G-20 nations to find an appropriate minimum “that can stop the race to the bottom.” Read more

Crypto market cap surges to record $2t, bitcoin at $1.1t - Bitcoin has risen more than 100% this year, while ethereum has gained nearly 190%. Both have massively outperformed traditional asset classes, bolstered by the entry of mainstream companies and large investors into the cryptocurrency world, including Tesla Inc and BNY Mellon. Read more

Credit Suisse takes $4.7b Archegos hit, replaces risk chief - While Credit Suisse was far from the only bank that allowed Bill Hwang’s family office to lever up large positions in a few stocks, others managed to unwind their exposure quickly with minimal damage. That raised questions over Chief Executive Officer Thomas Gottstein’s handle on the firm’s risk just weeks after the lender was caught up in another implosion of a little known financial player. Read more

Fintech is here to stay, says JPMorgan chief Jamie Dimon - Fintech companies are set to win significant market share from banks says JPMorgan's Chase chief Jamie Dimon, who laments the regulatory constraints that hobble banks as they face up to the threat from Big Tech competitors. Read more

Walmart files for trademark for fintech unit: ‘Hazel by Walmart’ - Walmart has shared few details on the fintech venture thus far, but the world’s largest retailer filed for a trademark on the name on March 29, in the process giving clues as to what the startup might actually do. Read more

Facebook confirms ‘test’ of Venmo-like QR codes for person-to-person payments in US - The QR code feature, similar to Venmo’s QR codes and others, will allow a user to scan a friend’s code with their smartphone’s camera to send or request money, while the sharable payment links will let you publish your payment address outside of Facebook itself. Read more

Sweden pushes ahead with a digital currency rollout—just don’t call it a ‘crypto asset’ - Sweden has strengthened its position in the race for a central bank digital currency (CBDC) after concluding the first phase of testing for its proposed currency, e-krona. In one of the most advanced explorations undertaken by a major economy, Sweden’s central bank, Riksbank, is now bringing in banks to test how the digital currency might work practically. Read more

Five banks to test FedNow real-time payments system - The Federal Reserve’s FedNow program, intended to streamline the clearing and settlement process, will be tested by five Northern California regional banks and three credit unions (CUs). FedNow, which will be fully implemented by 2023, will let individuals and companies transfer funds between accounts, pay bills and send or receive money from friends or family. The services will be near-real time and be available any day or time of the year. Read more

SEC accuses actor of $690m fraud based on fake Netflix deal - The claims are outlined in legal documents that U.S. prosecutors and the Securities and Exchange Commission released this week alleging Horwitz, 34, was running a massive Ponzi scheme. His scam: a made-up story that he had exclusive deals to sell films to Netflix and HBO. Dating back to 2014, the SEC said he raised a shocking $690m in fraudulent funds. On Tuesday, Horwitz was arrested. Read more

Companies selected for 11th Annual FinTech Innovation Lab New York - FIL announced the 10 startups selected to participate in the 2021 FinTech Innovation Lab New York program, from more than 200 applications across the globe. These companies aim to help financial institutions address key societal challenges, including managing climate risk, operating more sustainably, and developing improved digital products for customers. Read more

Goldman, BofA, JPMorgan line up to fund Nubank’s Mexico venture - Nu Mexico, as the unit is known, is receiving a $70m capital injection from its Brazilian parent company while JPMorgan, Goldman Sachs, and Bank of America will provide revolving credit lines worth $65m, General Manager Emilio Gonzalez said in an interview. Read more

Why Coinbase’s stellar earnings are not what they seem - The FT's Alphaville argues that the stand out concern remains that the current framework under which Coinbase is regulated (a money transmission one) is not at all suited to regulating its broader activities and that It’s easy to be profitable if your real unique selling point is being a beneficiary of regulatory arbitrage. Read more

Millions are tumbling out of the global middle class in historic setback - For the first time since the 1990s, the global ­middle class shrank last year, according to a recent Pew Research Center estimate. About 150m people, a number equal to the populations of the U.K. and Germany combined, tumbled down the socioeconomic ladder in 2020, with South Asia and sub-Saharan Africa seeing the biggest declines. Read more

State Street to provide tech for cryptocurrency trading platform - State Street said it would partner with Pure Digital, a start-up that aims to offer cash cryptocurrency trading for investors through their existing bank relationships, with State Street’s Currenex platform providing the underlying technology. The venue is set to go live in “mid-2021”. Read more

Walnut wants to crack open flexibility for healthcare bills - Its biggest challenge, says Patel, is to underwrite the population and pay the healthcare provider upfront in cash. It then collects from the patient on the back end, which comes with its own amount of risk. Read more

Select Financings


Blue dot - Israel based business tax accounting startup raised $32m in new funding led by Ibex Investors. Read more

Cora - Brazil based technology-enabled lender to small and-medium-sized businesses raised $26.7m in Series A funding led by Ribbit Capital. Read more

CRED - India based bill payment and rewards platform raised $215m in Series B funding led by Falcon Edge Capital and Coatue. Read more

dClimate - New York based decentralized network for climate data raised $3.5m in Seed funding led by CoinFund. Read more

dLocal - Uruguay based cross-border payments startup raised $150m in new funding led by Alkeon Capital. Read more

FinanZero - Brazil based online credit marketplace raised $7m in new funding from VEF, Dunross & Co. and Atlant Fonder. Read more

Finary - San Francisco based social investing platform raised $3.2m in Seed funding led by Upfront Ventures. Read more

Groww - India based investment app raised $83m in Series D funding led by Tiger Global. Read more

Nuvocargo - New York based US and Mexico trade startup raised $12m in Series A funding led by QED Investors. Read more

OneStream - Michigan based corporate performance management software company raised $200m in Series B funding led by D1 Capital Partners. Read more

Orum - New York based platform for financial institutions to move money in real-time raised $21m in Series A funding led by Bain Capital. Read more

Paymob - Cairo based digital payments start-up raised $18.5m in Series A funding led by Global Ventures. Read more

Ramp - New York based provider of digital corporate cards and spend management software raised $115m in Series B funding led by D1 Capital Partners and Stripe. Read more

TipRanks - Israel based stock research platform raised $77m in Series B funding led by Prytek and More Investment House. Read more

TrueLayer - London based open banking platform raised $70m in Series D funding led by Addition. Read more


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