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THE HEADLINES
POORDASH
Looks like DoorDash has been taking a page out of ‘Business Ethics According to Travis Kalanick.’ The courier (read: hungover Thai food delivery) service has allegedly been underpaying its “dashers” via deceptive practices, for years.
But Rob Schneider in ‘Big Daddy’ has had it up to here with double D applying customer’s tips to guaranteed minimum payments instead of increasing the total paid by the tip amount. “Hold me back!” – Bernie Sanders, probably. Once the press got a hold of the story pressure mounted on DoorDash to make a change …
So, what now?
To save face and quell an uprising of delivery workers screaming “FOOD IN LOBBY!” DoorDash plans to increase guaranteed minimums by the amount of tip a customer adds.
DoorDash surely needed this money to keep its bootstrapped, scrappy startup afloat, right?
Not exactly.
The controversy broke just as DD was raising some $400M. At the time of its last fundraise ($600M) in May, the company was valued at more than $13B. And the company recently inked a deal to deliver food for a burger chain called McDonald’s. Ever heard of it?
SHOOT YOUR SHOT
In what could be the “are you f*ing kidding me?” move of the century, Bernard Madoff has asked Donald Trump to be released from prison. Mind you, ASAP Rocky remains locked up abroad.
Let’s just let that all sink for a bit.
…
…
Look back at it
Bernie Madoff ran the biggest Ponzi scheme in US history, which scammed tens of thousands of investors out of roughly $17.5B. As of last November, $13.3B has been recovered by suing those who profited from their investment.
Bern was arrested in 2008 after being turned in by his two sons, one of which committed suicide on the two-year anniversary of the arrest. Having plead guilty to 11 federal crimes, Bernard was sentenced to 150 years in prison.
The 81-year-old is currently in year 10 of his sentence, of which, if I’m being honest, he probably won’t live to see the end of … even with advances in modern science.
Randall Jackson, a former federal prosecutor who worked the case said what we were all thinking: “That’s hilarious, I’m actually speechless.”
POCKETBOOK
As in, open it.
The FTC affirmed the staggering $5B fine it will slap on Facebook related to the social network’s poor privacy practices. Remember the Cambridge Analytica scandal back in March 2018? Turns out the FTC agreed that it was kinda f*cked up and the ‘Book was at fault.
$5B is by far the largest fine issued by the FTC to a tech company. The previous was a fine on Google (not Alphabet at the time, don’t @ me) for $22.5M.
But wait, there’s more!
Facebook reorganized its board of directors and appointed a Chief Privacy Officer to lead an independent group to review its privacy practices and sign off that the company is compliant. On top of that, Zuckerberg himself will be personally liable for the company’s compliance with strict privacy guidelines.
The SEC joined the fray as well, announcing that Facebook had made misleading disclosures around the risk of misuse of user data. That is, the company has not clearly told users the real reason behind why they keep getting robocalls. Zuck agreed to pay $100M to settle the SEC case. No word on if Uncle Sam has adopted Libra yet.
Quick turnaround
Luckily for Zuck FB released earnings today … and crushed it. Strong earnings and revenue growth helped the company rebound from the unfortunate news of the morning.
A $16.9B revenue in the second quarter was up 28% from a year ago and $2.6B in profit included a $2B charge as part of the FTC settlement. The stock rose modestly to close up just above 1%.
IN OTHER NEWS
iStockphoto
- The US Justice Department doesn’t see why not. The DOJ will (very likely) give its nod of approval to the never-ending proposed $26B Sprint/T-Mobile merger which Johnny Law believed could impede competition in the space. That is until Dish Network offered to take approximately $5B worth of wireless assets off of the two provider’s hands. After testy negotiations, the three came to a deal that the government can live with.
- Just when you think Deutsche Bank has hit rock bottom, it goes all “hold my beer.” Christian Sewing and DB brass can’t even manage to not botch a restructure. The “bank” (if you can really call it that) reported a €3.15B net loss for the quarter, due to a larger than expected restructuring charge (€3.15B vs. €3B). Sewing promises some 18k layoffs, as well as an exit from the equities sales and trading business, will pay dividends down the road.
- “Hard pass” – Chipotle to Beyond Meat. Chipotle isn’t picking up what Beyond Meat is putting down with CEO Brian Niccol indicating that the Beyond Meat is too processed to grace your burrito bowl. Dunkin Donuts, on the other hand, is totally on board with serving the low-grade dog food. Dunkin will serve BYND’s meatless sausage as part of its menu.
- “Told you so!” – Elon Musk, probably. Tesla, for lack of a better word, delivered on its promise to deal investors a less than stellar Q2. Shares of TSLA fell nearly 10% in after-hours trading following the announcement of a per-share loss of $1.12 vs. an expected $0.40 EPS loss. Still, the company reaffirmed its full-year expectation of 360,000 to 400,000 vehicles sold.
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