Tech Brew Ride Home - Mon. 11/11 - Apple Eyes An iPhone Replacement

Episode Date: November 11, 2019

New York State is investigating the Apple Card for alleged gender bias, sources say Apple thinks AR glasses could someday replace the smartphone, Dara Khosrowshahi said some things he regrets, and Amazon is gonna launch a grocery store not called Whole Foods. Sponsors: PixelUnion.net PaintYourLife.com: Text RIDE to 64-000. Links: Viral Tweet About Apple Card Leads to Goldman Sachs Probe (Bloomberg) @dhh Thread About the Apple Card (dhh.dk) Uber CEO backtracks after calling Saudi murder of Khashoggi "a mistake" (Axios) Apple Eyes 2022 Release for AR Headset, 2023 for Glasses (The Information) Amazon will launch new grocery store as alternative to Whole Foods (CNET) DoorDash Won Food Delivery by Seizing the Suburbs and $2 Billion (Bloomberg) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme ride home for Monday, November 11th, 2019. I'm Brian McCullough today. New York State is investigating the Apple card for alleged gender bias. Sources say Apple thinks AR glasses could someday replace the smartphone. Darakosha Shahi said some things that he regrets. And Amazon is going to launch a grocery store not named Whole Foods. Here's what you miss today in the world of tech.

Over the weekend, Ruby on Rails creator, David, Heinemeyer Hansen noticed something odd. He and his wife had both applied for one of those new Apple credit cards, which is serviced via Goldman Sachs. But despite the fact that he and his spouse both file joint tax returns, despite the fact that DHS's spouse has a higher credit rating than he does, despite the fact that they live in a community property state and have been married for many years, he was granted a credit limit 20 times greater than the credit limit that she was given. In a profanity-laced tweet storm, which I will link to in the show notes, DHS said, among other things, quote, it gets even worse. Even when she pays off her ridiculously low limit in full, the card

won't approve any spending until the next billing period. Women apparently aren't good credit risks, even when they pay off the effing balance in advance and in full. The customer service experience is infuriating two. They're quick to respond, but nobody is authorized to discuss the credit assessment process. No opportunity to present evidence. Just a, sorry, your wife is deemed to be one-twentieth of the credit worth. You are. Check again in six months, end quote. Well, aside from going viral, the tweet storm also drew the attention of New York State regulators, which have launched a probe into Goldman Sachs, investigating alleged gender discrimination in the Apple Cards' algorithms when determining credit lines.

Quoting Bloomberg, the department will be conducting an investigation to determine whether New York law was violated and ensure all customers are treated equally regardless of sex, said a spokesman for Linda Lacewell, the superintendent of the New York Department of Financial Services. Quote, any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class of people violates New York law, end quote. Apple Card only offers individual accounts, and it is possible for two family members to receive significantly different credit decisions, a Goldman spokesperson said. Quote, in all cases, we have not and will not make decisions based on factors like gender, he said. Hansen said, Goldman's response doesn't explain what happened after he started airing his issues on social media.

As soon as this became a PR issue, they immediately bumped up her credit limit without asking for any additional documentation, he said in an interview. quote, my belief isn't there was some nefarious person wanting to discriminate, but that doesn't matter. How do you know there isn't an issue with the machine learning algo when no one can explain how this decision was made, end quote. So lots of people have come forward subsequently to say the same thing happened to them, including Apple co-founder Steve Wozniak, who tweeted, quote, the same thing happened to us. I got 10x the credit limit. We have no separate bank or credit card accounts or any separate assets. It's hard to get a human for correction, though. It's big tech in 2019, end quote. And as Tarek Crim tweeted, quote,

How do we know a black box algorithm respects the law if we can't have a look at it? AI means algorithmic interference rather than artificial intelligence these days, end quote. Yes, people have been shouting about inherent bias in algorithms for a while now. Actually, the New York DFS just opened a separate probe against United Health group after a study found that its algorithms allegedly prioritized care for healthier white patients over sicker black patients. Kudos to DHH for speaking up, but this is kind of the point. Not everyone has 350,000 Twitter followers, so not everyone attracts notice when they speak out

about something like this. Indeed, as Jamie Heinemeier-Hanson herself said in a blog post this morning, quote, This is not merely a story about sexism and credit algorithm black boxes, but how rich people nearly always get their way. Justice for another rich white woman is not justice at all, end quote. Tara Kosra Shahi put his foot in his mouth over the weekend. In an interview with Axios, Uber's CEO, in a part of the discussion covering the Saudi Arabian government's role as Uber's fifth largest shareholder, Koso Shahi referred to the murder of U.S. resident and journalist Jamal Khashoggi as a, quote, mistake, which the Saudis are taking, quote, seriously. Actually, I'm just going to play you the exact exchange, so I don't mischaracterize it.

The two people you're going to hear talking are Koso Shahi of Uber and Dan Primak of Axios, who, of course, I quote, on this show all the time. My colleague Gabe Rivera tweeted, quote, beware a Dan Premack leaning back in a comfy sofa. It's a trap, end quote. I want to ask you about Saudi Arabia. Last year, you chose not to go to the big Saudi Arabian government's investment conference after the murder of Jamal Khashoggi. And you said that you wanted to wait for more facts to emerge. We're now at a point subsequent to that. The CIA has assessed that the Saudi government, including the Crown Prince, had a role in that murder.

You also decided not to go this year. Did you not go this year because of the Khashoggi situation? We had a board meeting at the same time. Well, that's convenient, but you're the CEO. You probably could have rescheduled that. We scheduled board meetings years and years ahead. It wasn't. If your board meeting had not been that day, would you have gone?

I don't know if I would have. You also, Saudi Arabia is your fifth largest shareholder. You have the head of the sovereign wealth fund on your board. Do you believe he should stand for re-election to the board? I think he's been a very constructive board member, Yasser has. And I personally have valued his. input greatly. It's up to him whether he wants to stand for re-election. But from your opinion, he represents and works for a government which you believe had a role

in the murder of a journalist who was a U.S. resident. Should that person be on the board of a U.S. company? I think that government said that they made a mistake. Well, they made a mistake and somebody's dead. Listen, it's a serious mistake. We've made mistakes too, right? With self-driving and we stop driving and we're recovering from that mistake. So I think that people make mistakes. It doesn't mean that they can never be forgiven.

I think they've taken it seriously. The CIA, the CIA didn't suggest that they made a mistake and it was an oversight. Like, with self-driving, that was basically a bad sensor, correct? The CIA suggested that the Crown Prince had a role in ordering an assassination. It's a different thing. You guys didn't intentionally run somebody over.

I didn't read that part of the CIA report. You're obviously deeper in it. But I think from a Saudi perspective, they're just like any other shareholder, right? It's we, now we're a public company. Anyone can invest in our company if they choose to do so. And they're a big investor, just like you could be a big investor as well. I don't think I can be as big as the Saudis.

That'll be hard. That'll be tough. Kosoashahi released the following subsequent statement. Quote, I said something in the moment that I do not believe. When it comes to Jamal Khashoggi, his murder was reprehensible and should not be forgotten or excused, end quote. Quoting Chris Welch from the Verge. This is truly one of the most insane things a CEO has ever said. Uh, yeah, they brutally murdered and dismembered a journalist.

Our self-driving car mowed someone down. S happens. Live and learn, a fellas, end quote. In a big report, the information is saying that Apple is aiming to release its rumored AR headset, only in 2022, which runs counter to the rumors that that headset would be coming as soon as next year. And actually, if the information is to be believed, that first one is maybe sort of a beta, because a sleeker, more sophisticated pair of AR glasses could be coming in 2023. The details of this timeline were apparently shared with 1,000 Apple employees in October

at an internal event in the Steve Jobs Theater, indicating that Apple sees this as a major initiative, thus everyone needs to be read into the plans, and also that they were okay. K-ish, with the details of this inevitably leaking out, quoting the information. Apple's headset codenamed N301 will offer a hybrid of AR and VR capabilities, according to people familiar with the device. It resembles the Oculus Quest, a Facebook virtual reality headset released earlier this year, but with a sleeker design, these people said. Cameras will be mounted on the outside of the device, allowing people to see and interact with their physical surroundings, they said. Apple wants to make heavy use of fabrics and lightweight materials to ensure the devices comfortable to wear for extended periods of time, executive said in the presentation in October.

The headset will have a high-resolution display that will allow users to read small type and see other people standing in front of and behind virtual objects. The technology will be able to map the surfaces, edges, and dimensions of rooms with greater accuracy than existing devices on the market, executive said at the meeting. To illustrate these capabilities, attendees at the October meeting were shown. a recording of a demonstration in which a virtual coffee machine was placed on a real kitchen table surrounded by people in a room. The virtual coffee machine obscured people standing behind it in the room. Apple is planning to reach out to third-party software developers as early as 2021 to encourage them to build apps for the new hardware, the company told employees at the October meeting. In contrast, Apple's AR glasses, code named N421, present bigger technical challenges

than the headset and are farther from release. They are meant to be worn all day, and current prototypes look like high-priced sunglasses with thick frames that house the battery and chips, according to a person who has seen them. Additionally, Apple has explored the use of lenses for the glasses that darken when people are using AR on them, a way of letting others know the wearer of the glasses is distracted,

said another person involved with the project. Apple applied for a patent for such a feature earlier this year. Apple's senior managers have told employees, They believe later versions of the AR glasses could replace the need for iPhones in roughly a decade, the person said, end quote. So yes, that would be quite ambitious indeed. It continues to be difficult to know what to make of what Amazon makes of its Whole Foods subsidiary. Has the Whole Foods acquisition been a success or a failure, and is it too soon to determine either way? But what can we make of Amazon possibly not being willing to wait to find that out?

According to job listings, Amazon is about to launch a brand new grocery store brand in California next year. The job listings literally describe it as Amazon's first grocery store. Quote, Amazon is opening a grocery store in Woodland Hills in 2020, and Amazon spokesperson confirmed to CNET on Monday morning, soon after the company published four new job postings for the location. Woodland Hills is a neighborhood in Los Angeles. The store will be different from Whole Foods, Amazon said. It didn't say whether it will open more of these locations, what its selection or pricing will be, or what the brand name is.

But in the job's postings, the company described the Woodland Hills location as, quote, Amazon's first grocery store, suggesting that it will have the Amazon brand name and that the company could expand to multiple sites. The store won't use the company's Amazon Go technology, which allows customers to check out without waiting in line. instead checkout will be conventional, as at other grocery stores, the company said, end quote. I mean, I suppose the obvious angle here is that Whole Foods has always been and continues to be high end, right? They don't call it Whole Paycheck for nothing. Plus, with the focus on organic and specialty foods, that still leaves a ton of room for more traditional grocery experiences, especially on the bread and butter, shall we say, Kroger end of the spectrum.

Maybe that's what Amazon is eyeing here. Let me quote again from CNET. When asked if the new store will compete against Whole Foods or signal a move away from investing in that brand, Amazon said no, offering strong support for continuing to grow that business. Quote, when it comes to grocery shopping, we know customers love choice and this new store offers another grocery option that's distinct from Whole Foods market, which continues to grow and remain the leader in quality, natural, and organic food.

The Amazon spokesperson said, noting that Whole Foods opened 17 locations. this year and that more are planned. The spokesperson said Amazon will continue to invest in grocery delivery with Whole Foods, end quote. Finally, as much as we've been discussing otherwise, not every company that has taken gobs of soft bank money has been unable to use that money to find success with. The biggest counterfactual to that particular narrative has to be DoorDash, which has used Massasan's money to focus heavily on expanding to the suburbs and has turned itself from an also-ran to the biggest food delivery app in the U.S. Indeed, a big knock on the whole gig economy was that it focused on the coasts and the cities,

but going in the opposite direction has been, quote, this center of a strategy that secured DoorDash a firm position atop the U.S. food delivery market, said Tony Zhu, DoorDash's chief executive officer. The suburbs, he said, were underestimated by competitors, giving DoorDash the opportunity to forge nationwide exclusivity deals with the likes of the cheesecake factory and chilies. Quote, while our competitors focused on the cities, we focused on the suburbs, said Zhu. That's how we were able to become the market leader, end quote. Helping that has been a $2 billion capital war chest substantially contributed to by SoftBank,

which in its most recent investment helped lift DoorDash's valuation to $12.6 billion. Indeed, that's exactly how SoftBank's strategy was all. always supposed to work. Find a player in a sector, flood them with cash so they could bludgeon the market and crowd out competitors, and someday reap the near-monopoly profits. Indeed, quoting Bloomberg, just a few years ago, DoorDash was struggling to find investors and agreed to cut its share price to raise capital. By late last year, annual sales had tripled, but questions remain about how sustainable the business is. Over the summer, a DoorDash investor prepared an informal presentation, arguing the merits of a sale of the company to Uber, according to a copy of the document obtained by Bloomberg.

Uber, which also counts SoftBank as its largest shareholder, is sitting on $12.7 billion in cash, and its CEO, Darukh Koso Shahi, told analysts on a conference call this week that the company is open to acquisitions in food delivery. However, Koso Shahi has also committed to cut spending in service of turning a profit by 2021. representatives for the companies declined to comment on the prospects of a merger, end quote. So, Uber does have $12.7 billion sitting in the bank, but as long as it needs that cash to create a runway to profitability, it certainly seems like DoorDash would be too big for Uber to swallow, especially at a $12.6 billion valuation for DoorDash. Although I don't know, the way things are going, the two could merge some ways down the road in a manner that would effectively mean DoorDash. would be essentially acquiring Uber. If that ever does happen, make note that I said this, because I'll look like a genius. That is all for today. Hope most of you had the day off.

Talk to you tomorrow.