Tech Brew Ride Home - Thu. 05/07 – Do Lyft Earnings Mean Ride Hailing As An Industry Might Survive?

Episode Date: May 7, 2020

Zoom makes its first acquisition, Google Authenticator now makes it easier to switch phones, Lyft earnings gives hopes to the ride hailing industry, new Sonos gear and a deep dive into Facebook’s new Oversight Board. Sponsors: Tibco.com/ride ExpressVPN.com/techmeme Links: Zoom buys Keybase — its first acquisition — as part of 90-day plan to fix security flaws (CNBC) Google releases unscheduled Android 11 DP4 as first beta pushed back to next month (9to5Google) Google Authenticator app update finally lets you transfer two-factor codes between devices (AndroidCentral) Lyft shares jump 15% as company reports more riders than last year despite coronavirus (CNBC) How Lyft intends to navigate and survive Covid-19 (TechCrunch) Sonos debuts new Arc soundbar, next-generation Sonos Sub, and Sonos Five speaker (TechCrunch) How Facebook’s oversight board could rewrite the rules of the entire internet (Protocol) Facebook Names the 20 People Who Can Overrule Mark Zuckerberg (Wired) A Little Hatred by Joe Abercrombie 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 Tech meme right home for Thursday, May 7th, 2020. I'm Brian McCullough today. Zoom makes its first acquisition. Google Authenticator now makes it easier to switch phones. Lift earnings gives hope to the whole ride-hailing industry, new Sonos gear, and a deep dive into Facebook's new oversight board. Here's what you miss today in the world of tech. Zoom is acquiring Keybase, a 25-person startup. In order to add end-to-end encryption to Zoom video calls, This is a fairly big deal because, first of all, this is Zoom's first ever acquisition in the company's nine-year history, but also because, you know, this is all part of Zoom's 90-day crash course to address its security issues and get folks back being comfortable using Zoom products.

Quoting CNBC, Zoom CEO, Eric Yuan, told CNBC the company needed a solution for users who are demanding the highest level of privacy and certainty that uninvited participants have, no access to their conversations. When Keybase is implemented, the Zoom user who schedules a meeting will be able to choose end-to-end encryption. That setting will prevent anyone from calling in by phone, which is one way people can access meetings and will disable cloud-based recording of the chat. Yuan said, it's critical that users know that the encryption key is not on Zoom's servers, so the company has no access to the contents of the call. In early April, Yuan hired former Facebook security chief Alex Stamos as a consultant. consultant to help the company beef up its efforts after apologizing to users for falling short of

the communities and our own privacy and security expectations, end quote. Within days, Stamos was on the phone with Keybase co-founder Max Crone, and the teams started working toward a deal. Yuan said after he talked with Crone and dug into Keybase's software, he was convinced this was the right deal. With in-person dealmaking off the table because of social distancing requirements, the negotiations took place over Zoom video calls. Terms of the deal weren't disclosed, end quote. Quick heads up about a slight delay that nonetheless could be super important to developers. Google says the Android 11 Beta 1 is being pushed back to June 3rd, about a month behind schedule. However, the final release is still on track for a Q3 debut, quoting 9 to 5 Google.

Recognizing the ongoing state of the world, Google today, quote, decided to add, a bit of extra time in the Android 11 release schedule, end quote. It's specifically pushing back beta 1 and all subsequent milestones by about a month with a final release still on track for Q3. Beta 1 release moves to June 3rd. We'll include the final SDK and NDK APIs with that release and open up Google Play publishing for apps targeting Android 11. The beta 2 moves to July, and Google will reach platform stability with that release. The beta 3 moves. to August and will include release candidate builds for final testing. With final APIs still set for June, Google is providing app developers an additional month to compile and test. Meanwhile, Android 11

DP4 today is focused on performance improvements and iterative updates, end quote. File this one under it's about time. Google Authenticator got its first major update since 2017, which includes a design makeover, but crucially, also makes it easier to transfer accounts between new devices. I know that the last time I upgraded iPhones, I had more than a moment of panic when I realized I hadn't made enough allowance for transferring my two-factor authentication systems. Thankfully, there was a procedure in place, but it was a bit clodgy and made me realize if you want folks to be good digital citizens and use two-factor authentication. for things, you probably need a better system that makes it easier for them to transition devices safely. Well, quoting from Android Central, Google has now added an account export tool letting users export and import any already set up accounts after verifying their identity via pin,

fingerprint, or face unlock. It would then generate a scannable QR code, which you would scan on the new device to complete the transfer. Previously, users had to manually reset up all of their two-factor authentication accounts every time they changed, phones, a process that could deter, some from even setting up on Authenticator to begin with. It still isn't perfect. Competitors like Authi offer CloudSync, while Authenticator is more manual. Imperfect as it is, it's still a far sight better than what existed before. Like all Google updates, it isn't immediately available for everyone via the Play Store, but it should land in a couple of hours, end quote. Sonos has debuted the $799 Sonos Ark Soundbar.

the $699 sub subwifor, and the $4995 speakers, which will all be available globally on June 10th, and all will require Sonos's new S2 app more on that in a second. The new third-generation Sonos sub just got more memory and processing power and a new wireless radio system. The ARC is the successor to the Sonos Beam soundbar, which is now the lower cost option at $399. It's also the first Sonos soundbar with Dolby Atmos support. And quoting TechCrunch, Sonos 5, meanwhile, has the same acoustic design as the Play 5, but with more memory, pricing power, and a new radio on board as well. It also comes in a full white version where the previous generation only offered a white face with a black body.

As mentioned, all three of these will work with the new Sonos S2 app. The company is launching in June, but these speakers will only work with that app. because of the operating system updates the app includes, which brings improved security and support for better audio quality when streaming. That S2 app is the future of the company, but it will come with some compromises for longtime Sonos users. The most important of which is that if you have older Sonos hardware, you'll need to remain on the S1 network. Those devices include some of the oldest that Sonos makes, but it's definitely dangling a carrot for upgraders here with this new lineup to convince them to retire those in order to upgrade to

the new experience, end quote. At the time of this recording, Lyft stock is up 20%, and actually Uber stock is up nearly 8%, seemingly in sympathy. Porque, you might be asking? Well, it's because Lyft reported Q1 revenue yesterday of $955.7 million, up 23% year over year, as its net loss dropped to $398.1 million down from, get this, 1.1.1 billion a year ago. And maybe the most interesting number, or maybe the most interesting number to investors at the moment, is that active rides actually rose 3% year over year in the quarter.

So what is this? Is it another indication that things aren't quite as bad as people fear? And thus, this is a bit of a relief rally. Quoting from CNBC, during a Wednesday earnings call, CEO and co-founder Logan Green acknowledged that COVID-19 had a profound impact. on Lyft's customers and core business. He revealed that for the month of April, rides were down around 75% year over year and were still down 70% last week. The CEO listed ways in which the company has tried to promptly control costs. For example, last Friday, Lyft cut headcount by 17% laying off nearly 1,000 employees and furloughing around 300 others. The company also slashed pay for its non-hourly employees by 10 to 30% and said its board of directors would give up 30% of their cash compensation

during the second quarter of 2020. The company, though, does not anticipate a need for further workforce reductions, executives said on the Wednesday call. In another effort to save money, Lyft has turned off virtually all ride coupons and stopped spending on recruiting new drivers to its platform, at least until rider demand rebounds, end quote. Also, this is quoting from TechCrunch. Lyft's CFO Brian Roberts said Lyft can manage to keep its second quarter adjusted EBITDA loss

under $360 million if rides on its ride share platform remain at April levels, which were down 75% year over year for the remainder of the quarter. Lyft reported Wednesday an adjusted Ibetta loss of $85.2 million in the first quarter. There are some early signs of a recovery. Ridership in the week ended May 3rd was up 21% from the lows experienced in mid-April, according to Lyft. However, Lyft can't afford to simply hope ride share will return. It has to, and already has, enact a plan that will allow it to navigate the pandemic and come out as a survivor.

In other words, Lyft will be judged on how well it can stem the losses and find new revenue streams, end quote. Yes, if I'm reading the T-leaves on Twitter correctly, I think what's going on here is that on some level, there were some investors who were fearful that there was a non-zero percentage possibility that ride-hailing as an entire industry. industry might be completely killed off by this crisis. So by demonstrating that they at least have a plan and some visibility for bare-bones survival, Lyft is allowing those most pessimistic of investors to breathe easier, at least for now. Worth repeating, however, that again, in its most recent week of operations, Lyft still saw rides down 70% year-over-year, and among other things, they're saying there are basically zero airport trips these days, and Lyft says given the crisis, it can offer zero visibility in terms of when it might turn a profit. Also, it has no plans to turn on a food

delivery service, for example, in order to chase new revenue streams, which is interesting for a lot of reasons. And finally, also worth noting, Uber reports its earnings after the bell today, so that's probably out by the time you hear these words. I don't know if you remember this, But Facebook was going to launch a content moderation oversight board that would operate outside of Facebook's control, sort of. In other words, it would be kind of a Facebook Supreme Court, as a lot of people are calling it, which would have the somewhat limited power to overrule Mark Zuckerberg on certain content decisions. Well, the Facebook Oversight Board announced its first 20 members yesterday out of a total of 40, eventually, quoting from Protocol. The board's founding members include a former prime minister of Denmark, a Yemeni Nobel Prize laureate, and a former federal judge nominated by George W. Bush.

If all goes according to plan, this Supreme Court-style body will be up and running by the fall, hearing cases and issuing decisions on what content should or shouldn't be removed from the world's largest. social network. It's a bold idea for Facebook, but the board isn't just for Facebook. In designing this new organization, Facebook's leaders deliberately structured it so that it could have a life beyond the company. To do that, they formed a separate legal trust with an initial $130 million investment from Facebook. But they also empowered that trust to both accept funding from outside Facebook and to form companies of its own. That structure would ensure Facebook CEO Mark Zuckerberg couldn't just shut the board down if he didn't like its decisions. But it also opens up the possibility that the trust might someday spin off additional oversight boards for, say, YouTube,

Twitter, or any other platform that makes content moderation decisions, end quote. Among the other members of the board are the newspaper editor who published the Edward Snowden leaks originally, a Colombian attorney specializing in free speech rights, and quoting Stephen Levy and wired. For now, the board will only consider appeals in cases where Facebook took down user content. Later, it will tackle cases where arguably objectionable content was allowed to stand. It will also limit itself to Facebook's main blue app and Instagram at first. The gravitas of the board is critical because its most significant impact may prove to be its recommendations on changing Facebook policies. Facebook has agreed to follow the board's

decisions on individual pieces of content, but it can't. reject proposed policy changes. The company must explain its reasoning when it rejects the board's suggestions. It is that gray area that will ultimately determine whether these 20 people and the 20 that will join them will make a difference in what almost 3 billion people can post and read on Facebook's properties. Facebook has much to gain by following the board's recommendations because all too often content decisions are a choice between free speech and a safe, wholesome environment, infuriating the losing side of a take-down or leave-up decision. Zuckerberg has long argued that the world doesn't want him as the arbiter of what can be said on

the world's biggest platform. Presumably, he would be delighted if someone else would take the responsibility and the heat for making those big calls. On the other hand, it's possible that some of the board's decisions will make Facebook uncomfortable. The people I spoke to on the board did not rule out at some point re-examining the bylaws that limit the board's purview. What if the board decided to dig into, say, the company's data practices, end quote. As ever with Facebook, lots of people have jaundiced eyes about all of this and have said so on Twitter, but I'm coming around to the opinion that however much the big moves Facebook tends to make, tend to have secondary effects that also just so happen to benefit it

strategically, in ways that are often more primary than the issue at hand, see the pivot to privacy and the whole Lieber thing, for example. there's always the main reason that Facebook is doing something and then there's also the icing on the cake, if you will. But however much there are layers to their intentions, I have come around to believing that their primary motives are often genuine in situations like this. Facebook doesn't think it's qualified to make calls on certain policy things all by itself. It wants help. You can read that as it also wants cover and maybe not fully accountable cover, but whatever. Here's Casey Newton in his newslet.

letter this morning. I'm most sympathetic to concerns that the board's lofty intentions will be overwhelmed by the sheer size of the task. As Sarah Fryer notes, board members are committing to an average of 15 hours a month on the project. David Kay, the United Nations Special Reporter on Free Expression frames the issue this way, quote, difficult content problems often take place at local levels in languages and code that may be impenetrable to those outside. Will the board ever have the bandwidth to address the massive impact Facebook will continue to have in communities worldwide? Will the board, in other words, be more like a band-aid on a massive wound than an appellate body to solve the crises of online speech?

And quote. Alex Stamos, Facebook's former chief security officer, describes how that problem looks from the inside. Quote, law professors love to come up with really thoughtful, complicated mental tests to distinguish between lawful and unlawful, and they are used to make arguments. to highly educated and experienced appellate judges, he tweeted. This kind of thoughtful argumentation is common inside of Facebook's policy team until it breaks upon the rocks of reality, which is that any hard speech decisions have to be made by machines overseen by humans who can apply 30 to 60 seconds of judgment to a case and not judge with weeks as the

timeline, end quote. I think the board can do meaningful work, even if it only tackles the highest profile cases, just as the U.S. Supreme Court has vast influence, even though it only hears a relative handful of cases each year. But by dint of its global scale, Facebook's task is in many ways larger and more complicated than the Supreme Court's. Independent though it may be, the board has to rely on Facebook to design its workflow and apply its decisions. It's far too early to tell whether it will come to be seen as effective or even legitimate. But it seems clear that for as much work as has gone into building the board so far, what follows will make the whole picking of board members look like the easy part, end quote. I know I said that these books give

me agita because they're so grim and violent. And actually I put off starting this for about three months. It's just been sitting on my Kindle. But I did over the weekend start a new Joe Abercrombie book called A Little Hatred. It's the first book in a new trilogy that takes place in the same universe as the First Law trilogy. Now we're following the children of the main characters from the first few books. And again, these books are so dark as to be almost evil in their plotting, I have to admit, but they're compulsively readable. So if you like your fantasy fiction even darker and grosser than Game of Thrones, there you go. Link in the show notes. I learned over the course of the subreddit question and answer that a lot of you all like

when I do share what I'm reading or watching or playing video games, whatever. So there you go. Talk to you tomorrow.