Out of Stock - Instacart, Elon Musk, Cruises, and Crabs
Instacart
For a long time, the business model for any consumer-facing product or service was that you'd sell that product or service for a good price, or offer some other interesting value proposition, and make your profit on the difference between cost and earnings.
In the last twenty or so years, however, new models emerged, thanks in large part to the tech industry. Now, rather than worrying about making a widget for $1 and selling it for $1.50, you could receive a pile of investment money and sell that $1 widget for $.50, while assuring investors you'll drive your competitors out of business within a few years (before the money runs out) and raise your prices to $2 or $3 to make up for it.
What happens when that doesn't work? What if you've built a business on a model that is fundamentally unsound? You've still got employees and investors and executives who desperately want to see a return on their money, and years invested in an idea you've convinced everyone would pay off.
One way to seek profits is via slashing costs, a favored tech startup gimmick. Firing staff may assuage investors, but if you're one of the dozens of gig companies, your cost center is your army of underpaid, exploited temporary laborers.
In advance of last year's IPO, Instacart cut minimum payments to drivers, and has adopted 'stacking', or bundling multiple orders together so a driver has to make multiple stops to pick up and drop off. Customers and drivers hate this practice, but it helps shore up the balance sheet.
Going public means Instacart now has to explain to financial analysts why its core business does not make money, and may lose even more money as states and cities pass laws requiring better pay for gig workers. Unless! What if there was a way to do what Adam Neumann never quite could and convince everyone you're not actually a delivery company - you're a tech-enabled data and advertising platform, actually. Well:
Nearly a third of Instacart’s $2.5 billion in revenue last year came from its “highly profitable” ads and software division, according to its prospectus.
We have talked before about some of the most egregious examples of payola - Amazon is by far the worst - and it is no surprise that Instacart has adopted it. By allowing grocers to compete against one another to get their cucumbers or Hamburger Helper listed above their rivals, Instacart is profiting on both ends. Customers pay a premium for the convenience of grocery delivery, drivers get paid less as the company saddles them with more labor, and large retail chains subsidize all of it with their ad dollars. Brilliant!
The primary problem with Instacart is that the service sucks, for both consumers and drivers. It is wildly inefficient to send a gig worker to stores one at a time, to pick items off shelves. Grocery shopping can be daunting if you know where you're going in the store, and what items you want (or what to substitute when something is inevitably unavailable). Expecting a stranger to do this in a tight window while relaying real time updates via a chat app? Come on.
Instacart claims that their software tools (which grocers also pay for) improve the consumer experience, but this is fundamentally incompatible with how grocery stores work - stocking is not an automated process, meaning many items that show available have not yet made it onto shelves. Instacart shoppers are forced to substitute or cancel portions of an order because of this fundamental disconnect in the way retail stores work. Being unable to meet such a basic minimum criteria as 'the items your app says are in stock are actually in stock' would normally be viewed as a critical business failure, except Instacart has burned billions in investor cash to warp reality. Consumers must accept Schrödinger's Groceries as a necessary evil to avoid spending their precious time at the store, and they largely have.
For drivers, the situation is far worse. They are punished for a grocery clerk's failure to fill a bin of cantaloupes, or Instacart's routing software sending them halfway across town to drop off another order. Shoppers depend on tips, which are impacted by many factors entirely out of their control.
But, the gig companies insist, shoppers can set their own hours! Work whenever they want! Despite touting shopper work as 'flexible', Instacart is anything but:
Instacart encourages shoppers to hang out in parking lots near busy areas identified using color-coded heatmaps, Business Insider reported earlier this year. The company says that being near a busy store improves shoppers' chances of stanching orders.
One of the main defenses gig companies give for classifying their workers as contractors is that they don't dictate their work schedule, but insisting your workers sit in a Safeway parking lot or risk missing out on orders sounds an awful lot like Employer Behavior:
One driver for DoorDash in California said he doesn't mind waiting in parking lots. But he says doing other things on his phone to pass the time, like watching YouTube videos, has made him miss out on decent orders. "It's like being clocked in," he said. "You can't be on your phone."
Believe it or not, there are a few perks - sometimes, Instacart drivers whose orders are cancelled get to keep some or all of the food:
It happens all the time: An Instacart shopper buys a cart full of groceries, then finds out that they are undeliverable because the customer canceled the order last minute or isn't home when they pull up.
But for some shoppers, those kinds of last-minute obstacles are a perk: Instacart often lets shoppers keep all or some of the groceries for free.
Sure, they have to drive orders back to the store and find a staff member to handle a return and make sure it's all accounted for but sometimes, hey, free food! You can eat it while you idle in your car in the parking lot waiting for your phone to ping.
Until recently, Costco would give drivers gift cards for refunded orders which many drivers simply kept for themselves:
Instacart shoppers are sometimes unable to deliver items from Costco after they've been purchased — if a customer isn't home during delivery, for example. Previously, the shopper would return the items to Costco and receive a "Shop Card," or Costco's version of a gift card, with the refund amount.
To recap: Instacart's app shows unreliable inventory, creating more work and friction for shoppers, and if the customer declines, cancels, or ghosts on the order, they're paying the shopper to return everything that can be returned, and simply taking a loss on what can't be. Who thought this was a good business model?
That is not to say it can't be done - Walmart's grocery delivery program makes more sense on its face, because Walmart controls the inventory, Walmart employees pack orders, and Walmart can more efficiently handle returns to its stores. Problem is - even Walmart resorts to gig labor exploitation with its Spark program. Is that an indication that even in a tightly run supply chain like Walmart's, grocery delivery is so inefficient and unprofitable it must rely on wanton labor exploitation to make sense? Maybe!
Grocery shopping is a miserable experience in a store set up to assault you from every vantage point with the bristling weapons of capitalism's most unpleasant industries. Forcing someone to submit to this multiple times a day feels Sisyphean.
Instacart lost two billion dollars last quarter, which somehow beat Wall Street expectations. The markets have decided that gig grocery delivery is something society needs so badly it's worth blowing billions and grinding a dwindling independent workforce into dust to make it happen.
Elon Musk
There is a version of Elon Musk's story you could tell which goes something like: one of the richest people in human history also happens to be an easily-distracted, attention starved, drug abusing narcissist who does not in fact have the mental capacity to run a bunch of disparate, often ill-conceived businesses.
It is quite difficult to run even one multi-billion dollar business by yourself, which is why no one does it. Mark Zuckerberg may have super voting shares giving him effective control over Facebook, but he needed Sheryl Sandberg and an army of lieutenants to actually run the it - many of Zuck's rogue big ideas turned out to be huge money losers.
Musk is known for not only spinning up business ideas and handing them off to anonymous toadies, but meddling personally in those businesses whenever he feels like. It's why no one can take his hiring of an NBC business ghoul to 'run' Twitter seriously - it's obvious to anyone with any proximity to the news that Lil' Yaccy's role is as meaningless as her weird #brands non sequiturs.
So, what is up with all of Elon's various businesses? He raised $450 million dollars for Hyperloop One, which built a small track in the Vegas desert, and is now shutting down and quietly selling off its assets. By all accounts it was a very normal company to work at:
Co-founder Brogan BamBrogan once arrived at work to find a noose on his chair. And another co-founder, the venture capitalist Shervin Pishevar, stepped aside after Bloomberg reported on sexual harassment allegations against him, which he denied. A one-time director, Ziyavudin Magomedov, was arrested in Moscow on charges of fraud and embezzlement unrelated to Hyperloop One.
What about the Boring Company? It actually built a couple tunnels, the most well-known serving as a way for dead-eyed CES conference attendees to spend $30 dollars traveling a mile to the convention center. Considering Boring has raised a ton of money, you'd expect more than one or two commuter tunnels, right?
The Boring Company has raised more than $795 million from venture capitalists on Musk’s big idea: underground, multi-station roadways where autonomous vehicles could shoot off individuals to their destination at speeds of 150 miles per hour. But on the ground, after seven years, Boring is only operating a mere 2.4 miles of operational tunnel, according to Las Vegas agencies and contracts reviewed by Fortune. Meanwhile Boring projects from California to Illinois, Texas, Florida, and Maryland have all fizzled or been disbanded.
Reinventing the subway, it turns out, isn't either easy or politically popular. Go figure!
What about xAI, Elon's attempt to build a chatbot unafraid to utter racial slurs in between forced snark that would make Douglas Adams spontaneously combust? Allegedly, Musk has tapped half a billion in funding for his vague AI promises, reporting he denies. Maybe part of the deal was to keep quiet about his investors lest they die of embarrassment after being roasted by Grok.
Tesla? Surely Elon's wildly valuable car company isn't suffering the same lurching fate as his other distractions? Cybertruck is on track to be the disaster literally everyone not in Musk's thrall predicted it would be. And, for some reason, Elon continues to push ahead with plans to make autonomous Tesla robots, except the robot he recently debuted was basically just a mannequin hooked up to a human in a Power Glove controlling it (mostly) off camera? These stumbles come on the heels of Musk demanding huge new stock grants to continue to 'focus' on Tesla and not spin all his new creations off into new companies which, as we've seen, is one way to ensure they fail.
Why has Elon become so focused on getting more Tesla shares? Perhaps because he sold a huge chunk of them and took on significant personal debt to buy...Twitter! Which is doing just great, thank you very much. In Twitter, Elon has found the ultimate business distraction. If you told a normal person who hadn't been subjected to years of Internet poisoning that the world's richest man spends the bulk of his time on a message board writing replies to anonymous accounts with Greek statue avatars, they might worry you'd sustained a concussion.
But! Twitter has captured and maintained Musk's attention precisely because it is as veering and chaotic as his attention span. Building cars and rocket ships and tunnels is boring (pun intended) precisely because it is slow, laborious work with no immediate payoff. Spewing your brain soup onto a captive audience of ravenous sycophants is instant, perpetual gratification.
I do believe that Elon desperately wants to make Twitter into a successful business. Not only because he sunk a large chunk of his available personal wealth into it, but because he is obsessed with it and, as others have pointed out, was its number one power user. Now, he site has become an extension of his id, plugging the gaps left by angry ex-wives and resentful children.
It is equally obvious that the man has absolutely no clue how to run Twitter, his Big Business Ideas hopelessly stuck in the early 2000s, the last time he ran a software company.
Which brings us to his latest brainwave, an obsession with turning Twitter into The Video Platform (whatever that means) presumably to supplant YouTube or TikTok, an idea ridiculous on its face even before you take into account the site's tiny user footprint compared to its two larger rivals. How does Musk intend to turn Twitter into a video powerhouse? Bribing one of the world's biggest video content creators to use the platform.
MrBeast posted a video on Twitter last week and Musk was desperate to make sure it did well. So he did the obvious thing, when you are a powerful man personally in charge of a tech company and no one can refuse you - he artificially juiced the stats:
X has an ad product called “Amplify Pre-roll” which allows advertisers’ to run video ads before a publishers’ video content. In the case of the MrBeast video, a Shopify ad ran in front of it. And when a post contains a video that has an Amplify Pre-roll ad in it, the post is promoted into users’ feeds like an ad, except it isn’t labeled.
I could fill a second newsletter with how wild this concept of 'advertising' is - that an advertiser can pay to boost a creator's content and the creator gets cut and also gets free reach? What? If this ad unit predates Musk I apologize but reading these words broke my brain because I have never encountered this structure in my years of running ads on social and search platforms.
Anyhow, MrBeast called this out which has resulted in a site-wide meltdown among the Twitter paid checkmarks, who had been promised (by Elon!) that they would be able to monetize their posts in exchange for giving the site money. By caping for a YouTuber, Elon has alienated his diehard bigot brigade, an excellent surprise outcome.
There's also the fact that Elon is basically paying MrBeast out of Twitter's pocket at this point - there is no way his sponsors are covering the quarter million-dollar advertising bill he racked up in three days. The funniest possible outcome would be for MrBeast to continue to milk Elon for millions a week while Twitter users go into full revolt over company funds being funneled to a guy nowhere near racist enough to be popular on Twitter.
Elon has tried to start many ill-advised offshoot businesses in recent years, but his obsession with Twitter may pose a threat to his entire empire, the more he merges the website with his terrible personality.
Cruises
We have talked in the past about the awful conditions for employees (and sometimes passengers) aboard cruise ships, and the disreputable companies who dominate the industry. None of this has stopped it from bouncing back from the COVID-19 slowdown - even during the height of the pandemic people were literally clamoring to be let back aboard their floating disease factories.
Whatever your opinion on cruises may be, people fucking love getting aboard big ol' boats with water slides and seventeen bars and maybe a little deadly bacteria in the hot tub.
But! Did you know that cruise ships are also incredibly bad for the environment?
[Bryan Comer's] analysis found that a person taking a US cruise for 1,200 miles (2,000 kilometers) on the most efficient cruise line would be responsible for roughly 1,100 pounds (500 kilograms) of CO2, compared with 518 pounds (235 kilograms) for a round-trip flight and a stay in a four-star hotel. In other words: Taking a cruise generates “about double the amount of total greenhouse gas emissions” as flying, Comer says.
Not to mention, “usually people fly to take a cruise,” notes Stella Bartolini Cavicchi, marine policy advisor at OceanMind
Listen, this will be the last place to parrot oil industry 'carbon footprint' propaganda. We should not waste our time shaming individual cruisers, who are probably perfectly nice people with friends and families who are understanding of their strange mental disorder.
It is the boats themselves that are bad, because of course a giant ship spewing pollution into the pristine natural habitats it is carrying thousands of drunk vacationers to see is a net negative:
Cruise ships’ climate impact isn’t limited to emissions that trap heat in the atmosphere. The enormous vessels also spew a soot-like substance known as black carbon, which absorbs sunlight and traps heat on the ground. In the Arctic, which is playing host to a growing number of cruises, black carbon can settle on snow and ice, speeding up the rate at which glaciers melt. Bartolini Cavicchi says that while cruise ships account for around 1% of the global fleet, they’re responsible for 6% of black carbon emissions.
Cruising to see the glaciers is melting them faster, sure, great. One reason for the lack of serious scrutiny towards cruise lines is large ships are thought to be more efficient than planes, which is true if you are talking about cargo ships, which are nearly entirely made up of tightly packed goods being sent somewhere. Cruise ships, on the other hand, are open, palatial spaces filled with a much smaller number of people whose entire day is spent enjoying energy-intensive attractions like activities, food, and entertainment.
Lastly, cruise ships often idle in port with their engines on, belching that same soot and pollution out across idyllic islands whilst spewing forth thousands of plump, pink tourists to wander the port for a few hours buying tchotchkes and taking selfies.
Crabs
The crisis first began in early 2022, after biologists discovered an estimated 10 billion crabs disappeared — a 90% plunge in the population.
"The first reaction was, is this real? You know, we looked at it and it was almost a flat line," said Ben Daly, a research coordinator with the Alaska Department of Fish and Game.
A recent survey of the species showed little sign of a rebound.
Remember those marine heat waves we talked about awhile back? Well, turns out they might be killing Alaskan snow crabs, to the point the fishing industry (which should be the least of our concerns) may collapse.
Alaska has cancelled the snow crab season entirely for the second year in a row, and while there's a chance the crab colonies may have moved elsewhere and will take some time to find, the most obvious explanation - humanity cooking the planet - is probably the right one.
Short Cons
WIRED - "...none of the top right-wing news outlets surveyed, including Fox News, the Daily Caller, and Breitbart, block any of the most prominent AI web scrapers, which also include Google’s AI data collection bot."
Rolling Stone - "But it may not matter how the high court rules if Republicans win the presidency next November. That’s because GOP operatives have already crafted an expansive blueprint, 887 pages long, laying out in painstaking detail how they intend to govern, including plans to leverage virtually every arm, tool and agency of the federal government to attack abortion access."
Auto Evolution - "Recent tests show that Tesla hasn't fitted an optical anti-pinch sensor on the Cybertruck's frunk and relies on a resistance sensor within the motor instead. While this works in certain situations, it does a lousy job of protecting your fingers when closing."
The Atlantic - "What the people who now want us to ignore the Fourteenth Amendment are arguing is that certain aspects of the Constitution ought to be nullified merely by their unpopularity—not even necessarily among a majority of voters but among a subset of extra-special voters."
WIRED - "“It’s really just junk science to consider something like this,” Jennifer Lynch, general counsel at civil liberties nonprofit the EFF, tells WIRED. Running facial recognition with unreliable inputs, like an algorithmically generated face, is more likely to misidentify a suspect than provide law enforcement with a useful lead, she argues."
Good Authority - "A majority (56%) of those surveyed in a February 2023 Pew poll said that focusing on increasing diversity, equity, and inclusion in the workplace is mainly a good thing, compared to just 16% who thought it was mainly a bad thing."
Fortune - "While some analysts on Wall Street expect certain barometers to go back to pre-pandemic levels, others are cautioning that settling of certain economic headwinds isn’t an indication of a return to 2020—it’s merely the establishment of a “new” normal."
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