After years of losses, African e-commerce giant Jumia claimed significant progress towards profitability in its Q4 2020. Backing that claim, Jumia reported record gross profit and some improvements to its cost structure.
The company wrote in its earnings release that while “2020 has been a challenging year operationally with COVID-19 related supply and logistics disruption,” it had also proven “transformative” for its business model.
Let’s examine its financial results to see how Jumia fared during the pandemic year and see if we can see the same path to profitability discussed in its written remarks.
Jumia’s core metrics were uneven in 2020. The company saw its user base grow by 12% in 2020, from 6.1 million customers in 2019 to 6.8 million customers. That means the company added 700,000 customers in 2020 compared to the 2 million customers it acquired the year before.
Other metrics were negative. The company’s gross merchandise value (GMV), the total worth of goods sold over a period of time, grew 23% from the previous quarter to €231.1 million. The company said this was a result of the Black Fridays sales in the quarter. However, when compared year-over-year, Q4 GMV was down 21% “as the effects of the business mix rebalancing initiated late 2019 continued playing out during the fourth quarter of 2020,” Jumia wrote.
In terms of orders made on the platform, Jumia saw a 3% year-over-year drop from 8.3 million in Q4 2019 to 8.1 million in Q4 2020. But while the company’s metrics were mixed during Q4 and the full-year 2020 period, there were encouraging signs to be found.
Last year, Jumia’s Q4 gross profit after fulfillment expense was €1.0 million. We reported at the time that the number’s positivity was commendable if merely another mile of the company’s path to profitability.
The company built on that result in 2020, allowing it to report a record gross profit after fulfillment expense result of €8.4 million in the final quarter of last year. From a full-year perspective, the numbers are even starker, with Jumia managing just €1.5 million in 2019 gross profit after fulfillment expense; in 2020, that number grew to €23.5 million.
That Jumia managed those improvements while seeing its 2019 revenues of €160.4 million slip 12.9% in 2020 to €139.6 million is notable.
JumiaPay and improvement in losses and expenses
There are other metrics that are encouraging for Jumia.
Its gross profit reached €27.9 million in 2020, representing a year-over-year gain of 12%. Sales and Advertising expense decreased year-over-year by 34% to €10.2 million, while General and Administrative costs, excluding share-based compensation, came to €21.8 million in the year, falling 36% year-over-year.
In 2019, Jumia incurred a massive €227.9 million in losses, a 34% increase from 2018 figures of €169.7 million. But that changed last year as Jumia reported a smaller €149.2 million in operating losses, representing a 34.5% decrease from 2019.
Turning from GAAP numbers to more kind metrics, Jumia’s Q4 2020 adjusted EBITDA loss also decreased. The company recorded an adjusted EBITDA of -€28.3 million in the final quarter of 2020, falling 47% year-over-year from 2019’s €53.4 million Q4 result. For the full 2020 period, Jumia reported €119.5 million in adjusted EBITDA losses, down 34.6% from FY19’s -€182.7 million result.
Jumia lost less money on an adjusted EBITDA basis in 2020 of any of its full-year periods we have the data for. Still, the company remains deeply unprofitable today and for the foreseeable future.
Jumia’s fintech product, JumiaPay, has been a factor behind its improving metrics.
In Q1 2020, it processed 2.3 million transactions worth €35.5 million. That number grew to €53.6 million from 2.4 million transactions in Q2 2020. In the third quarter of last year, it recorded 2.3 million transactions with a payment volume of €48.0 million. For Q4, JumiaPay performed 2.7 million transactions worth €59.3 million.
In total, JumiaPay processed 9.6 million transactions with a total payment volume (TPV) of €196.4 million throughout 2020. TPV increased by 30% in Q4 2020 from its 2019 result and 58% in 2020 as a whole.
JumiaPay is a critical part of Jumia’s business, as 33.1% of its orders in Q4 2020 were paid for with the service, up from 29.5% in Q4 2019.
Share price and optimism around profitability
Jumia went public in April 2019. Since opening as Africa’s first tech company on the NYSE at $14.50 per share, the company’s stock has been on a rollercoaster ride.
It traded at $49 per share at one point before battling with scepticism about its business model, fraud allegations, and shorting by Andrew Left, a well-known short-seller and founder of Citron Research. What followed was the company’s share price crashing to $26 before reaching an all-time low of $2.15 on the 18th of March 2020.
Later, Left made a reversal after claiming Jumia had handled its fraud problems. He took long positions at the company and later proposed it would hit $100 per share. That change in market sentiment, coupled with the fact that Jumia changed its business model and halted operations in Cameroon, Rwanda, and Tanzania, enabled its share price to climb back, reaching an all-time high of $69.89 this February 10th.
Before today’s earnings call, Jumia was trading at $48.81. Since dropping its latest data, the company’s share price has expanded by around 10% to just over $54 per share as of the time of writing, indicating investor bullishness despite its continued operating and adjusted EBITDA losses.
Oak HC/FT general partners Annie Lamont, Andrew Adams and Tricia Kemp invested in healthcare and fintech before the two sectors were mainstream, and today, as a result of that early intuition and a handful of key exits, the trio has over a billion dollars in new fund money to show for it.
The firm announced today that it has secured $1.4 billion for its largest fund to date, an investment vehicle that will exclusively back healthcare and fintech companies. The firm previously raised $500 million, $600 million and $800 million for its other funds, respectively. Doing quick math, Oak HC/FT, which closed its first fund in 2014, has been able to triple its total assets managed in six years.
Over the history of its fund, the team has outlined six notable exits, including Anthem’s acquisition of Aspire Health, Thermo Fisher Scientific’s acquisition of Core Informatics, Diplomat’s acquisition of LDI Integrated Pharmacy Services, AXA Group’s acquisition of Maestro Health, GoDaddy’s acquisition of Poynt and Limeade’s public debut. The firm declined to share any numbers around IRR, or share information on what percent of current portfolio companies are planning to go public and which are best capitalized to do so.
Today’s fund, its fourth to date, will be invested across 20 companies, with average check sizes between $60 million and $100 million. Oak HC/FT invests in both early-stage and growth-stage companies. The fresh capitalization comes during a watershed moment for the two sectors, heavily impacted by the coronavirus pandemic from an innovation and adoption perspective.
For example, digital health funding broke records in 2020, attracting over $10 billion in the first three quarters and increase in deals by investors, compared to the previous year. Fintech, despite an uneven beginning, has been tearing through capital to meet with demand, and valuations continue to skyrocket.
From a healthcare perspective, Adams told TechCrunch that it is looking at startups working on the cost of delivering care and ability to engage with complex patients. Lamont said that “virtualization of [both doctors and patients] has been incredible in the last year,” and that much of the firm’s focus is on startups that rely on providers taking risk. The investor is hinting at the big push of startups that are betting that value-based care will replace fee-for-service care. The former rewards service for money, instead of time for money, placing monetary incentive for doctors more on outcomes than number of visits it takes to get to an outcome.
I asked the team if telehealth was no longer as big of a question mark for them, since the pandemic has accelerated adoption. But Lamont argued that telehealth is still “unbelievably complicated to pull off at scale, which is less obvious to the public.” The firm is looking for startups who can bring a consumer experience to telehealth, taking the place of an in-person receptionist.
The firm is also looking at startups that blend its two expertises, healthcare and fintech, around payments and digitization of billing. Kemp said that the firm is less interested in standalone point-of-sale services for restaurants and bills, and are now looking at items that reduce friction with payments. One of its e-commerce optimization portfolio companies, Rapyd, raised $300 million at a $2.5 billion valuation in January.
Other subsectors of interest include digital consumer payments, as shown by portfolio companies Namogoo and Prove, and fraud and risk identification, as shown by portfolio companies Au10tix and Feedzai.
On the diversity front, Oak HC/FT said that within its portfolio, 26% of C-suite and executive leadership roles are held by women, and 52% of senior management roles are held by women.
The firm has invested in nearly 100 startups to date. Of the 35 investments it made in 2020, 20 of the deals were follow-on rounds.
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Help! Our startup needs to hire 50 engineers in artificial intelligence and related fields ASAP. Which visa and green card options are the quickest to get for top immigrant engineers?
And will Biden’s new immigration bill help us?
— Mesmerized in Menlo Park
I’m getting this question quite frequently now as more and more startups with recent funding rounds are looking to quickly expand. In the latest episode of my podcast, I discuss some of the quickest visa categories for startups to consider when they need to add talent quickly.
As always, I suggest consulting with an experienced immigration lawyer who can help you quickly strategize and implement an efficient and cost-effective hiring and immigration plan. An immigration lawyer will also be up to date on any immigration policy changes and plans in the event that the Biden administration’s U.S. Citizenship Act of 2021 passes. It was introduced in the House and Senate this month.
That proposed legislation would enable more international talent to come to the U.S. for jobs and clear employment-based visa backlogs, among other things. Given the legislation’s substantial benefits offered to employers, I encourage your startup — and other companies — to let congressional representatives know you support it.
Given that most U.S. embassies and consulates remain at limited capacity for routine visa and green card processing due to the pandemic, it is generally quicker to hire American and international workers who are already in the U.S. Although U.S. Citizenship and Immigration Services (USCIS) is experiencing substantial delays in processing cases due to the coronavirus, as well as an increase in applications, Premium Processing is currently available for most employment-based petitions. We are still able to support many folks with U.S. visa appointment scheduling at consulates abroad using various national interest strategies.
With all of that in mind, here are the visa categories that offer the quickest way to hire international talent.
Hiring individuals by transferring their H-1B to your startup can be completed in a couple of months with premium processing. Premium processing is an optional service that for a fee guarantees USCIS will process the petition within 15 calendar days.
What’s more, H-1B transferees can start working for your startup even before USCIS has issued a receipt notice or made a decision in the case. You just need to make sure that USCIS received the petition, which is why I always recommend sending all packages to USCIS with tracking.
Premium processing can help to get a digital receipt as the paper receipts are often backlogged. I stopped suggesting this route during the Trump administration, but am feeling more comfortable providing it as an option under the Biden administration. The H-1B is the only type of visa that allows somebody to start working upon the filing of a transfer application.
Kapor Capital, the venture firm focused on funding social impact ventures and founders of color, is raising a $125 million fund, called Fund III, a source familiar with the situation told TechCrunch.
What’s notable about this fund is that it will be the first time Kapor Capital is accepting outside money from investors for a fund. Historically, the capital have come directly from Kapor Capital founders Mitch Kapor and Freada Kapor Klein.
The fund will be led by Kapor Capital partners Brian Dixon and Ulili Onovakpuri. The two will function as co-managing partners.
Onovakpuri was promoted from principal to partner back in 2018. At the time, she told me was interested in technology that makes access to healthcare more accessible, either through reimbursements to low-income people or through subsidized payments. On the people operations side, Onovakpuri said she was looking at investing in startups that help create inclusive cultures.
“What we have found is that more needs to be done in order to keep [people from diverse backgrounds] in and happy, so that’s what I’ve invested in,” Onovakpuri said.
Her co-manager, Dixon, became one of the first Black investors to be promoted to partner at a venture capital in 2015. At the time, Dixon told me he was focused on increasing the number of founders who identify as women and/or an underrepresented person of color in Kapor Capital’s portfolio to above 50%.
“As partner, that’s what I’m trying to continue to do,” Dixon said at the time. “We’re still looking for the best companies. We’re still looking for companies that are going to be impact companies, but also have VC-like returns, so I think that’s what unique about Kapor Capital, is that not many early-stage firms have that focus, and we think we do it pretty well.”
Today, 59% of the companies in Kapor Capital’s portfolio have a founder who identifies as a woman and/or an underrepresented person of color. Kapor Capital has been instrumental in advancing diversity and inclusion in the tech industry. Back in 2016, for example, Kapor Capital began requiring new portfolio companies to invest in diversity and inclusion as part of a Founders’ Commitment.
Kapor Capital has invested in companies like AngelList, Pigeonly, Bitwise Industries, Blavity, Bloc Power, Hustle and others.
Kapor Capital declined to comment for this story.
Lithium-ion batteries power almost every new phone, laptop and electric vehicle. But unlike processors or solar panels, which have improved exponentially, lithium-ion batteries have inched along with only incremental gains.
For the last decade, developers of solid state battery systems have promised products that are vastly safer, lighter and more powerful. Those promises largely evaporated into the ether — leaving behind a vapor stream of disappointing products, failed startups and retreating release dates.
For the last decade, developers of solid state battery systems have promised products that are vastly safer, lighter and more powerful.
A new wave of companies and technologies are finally maturing and attracting the funding necessary to feed batteries’ biggest market: transportation. Electric vehicles account for about 60% of all lithium-ion batteries made today, and IDTechEx predicts that solid state batteries will represent a $6 billion industry by 2030.
Electric vehicles have never been cooler, faster or cleaner, yet they still account for only around one in 25 cars sold around the world (and fewer still in the United States). A global survey of 10,000 drivers in 2020 by Castrol delivered the same perennial complaints that EVs are too expensive, too slow to charge and have too short a range.
Castrol identified three tipping points that EVs would need to drive a decisive shift away from their internal combustion rivals: a range of at least 300 miles, charging in just half an hour and costing no more than $36,000.
Theoretically, solid state batteries (SSB) could deliver all three.
There are many different kinds of SSB but they all lack a liquid electrolyte for moving electrons (electricity) between the battery’s positive (cathode) and negative (anode) electrodes. The liquid electrolytes in lithium-ion batteries limit the materials the electrodes can be made from, and the shape and size of the battery. Because liquid electrolytes are usually flammable, lithium-ion batteries are also prone to runaway heating and even explosion. SSBs are much less flammable and can use metal electrodes or complex internal designs to store more energy and move it faster — giving higher power and faster charging.
“If you run the calculations, you can get really amazing numbers and they’re very exciting,” Amy Prieto, founder and CTO of solid state Colorado-based startup Prieto Battery said in a recent interview. “It’s just that making it happen in practice is very difficult.”
Prieto, who founded her company in 2009 after a career as a chemistry professor, has seen SSB startups come and go. In 2015 alone, Dyson acquired Ann Arbor startup Sakti3 and Bosch bought Berkeley Lab spin-off SEEO in separate automotive development projects. Both efforts failed, and Dyson has since abandoned some of Sakti3’s patents.
Prieto Battery, whose strategic investors include Stout Street Capital and Stanley Ventures, venture arm of toolmaker Stanley Black & Decker, pioneered an SSB with a 3D internal architecture that should enable high power and good energy density. Prieto is now seeking funding to scale up production for automotive battery packs. The first customer for these is likely to be electric pickup maker Hercules, whose debut vehicle, called Alpha, is due in 2022. (Fisker also says that it is developing a 3D SSB for its debut Ocean SUV, which is expected to arrive next year.)
Another Colorado SSB company is Solid Power, which has had investments from auto OEMs including BMV, Hyundai, Samsung and Ford, following a $20 million Series A in 2018. Solid Power has no ambitions to make battery packs or even cells, according to CEO Doug Campbell, and is doing its best to use only standard lithium-ion tooling and processes.
Once the company has completed cell development in 2023 or 2024, it would hand over full-scale production to its commercialization partners.
“It simply lowers the barrier to entry if existing producers can adopt it with minimal pain,” Campbell said.
QuantumScape is perhaps the highest profile SSB maker on the scene today. Spun out from Stanford University a decade ago, the secretive QuantumScape attracted funding from Bill Gates and $300 million from Volkswagen. In November, QuantumScape went public via a special purpose acquisition company at a $3.3 billion valuation. It then soared in value over 10 times after CEO Jagdeep Singh claimed to have solved the short lifetime and slow charging problems that have plagued SSBs.
Kaleido, makers of a drag-and-drop background removal service for images and video, have been acquired by up and coming digital design platform Canva. While the price and terms are not disclosed, it is speculated that this young company may have fetched nearly nine figures.
It’s the right product at the right time, seemingly. In 2019, the Vienna-based Kaleido made remove.bg, a quick, simple, free, and good-enough background removal tool for images. It became a hit among the many people who need to quickly do that kind of work but don’t want to fiddle around in Photoshop.
Then late last year they took the wraps off Unscreen, which did the same thing for video — a similar task conceptually, but far more demanding to actually engineer and deploy. The simplicity and effectiveness of the tool practically begged to be acquired and integrated into a larger framework by the likes of Adobe, but Canva seems to have beaten the others to the punch.
The acquisition was announced at the same time as another by Canva: product mockup generator Smartmockups, suggesting a major product expansion by the growing design company.
“We completely bootstrapped Kaleido with no investors involved from day one,” said co-founder and CEO of Kaleido, Benjamin Groessing, in a press release. “It has just been two founders and an incredible team. We’ve been profitable from the start — so this acquisition wasn’t essential for our existence. It just made sense on so many levels.”
The company declined to provide any further details on the acquisition beyond that the brand and name are expected to survive — at least Unscreen, which makes perfect sense as a product name even under another company.
German outlets Die Presse and Der Brutkasten cited sources putting the purchase “reiht sich dahinter ein” or in the same rank as the largest Austrian exits (the largest of which was Runtastic at €220M), though still in the two-digit millions — which suggests a price approaching $100M.
Whatever the exact amount, it seems to have made the team very happy. And don’t worry – they put that image together using their own product for each person.
Should you try to get your startup into an accelerator program? How do you make the right impression on the application? Where does your team need to be before you apply — and once you’re in, how do you make the most of your time in the program?
Join us at the TechCrunch Early Stage event in April, where Neal Sáles-Griffin, managing director of Techstars Chicago, will help us figure it all out.
Neal has seen this industry from just about every angle — as a teacher, advisor, investor and repeat co-founder. In 2011 he co-founded what is often referred to as the “first coding bootcamp,” with The Starter League, acquired by New York’s Fullstack Academy in 2016. In addition to leading the way at Techstars Chicago, he is also a venture partner at MATH Venture Partners, an early/middle-stage VC fund.
TC Early Stage — happening on April 1st and 2nd — is an event that we’ve tailored to be absolutely packed with information for early-stage founders, with key insights from the investors, founders and executives who’ve been through it all before. Day one will cover everything from fundraising, to honing your pitch deck, to finding product market fit; day two transitions into what we’ve dubbed the TC Early Stage Pitch-Off, where 10 companies will get a shot to pitch an incredible line-up of VC judges.
Oh, and it’s all fully virtual, so you can tune in straight from the comfort of your couch. You can find more details here, or get your tickets directly below.
Genealogy tracking online is a big business, and today comes some M&A news for one of the bigger names in the field. TechCrunch has learned and confirmed that Israel’s MyHeritage.com — a profitable site that lets people test DNA and track their family lineage and has some 62 million users — is getting acquired by Francisco Partners, for a price that a source close to the deal tells us is $600 million.
A spokesperson for MyHeritage confirmed the deal to TechCrunch over the phone but not the price. Francisco Partners has not responded to our request for comment but we’ll update this post as we learn more.
From what we understand the deal will be announced officially very soon. Update: we now have received a press release, so I guess that makes it “official.”
The market for DNA tests and genealogy research is generally a very fragmented one, but within that MyHeritage has been an early player — it has been around since 2003 — and a prolific one at that.
In addition to its 62 million active users of its site — which is available in 42 languages — it also has a database of some 13 billion historical records. Users have built and expanded on some 58 million family trees on its platform. It’s also run nearly 5 million DNA tests for its users.
Pricing for the service starts at free for limited use and goes up in several increments starting at $129/year through to $319/year depending on usage and features that you want to use. DNA kits cost $59.
The deal is a confirmation, if one is needed, that the hunting down of DNA lineage and family trees — perennial hobbies for people looking for more links to their histories — can be be big business.
“When I founded the company from my home eighteen years ago, I had a clear vision that drove me, and continues to drive me today – to make family history discovery easier using technology and to unlock the fun in genealogy: the human pursuit that bonds people,” said Gilad Japhet, founder and CEO of MyHeritage, in a statement. “With the help of an excellent and dedicated team, years of hard work, and with constant technological innovation, we created new and exciting ways for people to learn about their origins.
“In Francisco Partners we see a true partner for our journey ahead, not only demonstrated by the trust they are placing in our company through this acquisition, but in their desire for us to remain true to our vision by continuing along our path and helping us do what we do best – putting our users first and giving them life-enriching, and sometimes life-changing, experiences. This move will enable us to reach new heights, invest more resources in creating greater value for our users and to reach a larger audience. We’re incredibly excited for this next chapter in our company’s evolution.”
Indeed, while MyHeritage is already profitable this deal represents a moment for the company (and its new owner) to double down on investing in what it does already and expanding its services to the next level. It has grown in part through some 11 acquisitions to date, so making more consolidating purchases might be part of that.
It will also hopefully include investment in its cybersecurity.
MyHeritage has had a colorful, not always positive, profile in the public eye. It emerged as a key player in solving one of the most elusive murder cases in decades, the hunt for the Golden State Killer.
But is has also been the subject of a major data breach, compromising some 92 million accounts in 2018. Account details of some MyHeritage users were part of a huge trove of personal details — collated from a number of breaches of several sites — that were posted for sale online in 2019.
It also runs pro bono work including DNA Quest, for adoptees to find their biological families; and Tribal Quest, to help document the family histories and cultural heritage of remote tribes around the world. It has been running a Covid-19 testing lab in Israel as well to better track the spread of the coronavirus.
The deal is coming at a time when another major DNA player, 23andme, is going public way of a SPAC at a valuation of $3.5 billion.
Although a significantly smaller sum, $600 million would be a really strong exit for MyHeritage, which says it has only raised $49 million in funding since being founded in 2003, with investors including Accel, Index and Bessemer.
Part of the deal will see some individual and institutional investors continuing to keep stakes in the company alongside Francisco Partners, MyHeritage said. They include HP Beteiligungs GmbH, Yuval Rakavy, Japhet, and Gigi Levy.
PE firm Francisco Partners has been a prolific acquirer and investor in the tech sector, and tapping a profitable company that has more obvious growth potential is a logical move for it.
“By leveraging our operational expertise, market resources and strong industry networks, we believe Francisco Partners is uniquely positioned to help MyHeritage accelerate its vision for growth. We are deeply impressed by the incredible achievements and relentless determination of Gilad, a visionary leader in genealogy who has grown the company from a start-up to a profitable global market leader,” said Eran Gorev, Francisco Partners‘ President of Israel & Senior Operating Partner, in a statement. “We are looking forward to partnering with Gilad and the entire MyHeritage team to help drive market expansion for the company.”
Gorev is joining the board along with Francisco’s Europe head Matt Spetzler with this deal.
“Francisco Partners shares MyHeritage’s vision for growth as well as its intense commitment to ensuring the privacy of its users. The users’ personal data is an extremely important priority and we will work together with MyHeritage to expand its already strong privacy framework going forward,” said Spetzler.
Updated with more detail about the deal and the company.
The European Union has kicked off the first stage of a consultation process involving gig platforms and workers.
Regional lawmakers have said they want to improve working conditions for people who provide labor via platforms which EU digital policy chief, Margrethe Vestager, accepted in a speech today can be “poor” and “precarious”. Yet she also made it clear the Commission’s agenda vis-a-vis the issue of gig work is to find some kind of “balance” between (poor) platform work and, er, good and stable (rights protected) employment.
There’s no detail yet on how exactly regional lawmakers plan to square the circle of giving gig platforms a continued pass on not providing good/stable work — given that their sustainability as businesses (still with only theoretical profits, in many cases) is chain-linked to not shelling out for the full suite of employment rights for the thousands of people they rely upon to be engaged in the sweating toil of delivering their services off the corporate payroll.
But that, presumably, is what the Commission’s consultation process is aimed at figuring out. Baked into the first stage of the process is getting the two sides together to try to hash out what ‘better’ platform work looks like.
“The platform economy is here to stay — new technologies, new sources of knowledge, new forms of work will shape the world in the years ahead,” said Vestager, segueing into a red-line that there must be no reduction in the rights or the social safety net for platform workers (NB: The word ‘should’ is doing rather a lot of heavy lifting here): “And for all of our work on the digital economy, these new opportunities must not come with different rights. Online just as offline, all people should be protected and allowed to work safely and with dignity.”
“The key issue in our consultations is to find a balance between making the most of the opportunities of the platform economy and ensuring that the social rights of people working in it are the same as in the traditional economy,” she also said, adding: “It is also a matter of a fair competition and level playing field between platforms and traditional companies that have higher labour costs because they are subject to traditional labour laws.”
The Commission’s two-stage consultation process on gig work starts with a consultation of “social partners” on “the need and direction of possible EU action to improve the working conditions in platform work”, as it puts it.
This will be open for at least six weeks. It will involve platforms talking with workers (and/or their representatives) to try to come up with agreement on what ‘better’ looks like in the context of platform working conditions, either to steer the direction of any Commission initiative. Or — else — to kick the legislative can down the road on said initiative if the two sides come up with a way forward they can agree to implement themselves.
The second phase of the consultation — assuming the “social partners” don’t agree among themselves — is planned to take place before the summer and will focus on “the content of the initiative”, per Vestager. (Aka: what exactly the EU ends up proposing to square the circle that must be squared.)
The competition component of the gig work conundrum — whereby there’s also the ’employer fairness’ dynamic to consider, given platforms aren’t playing by the same rules as traditional employers so are potentially undercutting rivals who are offering those good and stable jobs — explains why the Commission is launching a competition-focused parallel consultation alongside the social stakeholder chats.
“We will soon start a public consultation on this initiative that has another legal base since it is about competition law and not social policies. This is the reason why we consult differently on the two initiatives,” noted Vestager.
She said this will aim to ensure that EU competition rules “do not stand in the way of collective bargaining for those who need it” — suggesting the Commission is hoping that collective bargaining will form some part of the solution to achieving the sought for (precarious) balance of ‘better’ platform work.
Albeit, a cynical person might predict the end goal of all this solicitation of views will probably be some kind of fudge — that offers the perception of a plug for the platform rights gap without actually disrupting the platform economy which Vestager has sworn is here to say.
Uber for one has scented opportunity in the Commission’s talk of improving “legal clarity” for platforms.
The ride-hailing giant put out a white paper last week in which it lobbied lawmakers to deregulate platform work — pushing for a Prop-22 style outcome in Europe, having succeeded in getting a carve out from tightened employment laws in California.
Expect other platforms to follow with similarly self-serving suggestions aimed at encouraging Europe’s social contract to be retooled at the points where it intersects with their business models. (Last week Uber was accused of intentionally stalling on improving conditions for workers in favor of lobbying for deregulation, for example.)
The start of the Commission’s gig work consultation comes hard on heels of a landmark ruling by the UK’s Supreme Court (also last week) — which dismissed Uber’s final appeal against a long running employment tribunal.
The judges cemented the view that the group of drivers who sued Uber had indeed been erroneously classified as ‘self employed’, making Uber liable to pay compensation for the (workers) rights it should have been paying for all along.
So if the EU ends up offering a lower level of employment rights to platform workers vis-a-vis the (post-brexit) UK that would surely make for some uncomfortable faces in Brussels.
While it may be unrealistic to talk about striking a ‘balance’ in the context of business models that are inherently imbalanced, given they’re based on dodging existing employment regulations and disrupting the usual social playbook for profit, the Commission seems to think that a consultation process and a network of overlapping pan-EU regulations is the way to rein in the worst excesses of the gig economy/big tech more generally.
In a press release about the consultation, it notes that platform work is “developing rapidly” across various business sectors in the region. So there’s a heavy tone of ‘we can’t stand in the way of tech-fuelled ‘progress”.
“It can offer increased flexibility, job opportunities and additional revenue, including for people who might find it more difficult to enter the traditional labour market,” the Commission writes, starting with some of the perceived positives that are, presumably, feeding its desire for a ‘balanced’ outcome.
“However, certain types of platform work are also associated with precarious working conditions, reflected in the lack of transparency and predictability of contractual arrangements, health and safety challenges, and insufficient access to social protection. Additional challenges related to platform work include its cross-border dimension and the issue of algorithmic management.”
It also notes the role of the coronavirus pandemic in both accelerating uptake of platform work and increasing societal concern about the “vulnerable situation” of gig workers — who may have to choose between earning money and risking their health (and the health of other people) because they can’t afford to stop working (if they don’t have full access to sick pay).
The Commission reports that around 11% of the EU workforce (some 24 million people) say they have already provided services through a platform.
Vestager said most of these people “only have platform work as a secondary or a marginal source of income” — but added that some three million people do it as a main job.
And just imagine the cost to gig platforms if those three million people had to be put on the payroll in Europe…
In the bit of her speech leading up to her conclusion that platform work is here to stay, Vestager quoted a recent study she said had indicated that 35% to 55% of consumers say they intend to continue to ask for home delivery more in the future.
“We… see that the platform economy is growing rapidly,” she added. “Worldwide, the online labour platform market has grown by 30% over a period of 2 years. This growth is expected to continue and the number of people working through platforms is expected to become more significant in the years ahead.”
“European values are at the heart of our work to shape Europe’s digital future,” she also went on to say, taking her cue to point to the smorgasbord of digital regulations in the EU’s pipeline — and tacitly illustrating the concept of an overlapping regulatory net which the Commission wants to straightjacket platform giants into more socially acceptable and fair behavior (though EU regulations haven’t done that yet).
“Our proposals from December for a Digital Services Act and a Digital Markets Act are meant to protect us as consumers if technology poses a risk to fundamental rights,” she said. “In April we will follow up on our white paper on Artificial Intelligence from last year and our upcoming proposal will also have the aim to protect us as citizens. The fairness aspect and the integration of European values will also be a driver for our upcoming proposal on a digital tax that we plan to present before summer.
“All these initiatives are part of our ambition to balance the great potential that the digital transformation holds for our societies and economies.”
SpaceX’s floating oil rig spaceship launch pad could be operating later this year according to Elon Musk
SpaceX’s grand vision for Starship, the next-generation spacecraft it’s currently in the process of developing, includes not only trips to Mars, but also regular point-to-point flights right here on Earth. These would skim the Earth’s outer atmosphere, reducing travel times for regular international flights from many hours to around 30 minutes. They’ll need to take off from somewhere, however, and rockets are a bit more disturbing to their local environs than traditional aircraft, so part of SpaceX founder Elon Musk’s plan for their regular use is covering oil rig platforms into floating spaceports.
Musk has talked about these plans before, and SpaceX recently went so far as to purchase two rigs – which it nicknamed Phoibos and Deimos after the moons of Mars. These are currently in the process of being retrofitted for use with Starship, and they’ll be stationed in the Gulf of Mexico near SpaceX’s Brownsville, Texas development site.
On Wednesday, Musk said on Twitter that one of the two platforms could be at least partially operational by the end of 2021. The SpaceX CEO is known for his optimistic timelines, but a lot of them have actually been relatively accurate lately – or at least not quite as unrealistic as in years past.
What he means by “in limited operation” isn’t necessarily clear. That could mean that they’re floating where they’re supposed to be, and technically capable of playing host to a Starship prototype, but not that SpaceX will be actively launching Starships from one by end of year. He did add that the plan is to put floating launchpads for Starship not only in the Gulf, but also at various points around the world – which is in keeping with the bold plan he shared via CG concept videos when Starship debuted, which depicted launch and landing facilities stationed in bodies of water near urban destinations.