Business
Indian rival slams Uber’s business model
Uber’s prime rival in India has some unsolicited recommendation for the U.S. startup: Go native.
“They’ve a really cookie-cutter strategy when it comes to what the mannequin is and the way [to] drive feed it into any geography,” Pranay Jivrajka, a prime govt at Ola Cabs, mentioned on the sidelines of CNN’s Asia Enterprise Discussion board in Bangalore.
Jivrajka, who till just lately served as Ola’s COO, mentioned that Uber ought to ditch its one-size-fits-all strategy and as an alternative attempt to perceive “native nuances” that will assist it to establish companies that “customers and drivers truly need.”
Uber declined to touch upon Jivrajka’s remarks.
Uber and Ola have for years waged a bitter battle for supremacy in India, a market with 1.3 billion potential clients. The nation has taken on elevated significance for Uber after a sequence of latest setbacks elsewhere in Asia.
The San Francisco-based firm suspended its operations in Taiwan final week, six months after it bought its operations in China to native rival Didi Chuxing. Didi, which is taking the combat to Uber in key international markets, is certainly one of Ola’s buyers.
In India, Uber has typically discovered itself enjoying catch-up with its Bangalore-based rival. Its most up-to-date native product providing — permitting Indian customers to e book a automobile for a whole day — is already supplied by Ola in 85 cities.
Ola additionally lets customers e book certainly one of India’s ubiquitous three-wheeled auto rickshaws, a service Uber began however then discontinued in 2015.
“What has helped us is having an ear to the bottom when it comes to understanding what the customers need,” mentioned Jivrajka.
Associated: Uber’s rivals are teaming up in Asia
Uber CEO Travis Kalanick insists that his firm is just not ready to go away India.
“We’re shedding, however we see a path in direction of profitability,” Kalanick mentioned throughout a December go to to Delhi. “We see ourselves being right here in the long term.”
Associated: Uber suspends its service in Taiwan as fines mount
India is not at all times a simple marketplace for both firm — tens of 1000’s of drivers representing each Uber and Ola went on strike in Delhi this week, demanding higher pay and advantages. The Delhi authorities has supplied to mediate the dispute.
Jivrajka didn’t touch upon the protests, however mentioned that Ola’s primary focus stays bringing extra drivers onto its platform.
“We want extra drivers as a result of the tempo at which demand is rising is method larger than the best way provide is getting aggregated,” he mentioned.
Associated: Uber CEO drops out of Trump’s enterprise advisory council
Jivrajka additionally had some recommendation for one more Silicon Valley big hoping to enter India: electrical automaker Tesla.
“There aren’t any guidelines on the Indian roads,” Jivrajka mentioned. “One factor lots of people say is that in case you can drive in India, you may drive wherever.”
— Manveena Suri contributed reporting
CNNMoney (Bangalore, India) First revealed February 13, 2017: 8:48 AM ET
Business
Where every cent of $1 goes at one L.A. restaurant, explained
My industry has always been as difficult as it is magical. In the post-pandemic era, challenges are categorically higher.
The threat to restaurants during the pandemic was obvious; it was a given that many wouldn’t come out the other side. In 2024, restaurants are back! No, restaurants are dying! No, restaurants are (sometimes) busy! It is whiplash, day to day.
For many, including my restaurant, Botanica, solvency is more elusive than ever due to the elevated cost of doing business. Since opening Botanica nearly seven years ago, our labor costs have risen 40% for hourly workers and 25% for salaried management, the result of minimum-wage increases and market-rate pay increases. Our rent has risen 17%. Our sales, on the other hand, have grown only 2.3%.
Obviously, this creates a near-impossible status quo. In our industry, there are no mechanisms for alleviating costs other than trimming spending on goods and labor.
In other words: There is no way to balance the books without compromising the quality, vision and values that define a business like ours. There are no tax breaks on costly insurance policies or credit card processing fees. And if we were to pass the costs on to our customers, we’d be compromising the vision and values that make us what we are. It’s an absolute conundrum.
Our way of doing business is under threat. From frequent conversations with restaurateur friends (including my co-founders of Regarding Her, a nonprofit focused on female food-industry leaders), I know that what Botanica is navigating at the moment is far from unique.
Why does this matter? Neighborhood-oriented restaurants are vital to communities and economies. They are meaningful gathering spots and dependable local employers. They support numerous other businesses: cleaners, farmers, coffee roasters, winemakers, equipment technicians, etc. They’re small and personal, and thus are approachable and accountable in ways that larger businesses aren’t. They’re often run by owners and managers who care deeply about their people, their neighborhood and their impact — even more than they care about their bottom line.
I know this because Emily Fiffer (Botanica’s co-owner) and I are among these people. And, moreover, we’re friends with dozens of like-minded owners across L.A. and beyond.
Eating at a place like Botanica might feel indulgent. Dishes on the spring menu range in price from $14 for marinated bean toast $36 for Baja striped bass. But from our perspective, the purpose of our business is not just to provide a nice evening of beautifully prepared, local, sustainable produce and natural wine. Our goal is to run a business with the most positive possible impact on our community, economy and environment — a business that embodies what we call “nourishing hospitality.”
There’s an economic concept called “the multiplier effect,” which describes how the effect of spending is greater than the original money spent. While every dollar you spend ripples through the economy in some way, restaurants surely must provide among the best bang for your buck, so to speak.
So one day I sat down to try to calculate exactly how this works with our model, and I landed on a startling figure.
Of every $1 spent by a customer at Botanica in 2023, $1.005 went back out the door.
Of that, 86.7 cents went toward “the good stuff” — meaning people, businesses and causes that it feels good to be supporting; 53.2 cents pays for the livelihoods of 50 staff members (including insurance, benefits and hefty payroll taxes); 26.2 cents buys products from a sensational web of farmers, purveyors and makers doing ethical, sustainability-focused work, who themselves employ countless passionate individuals; and 7.3 cents pays for a cadre of small businesses in supporting roles: our cleaning crew, florist, laundry services, a cavalcade of local equipment repair people, the family-run supplier of our recyclable and compostable to-go and market packaging, and so on.
And then 13.8 cents goes to occupancy costs (rent, utilities and trash/recycling/compost pickup); administrative costs (office supplies, our accountant, various apps and tools essential to operations, phone and internet, etc.); and the cost of credit card processing — 3.1 cents I really wish we could spend elsewhere!
The national average profit margin for independent restaurants is regularly cited to be in the zone of 3% to 5% (sometimes higher, often lower). This profit is necessary for retaining staff (raises), reinvesting in infrastructure (endless property and equipment repairs), navigating snafus (a power outage can result in thousands of dollars in losses), and repaying the investors, often friends and family, who funded the venture in the first place.
Botanica closed out 2023 with a 1.19% profit — but not from restaurant operations; those were just slightly less than break-even. Our revenue was boosted by a handful of commercial photo shoots held at the restaurant on days when we were closed.
Granted, Botanica is a more labor-heavy model than many in our cohort. We are open for breakfast, lunch and dinner; we have a robust coffee/tea/bakery program, and the front of our space is a market stocked with natural wine, house-made goods and products from local, largely women-owned businesses. These are laborious undertakings that require substantially more staff (with specialized training, no less) than a dinner-only joint. But these elements of our business, costly as they may be, are the ones that make us an especially useful, multifaceted neighborhood spot.
All this is to say that a restaurant like Botanica — like so many other independent, owner-operated neighborhood restaurants across the country — exists, first and foremost, to nourish its people. Hospitality is innately altruistic, and the neighborhood restaurant is especially, preciously, precariously so.
I don’t have any grand solutions to propose, though I do believe that low-margin, financially uncertain businesses like ours will need structural support to continue to exist. That 3.11% of revenue that goes to credit card processing fees ($98,725 last year, paid to our point-of-sale system, Toast) would be a transformational addition to our bottom line. And I’d vastly prefer to reinvest some of the 4.89% that went to payroll taxes ($155,000 in 2023) into our team.
In the absence of legislated solutions, it comes down to the diners. Nearly 20 years ago, right as I was starting out in the food world, Michael Pollan introduced the concept of “voting with your fork” via his seminal book “The Omnivore’s Dilemma”; it’s his way of succinctly expressing the importance and power that your daily food choices can have.
I’ve been trying to come up with a corollary that relates to the restaurant world — “dining with your values” doesn’t have the same ring to it; my suggestion box is wide open! — as a way to convey what it means to support restaurants not just for the creative/buzzy/exciting food they serve but for the broader philosophy that informs their work and exponentially impacts their small corners of the world.
Because for us to keep doing what we do, we need your support — and your understanding of the positive ripple effect that your support has. I hope this encourages you to feel good about your next brunch/dinner/coffee/cocktail outing at a thoughtful, community-minded restaurant near you.
It means more than you may know.
Heather Sperling is the co-founder and co-owner of Botanica, a restaurant and market in Silver Lake, Los Angeles.
Business
Your package wasn't delivered? Try living at one of L.A.'s '½' addresses
Casey Hogan had no idea her new address would be so frustrating.
But soon after moving into a granny flat in Van Nuys three years ago, she realized that the fraction in her house number — think: 101 ½ Main St. — was going to be particularly inconvenient in an era of constant deliveries.
Her packages get marked as “address not deliverable” or dropped off at the wrong door. Retail websites that are programmed to reject special characters, including the fraction’s slash, sometimes refuse her shipping address or auto-correct it to another location.
She has tried workarounds to this quirk of Los Angeles geography — most common in dense neighborhoods with duplexes or, as in Hogan’s case, at accessory dwilling units built on preexisting properties. Spelling out the fraction as “one half” has helped, but about a quarter of her packages or food deliveries arrive late or get dropped at someone else’s house.
In the case of a particularly urgent order before a flight, she had Amazon deliver a dog carrier to her mother’s home in Oceanside and drove there to pick it up instead of risking a snafu at her place.
“It’s still a nightmare,” said Hogan, 32, who works as a medical scribe. “Anything that could go wrong has gone wrong.”
In the increasingly deliverable world shaped by consumers’ skyrocketing, post-pandemic expectations that almost anything they want or need should arrive quickly and seamlessly at their doorstep, residents at more than 60,000 Los Angeles addresses like Hogan’s have been left on the sidelines. (Or really, left standing on their stoops, searching endlessly for packages.)
The shared inconvenience grew into a community on Reddit, where people swap tips, such as entering the address as a decimal — 101.5 Main Street — or spelling it out as Hogan does. One person made a more drastic suggestion: “Break down and get a P.O. box.”
Dealing with fractional addresses and other tricky deliveries, such as those behind gates, is equally frustrating — and costly — for retailers, logistics experts said, as well as for shipping companies that move more than 58 million packages a day in the United States.
The average American received about 70% more packages in 2022 than in 2017, according to a Capital One shopping research report. And a recent survey of 300 retail executives by the location data company Loqate found that almost 8% of first-time deliveries in the U.S. failed, costing about $17 per failed order — or roughly $200,000 a year.
“They have to deal with such a large amount of packages,” said Blake Droesch, a senior analyst at eMarketer who studies last-mile delivery. “This is not the post office of yore, where you could get an address half right, and the mailman will spend half the day trying to figure out who this letter belongs to.”
Since demand for deliveries spiked early in the pandemic, Droesch noted, there has been a significant shift in what people buy online, from items like new shoes or a laptop — things people didn’t mind waiting a few days to receive — to hygiene products and home essentials needed quickly.
“If you run out of deodorant,” he said, “you kind of need that the next day.”
Ram Bala, an associate professor of business analytics at Santa Clara University, studies the supply chain and is involved in a startup that will use generative artificial intelligence to improve shipping logistics.
Bala said it’s often odd little problems that sound simple to solve — in this case, figuring out how to accommodate fractional addresses — that end up being the trickiest.
“Anytime you try to fix that problem, there are unintended consequences somewhere else,” he said. “It’s a trade-off.”
Retailers don’t appear to be prioritizing a fix for people with fractional addresses, since doing so would require removing rigid formatting parameters built into software to ensure that normal addresses get entered correctly, Bala said.
In Los Angeles, which has about 1 million residential addresses, the roughly 60,700 fractionals are relative rarities. They’re concentrated in densely populated neighborhoods such as Boyle Heights, East Hollywood and Pico-Union, according to the city’s Bureau of Engineering, which oversees the handling of address numbers.
“The use of fractional numbers is discouraged and should only be used as a last resort,” a primer on the bureau’s website says.
A spokesperson for the city said the reticence to assign fractional addresses — which are often, but not always, ½ and never go beyond ¾ — stems from conversations with residents worried about not only confusing delivery drivers and visitors but the effect on property values. Still, it’s sometimes the best alternative when squeezing new units between existing ones.
The phenomenon isn’t unique to L.A.
Pockets of other big cities where large, historic buildings were divided into smaller dwellings, such as New York and Philadelphia, also have fractional addresses. And in an even more complicated twist detailed in a piece by Colorado Public Radio, the city of Grand Junction, Colo., has fractions in its street names, creating perplexing intersections such as C ½ and 28 ¾ roads.
Despite the delivery headaches, fractional addresses can carry a whimsical charm, often drawing comparisons to Platform 9 ¾, the fictional London train stop where students in the Harry Potter series caught the Hogwarts Express.
But for Juan Crespo, who started the Reddit thread asking for tips about living at a fractional address, it was more annoying than alluring.
Before moving into a unit in a Highland Park quadplex in 2021, the 32-year-old research scientist tried to change his shipping address with online retailers he used frequently, including Southwest Airlines and Target, where he and his spouse had created their wedding registry.
But the sites kept rejecting the slash.
He eventually called and, after a wait, got a Target employee to manually add the “½” to his address; by then, he said, several gifts, including a $300 stand mixer, had already been sent.
When ordering from DoorDash and Uber Eats, he said, his address would often be automatically switched to a different location a few blocks up, requiring him to enter a neighbor’s address instead.
“It was just a pain,” said Crespo, who has since relocated to Michigan and settled into a home with a full address number. “I’m glad we don’t have to deal with that anymore.”
For Hogan, who lives in the ADU in Van Nuys, the annoyance remains.
A few months ago, she posted to an online help forum, asking Google to have her fractional address added to Google Maps, since many retailers use the company’s mapping software to handle shipping logistics, and a problem there can create a ripple effect of issues on other sites.
“I have to resort to entering my neighbor’s address and hoping I can intercept the delivery person,” Hogan wrote. “HELP!”
A member of Google’s Product Experts Program, a group of volunteers who answer questions in exchange for perks from the company, quickly responded to Hogan saying that only an employee can add an address with a slash to the map. A volunteer asked her to upload a photo of her driver’s license or utility bill showing her address, but Hogan felt uncomfortable doing so and abandoned the effort.
She can easily rattle off a list of packages that never arrived or were initially dropped off somewhere else: workout clothes, two pairs of shoes from Nike, a showerhead from Jolie Skin Co. And she has gotten used to filing claims with shipping companies after getting notifications with pictures showing packages left in unfamiliar doorways. She bought a Ring doorbell camera and enabled the package notification feature, so she has proof that a delivery never arrived.
So many of her food deliveries got messed up, she said, that she set up a rack outside her gate with a sign that reads, “Leave food here.”
These days, she prefers to shop in person whenever possible and thinks twice before buying anything online — a hesitance, she admits with a laugh, that comes with a silver lining.
“I guess it does save me money.”
Business
TikTok said to plan job cuts amid a wave of tech industry layoffs
TikTok is expected to make cuts to its global staff, in another blow for the popular social video app as it faces the threat of a new law that would ban its service in the U.S. if its Chinese owner doesn’t divest.
The layoffs are expected to affect employees in content and marketing and user operations, according to technology-focused news outlet the Information, which first reported on the looming job cuts. TikTok did not immediately respond to a request for comment.
Some U.S. leaders have raised security concerns about TikTok and its parent company ByteDance’s ties to China. ByteDance and TikTok have said the new law “offers no support for the idea” that TikTok’s Chinese ownership poses national security risks.
An unnamed TikTok employee told CNN that the workforce reduction was not related to the potential ban in the U.S.
The cuts come as tech companies have shed their workforce this year to reduce their costs and, in some cases, prepare to hire more people skilled in emerging artificial intelligence tech.
It’s unclear how many layoffs will occur at TikTok’s U.S. headquarters in Culver City. TikTok employs roughly 500 people in Culver City, according to city data.
TikTok has launched legal battles to stop the government from going forward with its ban of the company’s U.S. operations. The firm sued the U.S. government and funded a separate legal challenge led by TikTok creators. Both petitions said the move to ban or force a sale of the app violates 1st Amendment free speech protections.
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