Hello folks, welcome back (or hello for the first time) to The Station, a weekly newsletter that looks at the way people and packages move around the world. I am your host, Kirsten Korosec, Senior Transport Reporter at theinformationsuperhighway.
I also started to publish a shorter version of the newsletter on theinformationsuperhighway . You are reading this. For the entire Enchilada that comes out every Saturday, you can subscribe to the newsletter by clicking here and clicking "The Station". It's free!
How is everyone doing before I get down to the essentials? This is not a rhetorical question. I am serious. I want to hear from you (see my email below). Perhaps you are a startup founder, a security driver with an autonomous vehicle developer, a venture capitalist, an engineer or a gig economy employee. I am interested in how you are doing, what you are doing to deal with it, and how to get around in your respective cities.
Please contact me by email at firstname.lastname@example.org to exchange thoughts, opinions or tips or to send a direct message to @kirstenkorosec.
It was a tough week for micromobility amid the COVID 19 pandemic. Bird dismissed approximately 30% of its employees due to the uncertainty caused by the corona virus.
In a memo from theinformationsuperhighway, Bird CEO Travis VanderZanden said:
The unprecedented COVID-19 crisis has forced our leadership team and board of directors to make many extremely difficult and painful decisions regarding some of your teammates. As you know, we had to stop many markets around the world and drastically cut spending. Due to the financial and operational impact of the ongoing COVID 19 crisis, we say goodbye to about 30% of our team.
The fallout of COVID-19 is not limited to Bird. Lime is also reportedly considering dismissing up to 70 people in the San Francisco Bay Area.
In the meantime, Wheels used self-cleaning handlebars and brake levers to reduce the risk of spreading the virus. NanoSeptic's technology, powered by light, uses mineral nanocrystals to create an oxidation reaction that is stronger than bleach, according to the company's website. NanoSeptic then implements this technology in skins and mats to transform everything from a mouse pad and door handles to handlebars into self-cleaning surfaces.
The result of all this: COVID-19 turns shared mobility upside down. This means that the layoffs will continue. This also means that companies like Wheels will try to innovate or spin to stay alive.
While some companies pulled scooters from the city streets, others changed the way they marketed services. Some turned to the gig economy workers who deliver food. Others, such as the Revel electric moped service, focus on healthcare workers.
Revel now lets healthcare workers in New York rent their mopeds for free. To qualify, all you have to do is upload your employee ID. Currently, free travel for healthcare workers is limited to Brooklyn, Queens, and a new service area from Upper Manhattan to 65th Street. Revel expanded the area to include hospitals in one of the epicentres of the disease.
Revel still rents out its mopeds to the rest of us out there, although they encourage people to only use them for important trips. As you may have guessed, the number of drivers has dropped significantly. The company claims to have intensified the disinfection and cleaning of mopeds and helmets. Revel is also active in Austin, New York, Oakland and Washington. It has suspended service in Miami in accordance with local regulations.
– Megan Rose Dickey (with a cameo by Kirsten Korosec)
offer of the week
I would normally highlight a large round of funding for a startup in the “Deal of the Week” section. This week I expanded my definition.
On Friday, the House of Representatives passed a historic stimulus package known as the Coronavirus Aid, Relief and Economic Security, or "CARES" law. President Donald Trump signed it hours later. The CARES law provides an unprecedented $ 2.2 trillion financial relief for businesses, public institutions and individuals severely affected by the COVID-19 pandemic.
theinformationsuperhighway has just started to get a multi-day look at the 880-page document. And in the coming weeks I will highlight everything that has to do with the transport industry or startups.
I'm going to focus on three points today: airlines, public transportation, and small business loans.
US airlines will receive $ 58 billion. Commercial transportation company loans total approximately $ 25 billion, and wages and salaries are approximately $ 25 billion for the industry’s 750,000 employees. Freight companies receive $ 4 billion in loans and grants in the amount of $ 4 billion. These loans come with some conditions. The airlines have to agree not to fire the workers by the end of September. The package prohibits share buybacks and the distribution of dividends to shareholders for one year after repayment of one of the loans.
Public transportation was allocated $ 24.9 billion. According to the American Public Transportation Association, the CARES Act provides for almost three times the funds for this category in the 2020 financial year. Funds are distributed through a formula that is $ 13.79 billion for urban areas, $ 2 billion for rural areas, $ 7.51 billion for good repair, and $ 1.71 billion for urban areas providing high density government transit. APTA notes that these appropriations are intended for operating costs to prevent, prepare for, and respond to COVID-19 from January 20, 2020.
Amtrak received additional $ 1 billion in grants that direct $ 492 million of these funds toward the northeast corridor. The rest goes to the national network.
Small business loans are an important part of the bill and an area where many startups can concentrate. There's a lot to unpack here, but basically the law provides for $ 350 billion in loans managed by Small Business Administration to companies with 500 or fewer employees. These loans are intended to cover the payroll, rent, utilities, and mortgage interest of an eligible borrower for up to eight weeks. If the borrower maintains his staff, part of the loan can be granted.
Venture-backed startups looking for relief can run into skills issues. It depends on how the employees are counted. Typically, SBA checks a company's affiliates to see if they qualify. A startup owned by a private equity firm is considered to be associated with the other companies in that firm's portfolio, which could result in employment growth well over 500. This rule also seems to apply to venture capital startups where more than 50% of the companies are involved. VC holds voting rights.
The instructions for this are still spotty. Fenwick & West, a Silicon Valley law firm, recently said in a statement that the rule "can be problematic for startups because the SBA membership rules are very complex and could cause lenders to choose several otherwise unrelated portfolio companies." a single venture capital company to determine if a borrower has no more than 500 employees. "
One last note: the SBA has waived these rules of membership for borrowers in the food and food supply chain. It is unclear what this could mean for startups in food automation or for companies that build autonomous vehicles for the delivery of food.
More deal $
COVID-19 has taken over, but business is still going on. Here is an overview of some partnerships, acquisitions, and fundraisers that caught our eye.
- Lilium, the Munich-based startup that designs and builds vertical takeoff and landing aircraft (VTOL) and wants to drive in its own taxi fleet, raised $ 240 million in a financing round led by Tencent. This is formulated as an insider round only with existing investors, a list that included the participation of previous supporters such as Atomico, Freigeist and LGT. The rating will not be announced. However, sources tell us that it is between $ 750 million and $ 1 billion.
- Wunder Mobility acquired Australia-based car rental technology provider KEAZ. (Financial details have not been released, but KEAZ founder and CTO Tim Bos Wunder Mobility joins as part of the contract.) KEAZ developed a mobile app and back-end management tool that lets rental agencies, car dealerships, and businesses share access can grant vehicles.
- Cazoo, a startup that buys used cars and then sells them online and delivers them to your door, has raised $ 116 million. The round was led by DMG Ventures, which also included General Catalyst, CNP (Groupe Frère), Mubadala Capital, Octopus Ventures, Eight Roads Ventures and Stride.VC.
- Helm.ai came out of hiding with the announcement that it had raised $ 13 million in a starting round that included investments from A. Capital Ventures, Amplo, Binnacle Partners, Sound Ventures, Fontinalis Partners and SV Angel. According to Helm.ai, software for autonomous vehicles was developed that can be used to skip conventional simulation steps, tests on the road and commented data sets – all tools that train and improve the so-called “brain” of the self-driving vehicle.
- RoadSync, a digital payment platform for the transportation industry, raised $ 5.7 million in a Series A run by Base10 Partners with the participation of repeat investor Hyde Park Venture Partners and Companyon Ventures. The company developed cloud-based software that enables companies to bill and accept payments from truck drivers, carriers, and brokers. According to RoadSync, their platform is in use at over 400 locations across the country with over 50,000 one-time transactions per month.
- The self-driving truck startup TuSimple works with the automotive supplier ZF to develop and produce autonomous vehicle technologies such as sensors on a commercial scale. The partnership, which is scheduled to start in April, will cover China, Europe and North America.
One last word
Keep in mind that the weekly newsletter offers even more mobility news and insights. I will leave you with this one diagram from Inrix. The company has released a U.S. traffic synopsis that is scheduled to be released every Monday. The graph shows the traffic from the week of March 14th to 20th. The result: COVID-19 reduced traffic nationwide by 30%.