Uber is now worth $17B. It was only 3 years ago that their ride count was in the tens of thousands and people weren’t sure if they were even worth $50 million.
See Also:
Huge Vote Of Confidence: Uber Raises $11 Million From Benchmark Capital –TechCrunch, Feb 2011
Uber raises $1.2B at a record-breaking $17B valuation –VentureBeat, 2 days ago
As a bit of a late adopter, I did my grocery shopping through Google Shopping Express for the first time a couple weeks ago and I am instantly in love.
Google Shopping Express offers a seamless shopping experience where shoppers can browse a selection culled from a dozen stores, including Staples, Whole Foods, Smart & Final, and Toys ‘R’ Us.
I placed two orders, one to be delivered to Barnacle’s Mountain View office and one to our San Francisco site. Because I have a discerning palate, it turns out that the orders came from nine different stores. Whew, I thought. That sure saved me a lot of work!
How it Works
Google has order fulfillment reps hanging out at each of the retail stores. These reps receive orders and pack them for delivery. Couriers (outsourced to 1-800Courier in SF, Modern Express in the South Bay) come to a store, pick up packages for an area, and drive door-to-door making the deliveries.
Interestingly, my SF order had a delivery from Nob Hill Foods, all the way down south in Redwood City. The Mountain View order also had an item from Nob Hill, but it came from the store in Los Gatos instead of the store in Redwood City — even though Redwood City is closer. In fact, there’s another Nob Hill store in Mountain View about 2 minutes away from our office.
Customer Experience
Because my order came from nine different stores, eight separate vehicles showed up at our offices. Only eight, because my Teriyaki Yakisoba from Smart & Final was canceled from the SF order: Out of Stock in Daly City. I received that same item in my Mountain View order, because it was still in stock in San Mateo.
In SF, three drivers showed up one at a time with our chips, crackers, and ramen, over a span of 4 hours. I received an email saying my Monster Energy Drink had been delivered, but nobody had shown up with it. I sent an email inquiry.
In Mountain View, I received my Teriyaki Yakisoba and Cracker Jack. Then it was noon, and I left for a couple hours to go feed homeless people. I returned to see three messages saying my almonds had been delivered, my ramen had been delivered, and an unsuccessful delivery attempt was made on my shampoo and that it would be redelivered the following day. I couldn’t find the purported almonds or ramen, so I emailed customer support.
The response:
“Hi Elaine,
I’ve connected with the courier. It looks like the Blue Diamond Toasted Coconut Almonds were left inside building 1599, around 12:02 PM.”
That’s down the street from our office. Now, I don’t fault the courier for being unable to find my address, because the building numbers are difficult to read — But is this what delivery has come to? Best effort? Is it now acceptable for the postman to drop my mail off at my neighbor’s house — “Ehh that’s close enough”? This time I had only ordered instant ramen and almonds, but what if my neighbor had received my weekly subscription of adult diapers and incontinence wipes?
Anyway, the ramen had seemingly vanished, but the remaining items were redelivered to Mountain View the following day. So Google Shopping Express got a 40% success rate at our Mountain View office, which is three blocks from Google’s main campus.
Our SF order did better with a 60% success rate: Only one canceled item and one missing item. It looks like mysterious disappearances are common.
I’m a fan.
Are They Profitable?
Ah, there’s the billion-dollar question.
Orders are transported in cute little Priuses, so the vehicle operating cost is far lower than the cost of hiring a courier. I assume that Google is optimizing for the courier’s time by designating one courier per store. Time spent consolidating orders from separate stores would be better spent driving.
Assumptions: Wages taken from Modern Express job listings on Craigslist. Vehicle operating costs from AAA. Stem miles is distance from store to delivery zone, estimated from Google Shopping Express maps. Driver starts and returns to store. Time and distance between stops estimated from 25-cent ramen I ordered for random strangers all over Mountain View (sorry Google).
After my 6-month free trial ends, the delivery cost is $5 per store. Would this be profitable? Even assuming that Google Shopping Express charges an additional commission to the stores themselves, the answer is…probably not. BUT, if Google replaces those expensive human couriers with self-driving cars, then the answer could be affirmative.
Environmental Sustainability
Based solely on miles traveled, it is more efficient to send multiple delivery vehicles instead of having customers make individual shopping trips. But there is still the question of whether or not I like having five separate people knock on my door to hand me one item at a time. The path from car to doorstep is the most error-prone part of this supply chain — why replicate this link with each delivery?
I suspect that Google is failing to account for redelivery attempts in their process of minimizing courier time. Google’s self-driving cars will be better at learning my address than hired couriers, so that should improve the delivery success rate.
That leaves the final piece of the story, which is a picture of all the packaging my eight items arrived in:
Sallie Krawcheck’s Ellevate Organization recently launched an index fund comprised of companies where women make up a significant portion of officers and directors: The Pax Ellevate Global Women’s Index Fund (PXWEX).
Now now, I know what you’re thinking. How do I go all in on PXWEX Puts?
That’s not very nice. Studies have shown that female leaders are less ego-driven and more risk-averse than men. So a woman-led corporation may be less likely to take over the world, but also less likely to go the way of Enron.
If these attributes are reflected in the Women’s Index Fund holdings, then the most profitable approach here would be to sell PXWEX variance swaps.
See Also:
Sallie Krawcheck Opens an Index Fund Focused on Women –NYTimes
Anyone with a voice on the internet these days claims to have read Piketty’s Capital in the Twenty-First Century*. It’s the 6-week running NY Times Bestseller on the rise of wealth inequality.
The truth is, we love inequality. The more inequal the better. As a capitalist nation, we reward the winners, which means that as a side effect there must be losers. We celebrate the successes of Elon Musk and Mark Zuckerberg despite the fact that they are in the upper echelons of the 0.1%, because it is wholly American to believe that we, too, might someday attain that status.
We don’t really hate the 1%. We worship the winners, we study their every move. We love the scrappy Airbnb kids and that Snapchat CEO who pees on girls. We even love the ones who create no value to society. We love Derek Jeter and LeBron James even though I couldn’t pick them out of a lineup.
What we don’t like are the winners who then deflate the ball and make it so no one else can play. We hate Monsanto and BP and Rio Tinto. We love Warren Buffett but hate Lloyd Blankfein and Jamie Dimon and the big stupid banks. We love Google and Apple but think Microsoft is evil (well, these days it’s just irrelevant).
No, we don’t hate the wealth gap or the fact that it’s so difficult to cross. We wouldn’t want it if it were easy. We don’t hate the game or the system or the fact that there are so few winners. We just hate the kids who ruin the game for everyone else.
Keep playing.
*I haven’t.
2014 UT Austin Commencement Address by Adm. William H. McRaven, commander of U.S. Special Operations Command.
Lessons learned from basic SEAL training:
It is on Wednesday of Hell Week that you paddle down to the mud flats and spend the next 15 hours trying to survive the freezing cold mud, the howling wind and the incessant pressure to quit from the instructors.
As the sun began to set that Wednesday evening, my training class, having committed some “egregious infraction of the rules” was ordered into the mud.
The mud consumed each man till there was nothing visible but our heads. The instructors told us we could leave the mud if only five men would quit—just five men and we could get out of the oppressive cold.
Looking around the mud flat it was apparent that some students were about to give up. It was still over 8 hours till the sun came up–eight more hours of bone chilling cold.
The chattering teeth and shivering moans of the trainees were so loud it was hard to hear anything– and then, one voice began to echo through the night—one voice raised in song.
The song was terribly out of tune, but sung with great enthusiasm.
One voice became two and two became three and before long everyone in the class was singing.
We knew that if one man could rise above the misery then others could as well.
The instructors threatened us with more time in the mud if we kept up the singing—but the singing persisted.
And somehow– the mud seemed a little warmer, the wind a little tamer and the dawn not so far away.
Full Transcript:
McRaven to Grads: To Change the World, Start by Making Your Bed
