The future of car ownership: Cars-as-a-service
It’s Mobility Day at TechCrunch, and we’re hosting our Sessions event today in beautiful San Jose. That’s why we have a couple of related pieces on mobility at Extra Crunch.
First, our automotive editor Matt Burns is back with part two of his market map and analysis of the changing nature of how consumers are buying cars these days. Part one looked at how startups like Carvana, Shift, Vroom, and others are trying to disrupt the car dealership’s monopoly on auto sales in the United States.
Now, Burns takes a look at how startups like Fair and premium automakers like Mercedes are disrupting the very notion of owning a car in the first place. Rather than buying a car or leasing one, users with these new services are asked to subscribe to their cars, giving them the flexibility to get a car when they need it and to get rid of it when they don’t. Fair has raised $1.5 billion in venture capital, so clearly the space has caught the eye of investors.
“In simple terms,” co-founder and then CEO [of Fair] Scott Painter, told TechCrunch following its recent raise, “for every dollar in equity we unlock $10 in debt, and we borrow that cash to buy cars.”
Fair works much like a traditional lease with more options. Users can drive the vehicles as long as they’re paying for them and can switch to a different one whenever. This is different from a traditional lease where the buyer is often locked into the vehicle for two to four years. The model makes Fair an excellent option for Uber and Lyft drivers, and in the last year, Uber sold fair its $400 million leasing business to accelerate this offering.
Meituan, Alibaba, and the new landscape of ride-hailing in China
Meanwhile, on the other side of the world, our China tech reporter Rita Liao takes a deeper look at the quickly changing tides of the ride-hailing industry in China. It’s a fight between intermediation, disintermediation, and who ultimately owns the ride-hailing consumer. As transit in China and the rest of the world increasingly becomes multi-modal, who owns the gateway to figuring out the best method and paying for it is increasingly in the driver’s seat:
The nascent model is reminiscent of a feature Google Maps added in early 2017 allowing users to hail Uber, Lyft, Gett and Hailo straight from its navigation app. A few months later, AutoNavi, a maps app owned by Alibaba, debuted a similar feature in China. Other big names like Baidu, Hellobike, Meituan and Didi subsequently joined forces with third-party ride-booking services rather than building their own.
The trend underscores changes in China’s massive ride-hailing industry of 330 million users. The government is tightening rules around vehicle and driver accreditation, leading to a wide-scale driver shortage. Meanwhile, established carmakers including BMW and state-owned Shouqi are entering the fray, offering premium rides with better-trained fleet drivers, but they face an uphill battle with Didi, which gobbled up Uber China in 2016.
Tackling the issue of mental health in Silicon Valley, with professional coach and former investor Jerry Colonna
Building a company is incredibly challenging, filled with emotional highs and lows and a constant din of stress. Despite this widespread challenge though, many founders don’t feel comfortable talking about their mental health in a world where it seems like everyone is always “crushing it.”
Jerry Colonna has made improving the mental health of founders and investors a large part of his mission in life. A former venture investor who now coaches executives, he recently published Reboot: Leadership and the Art of Growing Up, which not only talks about his own struggles with mental health, but also offers a framework for improving each of our own internal selves — creating better people and companies in the process.
Colonna joined TechCrunch’s Silicon Valley editor Connie Loizos for a live conference call with Extra Crunch members last week, and we now have a transcript available.
Loizos: So, Jerry, you did the self-exploration, with the help of the therapist, and then you decide that you’ve got to reach out and help other people that are going through similar challenges. How did you create a business out of that?
Colonna: Well, I did. And I created the business slowly. It was really in response to one young man who came into my office really lost. Telling himself that he was there to network his way to a job in the startup community.
And I asked him a series of questions that had him reveal that he had become a lawyer to please his father. And he then started to cry, and when that happened I said, “Okay, you are doing something different right now. What are you doing?”. And it was that moment that led me to seek out training as a coach.
The minute I began training, people started coming to me, and over the course of about a year, I designed a solo practice that had me, maybe, seeing clients two days a week. And in the meantime, I continued to serve on a bunch of boards of directors and do my own work.
And slowly, slowly over time, I built up a solo practice. Which felt perfectly sufficient at the time, but eventually, starting about six years ago, I realized that it wasn’t going far enough, it wasn’t where I wanted it to be.
Grasshopper’s Judith Erwin leaps into innovation banking
Extra Crunch fintech columnist Gregg Schoenberg offers us his latest interview, this time with Grasshopper’s Judith Erwin. Grasshopper wants to rebuild the retail banking sector from the ground up using digital services. Rather than building on top of another bank though, Grasshopper is a “bank bank” — it wants to be fully chartered like any other established player.
Erwin herself is a particularly interesting person to undertake such an effort, since she was also on the founding team of Square 1 Bank. The two talk about the future of banking, financial services, and the challenges of getting more women into senior management roles.
Schoenberg: I get that, but then I look at Brex or Bento or others that have figured out how to add value-added SMB services without being a bank. Isn’t it true that while fintechs can be a friend, they can also be a problem for you?
Erwin: They can, but I’ll tell you the big attraction they should have for Grasshopper is their cost of acquisition is going to be zero with clients I bring them. And that’s actually a big issue for fintechs.
Schoenberg: It’s huge.
Erwin: Right now, they have pots of money, which covers a lot of ills. But I think that if we are super easy to work with and they can just plug in and get clients at zero cost, why wouldn’t they? Especially if I’m bringing value to their clients.
Schoenberg: Who would be a good example?
Erwin: Look at Acorns. You would think I wouldn’t care about Acorns because I’m a business bank. But for my own personal reasons, I’m very cognizant of the impact of student loans. If I could partner with some of the folks who are focused on the employees of entrepreneurial companies, that could be a new avenue for a company like Acorns.
The startups creating the future of RegTech and financial services
FinTech has seen a huge explosion in venture investment the past few years, and that flood of capital is creating a whole new set of opportunities for software services to scalably handle the sorts of regulatory requirements every fintech company needs to handle: anti-money laundering, know your customer rules, and foreign capital controls, and more.
Marc Gilman, General Counsel and VP of Compliance at Theta Lake, provides an up-to-date look at the new players emerging across this space.
RegTech startups targeting financial services, or FinServ for short, require very different growth strategies — even compared to other enterprise software companies. From a practical perspective, everything from the security requirements influencing software architecture and development to the sales process are substantially different for FinServ RegTechs.
The most successful RegTechs are those that draw on expertise from security-minded engineers, FinServ-savvy sales staff as well as legal and compliance professionals from the industry. FinServ RegTechs have emerged in a number of areas due to the increasing directives emanating from financial regulators.
Thanks
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