Week in Review - 1099 Problems

TechCrunch Newsletter

Saturday, May 01, 2021 • By Lucas Matney

Hello friends, and welcome back to Week in Review! Last week, I talked about how the pandemic was shifting how our brains functioned at work. This week, we’re staring at another chapter in the unwinding of several of venture capital’s biggest wins of the past decade. If you're reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

The big thing This week, a little comment from a member of Biden’s cabinet sent several tech stocks spiraling. “We are looking at it but in a lot of cases gig workers should be classified as employees… in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Labor Secretary Marty Walsh told Reuters this week. "These companies are making profits and revenue and I'm not (going to) begrudge anyone for that because that's what we are about in America… but we also want to make sure that success trickles down to the worker." That quote sent stocks prices for Uber, Lyft and DoorDash downward, shaving billions off of their market caps with each down at least 10 percent since the interview went live. It was a comment that signaled a heightening of tensions after Uber, Lyft and DoorDash avoided California’s wrath by dumping an unprecedented sum into an on-ballot fight they ultimately came out on top of. Silicon Valley has been well on its way towards a sustained labor fight for quite a while, though large tech companies seem to have maintained the edge so far, such as in Amazon’s recent worker organization vote victory. Though Biden has been quiet on some issues, he reiterated his support of the Protecting the Right to Organize Act this week, legislation that would protect workers looking to form unions. It’s clear that these companies that have already been on financially tenuous grounding by virtue of missing profit margins are staring down the barrel of existential doom if the current administration embraces the idea that contract workers should be treated like full-time employees by the companies that employ them. Image Credits: Melina Mara/The Washington Post/Bloomberg / Getty Images

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Other things Here are the TechCrunch news stories that especially caught my eye this week: Apple ships an iOS update After a delay and quite a bit of hullabaloo, Apple shipped iOS 14.5 this week and with it the company’s App Tracking Transparency feature that will likely greatly curtail the amount of data sucked up by third-party app makers. A new CEO for TikTok The world’s hottest social media company is getting a new permanent CEO over 8 months after Kevin Mayer left the company in the midst of a war with the Trump administration. The new leader is a recent hire at ByteDance with a lengthy legacy in the tech world. Tesla still digs bitcoin After making a cool $100 million after selling some of its bitcoin coinage, Tesla is feeling pretty good about its investment in the cryptocurrency which allows it easy access to liquidity. It’s something that sounds great as the currency pushes through record highs, but can the ride last forever? Americans are dumping money into video games Q1 was a big quarter for tech stateside as more Americans impacted by the pandemic go back to work and latent areas of the economy eye a recovery after months of slowdown. Gaming is in a particularly interesting position, seeing strong pandemic gains all throughout 2020 and showing few signs of a slowdown. The category is up 30% year-over-year. The art market moves to the blockchain This week, I covered a startup building NFT tech for the traditional art market, including collectors, asset management firms and artists themselves. It’s a sign that even after record purchases subside, there’s real excitement around the future of NFTs. DoorDash standardizes its fee structure DoorDash had a blockbuster year, one of many tech businesses to benefit from pandemic shifts in consumer spending. Now, the company is making efforts to ensure the sustainability of its partnerships, rolling out a new fee structure for restaurants this week. Image Credits: Jakub Porzycki/NurPhoto / Getty Images

Extra things Some of my favorite reads from our Extra Crunch subscription service this week: How to fundraise over Zoom more effectively “While we might have thought virtual fundraising would impossible when the world shut down one year ago, I don't think anyone believes that anymore. Not only is it more efficient — no expensive trips to San Francisco or trouble fitting investor meetings into one day — virtual fundraising helps democratize access to venture capital.” Amid an IPO boom, how should fintech startups be valued? “…Yet, as fintech companies have begun to go public, there has been a fair amount of uncertainty as to how these companies will be valued on the public markets. This is a result of fintechs being relatively new to the IPO scene compared to their consumer internet or enterprise software counterparts. In addition, fintechs employ a wide variety of business models: Some are transactional, others are recurring or have hybrid business models.“ How to attract large investors to your direct investment platform “Many fintech startups have tried to become a market-maker between investors and investment opportunities. However, the challenge with this two-sided market is: How do you get the investors to show up? It's hard enough to get retail investors, but family offices and other large check writers are even more challenging to lure.” Image Credits: TechCrunch

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