A few years ago, while on a work trip in Los Angeles, I hailed an Uber for a crosstown ride during rush hour. I knew it would be a long trip, and I steeled myself to fork over $60 or $70.
Instead, the app spit out a price that made my jaw drop: $16.
Experiences like these were common during the golden era of the Millennial Lifestyle Subsidy, which is what I like to call the period from roughly 2012 through early 2020, when many of the daily activities of big-city 20- and 30-somethings were being quietly underwritten by Silicon Valley venture capitalists.
For years, these subsidies allowed us to live Balenciaga lifestyles on Banana Republic budgets. Collectively, we took millions of cheap Uber and Lyft rides, shuttling ourselves around like bourgeois royalty while splitting the bill with those companies’ investors. We plunged MoviePass into bankruptcy by taking advantage of its $9.95-a-month, all-you-can-watch movie ticket deal, and took so many subsidized spin classes that ClassPass was forced to cancel its $99-a-month unlimited plan. We filled graveyards with the carcasses of food delivery start-ups — Maple, Sprig, SpoonRocket, Munchery — just by accepting their offers of underpriced gourmet meals.
tweeted, along with a screenshot of a receipt that showed he had spent nearly $250 on a ride to the airport.
“Airbnb got too much dip on they chip,” another Twitter user complained. “No one is gonna continue to pay $500 to stay in an apartment for two days when they can pay $300 for a hotel stay that has a pool, room service, free breakfast & cleaning everyday. Like get real lol.”
Some of these companies have been tightening their belts for years. But the pandemic seems to have emptied what was left of the bargain bin. The average Uber and Lyft ride costs 40 percent more than it did a year ago, according to Rakuten Intelligence, and food delivery apps like DoorDash and Grubhub have been steadily increasing their fees over the past year. The average daily rate of an Airbnb rental increased 35 percent in the first quarter of 2021, compared with the same quarter the year before, according to the company’s financial filings.
set up a $250 million “driver stimulus” fund — or doing away with them altogether.
I’ll confess that I gleefully took part in this subsidized economy for years. (My colleague Kara Swisher memorably called it “assisted living for millennials.”) I got my laundry delivered by Washio, my house cleaned by Homejoy and my car valet-parked by Luxe — all start-ups that promised cheap, revolutionary on-demand services but shut down after failing to turn a profit. I even bought a used car through a venture-backed start-up called Beepi, which offered white-glove service and mysteriously low prices, and which delivered the car to me wrapped in a giant bow, like you see in TV commercials. (Unsurprisingly, Beepi shut down in 2017, after burning through $150 million in venture capital.)
These subsidies don’t always end badly for investors. Some venture-backed companies, like Uber and DoorDash, have been able to grit it out until their I.P.O.s, making good on their promise that investors would eventually see a return on their money. Other companies have been acquired or been able to successfully raise their prices without scaring customers away.
Uber, which raised nearly $20 billion in venture capital before going public, may be the best-known example of an investor-subsidized service. During a stretch of 2015, the company was burning $1 million a week in driver and rider incentives in San Francisco alone, according to reporting by BuzzFeed News.
But the clearest example of a jarring pivot to profitability might be the electric scooter business.
Remember scooters? Before the pandemic, you couldn’t walk down the sidewalk of a major American city without seeing one. Part of the reason they took off so quickly is that they were ludicrously cheap. Bird, the largest scooter start-up, charged $1 to start a ride, and then 15 cents a minute. For short trips, renting a scooter was often cheaper than taking the bus.
But those fees didn’t represent anything close to the true cost of a Bird ride. The scooters broke frequently and needed constant replacing, and the company was shoveling money out the door just to keep its service going. As of 2019, Bird was losing $9.66 for every $10 it made on rides, according to a recent investor presentation. That is a shocking number, and the kind of sustained losses that are possible only for a Silicon Valley start-up with extremely patient investors. (Imagine a deli that charged $10 for a sandwich whose ingredients cost $19.66, and then imagine how long that deli would stay in business.)
Pandemic-related losses, coupled with the pressure to turn a profit, forced Bird to trim its sails. It raised its prices — a Bird now costs as much as $1 plus 42 cents a minute in some cities — built more durable scooters and revamped its fleet management system. During the second half of 2020, the company made $1.43 in profit for every $10 ride.
“DoorDash and Pizza Arbitrage,” about the time he realized that DoorDash was selling pizzas from his friend’s restaurant for $16 while paying the restaurant $24 per pizza, and proceeded to order dozens of pizzas from the restaurant while pocketing the $8 difference, stands as a classic of the genre.)
But it’s hard to fault these investors for wanting their companies to turn a profit. And, at a broader level, it’s probably good to find more efficient uses for capital than giving discounts to affluent urbanites.
Back in 2018, I wrote that the entire economy was starting to resemble MoviePass, the subscription service whose irresistible, deeply unprofitable offer of daily movie tickets for a flat $9.95 subscription fee paved the way for its decline. Companies like MoviePass, I thought, were trying to defy the laws of gravity with business models that assumed that if they achieved enormous scale, they’d be able to flip a switch and start making money at some point down the line. (This philosophy, which was more or less invented by Amazon, is now known in tech circles as “blitzscaling.”)
There is still plenty of irrationality in the market, and some start-ups still burn huge piles of money in search of growth. But as these companies mature, they seem to be discovering the benefits of financial discipline. Uber lost only $108 million in the first quarter of 2021 — a change partly attributable to the sale of its autonomous driving unit, and a vast improvement, believe it or not, over the same quarter last year, when it lost $3 billion. Both Uber and Lyft have pledged to become profitable on an adjusted basis this year. Lime, Bird’s main electric scooter competitor, turned its first quarterly profit last year, and Bird — which recently filed to go public through a SPAC at a $2.3 billion valuation — has projected better economics in the years ahead.
Profits are good for investors, of course. And while it’s painful to pay subsidy-free prices for our extravagances, there’s also a certain justice to it. Hiring a private driver to shuttle you across Los Angeles during rush hour should cost more than $16, if everyone in that transaction is being fairly compensated. Getting someone to clean your house, do your laundry or deliver your dinner should be a luxury, if there’s no exploitation involved. The fact that some high-end services are no longer easily affordable by the merely semi-affluent may seem like a worrying development, but maybe it’s a sign of progress.
It was seven years ago when Waymo discovered that spring blossoms made its self-driving cars get twitchy on the brakes. So did soap bubbles. And road flares.
New tests, in years of tests, revealed more and more distractions for the driverless cars. Their road skills improved, but matching the competence of human drivers was elusive. The cluttered roads of America, it turned out, were a daunting place for a robot.
The wizards of Silicon Valley said people would be commuting to work in self-driving cars by now. Instead, there have been court fights, injuries and deaths, and tens of billions of dollars spent on a frustratingly fickle technology that some researchers say is still years from becoming the industry’s next big thing.
Now the pursuit of autonomous cars is undergoing a reset. Companies like Uber and Lyft, worried about blowing through their cash in pursuit of autonomous technology, have tapped out. Only the most deep pocketed outfits like Waymo, which is a subsidiary of Google’s parent company Alphabet, auto industry giants, and a handful of start-ups are managing to stay in the game.
said that fully functional self-driving cars were just two years away. More than five years later, Tesla cars offered simpler autonomy designed solely for highway driving. Even that has been tinged with controversy after several fatal crashes (which the company blamed on misuse of the technology).
Perhaps no company experienced the turbulence of driverless car development more fitfully than Uber. After poaching 40 robotics experts from Carnegie Mellon University and acquiring a self-driving truck start-up for $680 million in stock, the ride-hailing company settled a lawsuit from Waymo, which was followed by a guilty plea from a former executive accused of stealing intellectual property. A pedestrian in Arizona was also killed in a crash with one of its driverless cars. In the end, Uber essentially paid Aurora to acquire its self-driving unit.
But for the most deep-pocketed companies, the science, they hope, continues to advance one improved ride at a time. In October, Waymo reached a notable milestone: It launched the world’s first “fully autonomous” taxi service. In the suburbs of Phoenix, Ariz., anyone can now ride in a minivan with no driver behind the wheel. But that does not mean the company will immediately deploy its technology in other parts of the country.
Dmitri Dolgov, who recently took over as Waymo’s co-chief executive after the departure of John Krafcik, an automobile industry veteran, said the company considers its Arizona service a test case. Based on what it has learned in Arizona, he said, Waymo is building a new version of its self-driving technology that it will eventually deploy in other geographies and other kinds of vehicles, including long-haul trucks.
The suburbs of Phoenix are particularly well suited to driverless cars. Streets are wide, pedestrians are few and there is almost no rain or snow. Waymo supports its autonomous vehicles with remote technicians and roadside assistance crews who can help get cars out of a tight spot, either via the internet or in person.
“Autonomous vehicles can be deployed today, in certain situations,” said Elliot Katz, a former lawyer who counseled many of the big autonomous vehicle companies before launching a start-up, Phantom Auto, that provides software for remotely assisting and operating self-driving vehicles when they get stuck in difficult positions. “But you still need a human in the loop.”
Self-driving tech is not yet nimble enough to reliably handle the variety of situations human drivers encounter each day. They can usually handle suburban Phoenix, but they can’t duplicate the human chutzpah needed for merging into the Lincoln Tunnel in New York or dashing for an offramp on Highway 101 in Los Angeles.
“You have to peel back every layer before you can see the next layer” of challenges for the technology, said Nathaniel Fairfield, a Waymo software engineer who has worked on the project since 2009, in describing some of the distractions faced by the cars. “Your car has to be pretty good at driving before you can really get it into the situations where it handles the next most challenging thing.”
Like Waymo, Aurora is now developing autonomous trucks as well as passenger vehicles. No company has deployed trucks without safety drivers behind the wheel, but Mr. Urmson and others argue that autonomous trucks will make it to market faster than anything designed to transport regular consumers.
Long-haul trucking does not involve passengers who might not be forgiving of twitchy brakes. The routes are also simpler. Once you master one stretch of highway, Mr. Urmson said, it is easier to master another. But even driving down a long, relatively straight highway is extraordinarily difficult. Delivering dinner orders across a small neighborhood is an even greater challenge.
“This is one of the biggest technical challenges of our generation,” said Dave Ferguson, another early engineer on the Google team who is now president of Nuro, a company focused on delivering groceries, pizzas and other goods.
Mr. Ferguson said that many thought self-driving technology would improve like an internet service or a smartphone app. But robotics is a lot more challenging. It was wrong to claim anything else.
“If you look at almost every industry that is trying to solve really really difficult technical challenges, the folks that tend to be involved are a little bit crazy and little bit optimistic,” he said. “You need to have that optimism to get up everyday and bang your head against the wall to try to solve a problem that has never been solved, and it’s not guaranteed that it ever will be solved.”
Uber and Lyft aren’t entirely giving up on driverless cars. Even though it may not help the bottom line for a long time, they still want to deploy autonomous vehicles by partnering with the companies that are still working on the technology. Lyft now says autonomous rides could arrive by 2023.
“These cars will be able to operate on a limited set of streets under a limited set of weather conditions at certain speeds,” said Jody Kelman, the executive of Lyft. “We will very safely be able to deploy these cars, but they won’t be able to go that many places.”
This article is part of Owning the Future, a series on how small businesses across the country have been effected by the pandemic.
The Covid pandemic hit California hard. It has seen well over 3.5 million cases and over 60,000 deaths. Scores of businesses have closed. But for Ana Jimenez the owner of Tacos El Jerry, a small fleet of food trucks in Santa Cruz County, it provided an opportunity to bring her business into the 21st century.
Ms. Jimenez’s four trucks began taking orders through an app and a website, delivering directly to customers, and cultivating a customer base through a new social media presence. All of that added up to a significant increase in sales.
Facebook and Instagram pages for the food trucks, a social media advertising campaign and began accepting credit card purchases. “Each truck is now serving around 300 people per day, which translates to roughly $5,000 in sales daily,” Ms. Jimenez said.
Food trucks — kitchens on wheels, essentially — are flexible by design and quickly became a substitute during the pandemic for customers who couldn’t dine indoors and coveted something different than their mainstream carryout options. That, in turn, has delivered a new client base to add on to an existing cadre of loyal followers. In a very real sense, food trucks are vehicles for equality in the post-pandemic world.
“While the pandemic has certainly hurt the majority of small businesses, it has also pushed many to be more innovative by looking for new revenue streams and ways to reach customers,” said Kimberly A. Eddleston, a professor of entrepreneurship and innovation at Northeastern University.
Like Ms. Jimenez, some businesses have “focused on ways to maintain their customer base by, for example, delivering products directly to customers,” Prof. Eddleston said. “While others have created products and services that attract new customers.”
Blue Sparrow food trucks in Pittsburgh, adding pizza, four-packs of local beer, gift cards and five-ounce bottles of housemade hot sauce.
Mr. Cypher’s main fare since he hit the streets in 2016 has been global street food. His menu carries a heavy Asian inspiration. There’s made-from-scratch kimchi on the menu daily. Dishes can include rice bowls, Vietnamese banh mi, falafel burritos, and a burger made with a ramen bun.
During the pandemic, Mr. Cypher’s business took a hit when 24 festivals and over a dozen weddings where he was booked were canceled. “I switched gears to keep things as lean as possible,” Mr. Cypher said.
He temporarily shut down a second food truck — a retrofitted 35-foot, 1956 Greyhound bus that he used for the big parties — and introduced a website to interact with his customers and an online ordering system for his smaller truck, which he usually parked at a neighborhood brewery.
“I switched the menu to focus on soups, noodles, burritos and pressed sandwiches, so that the things that we were handing our customers would make it home and still be a good experience after they opened up the bag and took it out,” he said.
Today in Business
And he began to make and sell pizza one day a week at the kitchen where he used to do his prep work for the trucks before the pandemic. (The pizza, too, has an international flair: a banh mi pie, for example, made with pork or tofu, miso garlic sauce, mozzarella, pickled carrots, cucumbers, and cilantro.)
Accion Opportunity Fund, a nonprofit organization providing small-business owners with access to capital, networks and coaching. “Many food truck owners stepped forward to seize opportunity during a time of great uncertainty,” she said.
As Pittsburgh emerges from the pandemic, Mr. Cypher is adding a twist at his kitchen location. “We have licensing to offer beer on draft from our local breweries, so we’re going to have a small beer garden,” he said. “And that’s a revenue stream that we’re going to kind of lean into that we probably never would have done if not for Covid.”
In 2020, Mr. Cypher’s food trucks had $200,000 in gross sales, down about 40 percent from the previous year, he said. “But with the new offerings, more efficiency and only running one rig, we were actually able to net enough to keep the business moving forward,” he said. “This year we’re already up about 30 percent from where we were at last year at this time.”
Shiso Crispy, timing was much tricker: she opened her first truck in November 2019, just a few months before the pandemic. And yet Ms. Whaley, 35, who offers handmade gyozas, bao buns and their signature dish, dirty rice, now has two trucks because of a strategy of regularly parking in certain neighborhoods and offering discounted and free meals outside a nearby Ronald McDonald House. (She added the second truck in January.)
One challenge: “The internet here is shoddy. And cellphone service in different areas out here just doesn’t work,” she said. “During the height of the pandemic, I was consistently losing two or more transactions at my point of sale every shift.”
Clover Flex point of sale program for touchless transactions. “It has digitally transformed my business,” Ms. Whaley said.
She also signed on to an app, called Best Food Trucks, that allows customers near her to pre-order once they know her location for the day.
“The inextricably connected stories of food trucks and Covid are a perfect microcosm of the undeniable reality that women, immigrants and people of color, historically relegated to the edges of the economy, are actually the foundation upon which the next economy must be built,” said Nathalie Molina Niño, author of “Leapfrog: The New Revolution for Women Entrepreneurs.”
But the silver lining from the pandemic for some operators is more personal — including bringing families together. “I have a ton of wisdom about how to operate food trucks and cooking,” Ms. Jimenez said. “It’s the coming together of the generations that made the business stronger now and for the future.”
Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles
What’s Up? (May 9-15)
Panic at the Pump
A cyberattack on Colonial Pipeline, one of the biggest fuel arteries in the United States, pushed the average price of gas above $3 per gallon for the first time since 2014. Fearing a shortage, panicked buyers lined up at the pump, which, of course, made the problem worse. To appease the hackers, who are believed to be part of a foreign organized crime group, Colonial Pipeline paid nearly $5 million in ransom — a capitulation that could embolden other criminals to take American companies hostage. The pipeline’s operators restored service late last week but said the supply chain would need several days to return to normal.
It’s Not Your Imagination
A new report from the Labor Department confirmed what you may have noticed: Prices for consumer goods like clothes, food and other household goods were up 4 percent in April from a year ago, blowing past forecasts. Economists are attributing the spike to pandemic-related issues like higher shipping and fuel costs, supply disruptions, rising demand and understaffing at factories and distribution centers. The Federal Reserve tried to assuage fears of inflation by insisting that the increase was temporary. But the news spooked the stock market all the same. And retail sales in April fell short of expectations, holding steady but showing a slowdown in growth after a blockbuster March.
address concerns from U.S. officials that it could be used for money laundering and other illegal purposes. The company is also moving the project to the United States from Switzerland after a stalled attempt to gain approval from Swiss regulators. In other crypto news, Tesla’s chief executive, Elon Musk, abruptly reversed his support for Bitcoin, tweeting that his company would no longer accept the cryptocurrency as payment because of the fossil fuels used in its mining and transactions. After his tweet, the price of Bitcoin dropped more than 10 percent.
What’s Next? (May 16-22)
Free Rides for Shots
As part of an effort to get 70 percent of American adults at least partly vaccinated by July 4, federal and state governments are adding extra incentives. (In case keeping yourself and others safe, and the ability to go maskless, wasn’t a good enough reason.) The Biden administration has partnered with the ride-hailing companies Uber and Lyft to provide free transportation to vaccination sites nationwide starting May 24. West Virginia is working on a plan to offer $100 savings bonds to people ages 16 to 35 who get their shots. And those who receive the vaccine in Ohio will be entered into a lottery that awards a $1 million prize each week for five weeks, starting May 26.
Ellen’s Last Dance
Ellen DeGeneres will end her talk show next year after nearly two decades on the air. Her program has seen a steep decline in ratings after employees complained of a toxic workplace and accused producers of sexual harassment. The accusations looked particularly bad in light of Ms. DeGeneres’s tagline, “Be Kind,” which has become a branded juggernaut used to market merchandise to her fans. Although Ms. DeGeneres apologized publicly in September for the incidents, the show has since lost more than a million viewers, a 43 percent decline from about 2.6 million last season. It also saw a 20 percent decline in advertising revenue from September to February compared with the previous year.
(Slightly) More Golden Arches
In the battle to recruit workers in a tight job market, McDonald’s has become the latest fast-food company to raise hourly wages, following in the recent footsteps of chain restaurants including Chipotle and Olive Garden. But the McDonald’s pay increase applies only to its company-owned restaurants, which make up a small fraction of its business. About 95 percent of its U.S. restaurants are independently owned and set their own wages.
apply for a $50 monthly discount on high-speed internet services. Hearst Magazines sold the American edition of Marie Claire to a British publisher. And after more than a year of trying to figure out what to do with the embattled retailer Victoria’s Secret, the brand’s parent company has decided to split itself into two independent, publicly listed entities: Victoria’s Secret and Bath & Body Works.
Join Andrew Ross Sorkin of The Times in conversation with Dame Ellen MacArthur and other economic experts to explore what it will take to transform the economy in the battle against climate change. May 20 at 1:30 p.m. E.T. RSVP here.
Last February, when Glauber Contessoto decided to invest his life savings in Dogecoin, his friends had concerns.
“They were all like, you’re crazy,” he said. “It’s a joke coin. It’s a meme. It’s going to crash.”
Their skepticism was warranted. After all, Dogecoin is a joke — a digital currency started in 2013 by a pair of programmers who decided to spoof the cryptocurrency craze by creating their own virtual money based on a meme about Doge, a talking Shiba Inu puppy. And investing money in obscure cryptocurrencies has, historically, been akin to tossing it onto a bonfire.
But Mr. Contessoto, 33, who works at a Los Angeles hip-hop media company, is no ordinary buy-and-hold investor. He is among the many thrill-seeking amateurs who have leapt headfirst into the markets in recent months, using stock-trading apps like Robinhood to chase outsize gains on risky, speculative bets.
In February, after reading a Reddit thread about Dogecoin’s potential, Mr. Contessoto decided to go all in. He maxed out his credit cards, borrowed money using Robinhood’s margin trading feature and spent everything he had on the digital currency — investing about $250,000 in all. Then, he watched his phone obsessively as Dogecoin became an internet phenomenon whose value eclipsed that of blue-chip companies like Twitter and General Motors.
disavowed the coin, and even Mr. Musk has warned investors not to over-speculate in cryptocurrency. (Mr. Musk recently sent the crypto markets into upheaval again, after he announced that Tesla would no longer accept Bitcoin.)
What explains Dogecoin’s durability, then?
There’s no doubt that Dogecoin mania, like GameStop mania before it, is at least partly attributable to some combination of pandemic-era boredom and the eternal appeal of get-rich-quick schemes.
But there may be more structural forces at work. Over the past few years, soaring housing costs, record student loan debt and historically low interest rates have made it harder for some young people to imagine achieving financial stability by slowly working their way up the career ladder and saving money paycheck by paycheck, the way their parents did.
Instead of ladders, these people are looking for trampolines — risky, volatile investments that could either result in a life-changing windfall or send them right back to where they started.
posted a screenshot of his cryptocurrency trading app, showing that he’d bought more. And on Thursday, when the value of his Dogecoin holdings fell to $1.5 million, roughly half what it was at the peak, he posted another screenshot of his account on Reddit.
Many of the states that have suffered the worst recent coronavirus outbreaks have seen notable declines both in new cases and in hospitalizations over the last two weeks, according to a New York Times database.
For example, in Michigan, which has had one of the country’s steepest drops, the average number of daily cases sank 45 percent and hospitalizations tumbled 32 percent over that time period, as of Tuesday.
The average number of new cases is also down 30 percent in Minnesota, 38 percent in Pennsylvania and 33 percent in Florida in the past two weeks. In the same three states, hospitalizations are down 20 percent, 27 percent and 11 percent.
The progress for states like Michigan, which recently began to recover from one of its worst stretches in the pandemic, could indicate that vaccinations are beginning to rein in the virus in the United States. Hospitalization data can often lag behind case numbers for a number of reasons.
lower vaccination rates but did not see the same recent spike in case numbers as its northern neighbor.
“I don’t see us having a national surge. We’re not going to be like India. I do think the vaccine levels have surely helped us tremendously in taking that off the table,” Dr. Osterholm said. “But I do think at the state level, where we have substantial populations that need to be vaccinated, we could still see substantial activity.”
the pace of U.S. vaccinations had declined. Nearly all states now have a glut of vaccine doses that could be quickly redirected to adolescents once the Pfizer-BionTech vaccine has been authorized for 12- to 15-year-olds.
President Biden is pursuing a strategy focused on local outreach and expanded accessibility to the vaccine to help reach his goal of at least partly vaccinating 70 percent of Americans by Independence Day.
“If it’s available, if it’s nearby, if it’s convenient, people are getting vaccinated,” Mr. Biden said at the White House on Wednesday, highlighting initiatives like walk-up availability and free Uber and Lyft rides to vaccination sites.
Making it easier to get vaccinated could appeal to the roughly 30 million Americans who say they would get the shot, but have not yet done so for myriad reasons. Local officials and private businesses are also offering a wide range of different incentives, like free subway rides, beer, baseball tickets and cash payouts, to convince more reluctant Americans to get vaccinated.
The changes in the trajectory of the virus in the United States comes as other regions of the world, especially India and Southeast Asia, are getting hit hard. A number of variants are also spreading around the world, and scientists told a U.S. congressional panel on Wednesday that variants will pose a continuing threat to the nation.
Dr. Tedros Adhanom Ghebreyesus, the director general of the W.H.O., said on Monday that the world was seeing a plateau in known cases, “but it is an unacceptably high plateau with more than 5.4 million cases and almost 90,000 deaths last week.”
He continued, “Any decline is welcome but we have been here before, over the past year many countries have experienced a declining trend in cases and deaths, have relaxed public health and social measures too quickly, and individuals have let down their guard only for those hard-won gains to be lost.”
It has been only five weeks since New York State legalized the use of recreational marijuana. The board that will oversee the rollout has yet to be appointed, let alone rules set for how licenses will be issued to cannabis businesses. The sale of legal pot in the state is still a year away. And, of course, marijuana remains illegal on the federal level.
But already the rush is on to get a piece of what could be a $4.2 billion industry in the Empire State.
Brokers are talking to landlords about leasing storefronts to dispensaries. Representatives of out-of-state cannabis businesses are flying in to scope out properties. And suppliers of medical marijuana are expanding in the hope that they will be able to branch into recreational sales.
Agricultural land upstate is now marketed as being “in the green zone” for hemp farming or the construction of grow houses for cultivating marijuana.
may soon change.
heated discussions among local officials, some of whom “can’t fathom the idea of the devil’s lettuce businesses within their borders,” said Neil M. Willner, co-chair of the cannabis practice at Royer Cooper Cohen Braunfeld, a New York City law firm.
But the pandemic may have softened the stance of some officials, given the jobs and tax revenue that cannabis businesses can generate after the protracted health crisis has decimated both. The state estimates that the new industry could bring it $350 million in annual revenue and create 30,000 to 60,000 jobs.
Meanwhile, funding is pouring into the industry in anticipation of possible federal legalization, some lenders will now do business with cannabis companies, and real estate investment trusts have sprung up to serve marijuana interests.
an increase in purchasing over leasing in the past year.
“Going forward, when banking becomes more normalized for us — when we have the opportunity to get real estate debt in the way traditional industries do — we would have a preference for owning real estate,” said Barrington Rutherford, senior vice president of real estate and community integration at Cresco Labs, a cannabis company with operations in several states.
law firms, consultants, insurance agents and accountants specializes in helping clients jump through regulatory hoops. A listing service that is the industry’s answer to Zillow offers a wide range of real estate, from $65,000 lots in an industrial park in Lexington, Okla., to a $109 million, 45,000-square-foot grow house in San Bernardino, Calif.
The brick-and-mortar side of cannabis real estate has also evolved.
As cultivation of marijuana has become more sophisticated, grow houses have expanded — they can be 150,000 square feet or more, with high ceilings, heavy-duty ventilation, lighting and security. Processing typically occurs in separate buildings with high-tech machinery.
dispensaries are increasingly stylish, offering a rarefied retail experience. Accomplished architecture and design firms have gotten into the act. There are even companies that specialize in kitting out dispensaries and other cannabis real estate.
And as marijuana gains broader public acceptance — and some celebrity glamour, with Jay-Z’s Monogram and Seth Rogen’s Houseplant — stores are opening in prominent locations near traditional retailers.
“We’re next to Starbucks in downtown Chicago,” Mr. Rutherford said. “In Philadelphia, the store we’re opening is a half block from Shake Shack and down the block from Macy’s.”
“We are building a portfolio of sites that would be enviable by any retail organization,” he added.
The New York State law also provides for licenses for “consumption sites,” and this is expected to give rise to clublike lounges and cannabis cafes. The prospect of such convivial settings has led to predictions that New York City may become the next Amsterdam.
These new storefront uses would appear to be a godsend for New York’s retail real estate market, where availability has increased and rents have fallen.
“A few years ago, when the market was stronger, it was harder to find landlords willing to play ball,” said Benjamin S. Birnbaum, a broker at the real estate services firm Newmark. “What’s changed, because of the pandemic, is that every landlord is willing to talk about it.”
in a recent CNBC interview.
Regardless of size, opening a dispensary can be complicated and expensive, in part because states have required that would-be retailers have control of a site, through a lease or option to lease, before they can apply for a license. But the number of licenses in some states is limited, with no guarantee a business will get one.
In Oregon, some applicants had to wait so long — one or two years, said Andrew DeWeese, a lawyer with Green Light Law Group in Portland — they eventually gave up and essentially sold their place in line.
“It’s a Catch-22,” said Kristin Jordan, a cannabis lawyer in New York City. “You want to secure real estate, but you don’t want to jump the gun.”
Still, the prospect of operating in New York, a state with more than 19 million residents and a major tourist destination, is so enticing that cannabis companies are getting their ducks in row.
Companies that have medical dispensaries, which have been operating since 2016, are in an enviable position because it is believed they will have an advantage in securing additional licenses.
Cresco Labs has four medical dispensaries in New York, including one in the Williamsburg neighborhood of Brooklyn. It is unclear whether the state will allow recreational marijuana to be sold at those locations, but Mr. Rutherford is hedging his bets, adding parking and in some cases expanding by leasing a storefront next door to an existing space.
“We are making sure those stores are ready for the future adult use market,” he said.
Mr. Donaldson declined to be interviewed. A representative for him declined to address the working conditions at his companies but said of the videos with offensive content: “When Jimmy was a teenager and was first starting out, he carelessly used, on more than one occasion, a gay slur. Jimmy knows there is no excuse for homophobic rhetoric.” The representative added that Mr. Donaldson “has grown up and matured into someone that doesn’t speak like that.”
Many younger creators said they wanted to emulate Mr. Donaldson’s entrepreneurial path.
“I think Mr. Beast inspires all of Gen Z,” said Josh Richards, 19, a TikTok creator in Los Angeles with nearly 25 million followers. “He’s giving a lot of kids a new path to take, to teach these young kids on how to be entrepreneurial, not just to get a lot of views or become famous.”
A perfect viral recipe
Like many members of Generation Z, Mr. Donaldson, who grew up in Greenville, N.C., founded a YouTube channel when he was in middle school, back in 2012.
To crack YouTube’s recommendation algorithm, he initially cycled through different genres of video making. He posted videos of himself playing games like Call of Duty, commented on YouTube drama, uploaded funny video compilations and livestreamed himself reacting to videos on the internet.
Then in 2018, he mastered the format that would make him a star: stunt philanthropy. Mr. Donaldson filmed himself giving away thousands of dollars in cash to random people, including his Uber driver or people experiencing homelessness, capturing their shock and joy in the process. The money initially came mostly from brand sponsorships.
It turned out to be a perfect viral recipe that mixed money, a larger-than-life persona and wholesome reactions. Millions began watching his YouTube videos. Mr. Donaldson soon rebranded himself as “YouTube’s biggest philanthropist.”
The combination was also lucrative. Though Mr. Donaldson gave away increasingly large amounts — from $100,000 to $1 million — he made it all back and more with the advertising that ran alongside the videos. He also sold merchandise like socks ($18), water bottles ($27) and T-shirts ($28).
“The media has a bias toward celebrity and novelty and energy,” said U.S. Representative Ritchie Torres of the Bronx, who has endorsed Mr. Yang.
The candidate’s version of Trumpian provocation is a series of Twitter controversies over mildly misguided enthusiasm for bodegas and subways. “The Daily Show” last week launched a parody Twitter account featuring a wide-eyed Mr. Yang excitedly declaring gems like “Real New Yorkers want to get back to Times Square.”
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Mr. Yang was less amused than usual by that effort. “It seems like an odd time to utilize Asian tourist tropes,” he told me acidly. “I wish it were funnier.”
The joke is also probably on his critics. He has, like Mr. Trump, appeared simply to benefit from the attention. When his campaign asked the fairly narrow slice of Democratic primary voters who get their news from Twitter how they would characterize what they were seeing about the candidate, 79 percent said it was positive.
While Mr. Yang isn’t new to the city, he’s new to its civic life. He has never even voted in a mayoral election. The provocative heart of his presidential campaign, a promise to palliate dystopian, robot-driven social collapse by handing out $1,000 a month to a displaced citizenry, doesn’t make sense in city budgeting, and so he replaced it with a program of cash supplements targeted, more traditionally, at the poor. It’s unclear how many people still think he’s the free-money candidate.
His campaign’s top staffers work for a consulting firm headed by Bradley Tusk, a former aide to Mayor Bloomberg and the disgraced former Illinois governor Rod Blagojevich. Mr. Tusk, who also advised Uber, has steered Mr. Yang toward a broad-strokes, pro-business centrism and kept him out of the other candidates’ competition for the left wing of the primary electorate.
Mr. Tusk told me in an unguarded moment in March that Mr. Yang’s great advantage was that he came to local politics as an “empty vessel,” free of fixed views on city policy or set alliances. When I asked the candidate what he made of that remark, Mr. Yang took no offense. “A lot of New Yorkers are excited about someone who will come in and just try to figure out, like what the best approach to a particular problem is, like free of a series of obligations to existing special interests,” he said.
In the first months of 2021, what was good for the auto industry was decidedly good for the American economy.
Spending on motor vehicles and parts rose almost 13 percent in the first quarter, making a big contribution to the increase in gross domestic product, the Commerce Department reported Thursday. Strong sales of new and used vehicles were propelled by consumers who had delayed purchases earlier in the pandemic and by others who — because of the virus — wanted to rely less on public transit or shared transportation services like Uber.
Two rounds of stimulus payments since late December were a big factor. Low interest rates, readily available credit, rising home values and stock prices, and strong trade-in values for used models also eased the path for consumers.
In fact, demand in the first quarter was robust enough that the auto industry was able to post healthy results despite a shortage of computer chips that forced temporary shutdowns of many auto plants.
Ford Motor reported it made a $3.3 billion profit in the quarter, its highest total since 2011. While it produced 200,000 fewer vehicles in the quarter than it had planned, the average selling price of Ford models rose to $47,858, 8 percent higher than in the first quarter a year ago, Edmunds reported.
The combination of strong consumer demand and tight inventories — partly a result of the chip shortage — has produced something of a dream scenario for auto retailers. At AutoNation, the country’s largest chain of dealerships, many vehicles are being sold near or at sticker price even before they arrive from the factory.
“I’ve never seen so much preselling of shipments,” said Mike Jackson, the chief executive. “These vehicles are coming in and going right out.”
In the first quarter, AutoNation’s revenue jumped 27 percent, to $5.9 billion, and the company reported $239 million in profit. That was a turnaround from a loss a year ago, when the pandemic crimped sales and forced AutoNation to close stores.