Uber Freight's $200M, 2K-person, Chicago surprise

Tuesday, September 10, 2019 by Robinhood Snacks | Disclosures

"What do I have to do to get you in this Uber Freight?"

Dow Jones
26,836 (+0.14%)
S&P 500
2,978 (-0.01%)
8,087 (-0.19%)
$10,366 (-0.48%)
10-Yr US Treasury

Hey Snackers,

Hedge fund icon Ray Dalio is still making his way back from Burning Man (tie-dye fur coat included).

For the rest of us, all eyes are staring at Apple's keynote stage for its annual product unveil — here's how to watch on your soon-to-be-inferior phone.

1. Starbucks is whipping up its 1st pickup-only store — that's a big deal

No talky until coffee... Starbucks is making it possible — CEO Kevin Johnson sat down with Bloomberg to reveal a pick-up only store is in the works for NYC this fall. Picture NASCAR pit stop meets barista nightmare — Starbucks is targeting "people on the go" (aka all humans in Manhattan) because even pre-orders face lines lately. Other key deets:

  • The where: If NYC goes well, Starbucks will export the concept to LA, BOS, CHI, SEA, and SF.
  • The what: PSL, coconut milk lattes, frapp-a-anything — you name it, pickup-only Starbucks serves it.
  • The $$$: Pickup-only could become Starbucks' #ProfitPuppy — Coffee sales will bring in the same revenues, but at lower costs (less real estate & employees).

If the Starbucks mobile app had feelings... this would be its dream. The pick-up concept blends deliciously with the Starbucks app's growth — usage has surged to hit 2 shocking numbers:

  • 17.2M = that's how many Americans use the app
  • 40% = that's how much of Starbucks' sales came from app orders (QR-code for the win)

American companies are now inspired by Chinese ones... This wouldn't be Starbucks' 1st pickup location — it launched the same concept in China last summer as "Starbucks Now." It made that move because local Chinese rival Luckin Coffee pioneered the concept across the Great Wall, jumping to 3K locations in under 2 years (Starbucks is barely higher at 4K China stores). It's an early example of American retail copying Chinese competition.


Freight just brought sexy back... Uber wants to make trucking its next profit puppy. Just like ride-hailing, Uber Freight connects drivers (of 18-wheelers) with riders (Budweiser's beer kegs or Land O'Lakes' stacks of butter). Uber just announced that Freight is its fastest-growing business line, so it's investing more in a big way:

  • Cash: Uber's Freight line will get a $200M investment each year.
  • Personnel: Uber's hiring 2K people at its future 2nd-biggest location (and the only other one besides SF that gets engineers) — Chicago = Freight HQ.
  • Perks: To sign up new truck drivers to the gig-for-cargo platform, it's offering discounts on gas, free tires (but seriously — tractor-trailers need 18 of 'em), and cash bonuses.

Uber's spending money to stop losing money... It lost a gargantuan $5B last quarter (the last 3 months), and loses $3.36 each time someone delivers an Uber Eats meal. It's funneling money away from marketing (it laid off 400 this summer in that dep't) and toward this growing bet.


Freight has to be different than the rest of Uber... Uber's 3 non-Freight divisions — rides, bikes/scooters, and Eats — all face copycat competition. Without barriers to entry to creating an app platform, Lyft, DoorDash, and others keep prices low and competition fierce. Uber must find a way to prevent an Amazon Freight or Lyft Trailer from becoming a thing.


Haters gonna hate... Only some release a 23-page open letter about it. Hedge fund Elliott Management just sent one to AT&T after splurging $3.2B for a 1.2% stake in the telecom giant. The letter's core theme: Change (almost) everything. Here's how to interpret the Real Housewives-style takedown:

  • It's not personal, AT&T: Elliott has "tremendous respect for the Company’s legacy."
  • But there's a problem: Over the last 10 years, the broader market (the S&P 500) has risen 193% — but AT&T only rose 42%.
  • So it's time for a makeover: Specifically, cut the CEO and the board – Elliot thinks that “this is the moment to determine the right team for the next decade.”
  • Take the free advice and everyone wins: The fund thinks its proposals could push up AT&T stock by 65% in 2 years.
  • FYI, the fund doesn't own enough stock to force AT&T management to listen — but shares jumped because investors hope it does.

Here's the problem... There are a lot of problems facing AT&T. The hedge fund spent pages 2-23 covering them.

  • The botched iPhone: AT&T enjoyed exclusive rights to sell iPhones when they launched — but its poor service quality ended that.
  • The identity crisis: Verizon snagged the high-end wireless market while T-Mobile/Sprint grabbed the low-end — AT&T was awkwardly left in the middle.
  • The brutal acquisitions: AT&T has dropped a hefty $200B on them the last few years — it bought DirecTV at its peak, and satellite TV has only lost subscribers since.

AT&T is a tech company led by landline guys... That's the biggest issue. The current CEO has run things for 12 years, and the newly-promoted COO's telecom roots go back to 1998. But now AT&T is a tech media company that owns streaming tech and HBO — that means it competes directly with Netflix. Elliott wants leadership to be more iPhone, less landline.

What else we’re Snackin’
  • Hangry: Wendy's ups its breakfast game to nationwide next year, but it lowers its profit projections
  • Grounded: British Airways is cancelling almost every single flight at the start of this week because of a pilot strike (but seriously, don't bother going to the airport)
  • Partnered: Spotify users can now share their music and podcasts to Snapchat
  • Groovy: Volkswagen goes back to its older, simpler logo (look sharp, drive sharp)
  • Resumés: Amazon wants 'em — it's hiring 30K when "Amazon Career Day" hits on 9/17. Like Prime Day, but for job offers
  • App'd: Apple is handicapping its own apps within the App Store because they were coming up too high in search results (we covered it in this podcast)
Snacks Daily Podcast

Chewing more on Uber's freight moves, Starbucks' "express" plan, and AT&T's hedge fund intervention


Disclosure: Authors of this Snacks own shares of Luckin Coffee, Volkswagen, and Amazon


Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2020 Robinhood. All rights reserved.