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Zenefits CEO David Sacks To Step Down

Steve Jennings / Getty Images

David Sacks, the CEO of Zenefits, plans to step down as head of the embattled human resources startup after less than a year on the job, he told BuzzFeed News Friday evening.

Zenefits is currently conducting a search for a new CEO and does not yet know who will take over, or when the handover will happen, Sacks said. He said he plans to stay on as CEO until that time, at which point he will take on the role of chairman, working alongside his successor.

Going forward, Sacks is open to the possibility of working in the administration of President-elect Donald Trump, even in an informal role, according to a person close to him who insisted on anonymity. Peter Thiel, the billionaire tech investor who is a member of Trump's transition team, is an old friend of Sacks&039;s and sits on Zenefits&039; board. The two men, who met as students at Stanford University, once co-wrote a provocative book critiquing “multiculturalism” on college campuses and later were early executives at PayPal. (Both recently apologized for the book.)

The shakeup at Zenefits caps a turbulent year for the startup health insurance broker, which ousted its founding CEO, Parker Conrad, in February after revelations that it flouted state insurance laws. Under Sacks, Zenefits has shed hundreds of staff, struck settlements with state regulators that were investigating the company, and released a new software platform called Z2, all in an effort to remake itself.

Sacks said on Friday that he felt he had “accomplished everything I set out to accomplish,” and that he had been discussing with the board for a few weeks the possibility of his stepping down as CEO.

“It&039;s not a job I sought,” said Sacks, who had been the chief operating officer before the board asked him to take the helm. “I had a responsibility to the investors and employees to guide the company through this crisis, and we&039;ve done that.”

Sacks, who rose to prominence as chief operating officer of PayPal and later sold his software startup Yammer to Microsoft for over $1 billion, added, “This is the hardest thing I&039;ve done as an entrepreneur, effectively re-founding the company.”

“You saw how tired I was at Z2,” he said, referring to the October conference where Zenefits unveiled its new software platform. “This took everything I had.”

The Wall Street Journal reported Friday that Sacks planned to join Trump’s transition team, but Sacks refuted this, and told BuzzFeed News, “I have no plans to join the transition team.”

The Information earlier reported that Zenefits was searching for a candidate to possibly replace Sacks as CEO.

Even as it cleans up its legal mess, Zenefits is awash in red ink. BuzzFeed News reported on Friday that the company lost $204.5 million in its last fiscal year, on revenue of $43.5 million, though its revenue is growing and it has reduced its monthly cash burn.

Here is the full text of an email Sacks sent to his employees Friday night, which was obtained by BuzzFeed News:

All-

Ten months ago, the Board asked me to step into the CEO role at Zenefits amidst a regulatory crisis. This is not a job I sought, but I felt a responsibility to our investors, employees, and customers to help the company through the crisis.

I accepted no compensation to do this, even though it was offered to me. I wanted to make sure there was more for all of you. (One of the accomplishments I’m most proud of is that employee ownership has more than doubled since I became CEO.)

This week, we successfully resolved the issues that gave rise to the crisis, signing a deal with our lead regulator, the California Department of Insurance (CDI). We’ve also settled with 19 other states, including Washington. (Far from being a setback, the Washington deal provides an answer on the rebating question for a handful of states, helping to resolve all of the existential issues that faced the company just a year ago.)

One of the most remarkable features of the California settlement is that CDI reduced its fine 50% in recognition of the remediation and cultural transformation that we accomplished.

In fact, regulators across the country have praised the New Zenefits for resetting our values, culture, mission, leadership, and governance. Because of that, the company will pay less than 1% of invested capital for a clean bill of health with regulators.

This is due to all of your hard work. Each of you chose to embrace the new values of the company and make great decisions for the business and our customers. Ten months ago, when we were facing headlines like this, most outside observers would have said this outcome was not possible. But you did it.

And not just that. You kept building. You didn’t let the headlines distract you. You launched our new Z2 product that customers love. As a result, we’ve seen a huge increase in leads on the heels of Z2, causing Sales to hire again.

We&039;ve refocused on our core small business market and customer success. We’ve restored our relationship with all of our key stakeholders, including investors and our industry. We took tough but necessary steps to cut burn, including reducing headcount 35%.

In short, we&039;ve achieved every goal set forth in my Day 1 memo, which outlined the turn-around plan for this company.

With that turn-around complete, now is the time to start planning for the next phase of Zenefits. While there will be no immediate changes, I want to be transparent about my plan, which is to transition into a Chairman role and lead a search for the permanent CEO of the company.

The Chairman role will allow me to focus on what I do best — product and strategy — while working with a great operator who can help build our small business pipeline. I feel it is best to be public about this search so that we can attract the best candidates.

Zenefits has an amazing team, hundreds of millions of dollars in the bank, and years of runway to keep building. We are also the best All-in-One HR product for small businesses, a huge greenfield category. The company is spring-loaded for success, and I’m excited about partnering with a great operator to take Zenefits to the next level.

Looking back over the past year, I am extremely proud of the work that we did together to address the crises facing the company and turn the corner towards a better future, in which our success will be based solely on the quality of our product and service. In fact, of all the things that I’ve done in my career, and all the teams I’ve worked with, I couldn’t be more proud of this team and what we accomplished.

I told you on Day 1 that you were all co-founders with me in the New Zenefits. That is still true. I still love this company and our mission to make entrepreneurship and small business ownership easier and more accessible to everyone. I look forward to the work that we will continue to do together. This is not an end on any level, it is the next chapter.

LINK: Zenefits Lost $200 Million Last Year

Quelle: <a href="Zenefits CEO David Sacks To Step Down“>BuzzFeed

Facebook Scammers Are Profiting From Standing Rock By Stealing Native Artwork

Getty Images / SunFrog

As pipeline protesters at Standing Rock prepare to dig in for the winter, a growing network of dubious Native American Facebook pages is cashing in on the movement by selling stolen No DAPL T-shirt designs and by driving traffic to dubious clickbait websites, a BuzzFeed News investigation has found.

The owners of these pages and websites reside in faraway countries such as Vietnam and Kosovo, and they are capitalizing on online interest in Standing Rock, and Native American culture in general, to make money. BuzzFeed News identified more than 60 Facebook pages with more than 6 million fans that are generating money either by selling counterfeit Native American merchandise, or by driving traffic to ad-filled websites that in some cases have little or nothing to do with Native American issues.

Native designers say their work is being stolen and resold, and that some pages falsely claim to donate proceeds to the protesters at Standing Rock.

“They’re just capitalizing on struggle — it’s really crazy,” said Jared Yazzie, a Navajo who runs Oxdx, Native American clothing company in Arizona. He said some Facebook pages have even taken photos of his models and photoshopped different clothing on them.

“When they use my models I think that makes me the most angry,” he said.

Erica Moore with two people wearing one of her Standing Rock T-shirt designs.

Erica Moore / Via instagram.com

Erica Moore is a 23-year-old Native American who designed a series of T-shirts to help raise funds for the pipeline protesters. She said copies of her designs soon began showing up on Facebook and elsewhere.

“It&#039;s a different story if they would ask our permission to use the design, but I&039;ve seen my designs being sold without my consent, and I&039;ve seen people trying to re-design my design in some way to make it their own,” she said. “It just isn&039;t right.”

BuzzFeed News tracked some of the worst offending Facebook pages to owners in Vietnam. Like If You Love Native Americans has almost 190,000 fans and is connected to a website registered to “Hoai Thu Ngo Thi” in Vietnam. It promotes its T-shirts by photoshopping them on celebrities such as The Rock, Johnny Depp, Mark Wahlberg, and others. Many of its recent posts about clothing comment on the Standing Rock protest, though there is no evidence that the people running the page donate any proceeds to the protesters.

BuzzFeed News messaged the page on Facebook and the person who replied introduced themselves as a woman in Michigan named Maria Torres who claims to be Native American on her Facebook profile. The profile appears to only have been created in March of this year and primarily shares merchandise being promoted by the Like If You Love Native Americans page. The account also reposts content and merchandise from a page called Wolves In Native American Culture which points to a domain name registered to the same person in Vietnam.

Asked how the page gets its designs, the person running the page responded, “The clothing and fashion design industry is highly competitive; it is full of individuals.”

The fake Maria Torres profile on Facebook.

Facebook

After being told records show they are in fact located in Vietnam, the person admitted that’s where they are based, meaning the Maria Torres account is a fake created to promote its content and products. The person then denied stealing designs from Native artists.

“No steal their work,” they wrote in all caps. “I am an affiliate marketer search designs on that site an [sic] sell.”

The person said they simply find Native American T-shirts that have already been uploaded to SunFrog and collect them on one page, earning a commission each time they sell. SunFrog is one of several websites that enable anyone to to upload a design and then offer print-on-demand ordering for a range of clothing.

Kirk Yodzevicis, SunFrog’s general counsel, confirmed that people can create collections of existing designs uploaded to SunFrog, and said the company takes down any infringing designs and closes the related account. He pointed to a form on its website that anyone can use to make a claim.

“When we find out somebody stole a design they get their account shut down,” he said. He also said anyone who falsely claims to sell clothing in support of a cause will have their account closed and SunFrog will donate their earnings to charity.

Yodzevicis said SunFrog has seen an increase in infringing designs and false charity claims related to Standing Rock.

“Absolutely, no question about that,” he said. “Anytime there is any kind of an issue in the news that has some kind of passion about it you are gonna see people that are going to try and game the system.”

One of the bigger pages identified by BuzzFeed News is called Indigenous People of America and has over 750,000 fans. It shares a steady stream of news related to events in Standing Rock, but under many of its posts it also promotes the sale of a knockoff of a shirt created by actor Shailene Woodley to raise funds for Standing Rock. The page also regularly posts content from a website called TheIndigenousPeoples.com, which was only registered in early November and has its owner’s name hidden.

The only official seller of the Woodley shirt is Omaze, yet the design can be found for sale on many other online clothing sites as well as on Amazon. SunFrog removed a version of the shirt for sale on its site after being alerted to it by BuzzFeed News, though other copies of the design remain for sale on the site.

There is no evidence that any of these sellers donate money to Standing Rock, or that they had permission to sell Woodley’s shirt. (A rep for Woodley did not respond to a request for comment.)

Another big Facebook page hawking inauthentic Native American goods is Native American Indians, which has over 360,000 fans and promotes merchandise from a store called NativeThing.com. That website is registered to “Hoang Trung Hieu” of Vietnam. It’s the subject of a litany of online complaints from people who bought boots and other items under the impression that they were authentic Native designs and craftsmanship. Once they receive their order people realize it was made in China, gives off a noxious odor, and that the company subsequently refuses to accept returns.

“You get stuck with the smelly product you can&039;t wear,” wrote one woman on Facebook. “How many ways can you spell ‘screwed.’”

Many other pages pursue a similar strategy of building up an audience with Native content and then trying to sell them shirts and other items that are often rip-offs of Native designs. One newer page is called I Stand with Standing Rock Sioux Tribe and shares a steady diet of news about the protest mixed with constant pleas for people to show their support by buying shirts for the cause. The page did not respond to a question about whether it donates any money to the tribe.

Along with stealing the work of Native artists, and the likenesses of models and celebrities, some scammers even used a photo of the first Native American federal judge to create fake profiles to help spread their content.

Fake profiles featuring the photo of Judge Diane Humetewa.

Facebook

Judge Diane Humetewa serves as a United States District judge of the United States District Court for the District of Arizona. Her photo has been used on at least three fake Facebook profiles, one of which lists its two only friends as two young men in Kosovo. One of the men did not reply to an interview request from BuzzFeed News, and the judge’s chambers declined to comment, citing the Code of Conduct for US Judges.

One of the largest networks of Native American Facebook pages initially identified by BuzzFeed News belonged to two young men in Kosovo. One of the men, a 25-year-old named Dardan, said in a Skype interview that he only owns “two or three” Native American Facebook pages. But when asked if it’s possible that he in fact owns 13 pages as well as a Native American group with more than 15,000 members, he smiled and said, “Maybe. It could be.”

At the time of the interview, their pages had close to 2 million fans. However, after speaking to BuzzFeed News all of their pages were taken offline.

Rather than selling Native American designs, the pages has been used to promote links to a single website, BuzzDuzz.net, where Dardan and a partner publish clickbait articles about a wide variety of topics, though rarely about Native Americans.

“Lately most of the content [on the Facebook pages] is not about Native Americans,” he said. “It’s hard to get content just about Native Americans and I don’t have time for that.”

Dardan did not respond to a subsequent Facebook message from BuzzFeed News asking why they had removed their Native American Facebook pages. BuzzDuzz is still publishing as of this writing.

Some of the Native American designers who spoke to BuzzFeed News said the non-Natives running the pages and selling stolen designs are making more money than they are.

Aaron Silva, a Native American and the co-founder of The NTVS clothing brand in Minnesota, said the dubious Native American sellers often have one or several large Facebook pages to use to promote the merchandise. Silva also said these pages spend money to create sponsored Facebook posts that promote the item for sale to large numbers of people.

“These pages are taking our work and paying for the sponsored posts on Facebook and making tons of money off of us,” Silva said. “Just from the sponsored posts we do we’ll get maybe 1,000 to 2,000 likes and maybe generate 1,000 in sales off of like a $200 ad.”

He said he’s seen sponsored posts from dubious Native American pages that receive tens of thousands, or even hundreds of thousands, of likes and a large number of shares as well. “It tells me tons of people are seeing [the ad], and you can see in the comments that many people are buying,” he said.

BuzzFeed News found sponsored Facebook posts from the Native American Cultures page, which appears to only have been created in September, that fit Silva’s description. One of its current sponsored posts shows photos of Bernie Sanders and celebrities with the Shailene Woodley shirt. It asks people to “Support The Standing Rock Sioux Tribe” and to buy the shirt, but the link does not send people to her official sales page. This sponsored post for a stolen design has received over 125,000 reactions, 15,000 comments, and close to 18,000 shares as of this writing.

Facebook

Another sponsored post from the page shows Johnny Depp with a Native shirt design photoshopped onto him. It had over 33,000 reactions, nearly 4,000 comments, and over 8,000 shares. These sponsored posts also help grow the number of fans for that page: When BuzzFeed News first found the Native American Cultures page roughly two weeks ago, it had just over 57,000 fans. It now has over 72,000.

To put this into perspective, the engagement for that page’s sponsored posts is significantly better than a legitimate sponsored Facebook post currently running from Woodley herself. It has close to 12,000 reactions, just over 500 comments, and 2,100 shares as of this writing. (It’s possible the other sponsored posts have been running longer, or have been backed with more money, in order to accrue more engagement.)

“Facebook prohibits advertisements, which includes boosted posts, that are deceptive, false, or misleading, including deceptive claims, offers, or business practices,” a Facebook spokesperson told BuzzFeed News. “We are looking into these claims and will take appropriate action.”

Facebook

Silva tried to raise awareness about the fake Native pages by listing some of the worst offenders in a post on his company’s Facebook page. The comment thread was soon filled with people sharing other examples of suspect pages, and of designers talking about how they too had their work stolen.

Silva and others have also tried to contact T-shirt sites such as SunFrog and TeeChip to get their designs removed. They said the takedown forms and procedures take up a lot of their time.

“I’ve gotten a few of them removed that way but it’s so tedious,” he said.

Yodzevicis from SunFrog said their reporting form has only a few fields to complete and submissions are checked roughly every hour. He said anyone whose work has been stolen could simply email legal@sunfrog.com if they find the form too time consuming. He also said the company is working to implement a procedure whereby any money earned from a stolen design will be sent to the original artist.

“We are currently in the process of implementing a system wherein such funds, rather than being redirected to charity, can be claimed by an actual rights holder so they are actually compensated for their work and the use of their property,” he said.

Silva said Facebook is easier to deal with, but that it only removes the offending post rather than an entire page. (The company told BuzzFeed News it will remove an entire page in some circumstances.)

Yazzie has also tried directly contacting the Facebook pages that promote his stolen designs for sale. But at most he says they will delete the post with his design and just upload it again later.

“I’ve tried to send messages to one of the pages and at first I just got this automated message back, and then they replied with a lot of smiley face emojis back, which is kind of annoying,” he said. “They eventually blocked me from commenting on their page.”

It’s not lost on Yazzie and others that Native American culture and goods are yet again being appropriated by others for profit.

“It weighs heavy,” he said. “I hope people understand there is a livelihood behind [the designs]. The meaning that goes along culturally with the work is something we study and try to put out correctly.”

For his part, Silva is amazed at how so many people in different parts of the world have discovered that dubious Native American Facebook pages, websites, and merchandise can be a moneymaker.

“I wonder how they came across that working for them,” he said. “Did they try different ethnicities and cultures and see which one really hit?”

Quelle: <a href="Facebook Scammers Are Profiting From Standing Rock By Stealing Native Artwork“>BuzzFeed

A Lab Accidentally Released The Medical Reports Of 43,000 People, Including HIV Patients

BuzzFeed News was able to access the folder containing the reports via a simple search.

Google

The medical records of over 43,000 people have been accidentally made public after being put online by a pathology lab in Mumbai. The reports contain confidential details like names, addresses, dates of birth, and blood test results. They also include details of patients who have had blood tests done for HIV detection. Some included in the breach are as young as 17.

The reports, which the pathology lab Health Solutions was storing in an unprotected folder on its website, were accessible to anyone with the right URL. Worse, since the reports were exposed, they have already been indexed by Google and likely other search engines too. BuzzFeed News was able to access the folder via a simple search.

The confidential blood test reports included this one, which was done for HIV determination, from the Health Solutions website.

BuzzFeed News screenshot

The breach was first discovered by web security expert Troy Hunt, who told BuzzFeed News that reports were stored in a folder with directory listing enabled. “What this meant was that there was literally a folder describing all the 43,000-plus files,” said Hunt. “This also means we have no idea of how many people have seen the files — they could have been viewed within cache.” Hunt was also able to find out that the reports were sitting on a server located in Provo, Utah.

None of the reports were password protected or had any kind of access control on them, which means that anybody could download anybody else’s pathology reports. “It’s about as bad as it gets, security-wise,” Hunt said.

When BuzzFeed News contacted Rodrigues Kustas, administrator at Health Solutions, he denied any knowledge of the breach before disconnecting the call. Kustas called BuzzFeed News back 30 minutes later, saying he was now aware of the breach. He said Health Solutions was moving to a new website in January because its current one had been “hacked” several times. Due to the move, he said there wasn’t any way the lab could fix the problem right now.

“Look, we are not the doctors, we merely do blood tests for patients. We also have more than 250 franchisees all over Mumbai who do tests for us,” Kustas said. “So maintaining doctor–patient privacy is not something that we as the lab are concerned with.”

Kustas also said that the lab’s website was built by a third-party developer who he described as a personal friend, but refused to provide any more details.

The pathology reports are organized by folder. BuzzFeed News blurred every entry in the folder for privacy reasons.

BuzzFeed News screenshot

Unlike the United States, where the Health Insurance Portability and Accountability Act (HIPAA) mandates doctor–patient confidentiality, India does not have a strong legal framework around medical privacy or even a privacy law in general.

Doctors who BuzzFeed News spoke to said that each hospital follows its own guidelines around maintaining patient privacy in the absence of an umbrella framework.

The only reference to privacy comes in the Code of Ethics and Regulations published by the Medical Council of India (MCI), a statutory body that enforces medical standards in the country.

It says: “Confidences concerning individual or domestic life entrusted by patients to a physician and defects in the disposition or character of patients observed during medical attendance should never be revealed unless their revelation is required by the laws of the State.”

BuzzFeed News has reached out to all nine members on the executive committee of the MCI for comment.

A Google spokesperson pointed BuzzFeed News to the search engine’s page for removal policies, and provided the following statement: “Google Search generally reflects what’s on the web, so we ask that if people want content removed from the web, they start by contacting the site hosting the content. After the content is taken down, it will drop out of search engines’ web results.”

“This serves as a reminder that once we digitize anything, there’s a far greater risk of it being inadvertently disclosed,” Hunt said. “It&#039;s another case like so many others we&039;ve seen where there&039;s large amounts of sensitive data exposed and the owner is totally unaware.”

A screenshot taken on Friday of the URL that previously led to the directory of medical reports.

HSPPL

Quelle: <a href="A Lab Accidentally Released The Medical Reports Of 43,000 People, Including HIV Patients“>BuzzFeed

Zenefits Is Losing $200 Million A Year

Zenefits CEO David Sacks speaks at TechCrunch Disrupt SF on September 13.

Steve Jennings / Getty Images

Zenefits, the $2 billion health insurance startup seeking to recover from a scandal that brought down its founding CEO, has racked up nine-figure losses that are eroding its store of cash, a confidential document reviewed by BuzzFeed News shows.

Zenefits lost $204.5 million in its last fiscal year, which ran through the end of January, on revenue of $43.5 million, the document shows. In the first half of its current fiscal year, Zenefits lost money at about the same pace, with a $100 million loss on revenue of $35.3 million.

The startup health insurance broker, which raised $512.6 million of venture capital in May 2015, saw its total amount of cash dwindle to $272.4 million as of July 31 this year, the document shows. Companies generating large losses generally burn cash quickly and have to seek additional capital if they fail to become profitable.

At the same time, Zenefits&#039; revenue is increasing more quickly than its costs, though not at the explosive rate its venture capital backers might like. Its revenue in the six months from February through July equates to $70.6 million on an annualized basis — which would represent a 62% increase from the prior year. Its costs and expenses, annualized for the same period, would increase by just 12%.

The financial details, contained in a message sent to shareholders in November, show Zenefits continues to face financial challenges even as it cleans up a legal mess that nearly sank the company this year.

Zenefits — which gives away human resources software to small businesses and makes money by selling those businesses health insurance — ousted its founding CEO, Parker Conrad, in February after revelations that it flouted state insurance laws. The new CEO, David Sacks, has overseen a string of regulatory settlements, including a $7 million deal with California regulators announced this week, and has overhauled the company&039;s approach toward compliance.

In spite of the red ink, Zenefits&039; deep-pocketed investors are unlikely to let it run out of cash. The company is backed by some major investment firms, including TPG and Fidelity, and prominent venture capital shops including Andreessen Horowitz (which also is an investor in BuzzFeed).

Once considered among the most promising startups in Silicon Valley, with a $4.5 billion valuation, Zenefits slashed its valuation to $2 billion in a deal with its investors in June. It also laid off hundreds of staff this year, in a broad reorganization and cost-reduction effort. The company unveiled a new software platform, called Z2, at a sold-out conference in October.

Last year, the company fell short of its targets for a metric called “annual recurring revenue,” according to a Wall Street Journal report at the time. That metric refers to expected annual revenue based on commissions at a given point in time. It remained roughly flat this year, just above $60 million, according to a Bloomberg News report in October.

“We are proud of what we have accomplished this year,” a Zenefits spokesperson told BuzzFeed News in a statement. “We became an industry leader in compliance, cut costs through greater focus on our core market, and maintained a customer base with over $60 million of [annual recurring revenue]. Today, Zenefits has hundreds of millions of dollars in the bank, plenty of runway, and an amazing new version of our product. There is still more work to do, but on the heels of Z2, we are seeing a return to growth that is very encouraging.”

A detailed picture of Zenefits&039; financial performance has never previously been made public. Here is a selection of the numbers, according to the document reviewed by BuzzFeed News:

Fiscal year 2017, First Half (Feb. — July 2016)
Revenue: $35.3 million
Total costs and expenses: $133.5 million
Net loss: $100 million

Fiscal year 2016 (Feb. 2015 — Jan. 2016)
Revenue: $43.5 million
Total costs and expenses: $237.6 million
Net loss: $204.5 million

Fiscal year 2015 (Feb. 2014 — Jan. 2015)
Revenue: $7.8 million
Total costs and expenses: $51.5 million
Net loss: $43.7 million

Quelle: <a href="Zenefits Is Losing 0 Million A Year“>BuzzFeed

Instacart Is Being Sued By Its Workers

Bloomberg / Getty Images

Instacart is being sued by a group of workers — again.

Brought by Arns Law Firm — the same firm whose class action suit against the grocery delivery company was thrown out last month over an arbitration agreement — the new suit was filed on behalf of six named plaintiffs. It alleges that people who worked for Instacart as independent contractors should have been classified as employees and are owed repayment for minimum wage, overtime, expenses and more. The class could include as many as 14,000 workers from all over the country, the suit alleges, and the amount owed “far exceeds $5,000,000 in the aggregate.”

“The shoppers’ and drivers’ services are fully integrated into Instacart’s business, and without them, Instacart’s business would not exist,” the suit reads. “Instacart voluntarily and knowingly misclassified Plaintiffs and other Instacart shoppers as independent contractors for the purpose of avoiding the significant responsibilities associated with the employer/employee relationship.”

A spokesperson for Instacart said the company does not comment on pending litigation.

The suit notes that Instacart did reclassify a portion of its workforce as employees in response to regulatory pressure. Since June 2015, Instacart workers who work exclusively inside grocery stores have been employees of the company; only workers who also deliver groceries in their own cars are considered independent contractors. The suit argues that Instacart, because it did previously agree to reclassify some workers, “knew and/or recklessly disregarded that it was misclassifying its Shoppers from the outset.” It also claims that the IRS and labor commissions in New York and Colorado back up this finding.

In addition to the larger worker misclassification issue, the suit also touches on earnings. It alleges that online advertisements posted by Instacart promised workers could earn “up to $25 an hour,” though the company had enough data to know “it was impossible to earn that hourly rate consistently.” The suit also claims that Instacart knowingly duped prospective workers. To support this argument, it points to a livestreamed August 2015 all-hands meeting in which “managers Susie Sun, Michelle Suwuannukul, and Heather Wake instructed Operations Associates to continue running the advertisements that represented that Instacart Shoppers could make a certain amount of money per hour even though they were aware that Shoppers were making an average hourly rate that was well below the advertised rate.”

In recent months, Instacart workers have clashed with management over changes to their pay structure. In September, the company replaced in-app tips (paid directly to individual shoppers who delivered an order) with a service fee that is pooled and distributed among workers at Instacart&#039;s discretion. As BuzzFeed News has previously reported, CEO Apoorva Mehta said the change is necessary to the companies continued growth. But high-earning shoppers who shared their pay stubs with BuzzFeed News estimated the changes reduced their pay by between 30 and 40 percent. Frustrated workers have repeatedly threatened to strike and picket the company, and have been waging an informational campaign to explain the change to customers.

The lawsuit brought against Instacart today cites the tip issue as proof that the company has a level of control over independent contractor earnings commensurate with that of an employer. It also argues that, per the Fair Labor Standards Act, any optional amount paid by a customer in addition to charges for a service should be considered a tip.

For the plaintiffs in this newest suit, Instacart&039;s arbitration agreement remains a thorny issue. The lawyers argue, as they did before the last suit was thrown out, that the arbitration clause workers agreed to when they signed up with Instacart should be considered irrelevant because of an August ruling by a judge in a separate case that set a new precedent on the issue of class action waivers.

Companies like Uber and Lyft have both successfully used the threat of arbitration to push settlements of respective high-profile class action lawsuits brought against them by drivers, suggesting the issue could still be an impediment to the workers&039; case against Instacart.

Quelle: <a href="Instacart Is Being Sued By Its Workers“>BuzzFeed

How Snapchat Kept Fake News Out

Evan Spiegel, Snapchat CEO and cofounder

Larry Busacca / Getty Images

Facebook emerged during the U.S. election as a central political and news source, but also a hub for hoaxes, propaganda, and outright fake news, an issue that brought wide criticism and concern from figures reportedly including President Barack Obama.

But its leading U.S. competitor, Snap, has managed to sidestep the issue. Snap now boasts 150 million daily users, roughly 10 million more than more than Twitter. It’s a growing source of breaking news for its users. When Donald Trump purchased a national “Crooked Hillary” geo-filter during the presidential debates it was viewed 80 million times, and yet the sometimes controversial social network doesn’t come up in the rancorous debates over fake news.

There are a handful of obvious reasons why Snapchat might be a less fertile ground for propaganda from Macedonian teens, hoax purveyors, or hyperpartisan websites masquerading as news. User-generated content on Snapchat disappears after a short period of time. News is contained in a separate section, called Discover. Posts from the people you follow are displayed chronologically, not by popularity or personalized algorithm.

On Snapchat, the name of the game is projecting authenticity, not racking up faves, and the rules of the game are enforced in the way the app is designed. Snapchat profiles do not display a follower count or even let users know how many followers they have. Plus it’s hard to go viral when you can’t pass around a link to an individual’s post.

As Farhad Manjoo noted in The New York Times, “The diminution of personalization algorithms and virality also plays into how Snapchat treats news.”

The process publishers go through to get on Discover is as controlled as the rest of the app and involves a number of human gatekeepers along the way, a Snap representative told BuzzFeed News. Before they can post in Discover, news publishers have to be vetted as a potential partner, an agreement that comes with strict terms. Discover partners who publish daily on Snapchat in the U.S., France, and U.K. include recognizable names like CNN, MTV, Le Monde, Sky News, or Cosmopolitan. Jim VandeHei, the cofounder of Politico, even created a presidential campaign-specific Discover channel called We The People, in partnership with NowThisNews, but content, like today&#039;s offering, “Are you ready for texts from Trump?” seems more pop culture than partisan. (NowThisNews shares an investor with BuzzFeed. BuzzFeed is a Discover partner in both the U.S. and UK; BuzzFeed also ran NBC&039;s Snapchat content during the summer Olympics.)

Although publishers have editorial independence, there is collaboration between staffers who produce content for the app and Snapchat’s Discover team, which gives guidance on formatting. Content can be optimized to do well on Facebook and Twitter by altering the headline or image, but on Snapchat, articles have to be reformatted to fit the app. Publishers can deep-link to stories to their Discover content, but those links take you back to the app.

These features were built around Snapchat’s belief that users who share and consume content from friends provide the most potential for long-term growth, Rob Fishman, co-founder of Niche, a company that connects brands with social media influencers, told BuzzFeed News. “Snapchat makes discovery of people who aren’t in your phone book extremely difficult because they believe peer-to-peer sharing is stickier than a so-called influencer model,” said Fishman, whose company was acquired by Twitter in 2015. “They do see value in premium and traditional publishers, but they’ve created a standalone experience to capture that kind of content.”

“It’s impossible for somebody to go rogue in Discover.”

This is a huge difference from other social networks, where publishers and brands are “basically identical to individual users,” Fishman said. “It’s impossible for somebody to go rogue in Discover because everything in there is seen and vetted by Snapchat.”

The same kind of propaganda that plagued Facebook could theoretically be disseminated within Snapchat in a couple of ways: through a Live Story (a mash-up of photos and videos around a particular event like a concert or rally, curated by Snapchat) or a Story from individual accounts, which users can create by adding photos or videos of what they’re doing throughout the day. In those cases, however, a combination of human editors, the visual medium, and anti-viral design also make it inhospitable to fake news.

Individual Snapchat users can add text to an image or video, but space is limited. It’s possible to imagine a scenario where an individual uses their Story like a talk radio, but that kind of content is hard to share and Snapchat doesn’t promote individual accounts. “You literally don’t know how many followers you have on Snapchat, so it’s not designed for premium accounts to amass huge audiences. This is supposed to be million paper cuts not a few heavy hitters,” said Fishman.

For Live Stories, which show up in Discover, Snapchat relies on human journalists and editors, with relevant experience in verticals like music, entertainment, travel, or fashion, the company said. Last year, Snap hired Peter Hamby, one of CNN’s best known political reporters, as its head of news. Live Stories created in-house are rigorously fact-checked, a Snap representative told BuzzFeed. In the spring of 2015, Snapchat started covering politics along with other hard news. Live Stories in that category include coverage of U.S. election coverage, historic flooding in South Carolina, the Brexit vote in the UK, and the Brazil impeachment vote. Hard news stories are produced in house. Some Live Stories are comprised of photos and videos from Snapchat users, but again, the content is curated by Snapchat and goes through a human editor first.

Apple News, the mobile app released last year that has 70 million active users and content from 4,000 publications, is another potential platform for spreading fake news, which, like Snap, also relies on human touch points along the way. Apple News became a significant driver of traffic during the election cycle in particular. CNN has reported that Apple News sent 36.5 million unique readers their way in September and Bloomberg reported a 400 percent jump in visitors from Apple News in October. In fact, sources told BuzzFeed News that the Apple News has had to deal with a pretty significant number of attempts to spread fake news and hate speech through the platform.

However, the same walled garden approach that keeps iTunes and the App Store running smoothly has worked in Apple News. For example, Apple News reviews publishers who join Apple News. Individuals can also share content on Apple News, but if their RSS feed departs from the usual fare, Apple can detect that. There’s also a report a concern function where users can flag fake news or hate speech within Apple News and the company curates any content that gets featured, also like the App Store.

Manjoo’s recent profile of Snapchat in Times emphasized that favoring human editors and eschewing virality represented a big departure from more established social networks. Fishman pointed out that those innovations are also carefully managed. “In my opinion Snapchat is both ambitiously experimental, but also very tightly controlled,” Fishman said, pointing to the introduction of Stories and of Spectacles. “Both were dramatic and unprecedented offerings, but the way that they launched them was very carefully planned and executed. You can see that especially with Spectacles. There’s a lot of buzz around it and there are only a few pairs.”

Quelle: <a href="How Snapchat Kept Fake News Out“>BuzzFeed

The Consumer Technology Association Falls In Line Behind Trump

The Consumer Technology Association is a venerable, 92-year-old trade group that puts on the Consumer Electronics Show, the annual product extravaganza in Los Vegas that draws hundreds of thousands of attendees. The association of more than 2,200 corporations — and its president and CEO, Gary Shapiro — tends to give money to the traditional American party of big business, as you might expect.

Yet this summer, as then-Republican presidential nominee Donald Trump blasted tech-friendly trade deals like the TPP on the campaign trail, the CTA switched gears. Shapiro – who described Trump as “unqualified” — and his organization enjoyed a months-long flirtation with the Democratic Party and its nominee, Hillary Clinton.

But in the weeks since the election, Shapiro and others within the CTA have now twisted like a pretzel, publicly and repeatedly expressing optimism about the coming Trump administration — even if no one yet knows what his tech policies will look like, or how they&#039;ll shape the industry, other than to shake it up.

“We are in the innovation world,” Shapiro told Buzzfeed News. “We adapt to change. That’s what we do. We’re tech ninjas. That means things change and you adapt.”

But there&039;s adapting, and there&039;s adapting as quickly as the CTA has: The organization sent out a congratulations to Trump before Clinton had even given her concession speech. That may be keeping a finger to the wind, or it may, according to Berin Szoka, president of the libertarian think tank TechFreedom, be a sign that the organization feels it is obligated to help mold Trump&039;s inchoate tech platform.

“From their perspective, there&039;s no adult supervision,” Szoka said. “They&039;re trying to play that role. They want to be at the table, and they&039;re terrified of what would happen if this were left up to a strong anti-Silicon Valley contingent in the new administration.”

Whatever the reason, for Shapiro and the CTA, it&039;s been a quick journey from a Republican to a Democrat and back again. Over the years, Shapiro has donated to mainstream Republicans such as Paul Ryan, Darrell Issa, and Roy Blunt. And the CTA&039;s political action committee, to which Shapiro has given some $50,000, financially supported John McCain in 2008, Mitt Romney in 2012, and Marco Rubio in the Republic primary in 2016.

“We’re tech ninjas. That means things change and you adapt.”

But then something weird happened: Donald Trump broke with decades of business-friendly orthodoxy from the GOP and crushed the Republican primary field. Along the way, he antagonized the tech industry and promised to gut pro-business global trade agreements.

“People are worried on trade,” Shapiro said.

So Shapiro — and his organization — who had publicly supported Rubio, and were eager to preserve international trade deals with the Asian countries where most tech hardware is manufactured, found themselves in a strange position: With Her.

And also, very, very much against him.

Over the summer, Shapiro wrote a series of columns decrying Trump&039;s protectionist rhetoric on trade, praising Hillary Clinton&039;s tech policies, and fantasizing about a Clinton-Mitt Romney ticket that “Could Guarantee a Clinton Win.” In a Reddit AMA, Shapiro described Trump as “unqualified.”

And two weeks before the election, Shapiro wrote a column in US News & World Report that concluded “Trump simply doesn&039;t understand the modern economy.”

Then election day came and Trump won. And like a host of anti-Trump Republicans who vowed never to do business with the president-elect, Shapiro did not exactly reiterate his opposition with force. Instead, his strong anti-Trump stance seems to have lasted only a few hours after the results came in.

On the morning after the election the CTA sent out a press release congratulating Trump on his victory, and citing the Republican majority in the Senate as “an opportunity . . . to rollback unnecessary rules, tackle high-skilled immigration reform, reduce patent troll extortion, lower corporate taxes and reduce spending.”

Later the same day, Shapiro wrote a column for Fortune entitled “How Donald Trump Can Heal A Divided America Now,” in which he highlights Trump&039;s “willingness to achieve goals through deals,” and suggests ways that Trump could modify the Trans-Pacific Partnership rather than abandoning it entirely.

A week after the election, the CTA put out another release, touting Trump&039;s “Unique Opportunity to Advance IoT.”

And Tuesday, three weeks after the election, Shapiro wrote a column for Fox News outlining “Four reasons why our economy will thrive under President Trump.” While conceding that he voted for Clinton, Shapiro recommended that Americans “follow the lead of the initially jumpy financial markets and shift from doom and gloom to optimism.” Shapiro nodded to the possibility of Trump raising trade tariffs on China or withdrawing from NAFTA, but concluded that “the stock market can and will be the real-time measure of his economic success.”

Last week, the CTA&039;s Senior VP for Government Affairs Michael Petricone, speaking on Tech Freedom&039;s policy podcast, said that “The mantra of our industry is that change is good. We&039;re going to set an example here with CTA and the tech industry and move forward and find common ground with a new administration.” Petricone went on to frame Trump&039;s lack of a tech policy platform as a major opportunity for the industry.

Funding for the CTA comes principally from CES; that has liberated them, Szoka said, from relying on their members for financial support, like other trade groups. “Their interests sync up quite well with American consumers,” Szoka said. “They want a healthy, functional tech sector. That may explain why they are quicker to move. It&039;s an opportunity to steer things in a good direction.”

Asked whether he still thinks Trump is unqualified to be President, Shapiro told BuzzFeed News “the American people have decided he’s qualified. What I think doesn’t matter.”

Quelle: <a href="The Consumer Technology Association Falls In Line Behind Trump“>BuzzFeed