Here’s a rapid-fire update on all 34 stocks in Jim Cramer’s Charitable Trust, the holdings we manage in the CNBC Investing Club. Jim and Club portfolio director Jeff Marks ran through each one of them on Saturday during our special February “Monthly Meeting,” live from Miami.
Articles from February 5, 2023
Elon Musk says Twitter ‘trending to breakeven’ after near bankruptcy
Elon Musk Twitter account displayed on a phone screen and Twitter logo displayed on a screen in the background are seen in this illustration photo taken in Krakow, Poland on November 22, 2022.
Jakub Porzycki | Nurphoto | Getty Images
Twitter CEO Elon Musk said Sunday that the last few months have been “extremely tough,” but the social media company is “now trending to breakeven.” CNBC was not able to independently verify this claim.
Musk, who is also CEO of Tesla and SpaceX, said in a tweet that he has had to “save Twitter from bankruptcy” while also fulfilling his roles at his other companies.
“Wouldn’t wish that pain on anyone,” he wrote. “Twitter still has challenges, but it is now trending to breakeven if we keep at it. Public support is much appreciated!”
Twitter and Musk did not immediately respond to CNBC to a request for comment.
Since acquiring the company for $44 billion late last year, it’s been a rocky takeover for “Mr. Tweet,” as Musk recently dubbed himself. Under the billionaire’s management, Twitter has slashed headcount through mass layoffs, other terminations and changes that compelled many to resign, including the end of a work-from-home forever policy that had been put in place under former CEO Jack Dorsey.
Twitter launched — and relaunched — its updated Twitter Blue subscription service in December after Musk had pulled and delayed the service in November. The company suffered a “massive drop in revenue,” according to Musk, after advertisers paused spending on the social media platform.
The billionaire has also faced significant shareholder backlash at Tesla for being distracted, for stirring up political controversy with his strategy at Twitter, and for selling billions of dollars worth of his Tesla shares to finance his Twitter takeover.
In a tweet Sunday, a Twitter user expressed concern about how much Musk has had on his plate.
“I’m worried about me too,” Musk wrote in response.
—CNBC’s Lora Kolodny contributed to this report.
Dumbest spending mistake was Porsche car
Hilton CEO Chris Nassetta says selling his black Porsche 944 was the best financial decision he ever made.
That’s because buying it in the first place was his worst. He was in his 20s and fresh off a breakup when he saw the sleek model in a used car lot near his home in Arlington, Virginia. He had a third party ensure the car and the deal were legitimate, then paid $20,000 for it, taking out a loan to cover part of the cost.
“It nearly broke me,” Nassetta, 60, tells CNBC Make It. “I spent all my money on that stupid car.”
In retrospect, it was a bad decision from the start, Nassetta says: He was only making $17,000 per year at the time. Almost immediately, he had to spend an additional $2,000 on a new steering rack — and the car’s problems only got worse from there.
The Porsche was “riddled with problems I couldn’t afford,” Nassetta says.
Today, a Porsche 944 can be worth upwards of $30,000, depending on the year and condition, according to car valuation site Kelley Blue Book. But Nassetta sold his car just 18 months after buying it, and maintains it was his worst spending mistake — and the last sports car he’ll ever own.
Sports cars are both a popular purchase and a common regret. Ex-NBA star Dwyane Wade, for example, told Men’s Health in 2020 that the best financial advice he’d ever received was “to get rid of about 16 cars.”
One of those cars was a $6,000 per month Maybach that Wade said he rarely, if ever, drove. He eventually sold the entire collection, he added, keeping one Audi Q8.
Since 2007, Nassetta has driven something more practical: a four-door Lexus sedan he bought just after landing the top role at Hilton. The well-loved family car was new when Nassetta purchased it, and has stood the test of time: In the 16 years he’s owned the car, he’s put 115,000 miles on it, he estimates.
He also owns another car, a 1969 Ford Bronco. The make and model’s average cost is roughly $50,000 according to automotive lifestyle company Hagerty — but for Nassetta, the SUV’s value is more sentimental.
Nassetta’s family owns a ranch in Montana, and Nassetta had once told a nearby auto mechanic that a Bronco was his dream car. In 2020, the mechanic called Nassetta to say he’d found someone nearby with the vehicle — but it was barely running.
Together, Nassetta and the mechanic spent two years repairing the car, completing the project last May.
“We repaired every little piece of it,” Nassetta says. “What I’ve learned being at Hilton is I like building and I like projects. So doing that gave me great joy.”
Sign up now: Get smarter about your money and career with our weekly newsletter
Kind Snacks founder Daniel Lubetzky made a $220 million mistake—it turned his startup into a $5 billion company
Don’t make this common career mistake in your 20s, says the CEO of Hilton
15 most affordable U.S. cities for people who want to live alone
There aren’t many big cities where rent is cheap, even for a studio apartment.
But if you’re single and don’t like roommates, online brokerage RentHop found the 15 U.S. cities where rent is most affordable.
Out of 50 of the most populous cities, the following were ranked highest for affordability, as measured by median studio apartment costs as a share of the average income for single dwellers in each city.
Albuquerque, New Mexico, ranks as the most affordable city in the country for single renters. Studio apartments in Albuquerque go for a median price of $700, and the average single person would only need to spend 15.33% of their income to afford one.
Since financial experts recommend aiming to spend 30% or less on housing costs, that’s a pretty good deal.
There are a couple of surprises in the rankings as well. Seattle and Denver have relatively expensive rent prices, with studio apartments costing more than $1,400. But these cities also have high average annual incomes — close to $100,000 — which offset the added costs.
In contrast, New York City is the least affordable place to live if you’re single, as the cost of a studio apartment in the Big Apple as a share of income is almost 44%. Rent for studio apartments in New York has soared 23% in the past year, the study says.
To compile housing price data, RentHop used every studio apartment listed on its site from Jan. 1, 2022 to Nov. 18. While single dwellers might live in larger homes, studio units were chosen because they best represent the minimum space in which one can live alone.
Income numbers represent average non-family household income, as measured by the U.S. Census Bureau, looking back a year from November 2022. Since these are average rather than median numbers, income might be skewed a bit higher than what most people earn.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don’t miss: Here’s how much money you’d have if you invested $1,000 into McDonald’s 10 years ago
Most in-demand tech skills for freelancers—many pay over $125/hour
Tech companies have been making headlines for mass layoffs of late. Google, Microsoft and Amazon all announced they’d be letting go of tens of thousands altogether and Twitter and Meta both announced layoffs in the fall.
But demand for tech skills remains high. “The skills gap is still sharp, it’s still a significant gap,” says Vicki Salemi, career expert at Monster. “Employers are struggling to find labor in this tight labor market” that can fill various tech needs.
While employers won’t always be looking for full-time experts, some may be looking for part-time or contract work. If you have tech expertise and are seeking opportunities, here are seven skills that will likely be in-demand for freelancers this year according to freelancer platform Upwork, along with descriptions of what each entails and how much freelancers on the site are charging.
Full stack development
Full stack developers on Upwork charge as much as $135 per hour.
Mobile app development
A mobile app developer is a software engineer who specializes in creating apps for smartphones, tablets and computers. They know coding languages, fix any bugs that arise in the software and work with graphic designers and data scientists to build their apps.
They charge as much as $155 per hour.
Web designers on Upwork charge as much as $250 per hour.
These designers focus on creating user-friendly experiences on websites and apps. They plan the structure of their sites, develop its content, create prototypes and test for bugs.
They charge as much as $120 per hour.
A content management system, CMS, is a software that helps its users manage their various content, from creating it to publishing it. It also stores content in its database for later use. CMS developers are responsible for developing both the back and front end of the software.
CMS developers charge as much as $105 per hour.
These professionals test the functionality of a software without the help of automated tools. They ensure the software works correctly in various scenarios and note any bugs or issues along the way.
Manual testers charge as much as $50 per hour on Upwork.
Script and automation
Scripting and automation specialists charge as much as $350 per hour.
“We use technology every day,” says Margaret Lilani, vice president of talent solutions at Upwork. “We use it to work, we use it to learn, we use it to communicate, we use it to transact.” That’s especially true of the last three years, as people leaned more and more heavily on their devices to connect.
“That genie is not going back in the bottle,” she says, adding that, “in terms of businesses and their digital presence, they have to have that.”
If you’re looking to gain these skills, Salemi suggests looking at online certificate programs, MBA programs or community college courses.
5 in-demand side hustles you can do from home that pay $100,000 or more, according to new research
The 10 most in-demand work-from-anywhere jobs companies are hiring for in 2022
5 in-demand freelance jobs that you can do from home—and where to find them
Sign up now: Get smarter about your money and career with our weekly newsletter
The biggest risks in delaying iPhone and Android software updates
That screen-blocking software update notification that keeps coming back may be annoying to a phone user, but ignoring it for too long is a mistake.
Many consumers opt to not have phones set to automatic update. Once the day begins, these notifications can pop up at inconvenient and distracted times — while you’re rushing to make a call or send an email or text — but smartphone software updates are primarily designed for your benefit.
Companies including Apple and Samsung, as well as Alphabet‘s Google which makes the Android OS, are constantly working on security and user experience features in annual updates and more periodic updates to fix newly discovered bugs.
Apple’s current operating system iOS 16 launched this past September, and it boasts many new features: the ability to edit and unsend messages; set multiple lock screens and set Focus filters to limit who you receive notifications from; privacy and security updates like Safety Check so victims of domestic or intimate partner violence can reset access that they’ve granted to others; and Lockdown Mode, a method of extreme protection against cyberattacks.
Samsung’s Android 13 One UI 5.0 lets users customize their lock screen, create stickers from any photo and open apps in split screen, along with security updates like warnings when sharing personal information, and a security dashboard in settings to check for and fix security issues.
Not all software updates offer an array of new features, but when they do it can feel like you are getting a new phone without added cost. Yet, many users still do whatever they can to put off the 30 minutes that a software update can take.
Where human procrastination meets technology
It’s a phenomenon that’s been studied by researchers and termed “adoption procrastination.”
Researchers at the University of Tennessee and University of Munich identify this “deliberate delay” as a coping strategy that digital product users implement to counteract the negative emotions that arise when software updates are released. Discomfort often stems from the perception that software updates will require users to relearn how to use certain features on their device and threatens their current habits. Annoyance is a factor, too, and the assumption that current functionality of their phone is optimal, so a software update would only disrupt their devices’ usability.
But there is also more basic human psychology.
“I think some of it is just the nature, ‘I’ll get around to it, when I get around to it,'” said Dr. Richard Forno, University of Maryland Baltimore County’s director of the Cybersecurity Graduate Program and assistant director of the school’s Center for Cybersecurity.
He recommends setting up a phone to automatically download and install the updates overnight when you’re sleeping (as long as Airplane mode is not set). “That’s a feature that a lot of people could and should enable, so they don’t have to worry about it,” Forno said.
Apple, Google update options
Apple allows users to decide whether they want their phone to automatically download and install the newest iOS update, or if they prefer to manually update it. Android users can choose between three local system update policies, including automatic, windowed and postponed updates — all of these policies eventually result in a device automatically updating. The automatic system policy installs as soon as a new update becomes available; the windowed system policy installs updates during a daily maintenance window that the user gets to choose; the postponed option delays installing an update for 30 days. When 30 days have passed, the system then prompts the user to install the system update.
While it’s offered, cybersecurity experts don’t recommend waiting 30 days. “For the normal user, within a few days to a week is likely fine,” said Justin Cappos, associate professor of Computer Science and Engineering at New York University Tandon School of Engineering and a member of New York University’s Center for Cybersecurity. There are certain users who are at a greater risk if they choose to put off or ignore these notifications. “If you are a dissident who is possibly being targeted by a nation-state actor, you should update right away,” he said.
When a major security update comes out, everyone should act relatively fast.
Hackers will target the flaws you don’t update
Big annual OS updates may have the flashier and more reported on new features, but security protection is a major reason why users should download all new software updates available for their phone. Smaller, incremental updates, are released primarily to fix bugs and ensure users greater protection. It’s as simple as knowing that Apple or Samsung, or any other phone maker, is indicating that your current operating system is not the safest anymore, and it is sending that message out into the world. That’s not just good for you, but for hackers looking to exploit users who don’t get the message.
“You’re leaving yourself vulnerable to attacks. Once a vulnerability has been announced and a patch has been released, attackers quickly grab that information and create exploits for those specific vulnerabilities,” said Kathleen Moriarty, chief technology officer at the Center for Internet Security.
Without the latest security patches, every piece of information on your phone is open to attack, from social media accounts to banking information to text messages.
“If you reuse passwords in different places, and they’re able to capture a password that is stored on your phone, they might be able to gain access to other applications,” Moriarty said.
Reuse of passwords across accounts is bad cybersecurity practice to begin with and can become even worse when the personal phone security lapse is used to gain access to an employer’s network.
“Hopefully, you’re not using those across boundaries because this is one area of attack that has been used where, let’s say an administrator for an organization is targeted specifically through their personal accounts and that personal account access is used to gain corporate access,” Moriarty said.
If malware gets through an outdated OS, tricking you to click on a link or download something, it can gain access to your personal information, cause your battery to drain faster and reduce overall performance.
Performance fears overstated, patches better and quicker
Years ago, software updates were much larger and infrequent, which made these updates themselves more susceptible to hacking issues and bugs. For example, Apple found a major operating flaw after its 2017 release of MacOS High Sierra that enabled anyone to enter your computer without needing a password.
However, as Apple and Samsung have shifted toward releasing smaller software updates and patches more frequently, it minimizes the impact on devices and improves testing.
“I have a higher trust level because of the newer processes in place. There are far fewer problems that happen with software updates now than five or 10 years ago,” Moriarty said.
Companies also have developed software updates that can occur behind the scenes on a phone without a user having to download them. In Apple’s release of iOS 16.2, the operating system is now able to push out security updates between the incremental updates with a new feature called “Rapid Security Response.”
Back in 2019, Google’s Project Mainline was introduced in Android 10 and implemented this process of mobile updating without requiring user involvement or a system reboot. While this system can’t do an entire software update in the background through Google Play, it can install critical operating system patches without having to wait on the user or phone maker.
“They can push out security updates pretty much as they need to without requiring the phone to be rebooted and disrupt a person’s life, which is a good thing, because it’s transparent to the end user, but they’re getting the updates they need. So that’s a win for security,” Forno said.
Nowadays, there’s less reason to be worried when it comes to software updates, but the internet is also a good tool to quickly see how any recent update is working for other users. From social media platforms like Instagram and Twitter to tech news sites like The Verge, users can receive quick feedback on the latest software fixes.
“Because of the social media availability, you will know if there are big problems being caused that were unexpected or not predicted with a particular update. So, you could wait a little bit or decide not to be first, especially [for] a large update. But I don’t think the timeline is that long anymore. Due to things like Reddit forums and Twitter and other places where you have easy access to immediate feedback,” Moriarty said.
Smartphone battery issues
Some users avoid software updates out of fear that it will decrease their battery life or slow down the phone itself, and while this can happen after downloading a major software update, these issues are temporary.
“Your phone is going to burn through battery as it installs the update, runs all of its verifications and its checks, and then does a bunch of re-indexing. So, it would not surprise me if for a day or two, after you download an update, your phone battery life might be a little bit less because it’s working more,” Forno said.
However, there have been occasions where Apple’s iOS updates have caused poor battery life for an extended amount of time beyond the initial installment duration. For instance, the release of iOS and iPadOS 15.4 caused a large number of customers to report battery issues lasting for weeks after the updates’ release, which resulted in Apple’s quick release of iOS and iPadOS 15.4.1 to combat this bug.
A phone’s storage is also impacted when you install a security update. Depending on the size of the software update, how old your phone is and what operating system it is currently using, storage can be an issue.
“I think the average user needs to ensure their devices are updated regularly. … I don’t think they have to worry about checking for updates every day,” Forno said.
Age of iPhone, Android model matters
Software updates don’t guarantee that a phone will always be secure. As newer generations of iPhones and Androids are released, Apple and Samsung gradually phase out older devices, and OS support. For example, iOS 16 is supported on every iPhone released since the iPhone 8. Samsung now guarantees customers at least four years of major Android updates and as much as five years of security updates.
Hardware updates, including new chips and security features, come out on a regular basis, too.
“Updating to a new model of your phone every year to every few years can help you stay ahead of the security curve,” Cappos said.
Apple’s release of the iPhone 14 series included the A16 Bionic chip on Pro models, emergency satellite call technology, and better hardware security through the switch to eSIM-only cards. The next big release is the Samsung Galaxy S23 this month, which includes Samsung’s latest tweak to Android 13, One UI 5.1. Users should review the phone’s hardware, software and UI features, and owners of existing Samsung phone models will want to be on the lookout for an announcement about One UI 5.1 being made more broadly available.
Ford CEO Jim Farley frustrated after bad earnings
Ford CEO Jim Farley is frustrated.
The company’s fourth-quarter earnings on Thursday missed analyst expectations by a wide margin, as costs and supply chain issues again hurt Ford’s bottom line, Farley knows his company needs to change.
“We have to change our cost profile,” Farley told CNBC after a call with analysts to discuss the quarter’s results. “We know what we have to go after. I’d love to give you all the metrics and all the specific gaps we see. But you know, whether it’s absenteeism, the number of sequencing centers, the number of wiring harnesses we have, we know what it is.”
In short, Farley wants Ford to become a far more efficient company, and he needs it to happen quickly.
The push to transform Ford is taking on greater urgency after the automaker reported 2022 adjusted earnings of $10.4 billion, just three months after the company told analysts it expected to make $11.5 billion to $12.5 billion in that year.
How did Ford fall more than a billion dollars shy of hitting a profit target it gave Wall Street at the end of October?
Blame it on poor execution and higher-than-expected costs. Last quarter, Ford said, overcoming supply chain challenges, including a shortage of semiconductor chips, increased costs by $1 billion more than planned. Ford production was 100,000 vehicles shy of what the automaker expected to build.
Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022, at the automaker’s Ford Rouge Electric Vehicle Center.
Michael Wayland | CNBC
Supply chain and cost issues hurt Ford over the last two years. Last September, Ford warned third-quarter costs would be $1 billion greater than expected. For the last two years, high warranty costs — from recalls and troubled launches of new vehicles — were a problem that Farley and his team have been unable to fix.
Farley said Ford’s complexity is part of the problem.
“We have a lot of complexity relative to the customer and also inside our company. And we can cut the customer-facing complexity like we have, but it takes time to work that down to parts on the line, to the manufacturing line,” he said. “It just takes time to work through that and that’s what we’ll do.”
While discussing the fourth-quarter results with Wall Street analysts, Ford’s leadership declined to detail the specific steps it will take to cut costs and make the automaker more efficient and profitable.
Farley said the answer is not simply cutting jobs, which has historically been the way automakers have cut costs. “There are things we could do in the short term, but I don’t want to just make the output the cuts without redesigning the work. This has to be sustainable and that’s how we’re thinking about it nowadays,” he said.
Will this new push to cut costs hurt Ford’s growth in production and sales of electric vehicles? Farley said no.
In fact, he said he believes separating the EV and internal combustion engine vehicle operations into two distinct divisions will actually accelerate efforts to drive greater efficiency. To prove his point, Farley says Ford’s second generation of EVs will be radically simplified, which should eventually lead to fewer problems and higher margins.
“I can’t wait to show you and the whole world this next cycle of products,” he said. “Many of our competitors are just coming out with their first cycle and we can see their batteries are too big. Their distribution costs are too expensive. They’re spending too much money on advertising. You know, we can’t do that. We don’t plan on doing that.”
A Ford Mustang Mach-E GT at the 2022 New York International Auto Show in New York in April that year.
Jeenah Moon | Bloomberg | Getty Images
When Farley became CEO of Ford in October 2020, he vowed to quickly drive the automaker into a new leg of growth led by electric models like the Mustang Mach-E, the E-Transit commercial van and the F-150 Lightning.
And in many ways, he has succeeded. Ford is No. 2 in EV sales in the United States, with just under 8% market share.
While it’s not close to catching up with Tesla, which sells two out of every three EVs in the U.S., Ford’s EV production is increasing rapidly. At the end of last year, Ford was building 12,000 EVs a month. By the end of 2023, Ford expects EV production will reach 50,000 a month.
Still, for all of its accomplishments transitioning to EVs, Ford continues to face issues with internal combustion engine vehicles, which are responsible for almost all of Ford’s profits.
Farley knows investors are watching and waiting for Ford to finally get its act together.
“Be patient. You know, we got the right team. We got the right plan. We’re growing like heck in our pro and EV business,” Farley said when asked what he would say to Ford shareholders. “This key team is going to deliver for you and you are going to get a great return on your investment.”
— CNBC’s Meghan Reeder contributed to this report.
Some of Wall Street’s biggest names are exposed to the Adani Enterprises plunge
Chairperson of Indian conglomerate Adani Group, Gautam Adani, speaks at the World Congress of Accountants in Mumbai on November 19, 2022.
Indranil Mukherjee | AFP | Getty Images
Shares of India’s Adani Enterprises have plummeted over the past week, after the publication of an extensive critical report from U.S. short-seller Hindenburg Research. Some big international players have exposure.
Companies across the Adani Group of companies have seen a huge sell-off that took the total group’s losses past $110 billion by Friday close, after the Hindenburg report accused the conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades.”
The ports-to-energy conglomerate, led by one of the world’s richest men, Gautam Adani, has vehemently denied wrongdoing.
Adani Enterprises has suffered the biggest loss among the wider group’s many listed companies, shedding more than 60% of its market cap — or more than $30 billion — between the report’s publication on Jan. 24 and the close of Thursday trade.
The Adani Group firmly denies the accusations, calling them “nothing but a lie” from the “Madoffs of Manhattan” in a 413-page riposte that failed to soothe skittish investor sentiment and rein in a rapid sell-off.
Adani owns 64% of Adani Enterprises — the Adani SB Family holds 55.27%, while 8.73% is with Adani Tradeline Pvt Ltd, where Gautam and brother Rajesh Adani are controlling directors.
Top 20 shareholders in Adani Enterprises
|Institutions / Insiders||Ownership (%)||Shares (thousands)|
|ADANI SB FAMILY||55.3||630,034.7|
|Adani Tradeline Pvt Ltd||8.7||99,491.7|
|Life Insurance Corporation of India||4.0||45,815.0|
|Green Enterprises Investment Hldg||3.5||40,191.0|
|Flourishing Trade & Investment||3.0||33,937.7|
|Afro Asia Trade & Investments||2.7||30,249.7|
|Worldwide Emerging Market Hldg||2.7||30,249.7|
|HSZ (Hong Kong)||1.7||19,295.4|
|Elara Capital Plc||1.7||19,190.1|
|M.M. Warburg Bank (Schweiz)||1.3||14,290.9|
|The Vanguard Group, Inc.||0.7||8,497.0|
|SBI Funds Management Pvt||0.6||7,195.0|
|BlackRock Fund Advisors||0.6||6,454.2|
|Spitze Trade & Investment||0.3||3,986.0|
|UTI Asset Management||0.2||2,237.5|
|BlackRock Advisors (UK)||0.2||1,901.3|
|Kotak Mahindra AM||0.1||1,281.8|
|Geode Capital Management||0.1||1,114.0|
|Dimensional Fund Advisors||0.1||831.1|
|Nippon Life India AM||0.1||737.3|
Source: FactSet, as of 1030 UTC on 3 Feb
The third-largest shareholder, at 4.02%, is India’s state-owned Life Insurance Corporation of India. Morning sessions in both houses of India’s parliament were adjourned on Friday, as opposition leaders called for an investigation into the allegations against Adani, who is a close associate of Prime Minister Narendra Modi.
Indian Minister of Parliamentary Affairs Pralhad Joshi reportedly told journalists on Friday that the government “has nothing to do with Adani matters.”
The list of top 20 shareholders of Adani Enterprises also includes two of the biggest names on Wall Street: Vanguard owns 0.75% of the stock, while BlackRock Fund Advisors holds 0.57% and BlackRock Advisors (U.K.) Ltd has a 0.17% interest.
Spokespersons for Vanguard and BlackRock did not immediately respond to CNBC requests for comment.
Elara Capital, which currently owns 1.7% of Adani Enterprises, was the largest institutional shareholder until Feb. 2022, ownership data shows.
Hindenburg has accused Elara’s Mauritius-based funds of being part of a plan to manipulate the share prices of companies owned by Adani Group and hide how much the family owned. Elara has since disposed of 72% of the shares it held in the company, according to FactSet data.
Jo Johnson, the brother of former British Prime Minister Boris Johnson, resigned on Wednesday from his role as a director of Elara, according to Companies House.
Elara Capital and Johnson did not immediately respond to CNBC requests for comment.
Airbnb will soon push all vacationers and hosts to verify identity
The Airbnb logo is seen on a little mini pyramid under the glass Pyramid of the Louvre museum in Paris, France, March 12, 2019.
Charles Platiau | Reuters
Come Spring 2023, Airbnb will require all users booking reservations on its platform to verify their identity to book a reservation, further expanding a program that asks for credentials like a photo of a valid government-issued ID or a legal name and address.
Tara Bunch, global head of operations at Airbnb, said that while 80% of the rental platform’s bookings already feature identity verification as something hosts can request, the company is taking this additional step.
“It’s not so much that people that were booking listings were representing themselves as not being who they are,” Bunch said. “When you take away the anonymity of not being identify verified, I think it opens up the perception that people could behave badly and not be held accountable, and by definition, tends to cause people to behave a little bit better because they know they will be held accountable for bad actions.”
The move puts Airbnb more in line with traditional hotels, where front desk workers request to see some form of identification from a guest prior to check-in. Most other vacation rental platforms, like Expedia Group‘s Vrbo, don’t require identification verification but do allow guests or hosts on the platform to submit their information.
Airbnb has made efforts in the past to curb bad behavior. Amid the Covid-19 outbreak, the company placed a temporary ban on house parties citing health concerns. It made that ban permanent in June, as well as banning party-house-type situations, where people would book large houses for a single night. It also rolled out several enhanced safety features following a shooting that killed five people at one of its bookings in 2019.
Bunch said as the company looked to implement these features, it leaned on machine learning to help identify potential issues. In the case of stopping house parties, Airbnb looked at things like the age of the individual booker and how long they’ve been on the platform, as well as things like how far away they lived from a large home they were looking to book, or if there were multiple efforts to book the same property by people in close geographic regions. As a result, Airbnb was able to further reduce parties on the platform by 35% in Australia, where it tested some of these features.
While infrequent, Bunch said there have been examples of people purposely using false identities to dupe other users or defraud them. Bunch noted that there have been instances of financial fraud schemes where unverified users have looked to use stolen credit cards via fake identities, or even looked to move money between fictional guest and host combos. “An innocent guest can get caught up in that, so we felt that taking that completely out of the system, preventing any sort of financial fraud or being able to take advantage of someone with say a fake identity was really important,” she said.
In collecting this data, Airbnb utilizes a variety of third-party platforms, databases, and verification systems to confirm that someone is truly who are saying they are as well as doing other background checks, Bunch said, adding that there are also manual reviews when needed. That has put more emphasis on Airbnb’s internal data security, and Bunch said all of these points of ID verification from the platform are closely monitored by the company’s chief privacy officer and his team, as well as for compliance with local and national data privacy regulations.
“Guests and hosts come to Airbnb because we’re a trusted brand and they’re trusting us to keep their property safe and keep them safe, and to have a great experience in a beautiful location with a beautiful listing,” she said. “At the end of the day, the way we’re going to retain and attract guests and hosts and grow our platform is creating that level of trust within our community and being the place that people know they can come to book an experience or vacation and it is worry free.”
Their firms will struggle to make money in 10 years
A large number of CEOs from around the world think their companies are in trouble — and they appear ready to do something about it.
Nearly 2,000 CEOs recently polled by accounting and consulting firm PwC say their company won’t be “economically viable” within the next decade, without changing its current path. That’s almost 40% of the total number of CEOs surveyed across 105 countries for PwC’s annual global CEO survey.
They’re worried for a host of reasons. More than half of the CEOs surveyed cited shifts in consumer demand, regulatory changes and labor shortages as challenges to their profitability over the next 10 years.
Forty-nine percent worried about technologies like artificial intelligence slashing their profits, 43% said supply chain disruptions will continue to be a threat, and nearly a third worried about competitors from outside industries entering their field.
The PwC report cited “climate change, technological disruption, demographic shifts, a fracturing world and social instability” as additional “megatrends” that could reshape businesses in the coming years.
American CEOs were the most optimistic about their long-term business models, while business leaders in Japan and China were the least optimistic. And despite the concerns, most of the company leaders surveyed — 60% — aren’t planning any layoffs, at least over the next 12 months.
However, the report’s prescription for worried CEOs may not bode particularly well for some workers.
In the report, the authors recommended that company leaders start making bolder choices about their company’s long-term direction. They pointed to Philips, the Dutch multinational company that reinvented itself as a health technology company in the 2010s after focusing on lighting products since 1891.
Philips split into two companies to make that shift happen, shedding its lighting division off in an initial public offering in 2016. The move, while drastic, did work — pulling the company out of a significant rut at the time. (Its stock has plunged more recently, following a large device recall.)
The surveyed CEOs said they want to make such bold decisions but aren’t currently prioritizing them.
The majority said that in their ideal world they’d spend 57% of their work time figuring out how to meet future demands. Instead, managing their companies’ current performance takes up the bulk of their time, they said.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don’t miss: Kind Snacks founder Daniel Lubetzky made a $220 million mistake—it turned his startup into a $5 billion company