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David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
What do we want? Money!
When do we want it? Now!
That’s the takeaway from a new study in the journal Environmental Research Letters. In a survey of 2,170 Americans, the authors asked respondents to rate how attractive they found different financial incentives for buying a new electric vehicle. Immediate rebates—cash off sticker price, in other words—were consistently and “overwhelmingly” rated as the most attractive way for the government to subsidize purchases.
Currently in The United States, new EV buyers are eligible to receive up to $7,500 back in the form of a tax rebate. This discount is actually a piece of Obama-era legislation from 2009. President Biden attempted to expand the tax credit to $12,500 in the Build Back Better legislation but was stymied by West Virginia’s Joe Manchin, a man who has taken more money the fossil fuel industry than any other Democrat in the Senate
Seven thousand, five hundred dollars is no small sum, but, on average, survey respondents said they’d be willing to accept a lower rebate if they could have it today, to the tune of $1,400. In other words, the average respondent felt that $6,100 today was as good as $7,500 back on their taxes.
In general, the current tax rebates system was viewed more favorably by wealthier respondents—people who could afford to wait for their money and who were going to owe a lot more money when April 15th rolls around. Remember, if you owe less than $7,500 at tax time, a rebate of that size is always wasted, at least in part. “It's a pretty unequitable thing and very much favors the wealthy and people who have higher tax liabilities,” says John Helveston, a researcher at George Washington University, who co-authored the study.
In addition to perhaps contributing to this sort of financial inequality, the current tax rebate system also means the government is overpaying for the effect they’re generating. If $6,100 today is considered on par with $7,500 at tax time to the average EV buyer, the government could’ve saved $2 billion between 2011 and 2019 by giving out less money more immediately. Or—even better—the program could’ve had a significantly larger effect for the same cost.
The argument—and Helveston says he gets this all the time—is that EV manufacturers would simply raise their prices to account for the immediate rebate, effectively nullifying the benefit to consumers. Helveston says it’s certainly possible that the manufacturers and the dealers would capture a bit of the value from an immediate rebate, but he doesn’t think it’s quite so simple. “These cars are more expensive to start with. They're hard to sell,” he says. “If you put this thing on the lot at a higher price, you're not going to sell that car. The consumers just going to say ‘no.’”
Helveston says that the rebate system might actually make EVs more attractive to dealers in the long run. Dealers have historically been lukewarm on EVs because they don’t require oil changes or a lot of other routine maintenance that internal combustion engines need, meaning dealers see reduced long term revenue from the sale. If some of the rebate value winds up going to the dealer and allows them to sell expensive cars a bit more easily, Helveston says it might help accelerate EV adoption even further. “The dealers have just been completely ignored, but they're actually a pretty serious gatekeeper,” he says.
If American politics shows anything, however, it’s that just because a policy makes sense, doesn’t mean it’s easy to enact. A change to the federal EV tax rebate policy would have to come from Congress, and as long as Joe Manchin continues to protect the interests of the fossil fuel industry, this remains unlikely. However, all is not lost! “That doesn't mean you can't make an impact today,” says Helveston. “At the state level, there's a lot more flexibility.”
The Nation Conference of State Legislatures has a nice roundup of the state-by-state EV incentives on offer, which gives an idea of how wildly variable this landscape is. California has 15 different programs in place that offer benefits ranging from financing for installing an EV charger on your property to an $800 rebate for residential customers purchasing an electric vehicle. West Virginia only has one. Kentucky, Kansas and North Dakota have zero. Check out what’s on offer in your state and see if it persuades you to think electric for your next purchase.
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
On this episode of Office Hours, Spencer speaks with entrepreneur and venture investor David Beatty. Beatty is the managing partner and co-founder of Gaingels, an LGBTQIA+ investment syndicate aimed at fostering social change through their investment portfolios by creating a more diverse, inclusive and accessible venture capital ecosystem.
Their conversation was recorded at the Milken Institute Global Conference on May 2, 2022.
Beatty moved to the United States in 1990, where he started several successful businesses, including one involved in now-ancient fax and Telex technology. He retired in 2006, became an angel investor and eight years later, he decided to focus his investing efforts.
“In 2014, I started Gaingels with my co-founder, Paul [Grossinger], because there was nowhere for us as gay men to be able to invest in our own community,” he said.
The syndicate started out as “a group of mostly gay men, investing in mostly gay men,” Beatty said, adding that it has since expanded to include investors from a number of backgrounds, with the aim of promoting greater diversity to the startup and venture capital worlds.
Beatty argues that Gaingels' commitment to diversity, equity and inclusion goes beyond the obvious moral considerations — it’s sound business.
“It's not that it matters because it's the right thing to do,” he said. “It matters because companies like McKinsey and organizations like Harvard University have done so many studies that say that companies with diverse management teams and diverse boards fiscally outperform companies that don't.”
The organization’s structure — it’s a syndicate, not a fund — is crucial, he added. For every potential deal, Gaingels receives an allocation from the prospective company’s CEO, which can depend on the stage of the deal.
“And then we bring it to our members, and our members choose which deal that they wish to invest in,” he said. “And we put together a special purpose LLC for that. And then we do the work to enable that LLC to make that investment.”
Gaingels' membership has since expanded to 2,700, and the organization has invested in thousands of companies, according to its website. Pitchbook and CrunchBase have both recognized it as the among the most active venture capital firms in 2021, Beatty said.
“What it's doing is it's opening up this whole world of previously unavailable investment opportunities to individuals," he added. "And our focus is expanding the number of members we have to minorities from right across the board, not just the LGBTQ-plus community.”
Prospective portfolio company CEOs are asked to sign Gaingels letter, of commitment to do certain things in their hiring and HR practices—for instance, considering a non-discrimination policy and pledging to seek out qualified minority candidates for every executive job opportunity—that put them on a good footing for hiring and supporting an inclusive staff.
“—which you may think is a very simple thing,” Beatty said. “But when you know that you can get evicted from your house in 28 states in the United States just for being gay. These kinds of things actually matter when they come from companies.”
Aside from access to capital, Gaingels portfolio companies get access to a more diverse set of investors and get to the syndicate’s network of expertise and tools for hiring, including its jobs portal.
“We're now expanding that to use technologies with the partners who can bring in recruiters who can actually specialize in recruiting from minorities, so that we can actually provide more resources,” Beatty added.
The goal, he said, is to make it as easy as possible for executives of their portfolio companies to hire qualified candidates from traditionally underrepresented groups.
“It's amazing to me how pretty much all of the top venture capital firms want us to be co investors on their cap tables, because of what we can help them focus on,“ he said.
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
TikTok has already dominated the social media landscape. Now, its users are helping it become a search engine.
While at Fortune’s Brainstorm Tech conference, Google Senior Vice President Prabhakar Raghavan said internal research indicates that users aged 18 to 24 are forgoing Google Search or Maps and instead sending their inquiries to social media sites. Despite growing concern about misinformation on such platforms, TechCrunch reported that TikTok and Instagram are now steering attention away from the core feature that launched the company into notoriety.
“We keep learning, over and over again, that new internet users don’t have the expectations and the mindset that we have become accustomed to,” Raghavan said at the conference.
Google, for its part, wants to highlight TikTok and Instagram videos in its search engine. Additionally, Raghavan said the search engine is incorporating more visuals while also leaning into voice searches.
As TikTok users film their meals and often add short, quippy reviews, Raghavan said Gen Z is turning to social media apps for their next lunch spot. Many TikTok users turn to influencers for food suggestions, with Los Angeles restaurants like The Red Chickz and Paris Tokyo gaining notoriety on the app.
Users often check the app for a widerange of recommendations. Raghavan’s statements confirm that TikTok users are turning to the video-sharing app for information. Videos under the hashtag for facts, hacks and recommendations, #tiktoktaughtme, have gained a cumulative 8 billion views.
Influencers on TikTok, however, often do not accurately disclose when a video includes sponsored content, as required by the Federal Trade Commission. And marketing companies have shifted to incorporate ideologies, like Urban Legend, an ad-tech startup that recruits social media celebrities from macro to nano to create content around everything from climate change to discouraging mask mandates. Urban Legend’s strategy draws on the idea that users who turn to influencers for recipe recommendations or fashion trends may also trust their opinion on political issues—even if many of the posts were not flagged as sponsored.
TikTok has also come under fire for misinformation—from the potentially harmful abortion tips to internationalelections to Russia’s invasion of Ukraine, the app has been criticized for not doing enough to combat it. Google has also been criticized for how its algorithm can highlight misinformation, such as suggesting “fake” abortion clinics.
With TikTok’s growing popularity, Google must contend with how to capture Gen Z’s attention as they try to retain that audience. And TikTok, for all its problems, has helped communities come together to inform people about topics ranging from autism diagnoses for women to astrological terms to LGBTQ+ information. Suggestions get local, too, with Los Angeles residents sharing free things to do downtown, vintage stores to shop at and museums to visit—succinctly providing recommendations with flashy videos.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Netflix’s decision to partner with Microsoft for its ad-supported subscription plan could put the company on track to generate a multi-billion dollar ad business.
The struggling streaming giant could boost its revenue in the U.S. and Canada by $3 billion, or 20%, by 2024, Bloomberg Intelligence tech and media analyst Geetha Ranganathan recently wrote to clients. She added that Netflix could use ads to potentially monetize 25% of its U.S. and Canadian subscriber base, or about 19 million people.
Assuming the streaming service airs seven ads an hour, she estimated around $750 million in new quarterly ad revenue, or $3 billion for the year, in the U.S. and Canada. A more conservative estimate suggests a $1.25 billion revenue opportunity by 2024, she said.
“Given the average user spends two hours a day on the platform, Netflix's opportunity appears compelling,” Ranganathan wrote.
The streaming giant has raced to introduce a cheaper subscription tier this year after it lost subscribers for the first time in a decade. Since Netflix set a tight deadline for itself to launch the low-cost plan, the company sought an outside partner to handle the ad sales and technology.
In tapping Microsoft, Netflix is choosing an established player in the online ad business—without having to work with a direct rival. Netflix reportedly kicked the tires on Comcast and Google, but both of those companies have their own streaming services. In addition, Microsoft offers strong privacy protections for consumers, Greg Peters, Netflix’s COO and chief product officer, wrote in a blog post.
The outlook on Netflix has been dire lately; the company shed 200,000 subscribers at the start of the year and is expecting to lose two million more during the quarter that just ended. But with a global customer base of 222 million, it also has the potential to build a significant ad business.
Netflix is still in the “very early days” of developing its ad-supported plan, Peters said, adding that the company is reportedly aiming for a launch by year’s end. Whenever Netflix starts airing commercials, it’ll join an expanding roster of streaming services opting to sell cheaper subscriptions with ads, including Hulu, HBO Max and Peacock.
As consumers continue to cut the cord on traditional cable TV in favor of online streaming, they’re increasingly opting for these less expensive plans. Spending on internet-connected TV ads, meanwhile, has rapidly risen in recent years, jumping 60% in 2021 alone, according to research from Insider Intelligence.
“Despite the lack of ad infrastructure, Netflix dominates U.S. streaming viewership, which we think will allow it to quickly ramp up ad revenue,” Bloomberg’s Ranganathan wrote.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
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