Daily Tech Snippet: Thursday, March 24

• The Uber Model, It Turns Out, Doesn’t Translate: Other than Uber, the hypersuccessful granddaddy of on-demand apps, many of these companies have come under stress. Across a variety of on-demand apps, prices are rising, service is declining, business models are shifting, and in some cases, companies are closing down. Here is what we are witnessing: the end of the on-demand dream. That dream was about price and convenience. Many of these companies marketed themselves as clever hacks of the existing order. They weren’t just less headache than old-world services, but because they were using phones to eliminate inefficiencies, they argued that they could be cheaper, too — so cheap that as they grew, they could offer luxury-level service at mass-market prices. So do a lot of other apps offering services across a number of industries. They are super convenient, but the convenience comes at a premium, which seems here to stay. Some of these services could make for fine businesses, but it is hard to call them groundbreaking. After all, paying extra for convenience isn’t really innovative — it is pretty much how the world has always worked. Before we get to why many on-demand apps have struggled to achieve mass-market prices, it is important to remember why anyone ever thought they could: because Uber did it. The ride-hailing company that is valued by investors at more than $60 billion began as a luxury service. The magic of Uber was that it used its growth to keep cutting its prices and expand its service. Uber shifted from a convenient alternative to luxury cars to an alternative to taxis to, now, a credible alternative to owning a car. But Uber’s success was in many ways unique. For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service. The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars. But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said.

• Why you should be skeptical that any video is real: Be careful about believing what your eyes are telling you. Researchers have shown how a video of a person talking can be altered in real time to change what a speaker appears to be saying. In a new video, the scientists show how they edited YouTube clips to change mouth movements. The system uses a webcam to track one person’s facial expressions, and then applies them to the face of the person in the target video. The software creates a 3D representation of a subject’s face, which can then be swapped with the 3D representation of another face. The process works even if one subject has facial hair or a different skin tone. But it won’t work if a person’s long hair blocks his or her mouth. Currently the researchers are considering commercializing the technology for use in TV shows that are re-released in a different language. Editing actors’ facial movements to match the audio should make the dubbed programs seem more natural, even if what’s onscreen is actually fake.

• Square Teams Up With Facebook to Offer Ads That Can Be Gauged: On Wednesday, Square announced a new integration with Facebook. Under the integration, small businesses that use Square to process payments can buy and target Facebook advertising using Square’s software. Square will make subscription fees off the new product. Small businesses can benefit from the move because Facebook ads bought through Square’s platform are directly connected to sales activity and data, Square said. That will allow business owners to understand whether their Facebook ads are working to attract new and repeat customers. The Facebook ad integration is just the most recent new line of business for Square, which went public in November. When the company began in 2009, it focused on providing a square credit card reader that easily attached to smartphones and tablets, giving small, cash-only businesses the ability to accept credit cards. Square takes a small percentage of each transaction, a fee it splits with credit card companies and other financial intermediaries. But as Square has grown, the company has diversified from that payments processing core, which some analysts and investors have criticized for having overly thin margins. Square now offers cash advances to merchants through Square Capital, scheduling with Square Appointments and food delivery with Caviar. The company has also begun offering other subscription-based products to businesses, like an email marketing service linked to sales history. The new Facebook advertising integration was spurred by an acquisition of talent and technology from a start-up called LocBox a few months ago. Square hired Mr. Mehta and his colleagues from LocBox, which specialized in online marketing for small and local businesses, to work on similar advertising technology at Square. The new lines of business still account for far less revenue than Square earns by processing payments. But Square believes that as more small businesses begin adopting its full array of products, these nascent revenue streams will grow. Two weeks ago, Square reported its first quarterly earnings as a public company, posting a 49 percent revenue increase to $374 million for the fourth quarter from a year ago, with sales from its software and data products more than tripling.

• Why I’m skeptical about Apple’s future: Facebook is set to release its virtual reality headset, Oculus, next week. It will be big and clunky, expensive, and cause nausea and other problems for its users. Within a few months, we will declare our disappointment with virtual reality itself while Facebook listens very carefully to its users and develops improvements in its technology. Version 3 of this, most likely in 2018 or 2019,will be amazing. It will change the way we interact with each other on social media and take us into new worlds — like the holodecks we saw in the TV series Star Trek. This is the way innovation happens now. You release a basic product and let the market tell you how to make it better. There is no time to get it perfect; it may become obsolete even before it is released. Apple hasn’t figured this out yet. It maintains a fortress of secrecy and its leaders dictate product features. When it releases a new technology, it goes to extremes to ensure elegant design and perfection. Steve Jobs was a true visionary who refused to listen to customers — believing that he knew better than they did about what they needed. He ruled with an iron fist and did not tolerate dissent of any type. People in one division of Apple also did not know what others in the company were developing, that is the type of secrecy the company maintained. Jobs’s tactics worked very well for him and he created the most valuable company in the world. But without Jobs — and given the dramatic technology changes that are happening, Apple may have peaked. It is headed the way of IBM in the ’90s and Microsoft in the late 2000’s. Consider that its last major innovation — the iPhone — was released in June 2007. Since then, it has been tweaking its componentry, adding faster processors and more advanced sensors, and releasing this in bigger and smaller form factors—as with the iPad and Apple Watch. Even the announcements that Apple made Monday were uninspiring: smaller iPhones and iPads. All it seems to be doing is playing catch up with Samsung, which offers tablets and phones of many sizes and has better features.  It has been also been copying products such as Google Maps and not doing this very well.

• Shopify Doubles Down on ‘Buy’ Buttons Despite Sluggish Start: Last year certainly wasn’t the year of the “Buy” button that some envisioned, but Shopify is betting that 2016 could be. The e-commerce company, which makes software that small businesses use to sell products online, is expanding the number of online sales channels its customers can sell through as shopping on mobile devices booms. The new channels include product discovery app Wanelo, home design site Houzz and coupon app Ebates; Shopify said that more are on the way. “This is a continued bet on distributed commerce,” said Satish Kanwar, Shopify’s director of product. The expansion follows Shopify’s previous work to let its merchants start selling directly on Twitter, Facebook and Pinterest, in addition to their own sites. But shopping on Pinterest got off to a slow start last year, and e-commerce efforts on Twitter and Facebook are still in early stages.