Daily Tech Snippet: Friday, December 18

• Big IPO, Tiny Payout for Many Startup Workers: Side deals and volatile shares make stock options a bigger gamble for startup employees.The frustrated expectations of early employees have become a common thread in the latest round of technology IPOs. It used to be “the get-rich story happened for people who joined in the early days,” says Saar Gur, general partner at Charles River Ventures. Now they can be among the few left behind. Many executives, early investors, and even later investors are able to cash out before the rank and file, or bargain for guarantees that help ensure a bonanza. Whatever happens with an IPO, executives tend to hang on to enough equity to guarantee huge payouts when they sell their shares. Most early investors get a chance to sell options on secondary markets before a company’s IPO. Later investors increasingly demand preferential treatment, including agreements that if an IPO underperforms the terms of their investment, they’ll be made whole with an equivalent amount of additional shares. Late-stage investors in both Box and Square had such so-called ratchet agreements in place, further devaluing locked-up employee equity. When those kinds of deals are in place, employees often find their payouts disappointing because they’re so diluted, says Clara Sieg, a partner at Revolution Ventures. Box and Square declined to comment for this story. Ordinary employees are typically without meaningful financial protections or even a clear sense of what their equity stakes mean, says Chris Zaharis, who’s worked at startups for about 20 years and as a volunteer teaches people about their equity rights. Options grants often don’t come with information on strike prices (discounts on shares), preferential treatment, or even the total number of shares outstanding. “People on average overestimate what they are going to make by about 10X,” he says.

• Driverless Cars Have A Crash Rate Twice As High As Regular Cars - Because They Always Follow The Rules. They  The self-driving car, that cutting-edge creation that’s supposed to lead to a world without accidents, is achieving the exact opposite right now: The vehicles have racked up a crash rate double that of those with human drivers. The glitch? They obey the law all the time, as in, without exception. This may sound like the right way to program a robot to drive a car, but good luck trying to merge onto a chaotic, jam-packed highway with traffic flying along well above the speed limit. It tends not to work out well. As the accidents have piled up -- all minor scrape-ups for now -- the arguments among programmers at places like Google  and Carnegie Mellon University are heating up: Should they teach the cars how to commit infractions from time to time to stay out of trouble? “It’s a constant debate inside our group,” said Raj Rajkumar, co-director of the General Motors-Carnegie Mellon Autonomous Driving Collaborative Research Lab in Pittsburgh. Turns out, though, their accident rates are twice as high as for regular cars, according to a study by the University of Michigan’s Transportation Research Institute in Ann Arbor, Michigan. Driverless vehicles have never been at fault, the study found: They’re usually hit from behind in slow-speed crashes by inattentive or aggressive humans unaccustomed to machine motorists that always follow the rules and proceed with caution. Last year, Rajkumar offered test drives to members of Congress in his lab’s self-driving Cadillac SRX sport utility vehicle. The Caddy performed perfectly, except when it had to merge onto I-395 South and swing across three lanes of traffic in 150 yards (137 meters) to head toward the Pentagon. The car’s cameras and laser sensors detected traffic in a 360-degree view but didn’t know how to trust that drivers would make room in the ceaseless flow, so the human minder had to take control to complete the maneuver.

• Brazil court lifts suspension of Facebook's WhatsApp service: A Brazilian judge on Thursday ordered the lifting of a 48-hour suspension of the services in Brazil of Facebook Inc's WhatsApp phone-messaging application, overturning an order from a lower court. The ban, which went into effect at midnight Wednesday, lasted about 12 hours until an appeals court judge overturned it. The interruption of WhatsApp's text message and Internet telephone service caused outrage in Latin America's largest country, where the company estimates it has 100 million personal users, and led to angry exchanges on the floor of Congress. WhatsApp is installed on 92.5 percent of Android devices in Brazil, making it the most installed app in the country, according to SimilarWeb, an internet intelligence and marketing company. Rival messaging system Telegram said on Twitter that it received 1 million downloads in Brazil in one day due to the outage. Telegram was installed on 2.35 percent of android devices before the blackout and Facebook Messenger on 74 percent, SimilarWeb said. A judge in Sao Bernardo do Campo, an industrial suburb of Sao Paulo, had ordered the suspension of WhatsApp's services from midnight on Wednesday (0200 GMT Thursday). The order was made after the California-based company, despite a fine, failed to comply with two judicial rulings to share information in a criminal case. 

• Apple names Jeff Williams COO, a job once held by Tim Cook: Apple Inc promoted longtime executive Jeff Williams to the role of chief operating officer, reinstating the title previously held by Chief Executive Tim Cook, as part of a series of changes to the company's leadership team. Williams, who joined Apple in 1998, previously served as senior vice president of operations and oversaw development of the Apple Watch, the company's first new product since the iPad. "Jeff is hands-down the best operations executive I've ever worked with," Cook said in a statement. While it was unclear if the appointment meant Apple was grooming Williams to be Cook's successor, the Wall Street Journal reported, citing a source, that the move did not necessarily signal that.

• Yelp, OpenTable part ways amid heightened competition: Review site Yelp Inc and restaurant reservation service OpenTable have quietly ended a long-running partnership, the companies confirmed on Thursday, as the one-time allies increasingly eye each other's businesses. The companies parted ways in April under mounting competition, with OpenTable facing new rivals to its reservation business and Yelp dogged with questions about stalling growth. Both companies are trying to take charge of the entire customer experience, said an analyst. "If they have to share that customer with someone else, it threatens their long-term viability," he said. The companies halted a deal that since 2010 had allowed users to make OpenTable reservations through Yelp, home to a trove of reviews from diners.