Tag: San Francisco

HomeAway Sues San Francisco to Stop the Enforcement of a Short-Term Rental Law

Birdhouse at HomeAway's Austin headquarters, photo courtesy of HomeAway

Birdhouse at HomeAway’s Austin headquarters, photo courtesy of HomeAway

Austin-based HomeAway, the world’s largest online marketplace for vacation rentals, filed a lawsuit Monday against the city and county of San Francisco seeking to stop the city from enforcing a new short term rental law.

HomeAway claims the law discriminates against second home owners and non-resident individuals advertising short-term rentals, and gives Airbnb, based in San Francisco, a competitive advantage.

“In a community known for promoting equality and an entrepreneurial spirit, it is shocking the supervisors passed a law that, in our opinion, stifles opportunity in such a discriminatory manner,” Carl Shepherd, co-founder of HomeAway, said in a news release. “In its apparently single-minded goal to ‘legalize Airbnb’, we claim the Supervisors ignored the benefits of responsibly regulating a well-established industry, and embraced an unconstitutional and unenforceable regulation. As the industry leader, HomeAway feels a duty to fight for the entire short-term rental industry and the rights of all property owners, including the owners of the 1,200 San Francisco properties who advertise on HomeAway.”

The new law is unconstitutional because the law restricts “consumer choice in both how to offer or find a property and requires HomeAway and most of its competitors to overhaul their businesses to comply with a regulation that is almost entirely unenforceable,” Shepherd said. HomeAway also alleges the law allows only San Francisco residents to provide short term rentals. The law is intended to maintain housing stock and provide affordable housing, but HomeAway contends that no evidence exists to show short-term rentals have a negative effect on affordable housing.

“Our goal is to work with the city to amend the law to one that balances the needs of the community with the rights of all people to rent their properties, regardless of who they are, where they choose to live and how they choose to market those properties,” Shepherd said. “We expected any ordinance in San Francisco would be thought-leading public policy, but instead it fails on all counts resulting from a desire to anoint winners and losers, not to create policies that are fair to all.”

RideScout Expands to San Francisco

SFLaunchRideScout, an app that helps people find transportation, announced it is expanding to the San Francisco area.
The Austin-based company has also recently expanded its coverage to include “Sidecar, Silvercar, Muni, BART, Caltrain, Golden Gate Transit, AC Transit, Blue & Gold Fleet, Baylink Ferry and SamTrans — along with Flywheel, City CarShare, Bay Area Bike Share, and Scoot– as well as walking, driving, and even parking with Parking Panda,” according to its news release.
The free mobile app, available for both iOS and Android mobile systems, aggregates all ground transportation options for users.
“From day one, we have received requests for RideScout in San Francisco, as people have seen how easy and efficient it is to get around a city with our app,” Joseph Kopser, RideScout Co-Founder and CEO said in a news release. “The Bay Area has a wealth of ground transportation options, but the fastest or cheapest ride is not always clear. With RideScout, people can choose the best transportation option based on their needs right then and there, wherever they are, sorting by arrival time, cost or type of ride.”
RideScout is also available in Washington, D.C., where it launched in November of 2013 and Austin. It plans to add more partners in the Spring.

FBI Busts $1.2 Billion Silk Road Illegal Online Marketplace with Ties to Austin

Founder of Silicon Hills News

Ross William Ulbricht, alleged mastermind behind Silk Road, an illegal online marketplace for drugs, hacking software, forgeries and hit men. Photo from Ulbricht's LinkedIn Profile.

Ross William Ulbricht, alleged mastermind behind Silk Road, an illegal online marketplace for drugs, hacking software, forgeries and hit men. Photo from Ulbricht’s LinkedIn Profile.

The crazy tale of Ross William Ulbricht, also known as “Dread Pirate Roberts,” after a masked fictional character in the movie “The Princess Bride,” sounds like a HBO series on a renegade Internet entrepreneur gone wrong.
Ulbricht, 29, allegedly operated the Silk Road, a sprawling $1.2 billion black-market bazaar for drugs, computer hacking software, forgeries and hit man services. He founded the site, programmed its features and oversaw its operations on a daily basis, according to the Federal Bureau of Investigations.
The FBI arrested Ulbricht earlier this week on charges of narcotics trafficking, computer hacking and money laundering, according to a sealed criminal complaint by Christopher Tarbell, FBI special agent.

A Native of Austin

Ulbricht, who grew up in Austin and graduated from Westlake High School in 2002, is now in jail in San Francisco facing charges that carry several hundred years of jail time.
imgres-6The FBI arrested Ulbricht for owning and operating the underground website known as “Silk Road,” which provided a platform to sell heroin, cocaine, LSD and Methamphetamines. Ulbricht, under an alias “altoid” allegedly called the site “an anonymous Amazon.com.”
The complaint also alleges that the Silk Road provided a platform to trade “malicious software designed for computer hacking, such as password stealers, keyloggers, and remote access tools.” It also traded in other illicit goods and services through a payment system based on Bitcoins, an unregulated digital currency.
The FBI alleges that Ulbricht added a Bitcoin “tumbler” to the Silk Road payment system to “ensure that illegal transactions conducted on the site could not be traced to individual users.”
The two-year investigation of Silk Road, headed up by FBI Special Agent Tarbell, also involved agents of the Drug Enforcement Administration, the Internal Revenue Service, and Homeland Security Investigations.

So who is Ulbricht?

Ulbricht’s Facebook page reveals that he liked beer pong and crazy hat parties. He enjoyed movies like The Matrix, Office Space, Time Bandits and Lord of the Rings. His favorite books included Be Here Now, Hyperion, The Power of Now and Shogun.
His interests spanned money, partying, yoga, dancing, drumming and strength training.
He also focused on entrepreneurship and participated in a 3 Day Startup program in 2010. His LinkedIn profile listed his occupation as an “investment adviser and entrepreneur” based in Austin.
But the FBI alleges that starting in January of 2011 through September of this year, Ulbricht ran a global platform for drug dealers to sell controlled substances online.
And the plot deepened even further this year when Ulbricht allegedly “solicited a Silk Road user to execute a murder-for-hire of another Silk Road user, who was threatening to release the identities of thousands of users of the site,” according to the complaint.
The Silk Road operated on the “the onion router” or “tor” network, which provides anonymity to users.
“Based on my training and experience, Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today,” according to Tarbell. “Silk Road has been used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over a hundred thousand buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.”

All transactions took place using Bitcoins

Silk_Road_Marketplace_Item_ScreenThe site generated more than 9.5 million Bitcoins and collected 600,000 in Bitcoin commissions, equivalent to about $1.2 billion in sales and $80 million in commissions, according to Tarbell.
As of Sept. 23, the Silk Road had 13,000 items listed for sale under categories such as “cannabis,” “dissociatives,” “Ecstasy,” “Psychedelics,” and “Stimulants.” The items were sold in individual dosages and bulk orders.
During its investigation, law enforcement agents purchased more than 100 items of controlled substances such as cocaine, heroin, LSD and more from sellers on the Silk Road.
The Silk Road charged a commission, ranging from 8 percent to 15 percent, for every transaction on its site.

Hiring Hitmen

Tarbell also reported that Ulbricht took “it upon himself to police threats to the site from scammers and extortionists, and has demonstrated a willingness to use violence in doing so.”
In a second criminal complaint from the state of Maryland listed on the Baltimore Sun’s website, Ulbricht is alleged to have hired a hitman to kill an employee who he thought was stealing from Silk Road. He allegedly paid $80,000 to an undercover cop to execute the employee in January of 2013.
And in another case of hitman for hire a few months later, Tarbell outlines how Ulbricht allegedly sent messages to have a Silk Road user in Canada with a wife and three kids, named “FriendlyChemist,” killed for $150,000 or 1,670 bitcoins. The guy was trying to extort Ulbricht for $500,000 or else he would release the names and addresses of Silk Road users.

Ross Ulbricht, photo from Twitter

Ross Ulbricht, photo from Twitter

Ulbricht struck a deal with a user called “redandwhite.” After receiving his payment, that user messaged Ulbricht stating, “Your problem has been taken care of…. Rest easy though, because he won’t be blackmailing anyone again. Ever.” The user provided pictures to Ulbricht of the alleged dead body of the victim, but the police have been unable to find any record of a homicide occurring in White Rock, British Columbia on or about March 31, when this incident allegedly took place.

How did Ulbricht end up in jail?

He graduated from the University of Texas at Dallas with a Bachelor of Science degree in physics in 2006, according to his LinkedIn profile. Then he attended graduate school at the University of Pennsylvania School of Materials Science and Engineering.
On his LinkedIn profile, Ulbricht states that his goals shifted since graduate school and that he was focused on “creating an economic simulation” designed to “give people a first-hand experience of what it would be like to live in a world without the systemic use of force” by “institutions and governments.”
Tarbell believed that system to be Silk Road. He also reported that Ulbricht, under the alias “altoid” posted on different online forums to market Silk Road.

The Social Media Trail

The FBI heavily relied upon social media sites like LinkedIn, Facebook, Twitter and Google + to put together a profile of Ulbricht and link him back to Silk Road. For example, Ulbricht’s Google + profile listed his favorite YouTube videos, which included a number originating from Mises.org, the website of the Mises Institute, the world center of the Austrian School of Economics.
Ulbricht, under the alias DPR, had cited the “Austrian Economic theory” and the work of Ludwig von Mises and Murray Rothbard – economists closely associated with the “Misus Institute” as providing the philosophical underpinnings for Silk Road.
Ulbricht’s best friend is Rene Pinnell, founder of Hurricane Party and Forecast in Austin, which shut down in July of 2012. Pinnell moved to San Francisco shortly after that. Ulbricht was living at his parents house in Austin and moved shortly after that to join Pinnell in San Francisco.
In its complaint, the FBI reported that Ulbricht lived for a while with a friend who moved to San Francisco in September of 2012. That friend is believed to be Pinnell. They also made a YouTube video together interviewing each other for Story Corps, according to a posting on Pinnell’s personal website. The video shows Pinnell and Ulbricht in split screen talking about moving out to San Francisco, school friends, work, women and other interests. The two have known each other since sixth grade at West Ridge Middle School.

Josh, Frosty and other Aliases

In July of 2013, the U.S. Customs and Border Protection intercepted a package from Canada that contained nine counterfeit identity documents. Agents then visited Ulbricht at his house on 15th Street in San Francisco where he sublet a room for $1,000 monthly, which he paid in cash. He provided them with a copy of his real Texas driver’s license and said that his two other housemates currently only knew him by the fake name “Josh.”
He told the agents that “hypothetically anyone could go onto a website named “Silk Road” on “Tor” and purchase any drugs or fake identity documents the person wanted.”
“The agents also spoke with one of Ulbricht’s housemates at the address, who state that Ulbricht, whom he knew as “Josh,” was always home in his room on the computer.”
Tarbell concluded in his investigation that Ulbricht was stocking up on fake identities so he could rent multiple servers from hosting companies under false identities.
Ulbricht also used the alias “Frosty” posting in computer coding forums for help on programming his illegal underground website.
So how did a kid, who liked cliff jumping and snowboarding and grew up in Austin, got advanced degrees and studied to be an entrepreneur, go down such a bad path? That’s something that only Ulbricht knows. But one thing is for sure, this Silk Road didn’t lead to riches and the good life, but to the inside of a dingy jail cell. And if convicted, Ulbricht, a bright kid with so much promise, faces the possibility of spending the rest of his life in prison.
At a hearing on Friday, Ulbricht’s lawyer denied all charges including that Ulbricht ran the Silk Road website, according to the Los Angeles Times.

Austin Ranks #5 on Richard Florida’s List of Top High Tech U.S. Cities

Photo courtesy of Wikipedia

In 2006, Richard Florida visited San Antonio and spoke at the Texas Lyceum Conference.
I covered the conference for the local newspaper.
Florida made quite an impression on me. I thought he understood the high-tech workforce better than anyone.
And at a time when everyone focused on globalization and a mobile workforce, Florida’s message was that cities needed to create places where talented people liked to live.
“Place is the single most important thing in the global economy,” Florida said at the time.
That’s still true.
That’s why Austin does so well in attracting and retaining a high-tech workforce. The city is a wonderful place to live and raise a family. It’s affordable and the city has a thriving creative class of artists, musicians, writers and high tech workers. The city has lakes, hike and bike trails, parks and more. Austin Fit, a marathon training program downtown, regularly attracts between 300 to 500 people at 6 a.m. on a Saturday during the sweltering summer heat to train for marathons. Austin and its citizens focus on recreation and exercise. But they still know how to have fun with festivals like Keep Austin Weird and Eeyore’s Birthday as well as the nationally known Austin City Limits and South by Southwest. Austin also has great restaurants, bars and more than a dozen coworking sites.
One of the things that makes Austin attractive, in my humble opinion, is the collective intelligence of its people. Maybe it’s because the University of Texas makes it home there, but Austin people are whip-smart.
San Antonio isn’t on the list – yet. But I think San Antonio is making huge progress toward becoming a high-tech hub. Mayor Julian Castro has addressed the obesity epidemic and put a huge focus on the importance of exercise and nutrition. San Antonio has the Fit Family Challenge with free Zumba classes and more every week in city parks.
The city is also focusing on improving its high school dropout rate, which is among the highest in the country. San Antonio is affordable, beautiful and has a creative class of artists, musicians and writers. And it’s high-tech workforce has also been growing.
This month, Richard Florida has a revision of The Rise of the Creative Class book coming out: The Rise of the Creative Class Revisited and he’s compiled a list of the top tech cities in the U.S.
Seattle, home to Microsoft and Amazon, claims the top place from Silicon Valley, which ranked first in his last book. Silicon Valley, which consists of the San Jose metro area, ranks second followed by the greater San Francisco area.
Portland, Oregon claims the fourth spot followed by Austin.
Raleigh, San Diego, Durham, Greater Boston and Boulder round out the top 10.
New York and Washington, D.C., don’t make the list despite their growing high-tech regions.
Florida ranks the top Tech cities by technology, talent and tolerance.
“While technology is an important driver of economic growth and development, it needs to be part of a broader social and cultural ecosystem before it can generate real prosperity,” Florida writes in this article in Atlantic Cities. “There is considerable overlap between the Technology Index and the Creative Class, which makes up more than 35 percent of the workforce in 14 of the top 20 Technology Index metros, and exceeds 40 percent in six of them.”

SceneTap sparks controversy in San Francisco

SceneTap launched in several Austin bars last January and no one seemed to care all that much.
But at that time, Cole Harper, SceneTap’s CEO, wanted to make sure that we reported correctly on his company’s facial detection technology. He wanted people to know that it does not record identities and merely reports on how many men or women are at a bar at any given time and their ages so patrons could judge whether or not they wanted to join the scene. He was afraid there might be a privacy backlash.
Austin-based SceneTap gathers information from video cameras and collects statistics on the demographics of who’s at a bar. It then compiles the stats into percentages and posts them to a website or mobile app. Consumers can’t see the data associated with the stats to protect privacy.
Here’s the story we wrote at the time of the launch. And as far as I could gauge, the reaction in Austin was not that great. Certainly, no one protested the technology.
But that’s quite a different reaction to SceneTap’s reception in San Francisco. The company launched in several bars there last Friday and dozens of articles have been written about the controversy the so-called Big Brother technology has stirred up there. People have threatened to boycott bars employing the facial detection technology.
And now SF Weekly Blogs is reporting that San Francisco bars are nixing “SceneTap’s Creepy Facial Detection Cameras.”

To address the controversy, Harper has penned a letter to San Francisco. The letter is posted below.

Dear San Francisco,
We’ve taken a lot of heat in the past few days and I can completely understand the concern. I realize there are aspects of our technology that could appear to be controversial and raise serious red flags for people, and I assure you I’m not taking it lightly. I know that up until this point we’ve tried to explain what the app is all about in an attempt to set the record straight, but I owe you more than that.

Criticisms in the past week have broken down into two groups: invasion of privacy and a “creepy” app for men to hunt down women. I do understand how that might be your initial reaction after reading some of the blog posts and articles that talk about the app, so I’d like to take this time to better explain the technology and ease these concerns.

When I started SceneTap with my friend, Marc Doering, our intent was for this to be a lighthearted app for consumers and one that would help venue owners with their marketing efforts. Our first thought was “wouldn’t it be great to know what’s happening somewhere before you waste money on a cab?” To get that info, we could pay a doorman to click a button, but that would get expensive and manipulated quickly, so no go. We could use check-ins, but that would rely too much on users and pull personal information, as other geo-location services do – besides, check-ins would never encompass the entire population of a place, so that would be an incomplete evaluation of the scene.

Then we looked at video-based software, which could automatically translate an image into data. Facial recognition was ruled out for privacy reasons and the complexities of user governance. Facial detection, on the other hand, could only figure out facial features through an algorithm, and estimate, with a high level of accuracy, the gender and age of a person. The technology cannot identify an individual person. Recognition says, “Cole Harper walked in, and he’s a 28 year old male living in Austin with 300 friends on Facebook, and here’s his email.” Detection says, “This person appears similar to a male, age 28.” There’s no personal information collected or transmitted within that data.

Further, we knew that in publicizing any of this data, personal or not, we had a responsibility to present it in a way that protected operators and users. So we decided not to present any individual data either. Everything is shown as a percentage or an average over time. Further, we let venues and users decide on business rules to cap out what statistics would show. Male percentage would never exceed 72%, because that would negatively impact the perception of the venue (based on feedback). Female percentage would never exceed 58%, because it may create a “correction” from a swarm of males showing up. In almost a year, we’ve never had any complaints or concerns expressed from a user on the way we display this information (although operators do want to show a higher number of females and a lower number of males, for obvious reasons).

Back to the “video-based” software. Here’s the thing – there are no videos or images stored at any time. Once the data is triggered, the images are overwritten, deleted, gone. There are no tapes. There is no video feed either. No one can go to www.scenetap.com and see what is happening. It’s all data and numbers – that’s it. And since we’re only focused on the door, you’re free to do keg stands and dance like Bernie or hit on that bartender all you want – we do not track you in the venue.

Unfortunately, I think I underestimated the controversial aspects of this technology and what the public’s reaction would be. I know it’s hard to just take me at my word on this, so that’s why I’ve been trying to explain how the technology works in an attempt to put everyone at ease.

Because this is such a serious issue, we’ve been working with Congress, the FTC, and privacy advocate groups to further the privacy agenda as the world becomes increasingly filled with these types of cameras. I’ve also heard your suggestions about working with organizations like the EFF, and it’s something I’m going to explore because I want to make sure that you feel that your personal privacy is always respected.

At the end of the day, there isn’t a way to use SceneTap to go out and target specific women (or men) – all you can do is find out where there are more women or men of a certain age range. The “crowd size” has been most universally used in the decision on where to go, which has nothing to do with the gender/age component. For us, it’s about helping locals and tourists alike find the place that’s right for them. We aim to be more like an objective Yelp, a real-time Zagat…a tool to help you make your decision.

While gender is an interesting novelty, most of our users report using the app to find the scene that is right for them. For some people, it’s finding a bar that’s super packed with young people. For others it’s finding a less crowded bar where you know you’ll get a table or can chat on a date. I actually use the app more to find a place to watch a game with friends or the place with the good food/drink specials, so long as it isn’t dead.

I hope this helps to explain some things for everyone. I really do understand the concerns, but I want to assure you that we are working closely with both the government and the industry leaders to ensure that everyone’s privacy is protected. I think San Francisco is a great city full of passionate, smart people, and you know your technology and social media better than anyone else. I’m glad you’re challenging SceneTap and keeping us on our toes. You’ve given me some very serious things to consider, and you’ve helped me to see that I need to address the potential flaws in my business (perceived or actual) if I want this company to succeed.

If you have any questions, feel free to email me at charper@scenetap.com . Things will be crazy with the launch over the next few days, but I will personally take time to respond to everyone who reaches out to me as quickly as possible.


Cole Harper
CEO, SceneTap

Rackspace opens its San Francisco office today

Rackspace Hosting, which started out as a small venture in San Antonio in 1998 has since developed into a global corporation with nearly 4,000 employees.
I’ve covered the company since its early days. So it’s really thrilling to watch it launch a San Francisco office near the heart of Silicon Valley. Graham Weston, chairman of Rackspace, is in San Francisco today to celebrate the official opening. Here’s the list of today’s activities and I’ve posted a video from Rackspace that provides insight into what Rackspace does.

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