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Trucking startup Convoy closes operations with no buyer

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Re: Trucking startup Convoy closes operations with no buyer

#521

Post by booi »

friendzis wrote: post #516
irjustin wrote: post #513

Earlier quoted context omitted.

Errrr how? [Edit] Legally how is it. Not just because it's commonly measured in months of wages

It's not the way it is calculated. All payments attached to employment contract are wages, be it regular salary, bonuses, vacation pay or severance. Say the contract defines severance of 1 month for each full year worked capped at 3 months: at the moment contract reaches 1 year anniversary, the employee should be owed 1 month worth of severance upon contract termination

I've worked in the sf tech industry my entire career and my employment contracts have never included guaranteed severance. I've seen severance being paid out to fellow employees but afaik it is done as courtesy and wasn't legally required.

Are you European? Maybe it's different there.

Re: Trucking startup Convoy closes operations with no buyer

#522

Post by psunavy03 »

drewrv wrote: post #248
duxup wrote: post #94

Earlier quoted context omitted.

I'm confused as to what Convy "had" anyway. Was it largely spot rates, a bid board, and lots of small carriers? Customers easily could just get rates / carriers elsewhere and walk from Convoy? No other services making income keeping customers around? Rates are pretty fluid in logistics, very strange that they would rely on that alone if that was the case.

Obviously it didn't pan out, but you could think of Convoy as an aggregator of small carriers. A big shipper doesn't want to deal with 1,000 small carriers but they can deal with Convoy, and Convoy deals with the small carriers. Convoy could interface with large companies as though they had a large fleet of drivers and trucks. That "fleet" wouldn't require paying for benefits to employees, maintenance or fuel on the…

. . . so you're saying their business case was turning 3PL into 4PL?

Re: Trucking startup Convoy closes operations with no buyer

#523

Post by renewiltord »

belthesar wrote: post #407
ghaff wrote: post #90

Earlier quoted context omitted.

OTOH, I worked for a very small company during dot-bomb that cut salaries and the principals took no pay for a bit but came out the other side--for a decent number of years. Not sure I'd have been better off had they done a "Whelp. We did our best" a few months earlier. As you get larger, decisions obviously have longer runways.

There's always risk/reward evaluations that are made when in these situations. A handful of stories are being tossed around of examples where business owners ran the business to the redline, and then somehow pulled a rabbit out of a hat. These stories ignore that the significant majority of businesses fail. As an point of principal, is it better to bet on being the unicorn rarely, or to be the leader that takes respo…

If I’m going to work at a startup, I want to know that the founders are going to aim for the stars. If they’re going to throw in the towel like this, I’d opt out. The incentive isn’t there with guys who don’t have any balls.

What am I going to do with one more year of pay. Absolute pittance. People who are going to do this should be upfront that they are ball-less.

Re: Trucking startup Convoy closes operations with no buyer

#524

Post by psunavy03 »

JumpCrisscross wrote: post #349
toomuchtodo wrote: post #51

Earlier quoted context omitted.

Good management manages the treasury so those funds are available during a wind down. If you run out of runway and the bank account is empty, with nothing to provide workers who are getting term'd, you fucked up. (have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to pl…

> Good management manages the treasury so those funds are available during a wind down Given Convoy's margins and operational leverage, I'm not sure it was this simple. Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks. We need stronger unemployment benefits. Barring a public solution, severance ensco…

> Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks.

There's at least one major US freight forwarder who has been in business for over 40 years and who has never done a layoff, not in 2008, not in COVID, and not now. They're not perfect and have other flaws (like every other company everywhere), but still.

Re: Trucking startup Convoy closes operations with no buyer

#525

Post by pests »

nilram wrote: post #408
jahewson wrote: post #266

Earlier quoted context omitted.

I get your point but to free up cash for the employees he’d have to bail out all the other creditors first. Not a good precedent to set.

Under US bankruptcy law, cash first goes to employees, then creditors (including contractors), then owners.

Yep, that is how the law works. In this case cash is going to the creditors. Employees aren't owed anything, then the next in line are the creditors.

Re: Trucking startup Convoy closes operations with no buyer

#526

Post by ako »

ctvo wrote: post #235
pxx wrote: post #157

Earlier quoted context omitted.

The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. As such, spending your last cent to try to find a lifeline makes far more sense than calling it quits early. It's also certainly not in the interests of investors to just call things off.

> The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. Convoy knows their situation very well, and it hasn't changed for 6 months. As investors and founders you can make the call and be responsible to your employees, maintaining a good reputation for yourself (as founders), and enabling future deal flow (as investors) or this s…

As an employee you also know what situation you’re in, they already downsized from 1500 to 500. That in itself should be warning enough that you’re working at a very risky company.

Re: Trucking startup Convoy closes operations with no buyer

#527

Post by asimovfan »

paulddraper wrote: post #443
stuaxo wrote: post #419

Really terrible labour laws they can just tell you it's your last day.

If they run out of money, for sure. Do you want to foot the bill?

Well with proper labor laws in place, that bill could be secured in expense of the shareholders.

A wage labourer should be able to expect to know if they will be able to feed their families the next month.

Re: Trucking startup Convoy closes operations with no buyer

#528

Post by benced »

eli wrote: post #409
adastra22 wrote: post #115

Earlier quoted context omitted.

Company shutdown != layoff.

Yes it does though? The legal entity of the company still exists, it’s just no longer conducting business or paying employees. Thats a mass layoff. The California version of the WARN Act explicitly covers terminating business operations.

> A "faltering company" is not required to give notice of a layoff or plant closing when, before the plant closing, it is actively seeking capital or business, which if obtained would avoid or postpone the layoff or clo- sure, and if it reasonably believes that advance notice would hurt its ability to find the capital or business it needs to continue operating

https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/Worke...

Re: Trucking startup Convoy closes operations with no buyer

#529

Post by vidarh »

eru wrote: post #498
vidarh wrote: post #475

Earlier quoted context omitted.

There was a time when US unions striked despite being met by a risk of people getting outright murdered. Without hyperbole, the 8 hour working day was won with blood. The question needs to be whether you think a strike is right and morally justified, and worth the potential consequences, not whether it is legal.

Leisure and comforts like the eight hour workday are what economists call a 'normal good'. https://en.wikipedia.org/wiki/Normal_good > In economics, a normal good is a type of a good which experiences an increase in demand due to an increase in income, unlike inferior goods, for which the opposite is observed. When there is an increase in a person's income, for example due to a wage rise, a good for which the demand…

"Will want to" yes. But it was not being offered until after that extensive union activism despite decades of demands. To the point that people died for it. May 1st is the international day for labour demonstrations because of the US union fight for the 8 hour day. The demand long preceded a rise in income allowing people to risk walking over it, or be able to afford to offer to take less pay for less work.

It took decades from the demand was there until it became normalised to offer it, with concession after concession won as direct and explicit outcomes of industrial action.

That good conditions are offered far more easily when a working population is in a financial position to walk if it's not offered is entirely unsurprising and irrelevant. That you can't possibly win the same level of outcomes when the financial position of employers doesn't allow it is also entirely unsurprising and irrelevant.

Nobody expects magic. Nor does anyone suggest that there aren't other factors also at play.

Re: Trucking startup Convoy closes operations with no buyer

#530

Post by thaumasiotes »

irjustin wrote: post #519
irjustin wrote: post #513

Earlier quoted context omitted.

Errrr how? [Edit] Legally how is it. Not just because it's commonly measured in months of wages

I realize one possible misconception is severance vs "gardening leave" [0]. They look really similar, but legally entirely different. In "gardening leave" you're still an employee and on payroll until the last day. Whereas severance you're not an employee and typically paid lump-sum (but doesn't matter for this discussion). So in this specific situation, yes, that would be wages and would be paid out first before cre…

That's an unlikely misconception, since paid noncompete periods are not something that most people have ever even heard of.
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