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Uber loses $2.9 billion, offloads bike and scooter business

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Uber loses $2.9 billion, offloads bike and scooter business

By CATHY BUSSEWITZ Associated Press

NEW YORK (AP) — Uber lost $2.9 billion in the first quarter as its overseas investments were hammered by the coronavirus pandemic, but the company is looking to its growing food delivery business and aggressive cost-cutting to ease the pain.

The ride-hailing giant said Thursday it is offloading Jump, its bike and scooter business, to Lime, a company in which it is investing $85 million. Jump had been losing about $60 million a quarter.

“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said CEO Dara Khosrowshahi in a statement. “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up.”

On Wednesday, San Francisco-based Uber said it was cutting 3,700 full-time workers, or about 14% of its workforce, as people avoiding contagion either stay indoors or try to limit contact with others. Its main U.S. rival Lyft announced last month it would lay off 982 people, or 17% of its workforce because of plummeting demand. Careem, Uber’s subsidiary in the Middle East, cut its workforce by 31%.

Uber brought in $3.54 billion in revenue in the first quarter, up 14% from the same time last year.

Revenue in its Eats meal delivery business grew 53% as customers shuttered at home opted to order in. The company exited markets where its food delivery business was unprofitable, including the Czech Republic, Egypt and Honduras. But it added key accounts including Chipotle, Dunkin’ and Shake Shack, and it enabled delivery from grocery and convenience stores.

“At a time when our rides business is down significantly due to shelter-in-place, our Eats business is surging,” Khosrowshahi said on a conference call with investors. “The big opportunity we thought Eats was just got bigger.”

Gross bookings grew 8% to $15.8 billion, with 54% growth in the food delivery business and a 3% decline in rides, on a constant currency basis.

Uber’s bottom line was hurt in the first quarter when the value of its investments in Chinese ride-hailing giant Didi, Singapore-based Grab and others plummeted by $2.1 billion as demand collapsed in those regions.

The challenges are continuing in the second quarter. In April, rides were down 80% globally compared to last year, Khosrowshahi said. But rides have been increasing for the past three weeks and bookings in large cities across Georgia and Texas, two states that started re-opening, are up 43% and 50% respectively from their lowest points, he said.

Demand for the Eats business grew 89% in April, excluding India, and “we’ve seen an enormous acceleration in demand since mid-March,” Khosrowshahi said.

Grocery delivery could be a part of Uber’s future in the U.S.

“There’s going to be more room for more than one player,” Khosrowshahi said. “We’re in many of these cities already. So we just have the infrastructure to be able to get started in these cities … in a very low cost way.”

Uber updated its driver app to make it easier for ride providers to pick up delivery work, and nearly 40% of drivers in the U.S. and Canada cross-dispatched to work for the Eats platform in April, the company said.

But getting into grocery delivery would take time, and the boost in restaurant delivery is not enough to stem Uber’s losses, said Eric Schiffer, CEO of the Patriarch Organization.

“This is a brutal body blow to Uber’s path to profitability, and potentially even its existential future, because few rational people are wiling to put themselves into harm’s way to ride in a vehicle, and many drivers have their own concerns,” Schiffer said. “Uber customers would rather chew glass than sit in the backseat of one of those cars.”

Uber’s investment in Lime came as part of a $170 million funding round, which also included Alphabet, Bain Capital Ventures, GV and other investors. Customers will still have access to electric Jump bikes and scooters in the Uber app, but Lime will run the operation.

To help keep drivers and riders protected during the pandemic, Uber says it will require drivers and riders to wear a mask beginning sometime in the coming weeks. Lyft made a similar announcement Thursday.

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Trump bans dealings with Chinese owners of TikTok, WeChat

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Trump bans dealings with Chinese owners of TikTok, WeChat

NEW YORK (AP) — President Donald Trump has ordered a sweeping but unspecified ban on dealings with the Chinese owners of consumer apps TikTok and WeChat, although it remains unclear if he has the legal authority to actually ban the apps from the U.S.

The twin executive orders issued Thursday — one for each app — take effect in 45 days. They say they are necessary because the China-owned apps “threaten the national security, foreign policy, and economy of the United States,” and call on the Commerce Secretary to define the banned dealings by that time. While the wording of the orders is vague and appears to have been rushed out, some experts said it appears intended to bar the popular apps from the Apple and Google app stores, which could effectively remove them from distribution in the U.S.

“This is an unprecedented use of presidential authority,” Eurasia Group analyst Paul Triolo said in an email. At a minimum, he said, the orders appear to “constitute a ban on the ability of U.S. app stores run by Apple and Google to include either mobile app after 45 days.”

Triolo said the orders may face legal challenges and warned that Beijing is likely to “react harshly, at least rhetorically.” Trump’s orders cited legal authority from the International Emergency Economic Powers Act and the National Emergencies Act.

The action is the Trump administration’s latest attempt to hobble China, a rising economic superpower. Over the past several years, it has waged a trade war with China, blocked mergers involving Chinese companies and stifled the business of Chinese firms like Huawei, a maker of phones and telecom equipment. China-backed hackers, meanwhile, have been blamed for data breaches of U.S. federal databases and the credit agency Equifax, and the Chinese government strictly limits what U.S. tech companies can do in China.

Election-year politics in the U.S. are fanning the flames, as Trump appears to be using friction with China to drum up voter support.

Both Republican and Democratic lawmakers share concerns about TikTok running from its vulnerability to censorship and misinformation campaigns to the safety of user data and children’s privacy. But the administration has provided no specific evidence that TikTok has made U.S. users’ data available to the Chinese government. Instead, officials point to the hypothetical threat that lies in the Chinese government’s ability to demand cooperation from Chinese companies. 

Earlier in the week, Trump threatened a deadline of Sept. 15 to “close down” TikTok unless Microsoft or another company acquires it, a threat the new executive order appears to formalize. On Wednesday, U.S. Secretary of State Mike Pompeo announced an expansion of the U.S. crackdown on Chinese technology to include barring Chinese apps from U.S. app stores, citing alleged security threats and calling out TikTok and WeChat by name.

TikTok did not reply to queries. Tencent and Microsoft declined to comment.

“The U.S. thinking is that anything that is Chinese is suspect,” said Andy Mok, a senior research fellow at the Center for China and Globalization in Beijing. “They’re being targeted not because of what they’ve done, but who they are.” 

Leading mobile security experts say TikTok is no more intrusive in its harvesting of user data and monitoring of user activity than U.S. apps owned by Facebook and Google.

“I am the first to yell from the rooftops when there is a glaring privacy issue somewhere. But we just have not found anything we could call a smoking gun in TikTok,” mobile security expert Will Strafach told The Associated Press last month after examining the app. Strafach is CEO of Guardian, which provides a firewall for Apple devices.

The order doesn’t seem to ban Americans from using TikTok, said Kirsten Martin, a professor of technology ethics at the University of Notre Dame. She added that such an order would be nearly impossible to enforce in the first place.

“If goal is to get teenagers to stop using TikTok, I’m not sure an executive order will stop them,” she said. “Every teenager knows how to use a VPN (a virtual private network). They will just pretend they are in Canada.”

And it would be difficult to prohibit people from using the apps if they already have them, even if an app-store ban went into effect, said Vanderbilt University law professor Timothy Meyer. 

TikTok, known for its short, catchy videos, is widely popular among young people in the U.S. and elsewhere. It is owned by the Chinese company ByteDance, which operates a separate version for the Chinese market. TikTok insists it does not store U.S. user information in China, instead caching it in the U.S. and Singapore, and says it would not share it with the Chinese government.

TikTok says it has 100 million U.S. users and hundreds of millions globally. According to research firm App Annie, TikTok saw 50 million weekly active users in the U.S. during the week of July 19, the latest available figure. That’s up 75% from the first week of the year.

WeChat and its sister app Weixin in China are hugely popular apps that incorporate messaging, financial transfers and an array of other services, and claim more than one billion users. Around the world, many people of Chinese descent use WeChat to stay in touch with friends and family and to conduct business in mainland China. 

Within China, WeChat is censored and expected to adhere to content restrictions set by authorities. The Chinese government Citizen Lab internet watchdog group has said WeChat monitors files and images shared abroad to aid its censorship in China.

The order against Tencent could have ramifications for users beyond WeChat, which is crucial for personal communications and organizations that do business with China. Tencent also owns parts or all of major game companies like Epic Games, publisher of Fortnite, a major video game hit, and Riot Games, which is behind League of Legends.

“This is a pretty broad and pretty quick expansion of the technology Cold War between the U.S. and China,” said Steven Weber, faculty director for the Berkeley Center for Long Term Cybersecurity. Weber added that “there is a plausible national security rationale” for the orders.

As president, Trump has frequently taken the unusual step of provoking confrontations, often of a personal nature, with specific companies, both American and foreign.

___

By TALI ARBEL AP Technology Writer

AP reporters Barbara Ortutay in Oakland, Calif., Mae Anderson in New York, Frank Bajak in Boston and Zen Soo in Hong Kong contributed to this article.

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Facebook, citing virus misinformation, deletes Trump post

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Facebook, citing virus misinformation, deletes Trump post

Facebook has deleted a post by President Donald Trump for violating its policy against spreading misinformation about the coronavirus.

The post in question featured a link to a Fox News video in which Trump says children are “virtually immune” to the virus.

Facebook said Wednesday that the “video includes false claims that a group of people is immune from COVID-19 which is a violation of our policies around harmful COVID misinformation.”

A few hours later, Twitter temporarily blocked the Trump campaign from tweeting from its account, until it removed a post with the same video. Trump’s account retweeted the video. The company said in a statement late Wednesday that the tweet violated its rules against COVID misinformation. When a tweet breaks its rules, Twitter asks users to remove the tweet in questions and bans them from posting anything else until they do.

Twitter has generally been quicker than Facebook in recent months to label posts from the president that violate its policies against misinformation and abuse.

This is not the first time that Facebook has removed a post from Trump, Facebook said, but it’s the first time it has done so because it was spreading misinformation about the coronavirus. The company has also labeled his posts.

Several studies suggest, but don’t prove, that children are less likely to become infected than adults and more likely to have only mild symptoms. But this is not the same as being “virtually immune” to the virus.

A CDC study involving 2,500 children published in April found that about 1 in 5 infected children were hospitalized versus 1 in 3 adults; three children died. The study lacks complete data on all the cases, but it also suggests that many infected children have no symptoms, which could allow them to spread the virus to others.


By BARBARA ORTUTAY AP Technology Writer.
Associated Press Writer Amanda Seitz contributed to this story.

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Google unveils budget Pixel phone as pandemic curbs spending

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Google unveils budget Pixel phone as pandemic curbs spending

SAN RAMON, Calif. (AP) — Google has started selling a long-delayed budget smartphone boasting the same high-quality camera and several other features available in fancier Pixel models that cost hundreds of dollars more.

The Pixel 4a unveiled Monday will be available Aug. 20 after months of delay caused by supply problems triggered by the pandemic.

It will cost $349, a $50 discount from a cheap Pixel released last year. It’s also a major markdown from other higher-end models in the existing product line-up that start at $799. The next versions of Google’s top-of-the-line Pixel phones will be released sometime this fall, Google said, without revealing their their price.

The budget-minded Pixel 4a is coming out four months after Apple released a discount iPhone, the SE, priced at $399. The low price helped spur iPhone sales at a time of soaring unemployment, as the economy plunged into a deep recession that is causing millions of households to curb their spending so they can pay rent and buy food.

The availability of a lower-priced model was one of the big reasons Apple’s iPhone shipments during the April-June period climbed 11% from the same time, according to research firm Internal Data Corp. That was in stark contrast to the overall smartphone market, which registered a 16% decline in shipments from last year during the same three months, the steepest drop in the industry’s history, IDC said.

Apple CEO Tim Cook also cited the iPhone SE’s popularity as a major factor in the company’s unexpectedly strong performance during the April-June period. The stellar results have helped Apple’s stock rise 13% to new highs since Apple announced the numbers last week.

It’s doubtful the Pixel 4a will reel in as many consumers as the iPhone SE, based on Google’s inability to make significant inroads as a device maker so far, despite generally positive reviews for the devices, especially their cameras.

Google so far has been selling fewer than 10 million Pixel phones a year since rolling out the product line in 2016, barely making a dent a market where more than 1 billion phones are shipped annually, according to IDC.

The Pixel phones primarily serve as a showcase for Google’s Android operating system, which includes its search engine and other services, such as digital maps, that help sell the ads that generate most of the company’s revenue. Google gives away Android to other smartphone manufacturers such as Samsung, which is expected to show off its next Galaxy phones in a virtual event scheduled for Wednesday.

The new Galaxy phone is expected to cost around $1,000.

By MICHAEL LIEDTKE AP Technology Writer

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