Saturday, September 23, 2017

What could be next for Uberisation; Marks & Spencer gets into online food delivery; L'Oreal heiress is richest woman

1 What could be next for Uberisation (Simon Jack on BBC) Uber is not just a taxi-hailing app which has been baked into the lives of hundreds of millions of passengers and millions of drivers worldwide. Uberisation has come to mean the turning of traditional service industries on their head, by providing a technological platform to match users and providers on a massive scale.

It is the biggest company in the so called "gig" economy, in which short-term contracts or freelance work replace permanent jobs. Depending where you stand, that is either a great flexible working environment or a form of exploitation with little protection for workers.

Transport for London's decision not to renew its licence may come as a shock to the 3.5 million customers and 40,000 drivers who have built this model into their urban lives. But there is no shortage of groups who will be punching the air in celebration.

Uber has been dogged with a bewildering range of controversies. It's charged with failing to do proper background checks on its drivers and then providing them with poor working conditions, both of which Uber denies. Irate black cab drivers blame it for a rise in congestion and collisions and it's been accused of a failure to report sexual offences, which Uber also contests.

Given that rap sheet, no wonder the company didn't pass the "fit and proper" test, many will say. For the business community, revoking the licence of a tech giant from a global capital city sends a message that some entrepreneurs have described as unhelpful.

Others will see it as an important halt to a creeping revolution that threatens the pay, conditions and even dignity of work. It is widely thought that human drivers are only a temporary part of Uber's business plan. Uber is a company that is looking towards a driverless future.

London is not the first city to ban Uber: several countries, states and cities have done the same. But coming from a truly global city and a hub of technology, this is perhaps the biggest red light Uber has been shown.


2 Marks & Spencer gets into online food delivery (Zoe Wood in The Guardian) Marks & Spencer has launched an online grocery service that will enable shoppers to have their dinner delivered to their front door within an hour.

The first trial is based at its Camden store in north London and offers home delivery within one- and two-hour slots within a three-mile radius. The minimum order is £10. Until now, selling food online has not made sense for M&S as its customers do not typically spend enough on each visit to make the service viable.

But the trial is tapping into a food home delivery boom as Britons increasingly use app-based services such as Deliveroo, Just Eat, UberEats to have meals delivered. There is no delivery charge for orders which are being handled by gig economy courier firm Gophr.

M&S boss Steve Rowe concluded it could no longer ignore the fastest growing section of the UK’s £180bn grocery market as new delivery services, such as AmazonFresh, which allows shoppers to order groceries at lunchtime and get the delivery in time for dinner, revolutionise the way Britain buys food. The high-street store is different from other food retailers as it stocks just 7,000 products, compared with Tesco’s 40,000. It also focuses on own-brand goods with only a limited number of big-name brands. It is not clear how the retailer would overcome these hurdles if it offered customers a full grocery outlet in the future.


3 L’Oreal heiress is richest woman (Gulf News) The death this week of L’Oreal SA’s founding family matriarch is putting the spotlight on a reclusive 64-year-old heiress who now finds herself as the richest woman in the world.

Francoise Bettencourt Meyers has shunned the glittering social life that her late mother, Liliane Bettencourt, once embraced. Bettencourt Meyers is known for playing piano for several hours a day and has written two books — a five-volume study of the Bible and a genealogy of the Greek gods.

Her seclusion will be harder to maintain as the head of Europe’s fourth-largest fortune. Through family holding company Tethys, she takes charge of her family’s 33 per cent stake in the cosmetics maker, which lies at the heart of a net worth the Bloomberg Billionaires Index values at $43.3 billion.

Bettencourt Meyers steps into the spotlight at a time of increasing discussion about the future of the family’s stake, as well as the 23 per cent of L’Oreal held by Swiss food-giant Nestle SA. The billionaire heiress has shown less interest in L’Oreal matters than her mother did, despite her role as a board member for more than two decades.

In addition to music and study, the bookish and austere Bettencourt Meyers has involved herself in charity work. Her $43.3 billion net worth puts her $5.4 billion ahead of Alice Walton, an heiress to the Wal-Mart Stores Inc. fortune, and at the top of the list of 64 women featured on the Bloomberg index, a daily ranking of the world’s 500 richest people. Of the 64 billionaires, 58 are stewards of an inheritance.

Bettencourt Meyers had a difficult and at times contentious relationship with her mother. After the death of her father, French conservative politician Andre Bettencourt, in 2007, she spent years battling her mother in court, claiming she was mentally unfit and had been manipulated by her entourage.


Tuesday, September 19, 2017

Norway wealth fund value at $1trn; Britain's debt time bomb; Umeployment seen as biggest risk to business

1 Norway wealth fund value at $1trn (San Francisco Chronicle) Norway's sovereign wealth fund, the world's largest of its kind, has hit a milestone value of $1 trillion, beating all expectations since its creation over 20 years ago.

The fund, which reached its record value early Tuesday, has been boosted lately by a rise in stock markets and a weaker US dollar, which increases the dollar value of its holdings in other currencies.

Norway first deposited oil and gas profits into the fund in May 1996 and CEO Yngve Slyngstad said nobody at the time had expected it to hit the trillion dollar mark, calling the growth "stunning." The fund invests proceeds from the country's oil and gas industry to secure pensions for future generations in Norway, a country of merely 5.3 million people.

Because of its sheer size, the fund does not reinvest all its money in Norway, or it would overheat the economy. So it places it worldwide, with some 42 percent in North America, 36 percent in Europe and 18 percent in Asia.

Of the total, 65 percent is in stocks — including a $7.4 billion stake in Apple and $5.5 billion in Alphabet. Norwegian lawmakers passed a law in 1990 to establish a government-owned oil and gas fund. In 1998, its management was transferred from the Norwegian finance ministry over to the Norges Bank Investment Management, a unit of the Norwegian central bank.


2 Britain’s debt time bomb (Larry Elliott in The Guardian) Britain’s debt time bomb is primed and ready to go off at any time. From never-never spending on credit cards to car loans, from overdrafts to payday loans, there is enough high explosive to devastate the economy for a second time in decade. All that is required is for the fuse to be lit.

The Bank of England is aware of the risks and has been issuing ever-more explicit warnings about debt. The warnings are fully justified, even if the Bank of England has itself been responsible for the build-up in debt.
After all, in the first 313 years of the Bank’s existence, official borrowing costs never once fell below 2%. In 2009 they were cut to 0.5% and left there until shortly after last year’s EU referendum when they were shaved further – this time to 0.25%.

Low interest rates were supposed to encourage people to borrow rather than to save – and that is precisely what has happened. Household debt levels as a share of national output are edging back to the record levels seen in the boom years in the build-up to the financial crisis.

For now, debt is a problem for some individuals but not for the economy as a whole. Debt servicing costs are much lower than they were before the crisis and the unemployment rate is at its lowest since 1975. Difficulties would only really arise if the Bank felt the need to raise interest rates aggressively or if unemployment were to increase sharply for any reason.

Imagining the circumstances in which the debt time bomb might go off is not all that difficult. There could be a severe run on the pound if the Brexit talks go badly, which would force the Bank of England to raise interest rates despite its concern about the impact on heavily indebted borrowers. A trade was between the US and China could derail what has been a fairly feeble global economic recovery. In truth, it would not take all that much to light what looks to be a fairly short fuse.


3 Unemployment seen as biggest risk to business (Straits Times) Unemployment is the biggest risk for businesses globally, according to a World Economic Forum survey of business leaders published on Wednesday.

The company executives put unemployment or underemployment as the top risk over the next 10 years, followed by fiscal crises and the failure of national governance, data from the WEF's Executive Opinion Survey showed.

"Geopolitical risks and events have led to uncertainties which raise questions about how to manage resilience in uncertain times," said John Scott, chief risk officer, commercial insurance, at Zurich. For businesses in the North America, East Asia and Pacific regions, the biggest risks were considered to be cyber attacks and asset bubbles.


Wednesday, September 6, 2017

France to ban oil, gas production at home; India fears twin-front war with Pak, China; Asda to axe hundreds of jobs

1 France to ban oil, gas production at home (San Francisco Chronicle) France's government has unveiled a law to ban all production and exploration of oil and natural gas by 2040 on the country's mainland and overseas territories. The move is largely symbolic, however, as France's oil and gas production represents just 1 percent of national consumption — the rest is imported.

Current drilling permits will not be renewed, according to the bill formally presented in a Cabinet meeting. France currently has 63 oil and gas drilling projects on its territory. The ban, which the government claims is a world first, is part of a larger plan to wean the country's economy from fossil fuels, encourage clean energy and fulfill France's commitments under the Paris Climate Agreement to curb global warming.

The bill, which was described by Environment Minister Nicolas Hulot, also includes a definitive ban on all shale gas exploration and extraction. Until now, only hydraulic fracturing, a process known as fracking, was banned. All other potential methods are now to be prohibited as well.

Hulot had announced in July that France will stop producing power from coal — now 5 percent of its total output — by 2022. France also wants to reduce the proportion of the power it gets from nuclear energy to 50 percent by 2025 from the current 75 percent.


2 India fears twin-front war with Pak, China (The Guardian) India’s army chief as said the country should be prepared for a potential two-front war given China is flexing its muscles and there is little hope for reconciliation with Pakistan.

General Bipin Rawat referred to a recent 10-week standoff with the Chinese army in the Himalayas that ended last week. He said the situation could gradually snowball into a larger conflict on India’s northern border. Rawat said Pakistan on the western front could take advantage of such a situation.

The Press Trust of India news agency quoted Rawat’s remarks at a seminar organised by the Center for Land Warfare Studies, a thinktank in New Delhi. India fought a war with China in 1962 and three wars with Pakistan, two of them over control of Kashmir, since securing independence from Britain in 1947. All three countries are nuclear powers.

Rawat said credible deterrence did not take away the threat of war. “Nuclear weapons are weapons of deterrence. Yes, they are. But to say that they can deter war or they will not allow nations to go to war, in our context that may also not be true,” the news agency quoted him as saying.

His comments came a day after India’s prime minister, Narendra Modi, and China’s president, Xi Jinping, agreed on a “forward-looking” approach to Sino-India ties, putting behind the Doklam standoff.


3 Asda to axe hundreds of jobs (BBC) Asda is to axe hundreds of jobs at its West Yorkshire head office and a further site in the East Midlands as part of a major cost-cutting drive. About 300 jobs are to go at Asda House in Leeds and George House in Leicester the chain said, with job descriptions to a further 800 roles changed.

The grocery giant said its home offices needed to "adapt how they operate to support our stores". A spokesperson for Asda said: "In recent years, the competitive landscape in retail has changed significantly and Asda has been no different.

Figures for 2016 showed like-for-like sales were down 5.7% compared with the previous year. The chain is the third-largest UK supermarket behind Tesco and Sainsbury's according to market researcher Kantar Worldpanel, but has been hurt by the rise of German discounters Aldi and Lidl.


Monday, September 4, 2017

Gold spurts on North Korea tension; India credit growth slows; The rise of Snappcar

1 Gold spurts on North Korea tension (Siddesh Suresh Mayenkar in Gulf News) Gold prices spiked more than one per cent on Monday to its highest level in a year as risk averse investors sought refuge in the safe haven metal amid geopolitical tensions triggered by North Korea, which tested a hydrogen bomb on Saturday.

International spot gold prices hit a high of $1,334.33an ounce, the highest level since September of last year, before trading 0.68 per cent higher at $1,334.19.

“Safe haven assets are back in demand, following the announcement that North Korea had tested their most powerful nuclear bomb yet,” said Hussain Syed, Chief Market Strategist at FXTM. Comex Gold for December delivery was up 0.64 per cent higher at $1,338.90 an ounce. The Swiss Franc and the yen, which are also seen as safe haven assets, gained.

Gold has been a beneficiary of geopolitical tensions between the US and North Korea, even as the dollar has become weaker. The yellow metal has gained 16 per cent since the start of the year.


2 India credit growth slows (Khaleej Times) The credit growth of Indian banks slowed down to 8.1 per cent in 2016-17 from 10.9 per cent in the previous year, though the aggregate deposits improved on account of massive flow of funds after demonetisation, a Dun and Bradstreet report has said.

"The credit growth of all scheduled commercial banks slowed down from 10.9 per cent in 2015-16 to 8.1 per cent in 2016-17. The growth in aggregate deposits, on the other hand improved from 9.3 per cent in 2015-16 to 15.9 per cent in 2016-17, largely on account of a massive flow of funds into the banking system after the demonetisation of November 2016," the report noted.

It said that the banks' non-performing assets (NPAs) continued to display the highest level of stressed advances. "The gross non-performing advances [GNPA] of banks rose to 9.6 per cent in March, 2017 from 7.5 per cent in March, 2016. The net NPA ratio of banks stood at 5.5 per cent in March 2017," the report said.

"At present, the Indian banking sector is going through a critical phase. The credit growth has remained subdued, particularly in the case of public sector banks. Increase in stressed assets has affected the profitability of banks and therefore, deteriorating asset quality means a major challenge for the banking industry," Manish Sinha, managing director for India at Dun and Bradstreet, said.

The Indian banking sector has lately grappled with various challenges, including degradation in asset quality and a sharp slowdown in credit off take. The report highlights that an improvement in India's macroeconomic fundamentals, the underlying potential in terms of a largely under-banked population and the digital push by the government can be leveraged to help the sector turn the tide in the coming years.


3 The rise of Snappcar (Senay Boztas in The Guardian) He calls it “Airbnb for cars”, and if Victor van Tol is right, people sharing their vehicles could mean a Europe with 5m fewer of them in five years.

In 2011, Dutchmen van Tol and Pascal Ontijd launched Snappcar, a technology platform for car owners to rent their vehicles. The vision was a profitable startup, with economic, social and ecological impact.

“The 250m cars in Europe are used on average an hour a day,” says van Tol, chief executive of the Utrecht-based firm. “If a very small percentage of people start sharing, you can make a huge impact in bringing people together, cars not needing to be produced and saving money for owners and renters.”

He is, he says, 10% of the way to his goal of 500,000 cars shared, with operations in the Netherlands, Denmark, Sweden and Germany, 400,000 renter members and 45,000 vehicles on offer – all insured through Allianz.

Car manufacturers and rental firms are convinced such sharing could be one of the ways we drive in future: Europe’s largest car hire company Europcar took a 20% stake in Snappcar in June as part of a strategy to become a “global mobility solutions leader”.

Snappcar has also just completed an asset purchase of Germany’s number two peer-to-peer car sharing firm Tamyca – bringing it closer to challenging European market leader Drivy – and aims to expand to 20 European metropolitan areas, including the UK.

Like Airbnb breaking down the traditional hotel monopoly, van Tol thinks peer-to-peer car sharing gives more power to consumers and to owners: renters can pay less for an older car, for instance, while owners can (with full insurance cover) recoup part of their car costs.


Thursday, August 31, 2017

India growth rate slows; New Uber CEO suggests IPO; Millennials and the midlife crisis

1 India growth rate slows (BBC) India's economy grew at its slowest pace for three years in the April-to-June quarter, official figures show. The economy grew by 5.7% compared with a year earlier, down from a rate of 6.1% in the previous quarter.
Many analysts had expected the economy to bounce back after the government's crackdown on black market cash last year. However, confusion among some firms over a new tax on goods and services was blamed for holding back growth. Some retailers said ambiguous rules over the new sales tax, which began on 1 July, left them unsure over how to price their products.
But manufacturing saw the sharpest slowdown in growth, expanding at just 1.2% compared to 10.7% a year earlier. Growth in the financial, insurance, real estate and professional services sectors also slowed from 9.4% to 6.4%.


2 New Uber CEO suggests IPO (Straits Times) Uber Technologies' new chief executive Dara Khosrowshahi told employees the ride-services company would change its culture and may go public in 18 to 36 months.
Mr Khosrowshahi, who led travel-booking site Expedia for 12 years prior to joining Uber, made the remarks as he introduced himself to Uber's workforce during an all-staff meeting at its San Francisco headquarters. His plans include rebuilding Uber's culture and growing market share as well as possibly conducting an initial public offering in 18 to 36 months, according to people who attended the meeting.
It is common for venture capital-backed companies to signal an initial public offering at a vague time in the future. "This company has to change," Mr Khosrowshahi told employees, according to the Twitter feed of Uber's communications team. "What got us here is not what's going to get us to the next level."

The appointment of Mr Khosrowshahi, who described himself as "a fighter", comes as Uber is trying to recover from a series of crises that culminated in the ouster of former CEO Travis Kalanick in June. It is also a key step towards filling a gaping hole in its top management that at the moment has no chief financial officer, head of engineering or general counsel.

3 Millennials and the midlife crisis (Claire Suddath in Johannesburg Times) This month, two UK economists presented statistical proof for the existence of the midlife crisis. In a survey of 1.3 million people across 51 countries, they found that people report a measurable decline in happiness, starting in their 30s and continuing until around age 50, when they started to feel satisfied with their lives again.

"We're seeing this U-shape, this psychological dip, over and over again. There is definitely a midlife low," said Andrew Oswald, co-author of the study. Oswald's co-author, David Blanchflower, adds: "I don't know why some psychologists say it doesn't exist. It's blindingly obvious. All we did was plot the data points."
The very idea of a midlife crisis originated in the early 1960s with a Canadian psychologist named Elliott Jaques. He was studying the creative habits of 310 famous artists such as Mozart, Raphael and Gaugin when he noticed a common trait: When the artists entered their mid-30s, their creative output waned. Some became depressed. A few committed suicide.
If anything, the dip recorded by Oswald and Blanchflower may simply be the statistical proof of what millennials are only starting to learn: "adulting" is hard.


Tuesday, August 29, 2017

India cities' upgrade raises steel hopes; Burger King's own crypto-cash; South Korea test bed for self-driving cars



1 India cities’ upgrade raises steel hopes (Gulf News) Varanasi, Hinduism’s holiest site on the Ganges River in northern India, is one of 100 places earmarked to receive trillions of rupees to transform their ageing infrastructure and become ‘Smart Cities,’ replete with affordable housing, improved sanitation, and better transportation.

To build it all, India plans to triple its steel-making capacity, making it the world’s second-biggest producer, trumping Japan, and reviving an industry that a year ago was on its knees. “India is one of the bright spots for the global steel industry,” said Bijoy Thomas, a senior analyst at India Ratings & Research.




India used about 63 kilograms of steel per person last year, compared with 493 kilograms in China, according to the World Steel Association. That low consumption base, and the promise of a government-backed boom in construction, has prompted a flurry of expansion plans as steel prices recover from a slump in 2015.

India’s biggest producer, JSW Steel Ltd, plans to build two new plants of 10 million tons each in the resource-rich states of Odisha and Jharkhand, and spend billions more expanding its existing mills in an effort to double its size by 2030. Rival Tata Steel Ltd has sought environmental clearances to expand its two plants in India by 4 million tons a year.

India’s ambitious plans could force the country increasingly to turn to global markets to get enough coking coal and iron ore, Thomas said.

There are also plans for a metro system, part of a new urban rail policy approved this month that would bring new subways to 15 Indian cities and expand networks at 12 others. All of it will require millions of tons of additional steel.


2 Burger King’s own crypto-cash (BBC) Fast-food chain Burger King has launched its own crypto-currency, called WhopperCoin, in Russia. Customers will be able to claim one coin for every rouble (1.3p) they spend on the Whopper sandwich.

Russians will be able to buy a Whopper with the virtual cash, once they have amassed 1,700 whoppercoins. The company said it would release Apple and Android apps next month so people could save, share and trade their wallet full of whoppercoins.

Burger King has partnered with crypto-cash start-up Waves to create and run the scheme. The tech company will run the blockchain ledger for the coin to keep track of who has coins and what has been done with them. Customers will be able to claim their coins by scanning a receipt with a smartphone. 

The crypto-currency is a stand-alone system that has some technical similarities to Bitcoin but is distinct from it. This means the company would be able to shut the system down if it found it was being abused. Waves said that it had already generated 1bn whoppercoins to use in the loyalty scheme. 

  
3 South Korea test bed for self-driving cars (Khaleej Times) A test bed area for autonomous cars will be built west of Seoul by the end of next year to put test vehicles through real world road and traffic conditions, officials said.

Ground-breaking for K-City will be held in Hwaseong, Gyeonggi province, to build the 320,000 square-metre facility for 11 billion won ($9 million). The facility will have simulated roads that like highways, downtown areas, city outskirts and communal environments and have 35 different driving conditions such toll gates, tunnels, intersections, construction sites and even train track crossings, ministry officials said.

Pot holes, narrow streets and pedestrian crossings have also been added for testing the vehicles, as well as Wi-fi and fourth-generation wireless technologies. The section for highway driving will be completed by end of October and the entire K-city by end of next year, officials said. The area will be opened to private companies, academic institutions and start-ups to test their products.

Tuesday, August 22, 2017

Ford eyes electric car deal with China partner; India court rules out triple talaq; Pollution and Mumbai's blue dogs

1 Ford eyes electric car deal with China partner (BBC) Ford has said it is in discussions with a Chinese company to create a new line of electric vehicles for the world's biggest market. Ford said it was exploring a joint venture with electric car maker Anhui Zotye Automobile Co. The firm is a major manufacturer of small, zero-emissions electric cars.

The move comes as carmakers in China face new rules designed to boost electric car sales, part of the government's effort to fight pollution. China already has more electric cars on the road than any other country and Ford said it expects sales of all-electric cars in China to reach four million by 2025.

Officials are also working on new rules that would require 8% of car sales to be electric next year and 12% by 2020. A Ford spokesman said the company hoped to reach an agreement with Zotye by the end of the year.


2 India court rules triple talaq unlawful (San Francisco Chronicle) India's Supreme Court has struck down the Muslim practice that allows men to instantly divorce their wives as unconstitutional.
The bench, comprising five senior judges of different faiths, deliberated for three months before issuing its order in response to petitions from seven Muslim women who had been divorced through the practice known as triple talaq.

Indian law minister Ravi Shankar Prasad said that since the court deemed the practice unconstitutional there is no need for any further legislative action by the government. The decision was widely lauded by women's rights activists as a step toward granting Muslim women greater equality and justice.

More than 20 Muslim countries, including neighboring Pakistan and Bangladesh, have banned the practice. But in India, triple talaq has continued with the protection of laws that allow Muslim, Christian and Hindu communities to follow religious law in matters like marriage, divorce, inheritance and adoption.

While most Hindu personal laws have been overhauled and codified over the years, Muslim laws have been left to religious authorities and left largely untouched. Most of the 170 million Muslims in India are Sunnis governed by Muslim Personal Law for family matters and disputes.

India's Muslim Law Board had told the court that while they considered the practice wrong, they opposed any court intervention and asked that the matter be left to the community to tackle. But several progressive Muslim activists decried the law board's position.


3 Pollution and Mumbai’s blue dogs (The Guardian) Authorities in Mumbai have shut down a manufacturing company after it was accused of dumping untreated industrial waste and dyes into a local river that resulted in 11 dogs turning blue.

The group of strangely coloured canines was first spotted on 11 August, according to the Hindustan Times, prompting locals to complain to the Maharashtra Pollution Control Board about dyes being dumped in the Kasadi river, where the animals often swim. Footage shows the animals roaming the streets with bright blue fur.

“It was shocking to see how the dog’s white fur had turned completely blue,” said Arati Chauhan, head of the Navi Mumbai Animal Protection Cell, said. “We have spotted almost five such dogs here and have asked the pollution control board to act against such industries.” The board investigated, shutting down the company on Wednesday after confirming that canines were turning blue due to air and water pollution linked to the plant.

According to data obtained by NGO Watchdog Foundation through right to information, there are 977 chemical, pharmaceutical, engineering and food processing factories in the Taloja industrial area, located outside Mumbai.