Business and Technology News
The 2010s have been the decade of the subsidized ride.
Uber and Lyft duked it out on the streets of American cities, burning mountains of venture capital to keep fares low in the hopes of winning the battle for market share. The costs were steep: Lyft lost nearly $1 billion in 2018; Uber, with its global scale and broader ambition, lost $3 billion.
The private investors that pumped money into these companies were looking for growth at all cost, betting that one of the companies would grow large enough to reach monopoly status or fund the research to invent self-driving cars.
But now that both companies have been listed on stock exchanges, it remains to be seen whether public investors will believe in the same loss-heavy long-term story — or start clamoring for Uber and Lyft to stop the bleeding.
“In the long run they want to transform transportation, which will take significant investment,” said Reena Aggarwal, professor at Georgetown’s McDonough School of Business. “But when you become a public company there’s also a quarter-by-quarter scrutiny that comes with it — it’s great to grow market share, but eventually people start asking what’s the bottom line? Where are the profits?”
The quickest way for both companies to inch away from red ink would be to raise fare prices or cut driver pay, increasing what’s known as the “take rate,” or the cut of each fare that the company pockets. The company can also decrease incentive packages for drivers, and stop offering coupons to riders, but the effect is similar.
In its regulatory filings in advance of its IPO, Uber said that its take rate for its ride-hailing business was 22% in 2018, up from 21% in the previous year, but noted that it expects that rate to decrease in the near-term.
As the pilotless flying wing came in for a landing, winds suddenly picked up. Facebook’s Aquila drone — powered by the sun and wider than a Boeing 737 jetliner — struggled to adjust. Just before landing, part of the right wing broke off.
That inaugural 2016 flight proved an inauspicious beginning for Facebook’s foray into internet-beaming drones, but perhaps a fitting one. Two years later, the company pulled the plug on developing its own aircraft.
Since then, companies such as Amazon.com and SpaceX have made big investments in providing internet service around the world with thousands of small satellites. SpaceX had planned to send 60 internet-beaming satellites into orbit last week, but called off the launch to retool the software. Elon Musk’s rocket company said the launch will probably take place this week.
And don’t count out solar-powered, high-altitude drones — or giant balloons.
Advances in solar-cell and battery technology have made those technologies more feasible. Last month, Japanese telecommunications giant SoftBank said it would team up with California drone maker AeroVironment to build a drone capable of flying to the stratosphere, hovering around an area for months and serving as a floating cell tower to beam internet to users on Earth. Airbus and Boeing are also working on their own versions of high-flying, solar-powered drones.
Driving these and other projects is the promise of 5G connectivity. That fifth-generation cellular technology, which is just rolling out, will increase download speeds dramatically. And proponents say its reliability should enable services such as self-driving cars and remote medicine.
Connecting remote users would enhance the market potential even more, said John Robbins, an associate professor of aeronautical science and coordinator of the unmanned aerial...
LONDON — In ordinary times, worries about the health of the global economy tend to prompt leaders of the largest countries to join forces in pursuit of safety.
These are not ordinary times.
The biggest threat to global fortunes has become the intensifying conflict between the two largest economies on earth, the United States and China. As their leaders openly contemplate how to inflict pain on each other, the rest of the world now frets about becoming collateral damage in an escalating trade war.
This month, China and the United States appeared to be moving toward cooling their hostilities, while global economic prospects were improving. Worries about a worldwide slowdown were giving way to burnished hopes for expansion.
Fears about the weakening of China’s economy were easing as President Trump advertised a soon-to-be-signed trade deal. That lifted the outlook for Asian economies dependent on global commerce like Japan, South Korea and Taiwan. Europe, a perpetual source of concern, was flashing signs of renewal. Defying skeptics, the U.S. economy remained on a tear.
But then, as Trump sharply increased tariffs on $200 billion worth of Chinese goods, the world found itself grappling with the likelihood that the trade war will cost treasure. The concern mounted a week ago as Beijing retaliated and the Trump administration detailed plans to slap 25% tariffs on virtually all goods that China sends to the United States.
For businesses and consumers alike, it all raised the prospect that they would soon be paying higher prices for goods, a reality that discourages commerce.
“An escalation scenario would be terrible all around,” said Gabriel Sterne, head of global macro research at Oxford Economics in London. “A negative impact on trade flow is going to be bad...
The Polestar 2, the first electric car to go straight up against Tesla’s Model 3, is due to go on sale in the U.S. by summer 2020. But will it?
If the trade war between China and the U.S. gets much worse, the car — which will be made at a factory in Luqiao, China — might not be sold in the U.S. at all, said Thomas Ingenlath, Polestar’s CEO.
Polestar is a new electric car brand from Volvo, which in turn is owned by China automotive giant Zhejiang Geely Holding Group, known as Geely for short.
The Polestar 2 is a sporty electric sedan with 275 miles of range, priced between $45,000 and $65,000 before federal and state incentives, which can reduce that by as much as $10,000 for many California buyers.
The company plans to build 50,000 of the cars in its first year of production. Up to about 40% will be sold in China, Ingenlath said. Norway, which offers heavy incentives for electric cars, will be its No. 2 market.
Right now, Polestar plans to sell about 30% or so of the first year’s run on the West Coast of the United States and in Canada. “We would embrace free trade as in the interests of the consumer,” Ingenlath said. While all international companies must operate in a world where trade barriers are common, and Volvo’s U.S. plans have been made with existing tariffs factored in, Polestar won’t export cars to countries where rising tariffs make a product’s price “ridiculous,” he said, but will “scale up or scale down” U.S. plans depending on tariff levels. Tariffs on China-made cars sent to the U.S. are currently set at 25% by the Trump administration.
Ingenlath was in the Bay Area for the recent Google I/O developers’ conference. Polestar (and Volvo) plan to use the Android Automotive Operating System as the base for their infotainment...
At the most lucrative company, Facebook, interns are earning a median monthly pay of $8,000, or $96,000 per year. That's nearly as high as the median monthly pay at Salesforce and Google, $7,667 and $7,500, respectively, which work out to about $90,000 to $92,000 a year.
Almost immediately, the setbacks began, starting with Uber’s business. Its once-meteoric growth rate was slowing as its geographic expansion appeared to be running out of room and as competitors continued springing up across the world.
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Hewlett Packard Enterprise said Friday that it would buy the supercomputer pioneer Cray, a relatively tiny financial transaction that could loom large in a quickening race between the United States and China at the highest reaches of computing.
The big Silicon Valley company will pay about $1.4 billion to absorb a much smaller rival that has designed some of the most powerful systems in use and on the drawing board at national laboratories in the United States.
Supercomputers have long been a mainstay of military and intelligence agencies, used for chores ranging from cracking codes to designing nuclear weapons. They have many civilian uses as well, like predicting weather, creating new drugs and simulating the effect of crashes on auto designs.
Cray, based in Seattle, traces its lineage to a company founded in 1972 in Minnesota by computer designer Seymour Cray. That company was bought in 1996 by Silicon Graphics; it was sold in 2000 to Tera Computer, which adopted the Cray name. Cray died after a car crash in 1996, having left his original company several years earlier.
HP Enterprise, one of two companies created in the 2015 breakup of Hewlett-Packard, is a major supercomputer supplier in addition to selling general-purpose server systems. In the latest ranking of supercomputer installations, Cray was fourth with 49 systems and HP Enterprise fifth with 46.
What worries some U.S. officials is the rapid rise of suppliers based in China. One of them, Lenovo, which bought former IBM hardware operations, led the rankings with 140 supercomputers installed. Two others, Inspur and Sugon, were second with 84 and third with 54, respectively.
The United States managed to claim back bragging rights for having the world’s most powerful system last June, with an IBM machine at Oak Ridge National Laboratory in Tennessee that...
LONDON — Amazon is taking a big step into the international restaurant-delivery business — and taking a shot at one of Uber’s most promising markets in the process.
The e-commerce giant said Friday that it would lead a $575 million investment in Deliveroo, becoming one of the London-based startup’s biggest backers.
The cash infusion will strengthen one of the largest international rivals to Uber’s meal-delivery division, Uber Eats, which the ride-hailing company has identified as one of its most promising businesses.
Including the new investment round, which also involved existing backers like T. Rowe Price and Fidelity, Deliveroo has now raised $1.53 billion.
The startup, which was founded in 2013, has become a familiar sight in London, Paris and other cities, with couriers zipping along streets. Although the company began as a restaurant-delivery business — it now serves 80,000 establishments — it has also been setting up its own stand-alone kitchens, an increasingly popular business model.
Deliveroo has expanded beyond Britain to 13 other markets, including Australia, France, Hong Kong and Kuwait.
The Deliveroo investment offers Amazon another path into restaurant delivery, after it gave up its own such service in Britain in December. The service, which is running in several U.S. cities, was available to Amazon Prime subscribers in parts of London but did not make much of a dent in the face of competition from Deliveroo, UberEats and Just Eat.
“We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options,” Doug Gurr, who manages Amazon’s British operations, said in a statement. “We’re excited to see what they do...
Spyware crafted by a sophisticated group of hackers-for-hire took advantage of a flaw in the popular WhatsApp communications program to remotely hijack dozens of phones without any user interaction.
The Financial Times recently identified the hacking group as Israel’s NSO Group, which has been widely condemned for selling surveillance tools to repressive governments.
WhatsApp all but confirmed the identification, describing hackers as “a private company that has been known to work with governments to deliver spyware.” A spokesman for the Facebook subsidiary later said: “We’re certainly not refuting any of the coverage you’ve seen.”
The spyware did not directly affect the end-to-end encryption that makes WhatsApp chats and calls private. It merely used a bug in the WhatsApp software as an infection vehicle. The malware allows spies to effectively take control of a phone — remotely and surreptitiously controlling its cameras and microphones and vacuuming up personal and geolocation data. Encryption is worthless once a phone’s operating system has been violated.
Hackers are always looking for flaws in apps and operating systems that they can exploit to deliver spyware. State-run intelligence agencies including the U.S. National Security Agency invest tens of millions on it. Indeed, Google’s ProjectZero bug-hunting team scoured WhatsApp last year looking for vulnerabilities but did not find any. Instead, it was WhatsApp’s security team that found the flaw.
The development comes as Facebook looks to expand its messaging services by merging WhatsApp, Facebook Messenger and Instagram Direct, and bringing WhatsApp-level encryption to the others. The attack would not affect Facebook’s ability to do that.
The malware was able to penetrate phones through missed calls alone using the app’s voice...
WASHINGTON — Bogged down in a sprawling trade dispute with U.S. rival China, President Trump took steps Friday to ease tensions with America’s allies — lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe.
By removing the metals tariffs on Canada and Mexico, Trump cleared a key roadblock to a North American trade pact his team negotiated last year. As part of Friday’s arrangement, the Canadians and Mexicans agreed to scrap retaliatory tariffs they had imposed on U.S. goods.
“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico, and we’ll be selling our product into those countries without the imposition of tariffs, or major tariffs,” Trump said in a speech to the National Association of Realtors.
In a joint statement, the U.S. and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. The provision appeared to cover China, which has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting U.S. producers. The countries could also reimpose the tariffs if they face a “surge” in steel or aluminum imports.
In Washington, some were urging Trump to take advantage of the truce with U.S. allies to get even tougher with China.
“China is our adversary,” said Sen. Ben Sasse, R-Neb. “Canada and Mexico are our friends. The president is right to increase pressure on China for their espionage, their theft of intellectual property, and their hostility toward the rule of law. The president is also right to be deescalating tension with our North American allies.”
Earlier Friday, the White House said Trump is delaying for six months any decision to slap tariffs on foreign cars, a move that would have hit...
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BEIJING — The Trump administration has filed criminal charges against Huawei for stealing technology. It has all but snuffed out the Chinese tech giant’s sales in the United States, calling the firm an espionage threat. And it has tried to convince other governments to do similarly.
But Washington had not taken a straight shot at Huawei’s ability to do business anywhere in the world until late Wednesday, when the Commerce Department announced limits on the company’s access to U.S. technology.
U.S. companies including Qualcomm, Intel and Broadcom sell Huawei microchips and other specialized parts that go into its smartphones and telecom equipment. Google’s Android software powers its phones. Of the $70 billion that Huawei spent on components and other supplies last year, $11 billion went to U.S. companies, Huawei spokesman Joe Kelly said.
If Huawei is cut off from these suppliers, the effect could be catastrophic for the millions who use Huawei smartphones — and for the mobile networks, across a wide swath of the planet, that run on Huawei gear.
It would be “the trade equivalent of a nuclear bomb,” said Kevin Wolf, a partner at the law firm Akin Gump Strauss Hauer & Feld and a former assistant secretary of commerce under President Barack Obama.
Much remains unclea about the scope of the Commerce Department’s move. The department says it is putting Huawei on its “entity list” of firms that need special permission to buy U.S. components and technology. How it decides to grant such permission will determine how badly Huawei’s business is disrupted.
Given the spiraling tensions between China and the U.S. on tariffs, the move against Huawei may be short-lived. Talks to resolve the trade fight have stalled. The pressure is on to find common ground ahead of a potential meeting next month between...
Ten people, including five Russian fugitives, have been charged in connection with malicious software attacks that infected tens of thousands of computers worldwide and sought to steal $100 million from victims, U.S. and European authorities announced Thursday.
The malware enabled criminals from Eastern Europe to take remote control of infected computers and siphon funds from victims’ bank accounts, and targeted companies and institutions across all sectors of American life. Victims included a Washington law firm, a church in Texas, a furniture business in California, a casino in Mississippi and a Pennsylvania asphalt and paving business.
Several defendants are awaiting prosecution in Europe, and five are Russians who remain fugitives in that country. An 11th participant in the conspiracy was extradited to the United States from Bulgaria in 2016 and pleaded guilty last month in a related case in federal court in Pittsburgh, where Thursday’s indictment was brought.
Though the Justice Department has pursued malware prosecutions in recent years against foreign hackers, this case stands out as a novel model of international collaboration, said Scott Brady, the U.S. attorney in Pittsburgh.
Instead of seeking the immediate extradition of all 10 defendants — an often cumbersome process that can take years of negotiations, even in countries that have treaties with the U.S. — American authorities shared evidence with their European counterparts to allow officials in Ukraine, Moldova and Georgia to initiate prosecutions in the nations where the defendants reside.
“It represents a paradigm change in how we prosecute cybercrime,” Brady said in an interview before a news conference in The Hague with a coalition of a half-dozen countries.
Cybercrime networks “are increasingly targetable” when investigators work...