Lyft nearly triples its coverage across the U.S. 

As Uber takes steps to recover from a string of allegations that called its corporate ethics into question, competing ride-share service Lyft is anxious to establish itself as a viable Uber rival, CNBC reports.

Thursday, Lyft nearly tripled its coverage across the U.S., adding 160 cities—for a total of 350—and 32 states for a total of 40. 94 percent of Americans, the company says, can now hail a Lyft ride in minutes.

The company claims to cover more of the US than any other ride-share service, including Uber.

Uber offers service in about 150 US cities. There are holes in Uber’s coverage across the Southeast—the company offers no service in Arkansas, Mississippi, or West Virginia—and the Northeast—Uber rides are not available in Delaware, Maine, Vermont, New Hampshire, New Jersey, or Washington, D.C. Uber does not operate in Alaska.

Lyft, by comparison, now serves nine cities in New Jersey, four in New Hampshire, one in Delaware (the state’s capital of Dover), five in Maine, six in West Virginia, and six in Alaska.

Unlike Uber, Lyft lacks service in South Dakota. Neither company serves Arkansas or Mississippi.

Lyft remains well behind Uber in terms of capital, ridership, and breadth of service, CNBC notes. Uber gives 10 million rides per day across more than 80 countries around the globe. Lyft, which operates in the US exclusively, reached one million rides per day in early July.

Since it began in 2009, Uber has raised $14 billion in capital. Lyft, which launched in 2012, has accrued $2.6 billion worth of capital.

But, the gulf between the two companies is narrowing, CNBC notes. Lyft gave more rides in the first half of 2017 than in all of 2016. The company’s share of the US ride-hailing market has jumped from 12 percent to 30 percent over the past two years.

CNBC says Uber continues to grow its ridership, but Business Insider reported in June that Uber’s growth—in revenue as well as in ridership—slowed in the first quarter of this year. Uber, privately held, rarely publishes ridership statistics or financial data.

“We’ve always been the underdog in the race against Uber. We’ve taken a lot of ground. We still are,” Green told CNBC.

Amidst Uber’s many scandals, Lyft is making an effort to double down on its friendly, wholesome public image.

“As we get service levels to parity and pickup times are equal, people prefer using Lyft,” said Green, per CNBC. ”They like that we treat our drivers better. They like that we treat our customers better. And they like that we have a brand that sort of stands for taking care of people, where Uber has done a lot to build the opposite type of brand.”

CNBC spoke to two drivers who each work for both Uber and Lyft in New York City: Syed Manzar and Karim Guernah. Both noticed a change in customers’ attitudes after news broke of Uber’s various scandals.

Nick Raif, who uses Uber and Lyft to hail rides in the Chicago area, told CNBC the unflattering news concerning Uber sometimes prompted him to use Lyft instead. The two companies provide comparable coverage around Chicago, he said.

Raef said he found himself willing to pay an extra dollar or two for Lyft on days when the news surrounding Uber particularly disturbed him.

But, Jan Dawson of Jackdaw Research contends per CNBC that moral considerations are of secondary importance to most customers.

“It is so tempting to think Lyft is gaining because people are taking a stand against Uber, but convenience usually trumps morality,” he said.

Uber is making an effort to repair its public image, as well as its relationship with its drivers. In July, the company launched an initiative dubbed “180 days of change.” As part of the effort, Uber aims to increase driver compensation, to offer drivers more flexibility, and to offer better support for drivers in the event of emergencies like accidents or passenger violence

The company, according to CNBC, has hired thousands of drivers to help ease each individual’s work load and has for the first time allowed customers to tip drivers using the app. (Lyft’s app has long afforded customers that ability).

Uber is also regaining stability in its corporate leadership. Tuesday, the company announced that it had at last hired a permanent CEO: Dara Khosrowshahi, who had served as Expedia’s CEO since 2005.

Featured Image via Flickr/Alfredo Mendez

 

Cummins unveils fully-electric semi mere weeks before Tesla

Tuesday, Cummins, an Indiana-based manufacturer of diesel and natural gas engines for commercial trucks, unveiled a fully-operational, one-hundred-percent electric truck cab, forbes.com reports. The company plans to begin selling the battery systems that power the vehicle to commercial truck fleets and bus operators in 2019.

Cummins calls the cab AEOS, Forbes says, after one of the four-winged horses who pulls the chariot of the sun god, Helios, in Greek mythology.

The cab Cummins showed weighs 18,000 pounds (nine tons) and can haul up to 22 tons. A 140 kWh battery pack, which charges in about an hour, gives the vehicle a range of 100 miles. Cummins aims to cut the charging time down to 20 minutes by 2020.

Given their range, though, AEOS-powered vehicles will perform urban deliveries and short-haul trips.

Cummins CEO Thomas Linebarger said per Forbes that an electric eighteen-wheeler is not yet viable because an electric system cannot support the weight eighteen-wheelers haul, nor the distances they travel. However, Linebarger notes that electric propulsion technology is moving forward at such a pace that impracticalities are fast becoming realities.

“There are more technologies coming into economic relevance than we’ve seen in my career, ever,” Linebarger said per Forbes.

And Linebarger plans to keep his company on the cutting edge as the industry roars ahead.

“This is what we do,” he said, per Forbes. “We feel we do better when technologies are shifting.”

Forbes notes that Cummins was quick to adapt as environmental regulations began to tighten.

Cummins intends to offer an extended-range version of AEOS by 2020. That system will be a hybrid, and its diesel engine will double as an onboard generator, allowing for a range of 300 miles. The extended-range model will boast 50 percent better fuel emissions than any diesel hybrid available today.

Though Cummins has been developing electric powertrains and fuel cells for about 10 years, the company will buy the fuel cells from an unidentified third-party. It will not build vehicles in-house but rather will sell the AEOS system to companies that do. Those companies will install the system into their trucks.

Cummins’s announcement comes just weeks before Tesla plans to unveil its own electric hauler, which will probably employ some degree of autonomous driving technology. Tesla’s reveal should come sometime next month, according to a tweet by CEO Elon Musk.

Reuters speculated last week that Tesla’s semi will have a range of between 200 and 300 miles per charge, meaning it will qualify as a “long-haul” vehicle. Tesla declined to confirm or deny Reuters’ report regarding the truck’s range, and Scott Perry, an executive at fleet operator Ryder Systems, told Reuters he would not “count [Tesla] out for having a strategy for longer distances or ranges.”

If Tesla’s truck does achieve a range of 200 or 300 miles, its distance capabilities will be but a shadow of those of today’s conventional diesel trucks, which, according to Reuters, can travel as many as 1,000 miles on one tank of fuel.

A few companies besides Cummins and Tesla are also building large, electric vehicles. Proterra is testing fully electric buses meant to revolutionize public transport, and Nikola Motor Company is developing a pair of hydrogen-powered semis with ranges of up to 1,200 miles and a 15-minute refill time.

“All those competitors we take very seriously,” Linebarger said. “They’re innovative, well-funded and have a technology mindset, much like Cummins.”

Linebarger also notes, though, that the shift into a world in which the roads are full of 100 percent electric vehicles will be gradual, and that the AEOS will not meet every customer’s needs.

“We know that we cannot have one solution for everybody,” he said, per Forbes. ”We need to make sure we have the right technology for the right application. Even if the electrified power train replaces the internal combustion engine completely, that’s still a 20- to 25-year transition period customers have to manage through. If we have good technology, they’ll want to buy it from us.”

Featured Image via Wikimedia Commons

Fox News will no longer broadcast in the UK

21st Century Fox announced Tuesday that it will pull Fox News from UK airwaves, The Guardian reports. The network’s final broadcast across the pond took place at 4:00 p.m. local time Tuesday.

A spokeswoman told The Guardian: “[Fox] has decided to cease providing a feed of Fox News Channel in the UK. Fox News is focused on the US market and designed for a US audience and, accordingly, it averages only a few thousand viewers across the day in the UK. We have concluded that it is not in our commercial interest to continue providing Fox News in the UK.”

21st Century Fox awaits British authorities’ approval of its bid to acquire Sky TV, the UK’s top pay television network. The US media giant already owns 39% of Sky and is seeking to acquire the remaining 61% in the £11.7 billion ($15.2 billion) deal.

Sources told The Guardian the decision to pull Fox News out of the UK was strictly economical and in no way related to the pending acquisition.

But, UK media regulators and lawmakers have raised concerns about the “corporate culture” of the network. According to CNN, the British Office of Communications (Ofcom), which was tasked with reviewing the proposed takeover, said following its review that the sexual harassment allegations against former Fox News chairman Roger Ailes and former anchor Bill O’Reilly, were “deeply disturbing,” and evinced “significant failings of the corporate culture.”

O’Reilly and Ailes both denied the allegations, CNN notes.

Ofcom found no evidence that senior management at Fox had been aware of the alleged misconduct prior to July 2016. CNN reports that 21st Century Fox management (namely, Rupert Murdoch and his sons Lachlan and James)  “pressured Ailes to resign,” which he did in July 2016.

In April, Fox and O’Reilly parted ways. “After a thorough and careful review of the allegations,” 21st Century Fox said in a statement per foxnews.com, “the company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel.”

Despite its concerns regarding the sexual harassment allegations, Ofcom concluded that 21st Century Fox qualified as a “fit and proper” holder of Sky. The regulatory agency did not deem further investigation of the network’s broadcasting practices necessary.

Still, British lawmakers and lobbyist groups are urging Karen Bradley, the UK’s Secretary of State for Digital, Culture, Media and Sport, to refer the Fox-Sky deal for additional review. In response to those petitions, Bradley’s office asked Ofcom to conduct further research. Friday, the office confirmed that it has received “additional advice” from Ofcom concerning the deal, Deadline reports.

“The Secretary of State will now carefully consider that advice before making her decision on referral on the basis of all the evidence before her, and will do so as soon as is reasonably practicable,” the office says, per Deadline.

Bradley said late last month that while she saw no reason to further review 21 Century Fox’s adequateness as a broadcaster, she was likely to refer the deal for review by the UK’s Competition and Markets Authority (CMA).

“Unless new evidence…changes my mind in coming weeks, the bid will therefore be referred for a Phase 2 review on at least one ground: media plurality,” Bradley told Parliament in mid-July, per Variety.

Deadline notes that CMA reviews can take up to six months. If the deal is not finalized by the end of this year, 21st Century Fox will pay Sky shareholders £170 million ($219 million).

Twenty-two million viewers across five European countries—the UK, Ireland, Italy, Germany and Austria—pay for Sky service,

The European Union has already approved the acquisition. UK authorities represent the final regulative hurdle before finalization.

If the deal dissolves, Fox will pay Sky an additional £200 million ($258 million).

Featured Image via Flickr/Johnny Silvercloud

Best Buy shares plummet despite strong earnings report

Best Buy’s quarter two earnings report, released Tuesday, shattered analyst expectations, Bloomberg reports. But, the company’s stock has plummeted on CEO Hubert Joly’s warning that the sales growth may not be sustainable.

Joly cautioned on the earnings call, per Bloomberg, that investors should not expect comparable sales growth to continue at its second-quarter rate.

As of 12 pm ET Tuesday, Best Buy shares are down 11 percent since the market closed Monday.

For quarter two, the company reported comparable sales growth of 5.4 percent, more than twice analysts’ expectations of 2.1 percent. Quarter two marks the chain’s best comparable sales growth since quarter four of fiscal 2010, Bloomberg reports.

Non-GAAP diluted earnings per share jumped from $0.57 to $0.69 year over year, an increase of more than 21 percent. Sales revenue rose almost five percent year-over-year, from $8.53 billion to $8.94 billion, and came in 3.2 percent above analysts’ expectations of $8.66 billion.

Despite Joly’s warning, Best Buy has revised its full-year comparable sales growth target from 4.5 percent to 5.5 pecent and raised Non-GAAP diluted EPS targets to $0.80/share from $0.75/share (an increase of more than 6.5 percent).

CFO Corie Barry expects “continued positive industry and consumer momentum,” she said in a statement, per Bloomberg, adding that product launches throughout the fall and the holiday season should have a positive impact on Best Buy’s performance.

Still, Barry offers a word of caution regarding the future—particularly the holiday boom, during which discounts and other promotions, Bloomberg points out, cut into the bottom line.

“You can’t always carry trends forward into the fourth quarter,” she said on the call, per Bloomberg. “…there are still a lot of unknowns.”

Best Buy’s success this summer comes as a number of hot new tech products hit the shelves. Nintendo’s new gaming platform, the Switch, and Samsung’s new phone, the Note 8, presumably played a role in boosting Best Buy’s sales numbers, Bloomberg notes.

Sales of smart home devices like the Google Home and Amazon’s Alexa increased as well, as Best Buy made an effort to showcase such devices. Sales of “wearables” like the Apple Watch also climbed.

According to the earnings report, though, pricing pressure in the mobile phone market drove down margins on products like the Note 8, and wearables are inherently low-margin products. A decline in sales of tablets, which are high-margin items, further limited profits.

Still, gross profit increased 4.4 percent, from $2.06 billion to $2.15 billion, while gross profit percentage (i.e. the percentage of revenue that becomes profit) remained flat.

Best Buy’s online revenue increased 31.2 percent “on a comparable basis,” according to the earnings release, while online sales accounted for 13.2 percent of total domestic revenue, an increase from 10.6 percent a year ago.

The company’s online revenue was higher than it has ever been, except during a holiday quarter, Bloomberg reports.

Still, experts doubt whether Best Buy can continue to compete with Amazon, which, according to a consumer survey by Gordon Haskett analyst Chuck Grom (cited by Bloomberg), now controls more than half of online sales across 11 key categories, including electronics and small appliances.

“They are going to get perfect quarters like this every now and again,” Brandon Fletcher, an analyst at Sanford C. Bernstein & Co., said of Best Buy, per Bloomberg.

The company “will continue to face waves of growth and decline,” Fletcher added, “but its base products — printer ink, headphones, etc. — are not related to product launches and those sales are inexorably moving to Amazon and Wal-Mart online.”

Best Buy has succeeded in the stock market despite increasing pressure on the eCommerce front. At Monday’s close, shares had increased more than 60 percent in the past year.

But the company’s own management has asked investors to temper their enthusiasm, and investors are obliging.

Featured Image via Wikimedia Commons

Harley-Davidson rolls out new models as sales decline

Harley-Davidson, Inc. is set to revamp its Softail lineup with a slew of new 2018 models, Charles Fleming of The LA Times reports. The company told Fleming the new models are “already on their way to dealerships.”

The new bikes will weigh less than their predecessors and will feature new engines with more torque. Many will have improved lean angles so that they steer and corner better.

The company has announced eight new Softails, according to Fleming: the Fat Boy, the Heritage Classic (formerly the Heritable Softail Classic), the Low Rider, the Softail Slim, the Deluxe, the Breakout, the Fat Bob and the Street Bob.

The Softail line has absorbed the Dyna line, leading to the discontinuation of the Sportster 1200T, the Del VROD Muscle and Night Rod Special, and the Wide Glide.

Milwaukee-Eight 107 V-twin engines will come standard on each of the new models. Those engines measure 107 cubic inches and boast 147 Nm of torque.

The larger Milwaukee-Eight 114 will be available as an upgrade on the Heritage Classic, the Breakout and the Fat Boy. That engine will pack 161 Nm of torque.

Harley has taken steps to reduce the vibration in both engines, Fleming says, thereby reducing RPMs during idling and limiting engine noise when the bikes are at rest.

Harley told Fleming the two engines are “the most powerful…ever offered” in its Big Twin cruiser category.

Each of the new models will also be equipped with a new chassis and new suspension.

Harley has seen sales drop as the core of its customer base continues to age, and the company is struggling to attract a younger generation of bikers. Many among the new generation prefer other bikes over Harleys, and the company’s dominance in the market is waning.

So, prior to rolling out its new offerings, Harley launched what it calls, per the Times, “the most extensive research and development program” in its history, which dates back to 1903. The company asked current as well as prospective riders to suggest improvements, and many of those surveyed asked for lighter bikes with better handling.

Harley delivered, but doubt remains as to whether the new bikes will precipitate a rise in sales.

“This model year lineup may not be enough to reverse Harley’s US retail sales declines, now in their third consecutive year,” said USB analyst Robin Farley, per the Times.

Harley sold 54,786 units domestically in quarter two of last year, and 49,668 in this most recent quarter. That’s a decline of 5,118 units (9.3%) year-over-year.

The company has made other changes in an effort to drag its hogs into the modern age. LED headlights and a USB port will come standard on all new models. Cruise control will come standard on the Heritage Classic and will be available as an add-on on all other models. Anti-lock breaks will come pre-installed on the Fat Boy, the Deluxe, the Heritage Classic and the Breakout, and will be optional on the other models.

Some die-hard Harley riders, Fleming says, have resisted such changes as electric starters and anti-lock breaking systems.

Perhaps in an effort to appease such customers, Harley has given the Heritage Classic, along with some of the other new models, a vintage look, featuring, per Fleming, “spoked wheels, blacked-out rims and period-correct headlight bezels,” among other “details.”

Like all Harleys, the new models will benefit from the company’s parts and accessories catalog. Riders will be able to modify seat and handlebar configurations and make other changes.

Fleming, who test-rode the Heritage Classic and the Fat Boy, says both of those bikes sit low, making them suitable for smaller riders.

The Low Rider and the Street Bob, each of which costs $14,999, are the most budget-friendly of the new models. The Heritage Classic and the Fat Boy are the most expensive of the new bikes; with the 114 engine, each of those bikes will cost $20,299.

Featured Image via Wikimedia Commons

Starbucks stock falls, but one analyst predicts recovery

Since June 2, Starbucks stock has fallen more than 16 percent. Shares dipped just over nine percent (to $54.00/share) in 24 hours after the company released its most recent quarterly earnings report on July 27.

Investors are losing confidence in the iconic coffee brand due to declining growth rates, Daniel Schönberger of SeekingAlpha writes. Though Starbucks reported an 8 percent jump in revenue and a 12 percent increase in earnings per share last quarter, revenue growth has been falling since the first quarter of 2016, and EPS growth has declined from 37 percent in quarter four of 2013.

Still, Schönberger notes that most companies would love to post growth numbers comparable to Starbucks’, and points to a number of promising indicators for the company’s future.

The growth rate of the chain’s comparable sales increased over the most recent quarter. The comparable sales metric compares sales performance at a given store over some period of time. According to Schönberger, the figure is important from a sustainability perspective, as it is cheaper for a company to grow sales at existing locations than to open new stores. In the most recent quarter, Starbucks reported a 5 percent increase in comparable sales, up from 3 percent in each of the two prior quarters.

Still, in the long view, Starbucks’ comparable sales growth is slowing. In quarter four of 2011, comparable sales grew 10 percent. Until 2014, the company consistently reported comparable sales growth in excess of 5 percent.

Through the latter half of 2013, traffic growth accounted for the lion’s share of comparable sales growth. In the fourth quarter of that year, traffic growth began to decline, and increasing margins of individual sales (“ticket growth”) accounted for most of Starbucks’ comparable sales growth. Traffic has remained flat or declined in each of the last five quarters.

To maintain its dominance in the coffee sphere, Starbucks relies heavily on its brand image, Schönberger notes, citing a 2016 Interbrand report that ranks the Starbucks brand as the 64th most valuable worldwide, worth almost $7.5 billion. In 2016, Interbrand says, Starbucks’ brand appreciated 20 percent.

In a coffee sector in which competition is fierce, barrier to entry is low (i.e., it is easy to open a coffee shop), and customers can shift their loyalties with ease, the strength of Starbucks brand, Schönberger says, compels customers to tolerate long lines and high prices to obtain the familiar, quality product Starbucks offers.

Starbucks continues to expand in the U.S. The company opened 244 new stores on American soil last quarter and has opened 1,002 in the past 12 months. Schönberger argues, though, that the chain’s real potential for growth lies in international markets like India, Brazil, and Japan.

In its most recent earnings call, the company said year-over-year revenue in “China/Asia Pacific increased 9 percent while operating income jumped 22 percent. The company is particularly optimistic about its burgeoning presence in China.

“Starbucks’ opportunity for growth in China is unparalleled…” said Johnson.

There are approximately 2,600 Starbucks stores spread across 127 cities throughout China, Schönberger says. Starbucks’ growth in China mirrors its early growth in the U.S. Comparable sales growth is trending upward on the strength of increasing traffic. Starbucks intends to open 500 stores a year in China, CEO Kevin Johnson said in the earnings call.

Of course, there are risks associated with Starbucks’ expansion into China. Should tension between the U.S. and China continue to escalate, exchange rates may become volatile, Schönberger points out. Moreover, Chinese authorities could impose sanctions, even bans, on American businesses.

As of 2:08 Eastern Monday, Starbucks shares are trading at $54.25 apiece. The stock’s 52-week low is $50.84. Schönberger recommends that investors capitalize on the low share prices by picking up stakes in the coffee giant.

Featured image via Wikimedia Commons

Tax breaks entice Apple to build a data center in Iowa

Apple announced plans Thursday to build a $1.3 billion data storage center in Waukee, IA, a suburb of Des Moines. Construction will begin early next year, and the facility will be operational by 2020.

According to the AP’s David Pitt, the Iowa Economic Development Authority has given Apple $208 million worth of state and local government tax breaks to facilitate the project, which will bring 500 short-term construction jobs and 50 permanent positions to the area.

The subsidies include a $188 million in property tax breaks and $19.6 million in sales tax waivers.

Apple will purchase 2,000 acres (87.1 million square feet or 3.12 square miles) worth of land for the 400,000-foot facility, leaving plenty of room for future expansion. The center will operate entirely on renewable energy, like all of Apple’s data centers, the company’s press release says.

“Apple will be working with local partners to invest in renewable energy projects from wind and other sources to power the data center,” according to the press release.

The company will donate $100 million to Waukee’s Public Improvement Fund, which is dedicated to revitalizing streets, parks, and libraries, and building new community facilities. The Fund’s first project will be the construction of a youth sports complex.

Iowa governor Kim Reynolds, Waukee Mayor Bill Peard, and Apple CEO Tim Cook joined together in front of Iowa’s capitol building to make the announcement, Bloomberg reports.

Cook said Apple had chosen Iowa as the site of the data center because of the state’s “world class power grid,” as well as its thriving community of computer developers.

Microsoft, Google, and Facebook all have data centers of their own in Iowa. In some circles, the state is known as the Silicon Prairie. State and local governments in the area enticed those companies with tax breaks similar to the ones it gave Apple.

“If we want to grow this economy and provide more revenue, then we should be doing what we can to bring jobs and businesses to the state of Iowa,” she said. “This puts Iowa on the world stage. This gives us the opportunity with a global company like Apple to say we are the place to be.”

But critics of the subsidies warn that data centers are not economic catalysts so much as they are big, cement buildings staffed mostly by machines. The facilities are, more or less, exactly what they sound like: giant warehouses containing servers that store data. Apple’s Iowa facility center house information concerning Siri, the App Store, and iMessage, per the company’s press release.

Once the computer systems at data centers are operational, says Michael Hiltzik of The LA Times, such facilities need only limited human oversight and maintenance. That is to say, companies don’t hand out a ton of paychecks at data centers.

Iowa is spending $208 million to bring 50 permanent jobs to the state—each such job, in other words, will cost taxpayers $4.16 million, Hiltzik notes.

Some argue that with an $815 billion market cap, Apple hardly needs help from the taxpayers of prairie states like Iowa. “It’s a net fiscal loss that it’s a straightforward giveaway in the economy to a company that’s extraordinarily wealthy and it makes no sense from an economist’s point of view. It only makes sense from a politician’s point of view,” said David Swenson, per the AP’s Pitt.

Still, governments throughout the 50 states are giving tax breaks to tech behemoths to encourage them to build data centers. In 2009, for instance, North Carolina gave Apple $321 million worth of incentives to build a data center in Maiden, NC that would employ 50 permanent employees.

In addition to those in Iowa and North Carolina, Apple has data centers in California, Nevada, Oregon, according to The New York Times. 

According to that publication, Apple’s cost estimate for the Iowa facility breaks down as follows: $110 million to purchase and prepare the land, $620 million in construction costs, $600 million worth of computer equipment and $45 million worth of “other equipment.”

Featured Image via Wikimedia Commons

Amazon will take control of Whole Foods Monday, slash prices

Amazon announced in a press release Thursday that it will take control of Whole Foods beginning Monday, The New York Times reports. When Whole Foods stores open Monday, shoppers will see lower prices on a number of products, including bananas, eggs, salmon, tilapia, Fuji and Gala apples, and almond butter.

“We’re determined to make healthy and organic food affordable for everyone,” Jeff Wilke, the executive who runs Amazon’s consumer businesses, said in the press release. “Everybody should be able to eat Whole Foods Market quality we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.”

Wilke said the price cuts to be implemented Monday are “just the beginning” of an effort to “continuously lower prices” at Whole Foods.

In the near future, the release says, Amazon Prime will function as a Whole Foods rewards program, and Prime members will “receive special savings and in-store benefits.”

Competitive pricing is a cornerstone of Amazon’s business model. The company, the Times notes, has made a habit of delighting the consumer even at the expense of its own shareholders, and even its bottom line.

Amazon’s low prices also help appease regulatory agencies like the FTC, which approved Amazon’s acquisition of Whole Foods Wednesday.

“At the end of the day, the FTC is in the business of watching out for the consumer,” said Brendan Witcher, a retail analyst at Forrester Research, per the Times.

Of course, in order to cut prices, Amazon will need to cut costs.

Though Amazon has been developing automation technology meant to reduce the need for human labor, the company has pledged that its acquisition of Whole Foods will not jeopardize the jobs of Whole Foods employees. According to the press release, Whole Foods will “continue to grow its team and create jobs in local communities as it opens new stores, hires new team members, and expands its support of local farmers and artisans.”

Rather than cut labor costs, Amazon and Whole Foods will “invest in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers,” the release says.

The press release says Amazon values “customer obsession rather than competitor focus,” but the company’s ever-falling prices have historically made things difficult on competitors. In the past, the Times points out, Amazon has started price wars with Barnes & Noble and Walmart. After diapers.com failed to match Amazon’s prices, diapers.com parent company Quidsi agreed to a buyout deal.

Meanwhile, Whole Foods’ high prices have been its primary competitive disadvantage to low-cost, high-volume operations like Walmart and Costco. Many experts expect the Whole Foods-Amazon deal to send competitors reeling as Whole Foods quality becomes available at Amazon prices.

“I absolutely think it’s putting the rest of the market on notice,” Bob Hetu, an analyst at Gartner, the technology research firm, said, per the Times, of Amazon’s announcement on pricing.

Walmart stock dropped 2 percent Thursday following the announcement. Kroger’s shares fell 8 percent.

Walmart is making its own push to slash prices. Last year, the Times says, Walmart allocated millions of dollars toward the effort.

Walmart is also taking steps to increase its online presence in the grocery sphere and elsewhere.

Google Express, which fashions itself as an Amazon competitor, now sells a number of Walmart products.

Moreover, Walmart’s market share in the grocery space far exceeds that of Whole Foods. With 4,600 stores, Walmart is the nation’s largest grocer. Whole Foods has just 460 stores.

“We feel great about our position with our network of stores around the country and fast growing e-commerce and online grocery businesses,” said Randy Hargrove, a spokesman for Walmart, per the Times.

Stew Leonard Jr., chief executive of a regional grocery chain that operates six stores throughout New York and Connecticut and, like Whole Foods, aims to provide the freshest available produce, says his business has seen and survived a procession of upheavals in the market.

“I’ve been in retail since I was a kid, and I’m always nervous,” he said. “Costcos were opening, then Walmarts, then Whole Foods. But at the end of the day, you just have to try and get the freshest corn out there on the sidewalk.”

Many expect Amazon to leverage the Whole Foods acquisition to grow its online grocery delivery services like AmazonFresh, which has operated for over a decade with limited success.

Per the press release, Amazon will sell proprietary Whole Foods brands—including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch—through Amazon.com, AmazonFresh, Prime Pantry and Prime Now. Amazon implies that Whole Foods brands will be available on said sites beginning Monday.

According to the Times though, most consumers still prefer to buy their groceries at brick and mortar stores rather than online.

Amazon will also install its Amazon Lockers in some number of Whole Foods stores so that customers can pick up and return items purchased from Amazon at their local grocery stores.

Featured image via Pixabay

Indonesia extradites xiu.com founder, China continues crack down on fugitives

Chinese authorities have extradited Ji Wenhong, founder of online clothing retailer xiu.com, from Indonesia to face smuggling charges, the AP reports via New York Daily News. Indonesian officials returned Ji to China Saturday.

Authorities accuse Ji of having designed a system by which his company illegally imported goods from Europe and the US. Allegedly, the company would order goods from foreign clothing sellers and have the products shipped to Hong Kong. Then, travelers would carry the goods to mainland China, disguising them as personal belongings so as to avoid import taxes.

The AP cites Chinese authorities as saying the products were worth 438 yen ($65.5 million). Ji, authorities say, neglected to report the true value of the goods.

Ji fled China for Indonesia in May 2016 following the initial smuggling charges. His extradition is the latest fruit of Operations Fox Hunt and Sky Net, two concerted efforts by the Chinese government to repatriate a number of fugitives.

The international law enforcement operations, which President Xi Jinping launched as part of a comprehensive crusade against corruption in the government, have achieved a certain degree of success despite the reluctance of countries like the US and Hong Kong to cooperate in sending fugitives back to China. That reluctance stems from suspicions surrounding China’s human rights practices and the fairness of the country’s judicial system.

According to an AsiaToday report republished by The Huffington Post, the Sky Net and Foxhunt sent 381 alleged criminals, accused of stealing a combined 1.24 billion yuan ($186 million) from the government, back to China in the first half of 2017.

Despite their aforementioned reluctance to send fugitives back to China, the United States government has agreed to do so in cases in which China can provide sufficient proof of a criminal’s wrongdoing.

“We continue to encourage China to provide strong evidence and intelligence to ensure that our law enforcement agencies can properly investigate and prosecute cases related to the alleged corruption,” US State Department spokeswoman Jen Psaki told Business Insider in March 2015.

In September 2015, the US extradited Yang Jinjun to China to face bribery and graft charges, according to Reuters.

In early June of this year, US authorities extradited Zhu Haiping, former general manager of Shenzen Yuwei Industry Corporation, to face charges of what the Chinese government calls “violations of personal rights,” per Reuters.

AsiaToday reports that Zhu had been living in the US for 18 years. Immigration officials detained him in January, according to Reuters.

Reuters cites China’s Ministry of Public Security as saying the extradition was the first result of a cross-border law enforcement cooperation agreement forged between Xi and U.S. President Donald Trump in early April at Trump’s estate at Mar-a-Lago, a Florida resort.

Zhu’s repatriation, the Ministry added, per Reuters, was a “major achievement,” and a “model example” of things to come as a result of the Xi-Trump agreement.

China, Reuters says, is pursuing the extradition of Gun Wengei, a billionaire living in New York whom Chinese authorities have accused of making corruption allegations against top Chinese political officials.

According to AsiaToday, the Chinese government expects to apprehend 300 more fugitives by the end of 2017. Skynet relies upon the collaborative effort of at least four agencies in the Chinese government: the Central Organization Department, the Supreme People’s Procuratorate, the Ministry of Public Security, and the People’s Bank of China, BusinessInsider says.

The People’s Bank, according to BusinessInsider, aims to locate and shut down bank accounts criminals use to harbor illicit funds.

“There is no longer safety zone for criminals on the planet. This is even more so due to the development of information and communication. The day when we don’t have to foxhunt will come soon,” said Wang Defu, executive of the Public Security Bureau of Chaoyang District in Beijing, of Skynet, per AsiaToday.

Xiu.com, the AP reports, has acknowledged that some members of the company are under investigation but did not mention Ji by name. The company said it is operating normally.

Featured Image via Pixabay

McDonald’s will serve antibiotic-free chicken worldwide

McDonald’s announced yesterday, Aug. 23, that it would begin the process of removing human antibiotics in their chickens worldwide starting in 2018. Currently, McDonald’s only sells antibiotic-free chicken in the America’s. The announcement will bring the fast-food giant into a global effort to “battle dangerous superbugs,” according to Reuters.

The company’s target is antibiotics that are defined by the World Health Organization (WHO) as “highest priority critically important antimicrobials” (HPCIAs) to human medicine. Reuters points out that the plan to phase out antibiotics is still “not as strict as the company’s policy for the United States.” In the US, chicken suppliers have been providing McDonald’s with chickens “raised without antibiotics deemed important to human health” for over a year.

This move will surely have health activists everywhere cheering, as they have been working to get Big Food to stop using human antibiotics in meat for years. Grub Street reminds us of activists’ efforts, citing their “staging a shareholder’s revolt against McDonald’s and publicly shaming In-N-Out.”

Although their plans will roll out in 2018, some suppliers will have up to January 2027 to comply with the new standard.

With the New Year, chickens in Brazil, Canada, Japan, South Korea, the United States and Europe will all be raised without HPCIAs. The only exception will be Europe, where the company will use Colistin, “a last resort antibiotic,” when necessary.

Suppliers in Australia and Russia will stop using HPCIAs by the end of 2019. European suppliers will also be required to stop the use of Colistin at this time.

The rest of the markets will follow, complying with the new rules by January 2027.

Per Reuters, McDonald’s told a “ group of consumer and environmental organizations on Aug. 17 that 74 percent of its global chicken sales will conform to this policy as of January 2018.”

Along with the production of antibiotic-free chicken, McDonald’s hopes to propel similar plans forward for antibiotic-free beef. As part of yesterday’s announcement, the company said they are “working on” further plans to get rid of human antibiotics for beef, pork, dairy cows, and egg-laying hens.

Icelandic airline WOW brings cheap transatlantic flights to four midwestern US cities

Icelandic budget airline WOW Air announced Wednesday that it will expand its service to four Midwestern US cities—St. Louis, Cleveland, Cincinnati, and Detroit—beginning in Spring 2018, USA Today reports.

WOW will run four flights a week between each city and the airline’s hub, Keflavik International Airport near Reykjavik, Iceland. One-way tickets will start at $99.99. Passengers will have the option of scheduling connecting flights from Reykjavik to any of 12 other cities in Europe, including Paris, Amsterdam, London, Berlin, Frankfurt, Copenhagen, and more. Connection itineraries originating in the US will start at $149.99

“Our unique opportunity is to use Iceland as a hub. We can then distribute the traffic to our main destinations in Europe,” said WOW Air founder and CEO Skúli Mogensen, per USA Today. “…That’s really the key. Instead of having a single point-to-point flight, we actually give you a very affordable flight to multiple destinations in Europe via Iceland.”

WOW already serves seven other cities in the US. In 2015, the airline began serving Boston and Baltimore/Washington (BWI). Later, it expanded its service on the east coast, adding flights in and out of Newark, NJ and Miami, FL, and made inroads on the west coast in LA and San Francisco.

Now, WOW is looking to establish a presence in the Midwest. Earlier this year, it announced plans to serve Pittsburgh and Chicago.

Some doubt whether there exists an adequate market for trans-Atlantic travel in WOW’s four newest cities. Morgensen, who says his company is “very excited about these cities,” expects low fares to spur demand.

“With those kind of prices, we have seen in other markets that we enter that we have stimulated the market significantly,” he said, adding: “We like the region. We think there’s opportunity there. We think it’s under-served.”

Indeed, competition is sparse. Though trans-Atlantic service in and out of Detroit is common, WOW will be the only airline to fly between St. Louis and Europe, according to USA Today. Moreover, only Delta flies between Cincinnati and Europe.

WOW will battle for the Cleveland market with fellow Icelandic airline Icelandair, which announced Cleveland-Reykjavik service Tuesday. According to USA Today, no commercial airplane has flown across the Atlantic from Cleveland Hopkins International Airport since 2009, when United, which was based out of CHIA until 2014, discontinued a flight from Cleveland to London Heathrow.

Like WOW, Icelandair will run four flights a week between Cleveland and Reykjavik, with connections available from Reykjavik to other destinations throughout Europe. Icelandair, though, will serve more than twice as many European destinations as WOW.

But, Mogensen is confident WOW’s low fares will give the company an edge over Icelandair and other competitors.

“We welcome competition from all airlines,” he said. “No other airline has offered as low fares as we have done over the Atlantic.”

For comparison, a one-way Icelandair ticket from Denver to Reykjavik costs upwards of $250. WOW’s one-ways to Iceland from the Midwest, as mentioned, will cost less than $100.

Icelandair plans to fly Boeing 757s in and out of Cleveland, while WOW intends to use the single-aisle Airbus A321.

Tickets for WOW flights out of its four new US service cities went on sale Wednesday. Detroit service will begin April 26, 2018; Cleveland flights will start on May 4, 2018; Cincinnati service will commence May 10, 2018, and St. Louis service will begin May 17, 2018.

Icelandair says its Cleveland service will begin May 2018, but has yet to provide specific dates.

Mogensen says WOW will make more announcements regarding expanded US service in the near future.

“We will continue to add destinations in the U.S. in the next weeks and as always offer the lowest fares.”

Featured image via Wikimedia Commons

FTC approves Amazon’s acquisition of Whole Foods

Wednesday, the Federal Trade Commission (FTC) signed off on Amazon’s purchase of Whole Foods, The Washington Post reports. The $13.7 billion deal, which Amazon announced in June, is scheduled to take effect by the end of the year.

The FTC said in a statement that it had examined the “proposed acquisition to determine whether it substantially lessened competition.”

The deal would give Amazon 2% of the US grocery market, according to the Post. Walmart, which is among Amazon’s fiercest competitors in the grocery space and elsewhere, holds 20% of the market; Kroger has 7%.

Last year, Walmart generated $200 billion in revenue via grocery sales, the Post says. Kroger reported $115.3 billion worth of revenue in 2016. Whole Foods’ annual revenue approaches $16 billion.

“Based on our investigation,” the FTC says, “we have decided not to pursue this matter further.”

According to the Post, some have called upon regulators to amend antitrust laws to accommodate a corporate climate in which companies like Facebook, Google, and Amazon continue to grow.

The Post notes that the approval of the merger is the FTC’s first major action since President Trump took office in January. Trump has accused the eCommerce behemoth of shirking its taxes, fostering speculation that he might push the FTC to block the deal.

“Amazon is doing great damage to tax paying retailers,” Trump wrote on Twitter August 16. “Towns, cities and states throughout the U.S. are being hurt — many jobs being lost!”

Per the Post, Amazon reported paying $412 million in income taxes last year, $273 million in 2015, and $177 million in 2014. Though many states do not levy sales taxes on online retail transactions, Amazon collects sales tax in states where it is required to do so.

Whole Foods shareholders approved the acquisition earlier Wednesday. It is by far Amazon’s largest takeover to date, the Post reports.

In 2009, Amazon acquired online shoe retailer Zappos for $1.2 billion, and in 2014 the Seattle-based giant snatched up video game streaming site Twitch.

With the Whole Foods deal, Amazon, which has been closing in on brick-and-mortar commerce with services like Instant Pickup and PrimeNow, will enter a grocery sector that is struggling to keep up with changes in the ways consumers buy food. Over the last three years, the Post says, almost 20 grocers have filed for bankruptcy, largely because online food delivery services like FreshDirect are capturing an increasing share of the market.

Amazon has not disclosed its plans for Whole Foods as yet, but some have speculated that the tech company intends to build an online food delivery operation of unprecedented scale.

There are also whispers that Amazon will integrate Whole Foods into Instant Pickup. Customers could order groceries on their way to the store, then pick up their food as they walked in the door. Amazon could also use some or all of Whole Foods’ 460 brick-and-mortar stores as Instant Pickup warehouses and pickup centers.

Some warn that the takeover may jeopardize Whole Foods’ employees. As Amazon increasingly embraces automation and potentially looks to change the manner in which Whole Foods operates, staffing needs could change, leading to layoffs and personnel turnover.

“Amazon’s acquisition is a threat to Whole Foods workers and their families,” Marc Perrone, president of The United Food and Commercial Workers International Union, wrote in a letter to Whole Foods executives, per the Post. “They deserve a clear commitment from the entire board that their jobs, wages, and benefits will be protected from Amazon’s automated business model.”

John Mackey co-founded Whole Foods in Austin, TX in 1980, and remains its CEO today. The grocery chain is renowned for its favorable compensation and treatment of employees, most of whom earn more than minimum wage and benefits, according to the Post.

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades — they’re doing an amazing job and we want that to continue,” Amazon CEO Jeff Bezos said in a statement in June.

Featured image via Flickr/Mike Mozart

Village Voice to discontinue print publication, go digital

The Village Voice, the liberal, independent newspaper that has been a fixture in New York culture since the mid-20th century, announced Tuesday that it would discontinue its print publication, The New York Times reports. The paper will operate entirely online and will publish on a daily rather than a weekly basis.

The publication has not yet finalized the date of its final print edition, a spokeswoman told the Times.

The paper’s owner, Peter Barbey, who bought The Voice from Voice Media in October 2015, said in a statement that the decision to go paperless was an effort to keep up with the continued shift of media and its audience into the digital sphere.

Under Barbey’s leadership, the publication redesigned its website in 2015, and has since reported an increase in online traffic, the Times says.

The digitization, Barbey says, was also a response to readers’ desires to see Voice content more frequently. “Our audience,” wrote Barbey, per the Times, “…expects us to do what we do not just once a week, but every day, across a range of media.”

What is it, exactly, that the Voice does? It helps New Yorkers find everything from jobs to apartments to local music to phone sex. It offers political commentary, literary criticism, and descriptions of New York culture.

According to the Times, The Voice was “where many New Yorkers learned to be New Yorkers.”

Norman Mailer, Dan Wolf, and Ed Fancher founded the paper in 1955 in Greenwich Village. Since, the pages of The Voice have held the words of investigative reporters including Wayne Barrett and Jack Newfield, and music critics including Gary Giddins, Ellen Willis, and Robert Christgau. Nat Hentoff published a column in the Voice for more than 50 years.

Hilton Als, who has written for the New Yorker since 1994, and who won a Pulitzer Prize for Criticism in 2017, began his career at The Voice, as did novelist Colson Whitehead, who has won two Pulitzers for his fiction.

The paper has also published content by James Baldwin, E.E. Cummings, Allen Ginsberg, and a host of other notable writers.

The paper was sold until 1996 when management dropped the price in an effort to keep pace with competitors and to increase circulation. Then, Barbey notes, per the Times, “Craigslist was in its infancy, Google and Facebook weren’t yet glimmers in the eyes of their founders, and alternative weeklies — and newspapers everywhere — were still packed with classified advertising.”

Now, the Voice is making another change in an attempt to keep up with the industry. Some New Yorkers told the Times the Voice was already obsolete.  “You have Uber killing the taxi biz, are you going to lose sleep over The Village Voice?” said Paul Vezza, 60, the third generation owner of Astor Place Hairstylists. “No.”

Vezza remembers when hordes came into the shop every week just to pick up the most recent edition of the paper. He still keeps a stack of print copies of the Voice in his shop, but they remain mostly untouched, the Times says.

Alicia Johnson, a 46-year-old from Brooklyn, told the Times she hadn’t read anything in the Voice for a while. Still, she certainly hasn’t forgotten about it.

“That’s the iconic paper of this neighborhood,” she said. “If you are a New Yorker you should know that, period.”

Many New Yorkers, though, recognize the Village Voice by the red street corner boxes containing free copies of the paper. The recent announcement means those will be gone, and Johnson wonders how The Voice will capture the ears of New Yorkers without them.

But Barbey says that boxes or no boxes, weekly or daily, ink or pixels, the Voice will roar on.

“The most powerful thing about The Voice wasn’t that it was printed on newsprint or that it came out every week. It was that The Village Voice was alive, and that it changed in step with and reflected the times and the ever-evolving world around it,” Barbey said in a statement. “I want The Village Voice brand to represent that for a new generation of people — and for generations to come.”

Featured image via Wikimedia Commons

Boeing, Northrop to compete to design new land-based nukes for US

The US Air Force announced Monday that it has awarded two defense companies—Boeing and Northrop Grumman—each a $359 million contract to design new, land-based, nuclear Intercontinental Ballistic Missiles (ICBMs), CNBC reports. The companies will compete in what the Pentagon calls the “technology maturation and risk reduction” phase of development, which CNBC describes as the “preliminary design” phase.

The development of the new missiles is part of the US Military’s Ground-Based Strategic Deterrent (GBSD) intercontinental ballistic missile (ICBM) weapon system program.

A third potential contractor, Lockheed Martin, has dropped out of the running. The narrowing of the design-competition field marks a step forward for the GBSD program, notes Jefferies analyst Howard Rubel, per CNBC.

Said Rubel: ”You went from three competitors to two. You went from what I call broad concepts to now, two competing designers, who will come up with an industrialization concept that will…probably have some testing done to prove certain points along the way.”

The contract also represents a “win” for the Boeing’s defense operation, Rubel says, pointing out that Boeing lost a long-range strike bomber contract to Northrop, and has faced setbacks on an aerial tanker project.

Boeing hasn’t selected subcontractors yet, and Northrop has released just a partial list. Rubel told CNBC he expects Orbital ATK and Aerojet Rocketdyne, two manufacturers of rocket motors, to “split the propulsion work in some fashion.”

The new missiles, which the military expects to begin producing and deploying in the late 2020s, may replace the United States’ current nuclear ICBM, dubbed Minuteman III, the development of which Boeing led in the 1970s.

“Things just wear out, and it becomes more expensive to maintain them than to replace them,” Secretary of the Air Force Heather Wilson said of the aging missiles in a statement. “We need to cost-effectively modernize.”

China and Russia are both modernizing their nuclear fleets, and North Korea is becoming a credible nuclear threat to the US and others.

Still, some experts debate whether the GBSD project is cost-effective and whether modernization of the country’s land-based missiles is an effective defense strategy.

The Air Force originally estimated the cost of “acquiring” the new missiles at $62 billion, but now expects costs between $85 billion and $140 billion. Per CNBC, Reif Kingston, director of disarmament and threat reduction policy for the ACA, called the pricing information on which the Air Force and the Pentagon have based the fiscal projections “old and incomplete.”

“We [i.e. the US] haven’t built a new intercontinental ballistic missile in decades. As the program proceeds, they will have start to get a better sense of the costs. But at this point, there’s a lot of uncertainty, and the Air Force’s [first] estimate [of $62 billion] by all accounts is unrealistically low,” Kingston told CNBC.

Kingston also disputes Wilson’s claim that the development of new missiles would be cheaper than the continued maintenance of Minuteman III. At least in the short term, he says, there is an economic reason to delay GBSD.

“Sustaining the Minuteman III for a period of time (say 10-15 years) beyond 2030 would be cheaper than GBSD over that period,” he said. “The case for deferring a decision on GBSD and pursuing another life extension of the Minuteman III is strong.”

Were the Pentagon to defer the development of Minuteman III replacements, Kingston concedes, the nation’s supply of land-based ICBMs would indeed diminish. “A smaller force,” however, “would not diminish the overall strength and credibility of the U.S. nuclear deterrent,” said Kingston.

The US currently deploys a “nuclear triad”: a combination of land, sea, and air weapons.

Some critics of the GBSD project say nuclear land missiles are not as effective in a defense capacity as nuclear bombs and torpedoes. Air and sea weapons, such critics argue, are more suited to dispersion and avoidance of detection than land weapons.

As part of what CNBC calls a “nuclear posturing review,” the Trump administration will examine whether the triad remains an efficient strategy.

Featured image via Wikimedia Commons

Multiple law firms propose class-actions against Blue Apron as shares fall

A host of law firms have proposed class actions against Blue Apron accusing the company of misleading its shareholders, TechCrunch reports. Bragar Eagel & Squire, P.C. filed one suit, which is more or less a case example of the others, claiming Blue Apron reduced ad spending without notifying shareholders and concealed order-delay obstacles and the resultant customer-retention problems.

Quoted from the suit, per TechCrunch: “1) Blue Apron had decided to significantly reduce spending on advertising in Q2 2017, hurting sales and profit margins in future quarters; (2) Blue Apron was experiencing difficulty with customer retention due to orders not arriving on time or with all expected ingredients; and (3) the Company was experiencing delayed orders in Q2 2017 related to its new factory in Linden, New Jersey.”

Blue Apron stockholders have until October 16 to apply as plaintiffs in that suit. Most of the other suits are seeking plaintiffs as well.

The online food delivery has seen its shares drop almost 45 percent since its June 1 IPO. Many analysts have attributed Blue Apron’s struggles to Amazon’s acquisition of Whole Foods, announced in June.

One SeekingAlpha writer argues Amazon will enter the meal-kit space with a more efficient business model that will appeal to a wider range of consumers.

Blue Apron’s subscription-based model, according to the SeekingAlpha piece, requires a degree of commitment that customers are not willing to make. Blue Apron meal kits show up on a customer’s doorstep every week, whether the customer wants them or not. The demographic to which such a system would appeal is small.

Moreover, the subscription model saddles a company with the challenges of adding and retaining customers.

In contrast, Amazon could allow customers to purchase meal kits at any time, and could then deliver the goods to the customer’s door in a matter of hours. Customers could place combined orders containing, for instance, a few meal kits, a few fresh bananas, a bag of basmati rice and, say, a phone charger. The SeekingAlpha piece holds that the consumer market for on-demand food delivered within hours, without a prolonged commitment, outnumbers the market for steady, weekly deliveries.

SeekingAlpha calls BlueApron “one of this [online food delivery] bubble’s most famously disastrous IPOs. TechCrunch notes that shareholders often sue a company in the wake of a disappointing IPO.

“As soon as the stock goes down like that, the lawyers come out,” said Kathleen Smith, a principal at Renaissance Capital, per TechCrunch.

After Facebook went public on May 18, 2012, with a $16 billion IPO valuation—one of the largest in tech history—its stock dropped more than 38 percent in the first year. IPO investors threatened to sue the company over improper disclosure allegations similar to those law firms are making against Blue Apron. In the Facebook case, a judge ruled that because the plaintiffs had not acquired their shares prior to Facebook’s alleged misconduct, they had no grounds on which to bring litigation against the company.

Facebook offers an example of how a company can thrive despite an underwhelming IPO. Since Facebook stock hit its lowest point (23.63/share) on June 14, 2013, it has soared by more than 600 percent. Today, it is worth almost $170/share.

In May, two months after Snap’s early-March IPO, a new shareholder sued the company for wrongfully inflating its user metrics. At the time of the lawsuit, Snap’s stock had fallen more than 25 percent since the IPO. That suit, like those proposed against Blue Apron, pursued class-action status. By all indications, the case has yet to reach any conclusion.

Snapchat stock has continued to drop. Since the suit, it is down almost 30 percent. Today, shares cost just over half of their IPO value.

For all the lawsuits with which shareholders traditionally bombard companies struggling in the wake of their IPOs, few ever go to trial. The plaintiff, according to TechCrunch, must prove that company made “material” false statements and that the plaintiff relied on them. That burden generally proves too heavy. Most post-IPO shareholder suits are either thrown out or settled out of court.

Featured image via Wikimedia Commons

Monday’s total solar eclipse cost US employers almost $700 million

On Monday, many Americans saw a total solar eclipse for the first time in their lives. The last time United States denizens had a clear line of sight for a total solar eclipse was in 1979, according to a report by Challenger, Gray, and Christmas, Inc. So, American workers were more than willing to interrupt their banal daily routines to catch a glimpse of the historical event.

And financial experts were busy calculating the losses. According to the aforementioned report, the solar eclipse cost companies throughout the nation almost $700 million in lost time. Challenger, Gray, and Christmas estimated that 87,307,940 Americans would be at work during the eclipse and that each worker would take 20 minutes, on average, to gather his/her viewing supplies, travel to an appropriate viewing site, watch the two-and-a-half minute eclipse, and return to work.

The average hourly wage is $23.86, so if each worker takes a third of an hour to view the eclipse, he/she will cost his/her company $7.95. Multiply that figure by the estimated number of Americans at work during the eclipse and you find that U.S. employers lost approximately $694,098,123 as a result of the event.

Employers in areas which lie on the eclipse’s “path of totality” lost a combined $200 million, the report estimates. In Chicago, which lies just off of the totality path, employees “stole” $28 million worth of time.

However, the report notes that, in most cities, the eclipse occurred around lunch time, when workers are already taking breaks. “Since this is happening over the lunch hours, the financial impact is minimal,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, in the report.

Moreover, preventing employees from viewing the eclipse would likely do more damage to morale than allowing viewing would do to the bottom line.

So, Challenger advised employers not to “board their windows and keep employees locked up in conference room meetings until the eclipse ends.”

“Rather,” he says, “looking for how to turn this lack of productivity into a way to increase morale and strengthen the team is a much better use of the eclipse.”

Challenger adds that the eclipse, in fact, “offers a great opportunity to boost morale. Employers could offer lunch to their staff, give instructions on how to make viewing devices, and watch together as a team.”

The eclipse’s “path of totality,” which encompasses the locations from which viewers could see the eclipse in all its fullness, travelled from the Pacific Northwest—those in Newport, Oregon, saw the eclipse at 10:15 a.m. local time—through the midwest—Troy, Kansas residents saw the eclipse at 1:05 pm local time—and into the Southeast—the eclipse hit Clayton, GA at 2:35 pm Eastern. Click here for a full list of locales within the “path of totality.”

Many people traveled to such locales to view the event. According to US News, AAA Mid-Atlantic issued an advisory preparing travelers for “huge crowds of eclipse watchers, long lines and roadside delays caused by the influx of travelers from other states into prime eclipse-viewing destinations.”

GreatAmericanEclipse.com says most American’s live within a day’s drive of some location within the eclipse’s path of totality. Further, because August is a popular vacationing time, the site points out, many people presumably planned getaways around the eclipse.

The event’s effect on auto traffic, the site says, was akin to that of “20 Woodstock festivals occurring simultaneously across the nation.”

Whatever toll the eclipse took on the average American employer, it likely provided a proportionate boost to the country’s travel industry. Lodging enterprises benefited from an influx of eclipse-seekers, and towns not ordinarily considered tourist destinations became the epicenters of eclipse-viewing.

The next total solar eclipse visible on American soil will occur on April 8, 2024, per greatamericaneclipse.com. The path of totality will stretch from Mexico through central Texas, Arkansas, Ohio, Indiana, New York, and Montreal, Canada.

After 2024, North America will not see another total eclipse until 2045. So, get your gear and make your travel arrangements.

And tell your boss you’re taking a long lunch on April 8, 2024.

Featured image via Twitter/V3ctor

 

Google is helping online news companies get money out of readers

Google is developing tools to help online news companies get people to give them money, as the Verge reports. It remains unclear how much of that money Google intends to keep for itself.

The plan is to make it harder for people who can pay to read without paying. The changes should come in September.

Arguably, companies like Google and Facebook are themselves responsible for robbing online news organizations of digital advertising dollars in the first place by chewing up 60 percent the market. That’s part of why news organizations need subscriber money so badly.

Since the internet virtually wiped out physical news subscriptions, news companies have had to hustle to find new sources of money while retaining their journalistic credibility. Many reputable news sites have put up pay walls, including the New York Times, the Wall Street Journal and the Financial Times. While non-subscribers are allowed to view a limited number of articles on these sites, only paying subscribers have full access to all articles.

Google’s plan includes allowing non-subscribing readers to access full articles if they arrive at the site via Google search. The plan also includes other strategies designed to bolster subscriber numbers. Overall, the effort is intended to make it easier and faster for readers to subscribe, partly by better targeting readers using Google’s tremendous stores of data.

As Bloomberg reported, the New York Times and the Financial Times are among the news organizations working with Google.

In February, the Wall Street Journal struck back at Google’s search results policies which it claimed “discriminated” against paid news organizations. Google’s policy is not to list search results which are hidden behind a paywall.

Featured Image via Pixabay

Your new favorite beauty store: how Ulta beat Sephora

In 2013, beauty store chain Ulta welcomed a new CEO in Mary Dillon and ever since its star has been on the rise, Digiday notes.

It wasn’t long ago that Ulta was considered something along the lines of an expanded drugstore beauty aisle, while Sephora was considered to be the market leader in beauty. French giant Sephora has long held the preeminent position among beauty retail chains thanks to its wide roster of prestige beauty brands.

But Ulta evolved its own market strategy which allowed it to overtake Sephora in the beauty market in 2015, as reported by Bloomberg. So what’s Ulta’s strategy?

The popular beauty store stocks a mixture of less-expensive drugstore beauty brands and more-expensive prestige beauty brands. They offer products you could find at your local Walgreens as well as lines carried at Sephora and upscale department stores.

Urban Decay can be found gracing the beauty store’s shelves, and it recently made a deal to start working with MAC Cosmetics. Ulta has thus turned itself into a one-stop-shop for high-low beauty mavens. As its slogan runs: “All things beauty. All in one place.”

Additionally, Ulta developed an app to interface with guests. The app features makeup tutorial videos, and allows guests to try on makeup with its service “GlamLab.” It also allows guests to book in-store services for hair, brows, and skin. As of today, Sephora’s app has 535 ratings on the App Store, while Ulta’s app has 38,794.

Ulta also rejuvenated its previously-stale loyalty program. It made the program easier for guests to understand in order to cultivate long-term customers and repeated transactions. Last week at Boston’s eTail East conference, Ulta’s senior director of loyalty marketing Linh Peters stressed the importance of simplicity and ease of use in loyalty programs. That’s why, Peters claimed, 90 percent of Ulta’s business comes from loyalty program members.

Let’s look at how Sephora’s and Ulta’s respective loyalty programs differ.

In Sephora’s loyalty program, called Beauty Insiders, guests accrue points for every dollar spent. They can then trade those points and choose from a limited selection of mini beauty products, deluxe samples and in-store services.

Ulta’s loyalty program dispenses with the prizes and instead offers simple store credit, which means real savings for the customer. This way, guests can buy luxury brands cheaper than at Sephora, which rarely offers material discounts. Ulta also has a marketing team that works to offer targeted promotions to guests based on past shopping behavior.

Ulta has taken advantage of its boom in business to expand its store locations in flourishing strip malls, even as actual malls struggle.

Featured Image via Wikimedia Commons/Michael Rivera

Prisma’s artificially-intelligent machine vision tech is on the market

The company behind the photo filter app Prisma is shifting its focus away from the app and towards selling its technology to other companies, as reported by the Verge. You know, that app that can trick you into thinking bad phone photos are paintings?

You know, that app that can trick you into thinking bad phone photos are paintings? That’s Prisma.

It turns out the AI machine vision tech behind those cute painter filters is actually pretty versatile. That’s why Prisma Labs is trying to sell it to other companies for a number of diverse applications. They’re moving beyond simply courting smartphone app users.

Prisma calls itself a “mobile technology company specializing in deep learning related products,” and it claims to have “the fastest AI-powered on-device image processing with great quality.” The app boasts between five and 10 million active users.

Computer vision technology can be used for many applications. Obviously, there is quite a market for photo filter services, but that market is largely eaten up by giant social media companies such as Facebook and Snapchat. Prisma specializes in offering such abilities locally on-device. That means that mobile users chew up less data and battery life than they would by using web-based services.

Other applications of machine vision include such technologies as object detection, scene recognition, and facial landmark mapping, which can be used to beautify or alter faces in photos. In image processing, the technology can also be used to divorce objects in the foreground from the background.

The new service Prisma Platform offers software engineers the ability to apply Prisma’s deep learning technology within their programs with the addition of only a few lines of code.

As Prisma’s cofounder and CEO told the Verge:  “Even Google is buying companies for computer vision. We can help companies put machine vision in their app because we understand how to implement the technology.”

Featured image via Flickr/Gary Ullah.

Changes are coming to Google’s search results page

As reported by TechCrunch, changes are coming to Google’s mobile search.

Now: video previews

Now, whenever your Google search query returns video results, Google will automatically play a six-second video clip on the results page to give you an idea of its contents.

Don’t worry: the preview will be silent. Your search results will not be broadcasted to the world.

The video previews will not simply be the first six seconds of every video since the first six seconds of any video aren’t necessarily the most accurate reflection of the contents of the full video. That’s why Google has devised a program which can sift through the whole video and select a sex-second clip which, hopefully, gives you a better idea of what you’re about to watch. For each video, the same six-second clip will load for every user.

Google’s servers individually set the previews for each video, so not all videos will have previews yet. But the majority of videos people are likely to search will already have video previews ready. It may take a bit of time for newly-added videos to have previews available to load.

The new feature will work with most major video servers, including Google’s own YouTube.

Google hopes this new feature will give users an idea of what a video has in it, without any need to scrub through the video manually. It will also help users filter out videos that only ever show a single frozen image.

Currently, the preview feature is only available for mobile users via the Chrome and Google apps.

Upcoming: Google’s data-friendly search app

Video previews are not the only change Google has brewing for its search page. Google has been testing a data-friendly version of its search app, as Android Police reports.

The advantages of the new app are pretty straightforward: low data usage, high offline capabilities, and workability with slow connections. It won’t include as much pre-loaded data. It won’t include all the bells and whistles of the full Google search app, but it should work well for users who only need or can support the basic functions.

The app has also been designed to be simple and easily accessible.

The app is not yet available to the U.S. — a pilot version called “Search Lite” is currently being tested in Indonesia.