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For Uber, NY regulators hit a nerve

The Market Intelligence Platform


For Uber, NY regulators hit a nerve

In his two years as Uber Technologies Inc. CEO, Dara Khosrowshahi has proven himself adept at avoiding controversy, talking without generating headlines and generally presenting a kinder, friendly image of Uber to the world. This was especially useful last week on a call with analysts as he enthused about the ride-hailing company’s bright prospects shortly after it reported a second-quarter loss greater than the annual GDP of many island nations.

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Source: Associated Press

Khosrowshahi has particularly stressed Uber's willingness to cooperate with local regulators and typically adopts a conciliatory tone when discussing the subject. So it was interesting to note the one subject that provoked an unusually forthright reaction from the CEO: Uber's challenges in New York.

Uber has not accepted new driver sign ups in New York City since April 1 due, it says, to the Taxi and Limousine Commission's recent legislative changes that included establishing a minimum wage for ride-hailing drivers and putting a freeze on new ride-hailing vehicle licenses. The movement has been championed by Mayor Bill de Blasio, who tweeted Aug. 7 that ride-sharing companies' "days of exploiting hard working New Yorkers are OVER." The freeze on licenses was extended for a further year last week — the day before Uber's earnings release.

"I think that a lot of the changes that are, have been introduced or potentially introduced in New York City, we just don't agree with," Khosrowshahi said on the Aug. 8 earnings call. "The city's essentially introducing another medallion system. And if you've read any of the articles in The New York Times, that system is ripe for abuse by people in power. And it's happened in the past, and the city could be setting itself up again. Anyone … who tells you that the changes in New York City are good is full of malarkey."

Uber has faced regulatory challenges in plenty of cities and is the subject of a blanket ban in many, but New York seems to have struck a particular nerve, suggesting the extension of the license freeze may have heightened concerns that others will follow its lead. Khosrowshahi maintains that Uber's business in the five boroughs is "pretty healthy, and it continues to grow," but he will surely be hoping that in this instance, there really is no place like New York.

Chart of the week: Average house prices near Amazon's HQ2 in Arlington, Va.

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Automotive

Trump administration advances proposed auto standards freeze

The Trump administration is proceeding with a proposal to weaken Obama-era national vehicle standards in spite of a recent deal between California and four major automakers in which the companies will comply with the state's own tougher rules.

Lyft CFO: Price adjustments on rides should boost Q3, Q4 revenue

The executive said the adjustments were made at the end of June.

Uber expects adjusted EBITDA loss of up to $3.2B in 2019, CFO says

However, net revenue growth rates are expected to improve in the second half of the year.

Retail

Amazon could face logistical obstacles as it rolls out 1-day delivery

The e-commerce giant relies on a network of third-party carriers to deliver more than 10 million goods within a one-day window.

UK retail turmoil poses mounting challenge to landlords Hammerson, Intu

First-half earnings for the U.K.'s two largest listed retail landlords suggested more pain to come, with the future of both looking increasingly uncertain.

List prices for homes near Amazon's HQ2 site in Arlington, Va., double

The median list price of a single-family home in the 22202 ZIP code was $1.6 million as of June, up from $780,000 in November 2018, according to data from Bright MLS, the Washington, D.C., region's multiple list service.

Consumer discretionary sector lags behind S&P 500 in July

The S&P 500 Consumer Discretionary index recorded a total return of 1% in July, versus the 1.4% gain of the overall S&P 500 index.

Food, Beverage & Tobacco

Kraft Heinz withdraws fiscal FY'19 EBITDA guidance; shares tank to fresh lows

Executives declined to provide new 2019 guidance, citing CEO Miguel Patricio's focus on submitting a new strategy to the food company's board of directors by the end of the year.

Hershey outpaces S&P 500 Consumer Staples peers in July on strong Q2

A total of 20 out of the 33 constituents of the S&P Consumer Staples Index recorded positive returns in July, with Hershey emerging as the only stock to record a double-digit growth.

Execs: Sales of new Monster energy drink fell short of post-launch expectations

Monster is also comfortable with the new drink's performance to date, executives said Aug. 7.

CEO: New tariffs could brew extra cost for Keurig Dr Pepper

Executives predict a hit of up to $15 million on coffee brewing systems should new tariffs on $300 billion in imports from China take effect.

Blue Apron to end Jet.com partnership

The meal-kit company also posted a narrower-than-expected loss per share for its second quarter Aug. 6.

Tyson in contact with Chinese pork buyers in wake of swine fever, CEO says

The meat processor expects global shipments of meat to China to increase by the end of the 2019 calendar year.