The pandemic was a difficult time getting people from point A to point B.
For months, government rules and fears of catching Covid-19 meant everyone stayed seated. Eventually, however, there are signs of change – and Uber is excited.
“Uber has already started shooting at all cylinders,” CEO Dara Khosrowshahi told analysts after the company reported earnings on Wednesday.
What Happens: As the economic recovery accelerated in key markets like the US, the startup posted a net loss of $ 108 million in the first three months of the year. This is a dramatic improvement over the loss of $ 968 million in the last three months of 2020.
The company’s core business is still weak. The gross bookings for trips decreased by 38% compared to the previous year. However, the strong growth in grocery delivery, with bookings up 166% year over year, is helping Uber weather the storm.
However, even if customers return to the app, there is significant uncertainty about Uber’s relationship with its drivers.
Look here: Driver supply has been a problem lately as the company tries to convince people it is safe to promote drivers again. Khosrowshahi said the company is offering incentives to get old drivers back on the road and find new recruits.
“There is a greater reluctance for some drivers to come on board to drive other people as opposed to again. [driving] Eat, ”said Khosrowshahi.
The longer term problem is how Uber compensates its workers.
Earlier this year, the UK Supreme Court confirmed a decision that Uber drivers in the country should be classified as employees rather than independent contractors. This means that they are entitled to a minimum wage, vacation time and a pension.
Uber said Wednesday that it would need to allocate $ 600 million to address these changes.
It’s not the only place the tide could turn on Uber on employment issues. Tony West, chief legal officer, admitted that the company is actively engaging with officials across Europe on such matters. He said this was “really on the front lines”.
But the approach of the Biden administration is also increasingly being scrutinized. On Wednesday, the U.S. Department of Labor said it was withdrawing a Trump-era rule that would have made it easier for companies to classify gig economy workers as independent contractors.
“Legitimate entrepreneurs play an important role in our economy, but too often workers lose vital wages and related safeguards when employers misclassify them as independent contractors,” Labor Secretary Marty Walsh said in a statement.
Investor Acknowledgment: West said the current administration did not have a unified view of what “creates room for meaningful dialogue”. But investors may not be as confident. In premarket trading, stocks fell 4%.
GameStop and Archegos drama could trigger new SEC rules
A tumultuous start to 2021 has caught the attention of Wall Street’s top regulator as it ponders new rules following the GameStop trading frenzy and the collapse of the Archegos hedge fund earlier this year.
That’s according to Gary Gensler, chairman of the Securities and Exchange Commission. Gensler will testify to the House Financial Services Committee on Thursday.
His prepared observations indicate a wide range of concerns about the functioning of markets and investor behavior, as well as a belief that stricter supervision may be needed. The SEC expects to release an employee report this summer evaluating recent market events.
In the meantime, here is a selection of what Gensler thinks:
- On playful trading apps: “If we watch a movie that a streaming app recommends and that we don’t like, we may lose a few hours of our evening. If a fitness app encourages us to exercise, that’s probably a good thing. However, following the wrong prompt in a trading app could have a significant impact on a saver’s financial condition. “
- How Robinhood Makes Money: “Higher trading volumes generate more payments for the order flow. This raises a number of questions: Do broker-dealers have inherent conflicts of interest? … Are broker-dealers encouraged to encourage customers to trade more often than is in the best interests of those customers? “
- On social media: “I’m not worried about regular investors exercising their freedom of speech online. I’m more concerned about bad actors who may be using influential platforms. “
- By and large, “Whenever major market events happen, it is a good idea to consider the risks they could pose to the entire financial system, even if the system holds up.”
Why Melinda Gates just got shares in a Canadian railroad
With Melinda and Bill Gates’ divorce, the division of their vast wealth is unlikely to result in fireworks and anger. That’s because the couple has a separation agreement, reports my CNN business colleague Jeanne Sahadi.
In Washington state, where Melinda Gates filed for divorce this week, a separation treaty promotes “amicable dispute settlement” and is binding unless the court determines for some reason that it was executed unfairly to a party .
Such an arrangement is typical of divorces of very wealthy couples, where the division of assets can be complex.
“There is 100% reason to believe the divorce will be amicable,” said prominent divorce attorney William Breslow.
See here: Just this week, Bill Gates transferred shares in AutoNation and Canadian National Railway worth around $ 2 billion to his wife, according to the SEC from his company Cascade Investments.
The Wall Street Journal also reports Melinda Gates now has a 4.9% stake in a Coca-Cola bottler worth around US $ 121 million and US $ 386 million in the Mexican broadcaster Televisa.
ArcelorMittal, Edgewell Personal Care, Kellogg, Moderna, Papa Johns, Plug Power, SeaWorld Entertainment, Tapestry and Wayfair will report on the results before US markets open. Beyond Meat, Datadog, Expedia Group, GoPro, Groupon, Live Nation, Monster Beverage, Peloton and Square will follow upon graduation.
- The Bank of England announces its latest policy decision.
- Initial U.S. jobless claims for the final week after 8:30 p.m. ET.
- SEC chairman Gary Gensler testifies before the House Financial Services Committee at noon ET.
Coming tomorrow: April’s US jobs report is a crucial test of the country’s economic recovery.