This weeks news includes; Google sues Uber, Verizon cut Yahoo acquisition price, Burger King owner to acquire Popeyes, Ford to continue with Mexican plant despite Trump.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.
Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- The Guardian looks whether consumers can keep shoring up the UK economy?
- City A.M explores how Blockchain technology will change the financial services industry.
- Sky News looks at whether finger print payment could kill off the use of cards.
- The Guardian claims that windfarms aren’t the real reason energy bills are rising. It is the free market to blame.
1. ALPHABET SUES UBER OVER SELF DRIVING TECHNOLOGY THEFT
The race to bring self-driving cars to the road got uglier this week as the self-driving car company owned by Google parent Alphabet accused Uber of using stolen technology to speed up its autonomous car development. Waymo filed a lawsuit against Uber on Thursday accusing the ride-hailing company of stealing its trade secrets.
“Competition in the self-driving space is a good thing; it pushes everyone to develop better, safer and more affordable technology. But we believe that competition should be fueled by innovation in the labs and on the roads, not through unlawful actions,” the Waymo team said in a Medium post announcing the suit, which names both Uber and Otto, a start-up owned by the ride-hailing company, as defendants.
The lawsuit argues that former Waymo manager Anthony Levandowski took information when he left the company to co-found a venture that became Otto.
It alleges Mr Levandowski downloaded more than 14,000 highly confidential design files including some relating to what they call a LiDAR system of radar-like technology that allows self-driving cars to map the environment around them – thereby allowing Uber and Otto to fast-track its self-driving technology.
Uber said it took the allegations seriously and would review the matter carefully. The lawsuit puts both companies in an awkward position as Google Ventures, another Alphabet subsidiary, is also an Uber investor. (The Independent)
2. VERIZON CUT YAHOO PURCHASE BY $350m
In January, a month after Yahoo Inc. disclosed a second massive data breach, Verizon Communications Inc.’s top executives huddled at the company’s headquarters and weighed their options.
They could walk away from their $4.83 billion deal to buy Yahoo’s internet business; wait to learn more about the damage to Yahoo’s brand; or plunge ahead with the purchase and their plans to build a digital media business.
Verizon Chief Executive Lowell McAdam wanted to proceed and took the lead in the negotiations that ended with a new deal announced Tuesday: Verizon would pay $350 million less than it first offered, and the two companies would still split any future costs from the data breaches.
Mr. McAdam was worried that delaying or calling off the deal would put on ice Verizon’s ambitious plans to take on Facebook Inc. and Alphabet Inc.’s Google in digital advertising.
Verizon plans to fold Yahoo’s digital advertising technology and portfolio of websites like Yahoo News, Sports and Finance into AOL, which Verizon acquired in 2015. Verizon plans to keep the Yahoo brand.
But the company has a long way to go to become a force in digital advertising. In 2016, Yahoo and AOL combined controlled about 2% of global digital advertising revenue, compared with Google’s 32% and Facebook’s 13%, according to eMarketer. (Wall Street Journal)
3. BANKING RESULTS
RBS
Royal Bank of Scotland has reported a £7bn annual loss as past problems continue to dog its performance. The deficit is more than treble 2015’s loss of £2bn. It is the ninth year in a row RBS has failed to make a profit.
The loss came as the bank set aside more money to deal with legal action in the US and its abandoned attempt to spin off its Williams & Glyn business. RBS plans to cut costs by £2bn over the next four years, which will mean job cuts and further branch closures. (BBC News)
Lloyds
Lloyds Banking Group has reported its highest annual profit in a decade, helped by a reduction in payment protection insurance (PPI) provisions. Pre-tax profits increased by 158% to £4.24bn, a level last seen in 2006 before the financial crisis. Provisions for PPI declined from £4bn to £1bn, bringing the total to £17bn.
The UK government’s stake in Lloyds has now fallen below 5% and it has said it wants to return the bank to full private ownership this year. The government spent £20.3bn to acquire a 43% stake in Lloyds at the height of the financial crisis. It has returned more than £18.5bn to the taxpayer since 2009. (BBC News)
HSBC
Shares in HSBC have fallen after the bank reported a steeper-than-expected fall in annual profits. It reported a $7.1bn (£5.7bn) pre-tax profit for 2016, down 62% on the $18.9bn reported a year earlier. HSBC attributed the fall to a string of one-off charges, including the sale of its operations in Brazil.
HSBC said its performance had been “broadly satisfactory” given “volatile financial conditions” but warned a rise in global protectionism was a concern. The bank also announced a smaller-than-expected share buyback. That also helped undermine shares, which were down by more than 6% in London. (BBC News)
4. GIG ECONOMY BOSSES DEFEND BUSINESS MODEL
Bosses from Uber and Deliveroo have told MPs they would have to reduce flexibility and offer less work if they were forced to offer greater employment benefits. The Work and Pensions Committee is examining the welfare system’s capacity to support self-employed workers in this sector.
Committee chair Frank Field said it was one-sided flexibility. Some five million people work in the so-called “gig” economy. They are mostly employed in sectors such as food delivery or taxi driving.
The UK and Ireland managing director of online delivery food service Deliveroo, Dan Warne, said flexibility was extremely important to its riders because 85% of them used it as a supplementary income stream, working on average 15 hours a week. He said its business model also allowed people to work for competitors and no-one was penalised if they did not turn up for work.
“We cannot offer that amount of flexibility to those riders if we’re forced to pay a given wage and a given hour to every single rider,” Mr Warne added.
The company has also confirmed that it is dropping a controversial clause in its contracts that prevents couriers taking the company to an employment tribunal, contesting their self-employed status. All the companies insisted they were paying the National Minimum Wage. (BBC News)
To find out more about the pros and cons of the gig economy have at look at our commercial awareness insight article – The Gig Economy: Is it Good for Society
5. EXPEDIA AND AMAZON COMMIT TO UK INVESTMENT
As politicians and businesses wrestle with potential changes to U.K. border controls, one of the world’s largest online travel booking companies has decided to add hundreds of new staff in London, and it’s not alone in looking to expand.
Expedia Inc. will expand its U.K. office by 138,000 square feet, or to roughly twice the size of its existing space, and has signed a new lease that runs until 2030, according to a company statement. The company currently has about 1,400 staff at its London hub.
Amazon.com Inc. is also hiring for its U.K.-based voice-recognition technology, cloud computing centers and Prime Air division, it said in a statement.
The moves come as the U.K technology industry frets about the fallout from the nation’s decision to leave the European Union by 2019, even as global tech companies continue to consider London the region’s major hub.
A poll of 940 startup executives in the U.K. and other countries by the London unit of Silicon Valley Bank, a Santa Clara, California-based investment bank, found that following Brexit, one in 10 are considering moving their headquarters across the English Channel.
Some companies have brushed aside domestic U.K. concerns, though. Large U.S. tech firms including Snap Inc., Facebook Inc. and Google all have announced plans to expand in London in recent months, and the $100 billion technology fund of SoftBank Group Corp. has chosen the U.K. capital as its headquarters.
Expedia also bases its “usability lab” in London. In the lab, the travel company tests innovations that measure tiny muscle movements in attempts to improve its booking process. The company’s expansion “offers further proof that London remains open for business, talent and investment,” said Mayor Sadiq Khan.
Amazon, meanwhile, made its first drone delivery to a customer in December, dropping off one of its Fire TV streaming devices and a bag of popcorn to a house in the English countryside, 13 minutes after receiving an online order. Amazon is conducting the drone testing in the U.K. because regulations in the U.S. are too strict. Doug Gurr, the head of Amazon’s U.K. operations, says the company is “hiring for all types of roles,” from flight-test engineers and software engineers to corporate managers in its development centers and head office. (Bloomberg)
6. BURGER KING OWNER TO ACQUIRE POPEYES FOR $1.8 BILLION
Burger King owner Restaurant Brands is to expand its fast food empire by buying chicken chain Popeyes Louisiana Kitchen for $1.8bn (£1.45bn) in cash. Popeyes, whose fans include pop singer Beyonce, began 45 years ago as a Southern-fried “Chicken on the Run” restaurant in a New Orleans suburb. The chain now has more that 2,600 outlets, mainly in the US.
Restaurant Brands, which includes the Tim Hortons chain, has more than 20,000 outlets in more than 100 countries. The $1.8bn deal will see Popeyes shareholders get $79 for each share they hold. Media speculation about the sale began on 10 February, Restaurant Brands said in a statement.
Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons for $11bn. The fast food giant said it would pay for the Popeyes deal with “cash in hand” and financing from JP Morgan and Wells Fargo. (BBC News)
7. EE BALLOONS AND DRONES TO HELP FIX MOBILE BLACKSPOTS
A fleet of blimps is bringing mobile phone and wireless broadband coverage to rural communities in the UK. Mobile network operator EE says the fleet will enable remote communities to maintain voice and data services when coverage is lost due to natural disasters such as flooding. EE expects to launch its first “helikite” – a mobile broadcast site tethered to helium balloons – later this year. EE is also preparing to deliver coverage via drones, although that project is not ready to launch.
The balloons will allow a mobile signal to be beamed into the area below, allowing communities to make calls and access the internet when the traditional mobile phone mast system goes down or needs more capacity.
Marc Allera, the chief executive of EE, said that the balloons – and ultimately the drones – could also be used to boost coverage at major events and venues such as Glastonbury or Wembley Stadium, where mobile phone users often struggle to connect to networks.
However, the company added that airspace regulations could hamper wider use at football matches and music festivals. The company said the helikite balloons are best suited for ensuring coverage in the case of natural disasters and events, because they can stay airborne for up to a month and have a signal radius of up to 5km.
The balloons are more weather-resistant than the drones, although the company said lightning strikes posed a risk. Because they are motor-powered the drones can only stay airborne for a few hours at a time, and only have a signal range of up to 2km, making them best suited for shorter usage such as search and rescue operations. (The Guardian)
8. FORD CONTINUES WITH MEXICO MOVE DESPITE TRUMP PRESSURE
Ford Mexico CEO Gabriel Lopez said at a company event in Mexico City Thursday that it’s going ahead with plans to expand two of its plants — an engine plant in Chihuahua and a transmission plant in Irapuato.
These plans aren’t new — they were first announced in 2015. But they may seem at odds with all the recent buzz about U.S. automakers bringing jobs back to the U.S., particularly Ford, amid pressure from Trump.
Ford got a lot of attention last month when it dropped its plans to build a $1.6 billion assembly plant in San Luis Potosi, Mexico. But the small car production originally planned for the discontinued San Luis Potosi plant is shifting to an existing Ford Mexican assembly plant, not returning to the U.S.
Ford never claimed to be bringing work back, but onlookers could be forgiven for getting confused. On that same day, Ford announced plans for a $700 million investment and 700 new jobs to build electric and self-driving cars at a Michigan plant.
Fields said the investment was a “vote of confidence” in the incoming Trump administration. But that production was never supposed to go to Mexico.
Trump, who frequently criticized Ford and its Mexican plants during the campaign, has had plenty of praise for Ford since his election, choosing to portray it as bringing work back from Mexico in response to Trump’s election.
The two expanded Mexican plants are still on track to open later this year, said Ford spokesperson Kelli Felker. Ford is spending $2.5 billion on constructions, and will hire 3,800 workers once the plants are fully up and running. (CNN)
9. 5G COMING TO CENTRAL LONDON
5G networks will be trialled in central London later this year with telecoms infrastructure firm Arqiva teaming up with boffins at Samsung to develop the new technology. Britain is in the process of dragging itself into the 21st century by developing the country’s fixed line superfast fibre access.
But fixed access 5G points to be tested by Samsung and Arqiva could be a viable alternative, bypassing the need to dig up roads and lay down extra cable.
Instead of plugging into a phone line or fibre connection, 5G access units pick up 5G coverage and distribute a wireless network across a given area, replicating the function of a standard fixed line wireless router.
This gives 5G considerable advantages over comparable fibre-to-the-home deployments in terms of service rollout times and the costs to both the service provider and the subscriber. Last week, O2 chief executive Mark Evans told City A.M. 5G mobile networks in the UK can be delivered more quickly than fibre broadband and provide a boost of billions of pounds to Britain’s economy.
The news comes as BT announced its own tie-up with King’s College, London to develop 5G technology. BT is best known for its fixed line capabilities, despite owning mobile firm EE. And the FTSE 100 firm has partnered with the university to test the technology, which is currently slated for a 2020 UK launch. (City A.M)
10. JOHN LEWIS JOB CUTS
John Lewis plans to cut nearly 400 jobs in its home fittings services and restaurants amid a shift to online shopping.
The changes will affect administration staff in its carpet, curtain and blinds fittings service. No jobs will be cut among the estimators and fitters. However, administration roles will move from stores to a centre in Didsbury, Manchester, which will also serve online customers. Catering staff in its in-store restaurants will also be affected.
John Lewis already uses outside suppliers in a third of its restaurants and plans to adopt a uniform menu in all, meaning chefs will no longer be required. John Lewis said about 773 staff could be affected by redundancy but would be able to apply for 386 new posts. At the end of the process about 387 roles will go. The changes will affect 32 of its 48 stores. (BBC News)
