This week’s news includes; Uber wins high court license case, M&S acquires 50% stake in Ocado, ITV and BBC to launch Britbox, Tesla to shift to online sales only
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. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- All About Law What role does the law play in the future of energy?
- Legal Cheek Robots are not coming to take our jobs — but they are changing the way we do them.
- The Independent How is UK unemployment so low despite Brexit turmoil?
1. UBER HIGH COURT CASE
The High Court issued a lifeline for Uber after rejecting black cab drivers attempt to revoke Uber’s operating license in London. Uber was granted a 15 month license last June after its license was initially revoked for serious failures in passenger safety. There were instances where Uber failed to report criminal allegations to the police on numerous occasions. The granted license was contingent upon improvements in safety standards.
This comes as small win in a sea of losses as Uber gears up for its IPO. Uber posted losses of $1.8 billion in 2018. Last year it lost a workers rights case, meaning riders could not be classified as self-employed and would be workers. This means riders would be entitled to basic employment rights. This ruling could disrupt Ubers model although Uber is still permitted to appeal this case to the Supreme Court.
2. M&S AND OCADO
Marks and Spencer has acquired a 50% in Ocado for £750 million, allowing it to offer a home delivery service for the first time. The new service will be called Ocado.com and will provide M&S grocery products as well as Ocado branded products. Ocado Solutions will become a separate entity, not under the control of M&S and will provide warehouse technology and supplies services. Ocado’s delivery division is currently tied to Waitrose so its deal with M&S will begin in September 2020 once the Waitrose contract lapses. Waitrose will then provide its own delivery service.
It is hoped that Ocado can turn around M&S’s fortunes. M&S has been struggling and has earmarked numerous stores for closure. One key issue which has been attributed to the decline is M&S’s lack of an online delivery service. Shoppers at M&S only spend an average of £13 per shop, dwarfed by Ocado’s average shoppers’ spend of £100. The CEO hopes that over 30% of M&S business will be online. Despite this, the Ocado deal did not go down with investors, are M&S shares fell 10% in response to the news.
3. AT&T TIME WARNER MERGER
A US federal appeals judge has upheld the decision that the $85 billion merger between AT&T and Time Warner was legal and required no further conditions. There were serious competition concerns surrounding the merger due to the sheer scale. AT&T is a content distributor owning brands such as DirecTV. Time Warner owned HBO, Warner Bros Animation, CNN, and Cartoon Network, all of which have come under AT&T’s control following the merger. Critics expressed concerns that AT&T could overcharge its competitors in the distribution for Time Warner content. The deal was
See the full ruling here.
4. BRITBOX
ITV and BBC have revealed plans to launch a streaming service, Britbox, by the end of the year. The service will offer British boxsets and will purchase rights to other British television shows. Traditional TV broadcasters have been unable to keep up with rapidly growing streaming sites like Netflix and Amazon Prime. Netflix has hit new heights, with over 148 million subscribers and accounts for over 10% of all US TV viewing. ITV has suffered from falling advertising revenues as competition for viewers heats up.
ITV has however, been doing well over the past year. The broadcaster posted better viewing figures, up 3%, boosted by increased daytime viewing figures. ITV’s Love Island was the most popular show across all digital channels racking
5. TESLA
Tesla has announced that it will slash the price of its landmark Model 3 car but at the costs of jobs. Model 3 will now be retailed at $35,000 as promised. Until now the car has cost up to $50,000 but with over 500,000 pre-orders in 2016, this didn’t stop the Model 3 instantly becoming the most popular electric vehicle ever. This model marks Tesla’s move into mass markets. In order to achieve this however, Tesla is switching to an online-only sales model and is shutting down some showrooms. There are no details on how many stores or jobs will be cut but Tesla aims to make 5% of costs in savings. The cuts come as Tesla’s competitors are hot on their tails. Tesla had the first mover advantage in the electric car market but traditional manufacturers have all unveiled grand plans for hybrid and electric vehicles. Whether Tesla can dominate the mass market remains to be seen.
For more on Tesla and the Model 3, check out our company watch page.
6. UK-CHINA CAR EXPORTS
UK exports to China have slumped 72%, according to the Society of Motor Manufacturers and Traders (SMMT). Total car exports fell 21% to 93,781. In addition, fewer cars were produced in the UK as numbers fell to 120,649. Even UK sales to the EU fell by 20%. China makes up 7.5% of UK car exports but declining Chinese sales have had a significant impact on companies’ books. This follows a 7% fall in new car sales, the largest annual drop since 2008.
Sky News looks closer at the figures
7. KPMG FINED
KPMG has been fined £4 million over its audit of Co-op Bank by the Financial Reporting Council. The fine relates to its 2009 audit of the bank and brings an end to a five-year probe.
The big four accountancy firms have been getting slammed for poor practices. KPMG alone received fines for its subpar audits of Ted Baker and Quindell. The Competition and Markets Authority has proposed a system of joint audits on large listed companies, but this has received strong criticism.
The big four have already attempted to alleviate concerns by discontinuing the provision of consultancy services to FTSE 350 audit clients.
8. JLR UK INVESTMENT
JLR is preparing for significant investment in UK manufacturing, according to the BBC. This contrasts the bleak outlook across the auto industry, where numerous job cuts and factory closures have been announced. JLR had announced 4500 job cuts earlier this year. This is due to rapidly declining diesel car sales and revenue from China. JLR has been particularly affected by the decline in diesel sales as 90% of JLR’s fleet are diesel vehicles. Even
9. AMAZON UK APPRENTICESHIPS
Amazon has announced that it will create 1,000 UK apprentices by 2021. There will be nine apprenticeship programmes in fields such as engineering, robotics human resources and IT. The roles will be spread across the country. Apprentices will be paid up to £30,000 per year but a minimum of £9.50 per hour. In addition, 90 apprentices will go on to fill post/graduate positions. Amazon has gone on a UK hiring spree. It
10. FEDEX DELIVERY BOT
Fedex has revealed plans to launch an autonomous delivery robot. The robot will trial in cities across the US starting in July. The electric robot can climb steps, manage unpaved ground and curbs. It is hoped that this would transform the deliveries of goods. Numerous service providers are exploring autonomous vehicles to bring deliveries into a new era. Security will undoubtedly be a huge concern but there is no doubt that the industry will find solutions. Amazon, Google have already began testing delivery drones.
See Fedex’s promotional video below;
