Re/code.net: Why Uber has to be first to market with self-driving cars

Why Uber has to be first to market with self-driving cars

That’s true, especially if the company wants to IPO in the next two years.

The race to get the first network of self-driving cars on the road is off to a lukewarm start.

Uber recently launched a limited test of its self-driving cars in Pittsburgh, as part of a partnership with Volvo. Singapore-based self-driving startup nuTonomy launched its own limited pilot a few days before that and struck a partnership with the Southeast Asian ride-hail company Grab.

It’s all exciting — how can robot cars at your beck and call not be? — but it doesn’t yet mean much.

The true test of the viability of the self-driving technology will come down to which company will launch a fully operational network of self-driving cars and when.

While it would be advantageous for any of the companies attempting to develop a shared network of self-driving cars to be first or near first to market, it’s a near necessity for Uber.

Valued at a lofty $70 billion, Uber has a lot more at stake than its competitors. As Uber CEO Travis Kalanick said in an interview with Bloomberg developing self-driving cars are “basically existential for us.”

That’s because the second another ride-hail company or automaker launches its own network of self-driving cars, the marketshare Uber has poured time and money into dominating is at risk.

Without that marketshare, Uber may not be able to provide the returns on investments the company’s portfolio of backers expected. And without those returns and that scale, it’s unlikely Uber can uphold its valuation.

The key to operating a ride-hail service efficiently is having enough drivers to meet rider demand. If a competitor — let’s use Lyft in this example — rolls out 100 self-driving cars in a city, a decent portion of the marketshare Uber spent countless time and money attempting to capture is now up for grabs.

A self-driving car could easily perform 100 rides a day or around four rides an hour while Uber drivers typically perform somewhere between one and two rides an hour depending on the city and can only drive up to 12 hours a day. At most, Uber drivers would typically be doing 24 rides a day.

That means 100 Uber drivers would only perform at most 2,400 rides a day compared with a self-driving network that could turn 10,000 rides a day. That’s without accounting for the fact that Uber can’t tell its drivers how long they have to drive. In fact, Uber takes pride in how flexible driving is. As of 2015, 52 percent of Uber drivers were part-timers, according to a study the company commissioned.

With Uber’s valuation, holding on to that marketshare is crucial to its survival. Especially since, in pursuing its ambitious goals, Uber has lost $1.2 billion in just the first half of 2016, according to reports.

Re/Code.net : Police can’t read your iMessages, but here’s what they can see

Police can’t read your iMessages, but here’s what they can see
Apple can tell them who you’ve tried to ping.

While Apple has made a big deal over the past few years about how little customer data it stores on its servers, that doesn’t mean the iPhone maker doesn’t have any information that police agencies can get their hands on.
As noted by The Intercept, one thing Apple knows is which phone numbers a person is at least considering sending a message to. That’s because as soon as an iPhone owner types in a phone number, Apple’s servers are pinged to determine whether the number represents another iOS device.
If so, Apple will send any messages using its own service (they appear in a blue bubble). If not, Apple will send any messages as a standard text message (displayed in green).
That Apple’s servers would be pinged with every number a person is messaging should not come as a surprise. After all, how else would the iPhone know how to send the message?

More of a revelation was the fact that Apple stores the information for 30 days. Choosing how to send messages is tricky and has caused Apple problems in the past, especially when a user switches from iPhone to Android.
About three and a half years ago, Apple engineers started storing a cache of which numbers customers were trying to message in order to help identify bugs and address customer complaints, according to a source familiar with the company’s efforts.
So what does all this mean? Apple still has far less information about its messages than a cellular provider has on its customers’ standard text messages. Carriers would likely be able to determine not only exactly what message was sent and when, but also where the customer was when they sent it.

Apple, for its part, doesn’t appear to even know if a message was sent to a particular number or details on any follow-up conversations — only that at one point a number was typed into an iOS device.
The iPhone maker has always said that it will share data it has access to with law enforcement agencies upon a lawful request, such as a warrant or other court order.
However, since Apple has crowed about how little data it stores on its customers, it’s definitely worth knowing what information it does keep.
"Because iMessage is encrypted end-to-end, we do not have access to the contents of those communications," Apple said. "In some cases, we are able to provide data from server logs that are generated from customers accessing certain apps on their devices."
All this is a reminder that just because a message is encrypted doesn’t mean that there are no digital breadcrumbs left behind.

FT : Smiths seeks technology acquisitions


Smiths Group has opened the door to further acquisitions as the UK conglomerate seeks to join the ranks of the world’s top engineering and technology companies.
The FTSE 100 group agreed this year to acquire a business that makes security systems for airports, border crossings and nuclear power plants from Morpho, the French aerospace group, for $710m.

More deals could be on the cards, according to Chris O’Shea, finance director.
“The acquisition of Morpho Detection is not the limit of our ambitions. I’d be happy to look at something several times that size,” Mr O’Shea told the Financial Times.
Smiths, which started out as a jewellery shop 165 years ago, was long viewed by the City as ripe for break-up due to its disparate collection of businesses. Its products range from X-ray scanners to heating elements and medical infusion pumps.
Instead, an overhauled management that has been in place for a year has promised to build on the wide-ranging portfolio it inherited.
On Wednesday, Andrew Reynolds Smith, chief executive, outlined a strategy for the company to achieve a top three leadership position in each of its market segments, with the possibility of disposals in areas where it is unable.
“We are in build and grow mode and we will be doing some pruning and grafting on the way,” said Mr Reynolds Smith.
“We see a potential road map to becoming one of the world’s leading technology companies, but we have to be more focused in how we invest and improve our competitiveness”.
As part of this, annual research and development expenditure will increase by more than a quarter to above £100m.
The comments came as Smiths revealed that tough conditions in global energy markets dragged on profitability in the year ending 31 July.
Fewer orders of new equipment at its business that supplies mechanical seals and bearings for the oil and gas sector saw group operating margin drop 30 basis points to 17.3 per cent. Smiths said it would look to expand the unit’s sales to customers in other industries such as chemicals, pharmaceuticals and pulp and paper.
Although sales increased at its other four divisions, underlying revenue dipped slightly to £2.95bn after stripping out positive currency effects from the weaker pound. Lower one-off costs, such as writedowns and litigation, led pre-tax profit to rise 6.5 per cent to £346m compared to the previous year.
Andrew Carter, analyst at RBC Capital Markets, sais that the results were better than expected.
Smiths was linked earlier this year with Pfizer’s sale of its infusion pumps unit, reportedly valued at between $1.5bn to $2bn, but executives at the group declined to comment.
Shares in the company rose 3.6 per cent on Wednesday to £14.37, giving it a market value of £5.7bn.

>>> National Grid gas networks bidders warned against assumptions about future p

National Grid gas networks bidders warned against assumptions about future price control regulation
https://www.ofgem.gov.uk/publications-and-updates/letter-potential-buyers-gas-distribution-network-assets
Ofgem, the UK energy markets regulator, has warned prospective buyers of a majority shareholding in National Grid’s [LON:NG] UK gas distribution networks against assumptions regarding future price control decisions. A letter to potential buyers, published on the ofgem website on Wednesday, 28 September, follows:
Letter to potential buyers of gas distribution network assets
Ofgem has today published a letter to potential buyers of the majority stake in National Grid’s four gas distribution networks and part of SSE’s equity stake in SGN, which distributes gas across Scotland and the south of England.
Ofgem regulates these businesses under our RIIO-GD1 price control (2013-2021) for gas distribution. The regulator is reminding bidders that firm decisions have not yet been made about RIIO-GD2, the price control period after 2021, and if they purchase these businesses at a premium over the Regulatory Asset Values, they will not be compensated for that premium. Ofgem does not need to provide consent for the sale of shares in either transaction.

(BofA-ML) Client Flow : Selling streak continues

More institutional and private client-led selling, HF buying
Last week, during which the S&P 500 climbed 1.2%, BofAML clients were net sellers of US
equities for the 12th consecutive week, in the amount of $0.9bn. Year-to-date, cumulative
net sales of US stocks by our clients are at post-crisis highs; broader (non-client) global
fund flow data from EPFR suggest that the US has seen the second-largest equity
outflows of any region (after Europe) this year. Similar to the prior week, BofAML
institutional and private clients sold stocks while hedge funds were net buyers.
Institutional clients have been the biggest net sellers year-to-date, followed by private
clients. And also similar to the prior week, clients sold stocks across large, mid and small
caps. Buybacks by corporate clients continued to decelerate, and are now tracking the
weakest of any 3Q since 2010. As we noted last week, elevated market valuations may be
one deterrent, as buybacks tend to be more rewarded when stocks are cheap.

ETF buying, single stock selling (except Telcos & Materials)
Clients sold single stocks across nine of the eleven sectors last week, led by Health Care
and Tech stocks. The selling of Tech stocks was the biggest reversal from recent trends,
and flows out of Health Care stocks were their largest in five months. Only Materials and
Telecom stocks saw net buying last week, while ETFs saw the biggest inflows. While no
sector currently has a multi-week net buying streak, Telecom stocks have seen net buying
in ten of the last eleven weeks. Consumer Discretionary continues to have the longest net
selling streak, with outflows for the last 13 weeks (the longest selling streak for this sector
in our data history). But given this is still the most crowded sector by mutual funds, there
could be more to go, and we are cautious on Discretionary for a host of reasons.

Other notable flows: Pension funds continue buying stocks
• YTD, clients have sold a post-crisis record of $32bn of single stocks, vs. small
cumulative inflows into ETFs (Chart 1). In a similar vein, both SimFund data on USdomiciled
funds/ETFs and global EPFR flow data suggest large long-only outflows
but smaller ETF inflows YTD. Flows from active to passive—coupled with poor
performance and a fee-sensitive investor base—remain headwinds to active funds.
• Health Care, Discretionary and Real Estate saw net selling by institutional clients,
private clients and hedge funds alike last week. No sector saw net buying by all three.
• While broader institutional clients remain net sellers, pension fund clients (a sub-set
of institutional), were net buyers of US stocks for the fifth consecutive week. Buying
was led by ETFs and stocks in the Tech and Health Care sectors; only the bond proxy
sectors (Real Estate, Telecom, Utilities and Staples) saw sales by this group last week.
See Pension fund flows for details.

WSJ : No Quick Fix to City of London’s Brexit Conundrum

No Quick Fix to City of London’s Brexit Conundrum
Some argue EU rules provide a way for London-based banks to keep their access to Europe, but the reality is more complicated, Simon Nixon writes

As the debate over how to carry out Brexit intensifies, the City of London finds itself in the firing line. To some hard-line Brexiters, repeated warnings from bankers about the costs of quitting the European single market and losing passporting rights—which allow U.K.-based firms to sell financial services anywhere in the European Union—smack of special pleading. Passporting is a red herring, they say, because the U.K. would qualify as an “equivalent” regulatory regime under EU rules, allowing most financial-services activity to carry on as before. City warnings of imminent doom often turn out to be wrong, not least over Brexit itself. The City will be fine because it is always fine.
The City, though, hasn’t always been the global financial hub it is today. In the decades after World War II, London was a backwater, a largely domestic capital market, dominated by domestic firms and presided over by an old-money elite sustained by fat, fixed commissions, elaborate barriers to entry and rampant insider trading.
What restored London’s global fortunes was a combination of the Thatcher-government overhauls, which removed capital controls, eliminated restrictive practices and opened the City to foreign competition, and the creation of the EU single market. It was the advent of passporting in the early 1990s that enabled London to suck in the bulk of Europe’s wholesale financial-services jobs, and its related tax revenues.
Similarly, the argument that passporting is now irrelevant rests on shaky legal foundations. Market access based on regulatory equivalence is only available for some asset management and trading activities; retail and commercial lending are excluded. Meanwhile, the key piece of EU law—the Markets in Financial Instruments Directive—won’t come into force until 2018. Its equivalence provisions have never been used before and equivalence decisions in any case lie in the sole hands of the European Commission, leaving the process susceptible to political pressures.
Besides, banks are unlikely to rely on equivalence for long-term business planning. The difference between a passport and equivalence is similar to the difference between offering someone citizenship or a temporary right to remain, notes Simon Gleeson, a partner at Clifford Chance. One allows a person to build a life in a country; the other encourages them to seek long-term security elsewhere.
The risk for firms is that a regulatory regime might not stay equivalent for very long, given the dynamic nature of financial market regulation. At the very least a mechanism would be needed to ensure that the regulatory frameworks of both sides evolved in tandem. That could be difficult for the U.K., notes Karel Lannoo of the Centre for European Policy Studies. For example, would the EU make equivalence conditional on the U.K. abiding by EU rules on banker bonuses? And what if the EU decided to tighten those rules further? Would the U.K. follow?

Most firms are more likely to restructure their European operations to create separate EU subsidiaries rather than rely on equivalence,Moody’s Investors Service said in a report last week. How much would this cost Britain? The government is frantically trying to work this out by mapping the entire financial-services ecosystem.
But clear answers are elusive. Pan-European banks don’t collect information on revenues and costs by passport. However, a strict legal analysis suggests the disruption is potentially huge: The standard regulatory test to determine where a financial service is traded is to look where the person soliciting the trade is based. In the most extreme scenario, banks could be obliged to transfer all EU customer-facing staff to EU-based subsidiaries—and those subsidiaries would need to be separately capitalized, funded and managed.
Ultimately, banks will base their decisions on what makes commercial sense. A big consideration will be whether creating new ringfenced EU subsidiaries generates any extra capital requirements. That is possible given that banks will need approval from the European Central Bank to use the risk-based models they currently use to keep their capital requirements down.
After all, Brexit is taking place as bank business models have never been under greater pressure. The current turmoil surroundingDeutsche Bank partly reflects market skepticism over its long-term ability to generate an economic return on capital. In this environment, banks may respond to any additional Brexit-related pressure on returns by simply withdrawing capital from European markets.
Of course, this would hurt the wider European economy as much as the U.K., prompting some Brexiters to argue that this should convince an economically rational EU to strike a generous deal that preserves the current arrangements. But a European might respond that it is up to the U.K. to propose a solution that gives the EU sufficient influence and control over the City of London to justify continuing the passporting regime.
After all, the political pressures on the U.K. are surely higher. The EU generates an estimated 25% of U.K. financial services revenues, and the City generates an estimated £60 billion in U.K. tax revenues, according to KPMG, which suggests the U.K. could be facing a £15 billion budgetary black hole—and that excludes any impact on sectors reliant on City spending. That would confront the government with some unpalatable political choices—possibly more unpalatable than disappointing hard-line Brexiters.

>>> What to look at today - 29th of September 2016

Dow +0.61% S&P +0.53% Nasdaq +0.24% Russell+0.75%
US Market closed higher helped by a leg up on oil on report of that OPEC reached aproduction cap agreement. Oil ticked lower following the EIA data, falling to the $44.50/bbl price level. energy component staged a reversal shortly after midday as Reuters reported that OPEC agreed to lower its production to 32.5 million barrels per day from approximately 33.2 million barrels. However, the reduction will not go into effect until OPEC meets on November 30. Nevertheless, WTI crude rallied into its pit close, finishing higher by 5.4% ($47.07/bbl; +$2.40). Eight sectors ended in the green with industrials (+0.7%), materials (+1.0%), and energy (+4.3%) leading the pack. Conversely, countercyclical health care (-0.1%), utilities (-0.3%), and telecom services (-1.0%) lagged. financials underperformed on yellen comments on cap.requirement. volume were slighlty above average with 903 mil shares. OPEC officials said to confirm a production cut, limiting output to 32.5-33M bpd range; Setting a committee to decide on level of cut for each member with final decision in November; Saudi Arabia's deteriorating fiscal conditions said to trigger the surprise concession. JPY sold off across the board on risk-appetite as worries over high-yield debt recede. China Commerce Ministry notes increasing downward pressure on trade.

Nikkei +1.65% Hang Seng +0.24% CSI +0.53% Shanghai +0.46%

Eur$ 1.1225 CNH 6.6826 CNY 6.6708 JPY 101.67 GBP 1.3017 CHF 0.9718 RUB 62.9825 WTI$ 47.17 (+0.26%)

S&P +0.16% EuroStoxx +1.21% FTSE +1.02% DAX +1.12% SMI +0.79%

Macro :
- OPEC Said to Agree on Oil Output Limit of 32.5m B/D in Algiers
- Fed's Evans says could raise rates if more fiscal policies to support growth were formed; sees some frothiness in asset valuations
- Spotify Said in Advanced Talks to Buy Soundcloud: FT - http://on.ft.com/2d8GTEq
- Fed’s Mester: Sometimes Being ‘Prudent’ Means Hiking Rates

Keep an eye on :
- ABE SM : Abertis Weighs Buying CDC’s 15% Stake in Sanef: Expansion
- AB1 GY : Air Berlin to Restructure, Laying Off Up to 1,200 Employees
- ATLN VX : Actelion to Investigate All-Oral Combo Therapy for Relapsing MS
- AIR FP : U.S. Clears Boeing Fighter Jet Sales To Middle East
- AIR FP : Bombardier CEO: Current Profit Is Insufficient to Pay Down Debt
- BAYN GY : Bayer Says Safety Data on Xarelto Disclosed Properly
- BKIA SM : Spain Studies Merger of Nationalized Lenders Bankia, BMN
- CBK GY : Commerzbank to Cut About 10,000 Jobs: Bild
- COLR BB : Colruyt Doesn’t Rule Out Resuming Opportunistic Stock Buybacks
- CSGN VX : Credit Suisse, Barclays Said to Be in Mortgage-Settlement Talks
- DBK GY : Deutsche Bank Has No Reason to Sell Polish Unit: Niemycki in DGP
- ENEL IM : Enel Signs Accord to Sell Marcinelle Energie to Direct Energie
- ERICB SS : Ericsson’s Largest Owners Evaluating Ownership Options: SVD
- GPLG NA : Galapagos, MorphoSys Start Dosing MOR106 in Atopic Dermatitis
- GSK LN : Glaxo to Sell Its Remaining 6.2% Stake in Aspen Pharmacare
- INGA NA : ING Sells 46.7m Shares,Cuts Kotak Mahindra Bank Stake to 3.9%
- NOKIA FH : Sprint CFO Sees Network Spending Less Than $3b Target
- NYR BB : Nyrstar Sees EU3-5m Ebitda Impact From Port Pirie Smelter Outage
- OHL SM : OHL Buys Back EU23.3M of Principal of 2020 Bonds
- UG FP : PSA Plans to Sell First Fully Autonomous Vehicle in 2021: L’Obs
- PLUS LN : Plus500 Founders Selling 15.5m Shares in Placing
- SAN FP : Sanofi Faces Class Action in France From Depakine Users: Echos
- SU FP : Schneider Said to Hire JPMorgan to Explore Sale of DTN Service
- STL NO :Statoil Brazil Looking at Subsalt Polygon Opportunities: Reuters
- RIG US : Transocean Holder Icahn Cut Stake to 1.5% for Tax Purposes
- VOW3 GY : Volkswagen Annoints Mobility Services Unit as Group’s 13th Brand
- VOW3 GY : VW CEO Mueller Says He ‘Would Love’ a DOJ Settlement by End Year