Uber Launches War Against Yellow Cabs, Cuts New York Fares By 20% As Ali-Baba Launches Chinese Uber Competitor

Curious what Uber is spending the record $1.2 billion in cash it raised in its most recent funding round (which valued it at a whopping $18.2 billion)? The answer: subsidies.

In a page right out of Amazon’s playbook, the management of Uber has found that the best use of proceeds now that it may have finally saturated addressable markets, is to use its cash on hand to fund sub-equilibrium pricing losses and in the process, hopefully, put its competition out of business.

Earlier today, the Uber blog announced that UberX is “now cheaper than a New York City taxi.” It added the following:

We just dropped uberX fares by 20%, making it cheaper than a New York City taxi. From Brooklyn to the Bronx, and everywhere in between, uberX is now the most affordable ride in the city.





These prices are only in effect for a limited time. The more you ride, the more likely we can keep them this low!


We know you may be asking yourself how this affects our partner drivers. What we’ve seen in cities across the county is that lower fares mean greater demand, lower pickup times and more trips per hour — increasing earning potential and creating better economics for drivers. What does what mean in the long run? They’ll be making more than ever!

“More than ever”, at least until the subsidy cash runs out. And since Uber’s valuation is one that will make sense only if Uber effectively manages to put the bulk of the legacy taxi business in the US out of business, the conflict with the existing cab industry is about to go into overdrive.

Because while one may or may not believe that Uber will ultimately succeed in putting NYC’s cab drivers out of business, and it is very much doubtful if legacy Yellow Cabs will follow Uber in its price dumping strategy, one thing is certain: the value of a New York Yellow Cab Medallion, which about a year ago hit a record $1.3 million price, will suffer – at least in the near-term – as the conflict between Uber and Yellow Cab picks up, and as the NYC market is suddenly flooded with countless providers of cab-equivalent services.

Recall from August of last year:

The best returning asset class traded in the NY Metro area is yellow but doesn’t change hands on Wall Street. As ConvergEx’s Nick Colas notes, over the last 12 months New York City taxi medallions have risen 49% in price, besting the relatively humdrum returns of the S&P 500 (up 21%), the NASDAQ (22%) and the Dow (18%).  Medallions – essentially the right to operate a for-hail taxi in New York City – now trade for as much as $1.3 million, an all-time record.  




Part of this dynamic is fixed supply – there are just 13,336 medallions available for a city of 8.3 million people.  There is also a macroeconomic point, with a stronger NYC economy for those inhabitants who can afford the service.  The more surprising observation, however, is that new technology in the form of in-car credit card machines and more recently smartphone hailing apps both materially increase the value of owning a medallion.  In a world where every technology is deemed “Disruptive”, here’s a case where the status quo has actually reaped much of the reward.

Alas, there is no way to short the Medallion “price” which with the ongoing private status of Uber makes arbing the future of the cab industry rather difficult except for the most connected institutional investors, those which will have no choice but to keep investing in future Uber rounds at ever higher valuations until one day the Amazon strategy of beggar thy competitor either succeeds or fails.

And while the future of this particular Uber tactic is unknown, what most investors in the startup are wondering is what will its fate be in its largest addressable market, China. It is here where a far more notable development has taken place, with Bloomberg reporting that Hangzhou Kuaidi Technology Co., a taxi-booking service backed by Alibaba Group Holding Ltd. is adding luxury cars in China to boost revenue as it steps up its challenge to Uber Technologies Inc.

Kuaidi is targeting wealthy travelers with a new smartphone application as it partners with chauffeur companies in Beijing, Shanghai, Guangzhou and Hangzhou, Chief Executive Officer Dexter Lu said in an interview. The new cars include the 5-Series from Bayerische Motoren Werke AG and Audi AG’s A6.


Uber and Kuaidi are competing with Didi Taxi, which is backed by Tencent Holdings Ltd. (700), for a bigger slice of China’s 500 million users who access the Internet from their phones and are boosting use of location-based services. The new app, known as “Yi Hao Zhuan Che” in Chinese, is part of Lu’s push for a revenue model to sustain the business, which generated 50 million yuan ($8 million) of sales last month.


We operate under a similar model as Uber does in China,” Lu said on July 4. “Our work load will be very heavy in the second half, but it’s also very exciting.”


Uber, which has valuation of $17 billion after a recent funding round, is expanding in China and hiring in 14 cities, according to a July 1 LinkedIn post. The San Francisco-based company has been targeting customers in China willing to pay a premium for the luxury of tracking the vehicle’s approach, not handling local cash and finding daily newspapers and a Wi-Fi access inside the car.

Looks like “zero barriers to entry” is a popular saying for a reason.

One thing is certain: the winner from this competition, however long it may last, are consumers.

via Zero Hedge http://ift.tt/1jgUohS Tyler Durden

More Powderkegs: Israel Prepares For Gaza Escalation, Boosts Troops On Gaza Border

As the teen deaths, rocket launches (and landings), and rhetoric fly back back and forth; it appears last week’s de-escalation is off…


The US administration has been oddly quiet so far on this… we await their ‘supportive’ comments.

Bloomberg reports,

As many as 1,500 reservists to be mobilized to reinforce infantry, paratroop units, military spokesman Lt.-Col. Peter Lerner says in phone interview.


“While last week the army talked about de-escalation, now we’re talking about preparation for possible escalation”

*  *  *

So, Iraq, Syria, Kuwait, Jordan, Egypt (post gas subsidies), and now Israel.. must be time to BTFATH in US stocks…

via Zero Hedge http://ift.tt/1jgUplY Tyler Durden

The Kids of Same-Sex Parents Do Better Than Kids in Conventional Families

same sex parents Or at least they do in Austraiia, according to
their parents in a new
published in the journal BMC Public Health. The
study asked parents how their children are doing with respect to
various psychosocial measurements. From the abstract: 

A cross-sectional survey, the Australian Study of Child Health
in Same-Sex Families, was distributed in 2012 to a convenience
sample of 390 parents from Australia who self-identified as
same-sex attracted and had children aged 0-17 years.
Parent-reported, multidimensional measures of child health and
wellbeing and the relationship to perceived stigma were

315 parents completed the survey (completion rate = 81%)
representing 500 children. 80% of children had a female index
parent while 18% had a male index parent. Children in same-sex
parent families had higher scores on measures of general behavior,
general health and family cohesion compared to population normative
data…There were no significant differences between the two groups
for all other scale scores…

Australian children with same-sex attracted parents score higher
than population samples on a number of parent-reported measures of
child health. Perceived stigma is negatively associated with mental
health. Through improved awareness of stigma these findings play an
important role in health policy, improving child health

Regarding the problem of stigma associated with same-sex
parents, the Washington Post

According to the study, about two-thirds of children with
same-sex parents experienced some form of stigma because
of their parents’ sexual orientation. Despite these kids’
higher marks in physical health and social well-being, the
stigma associated with their family structure was linked to
lower scores on a number of scales. Crouch said stigmas ranged from
subtle issues such as sending letters home from school
addressed to a “Mr.” and “Mrs.” to more harmful
problems such as bullying at school. The greater the stigma a
same-sex family faces, the greater the impact on a child’s
social and emotional well-being, [lead researcher Simon] Crouch

However, according to a report published
by the American Academy of
 last year that analyzed three decades of
data, children raised by gay and lesbian parents
showed resilience “with regard to social, psychological and
sexual health despite economic and legal disparities and social

“Many studies have demonstrated that children’s well-being is
affected much more by their relationships with their parents, their
parents’ sense of competence and security, and the presence of
social and economic support for the family than by the gender or
the sexual orientation of their parents,” said
, co-author of the American Academy of
Pediatrics report.

This new study basically bolsters the findings that I reported
in my Wall Street Journal op-ed, “The
Science of Same-Sex Marriage
,” last year.

from Hit & Run http://ift.tt/1rHFjZd

All Cops Should Wear Video Cameras

CopcameraThe folks over at the millennial generation news
site, News.Mic are reporting on how
requiring police to wear video cameras
has dramatically reduced
violence and complaints against cops in Rialto,

Take the city of Rialto, California, for instance.
In February 2012
, the city’s 70 police officers had to take
part in a controlled study, obligating them to wear a tiny camera
that filmed all their interactions with the public. The results
were incredible: In the first year of the cameras’ introduction,
complaints against Rialto police officers fell by 88%, while
use of force by officers fell by almost 60%. …

“When you put a camera on a police officer, they tend to behave
a little better, follow the rules a little better,” Rialto Police
Chief William A. Farrar told the New York Times. “And if a citizen
knows the officer is wearing a camera, chances are the citizen will
behave a little better.”

Cities like New York,
, Fort Worth, Oakland, and the
very troubled department in Albuquerque
, New Mexico are now
trying various pilot programs in which officers wear video

I made the case last year for mandatory cop cameras in my
column, “Watched
Cops Are Polite Cops
.” See below Reason TV’s interview with
Seattle ex-cop and founder of the police video company Vievu Steve Ward about the benefits of
officer-worn cameras.

from Hit & Run http://ift.tt/1xGoKND

Stocks Tumble – Give Up All The “Great” Jobs Report Gains

Whocouldanode? Treasury yields continue to push lower (now below Thursday’s lows) having not looked back since the jobs report. Stocks – having exuberantly spurted to record highs to ensure American consumer comfort over the long weekend – have now collapsed back and given up all their post-“great-jobs-report” gains… CNBC is puzzled…



As a reminder, here’s why the headline jobs print was not so great after all...

via Zero Hedge http://ift.tt/1mrb19p Tyler Durden

Consumer Spending Slides In All Important June, Gallup Finds

It appears the hopes and dreams of a resurgence in US GDP in Q2 will have to be extended-and-pretended another quarter. As Gallup notes, Americans’ self-reports of daily spending fell back in June, averaging $91 for the month – down notably from a six-year high of $98 in May – and flat to the $90 average found in June 2013. Not exactly the pent-up demand ‘surge’ so many economists (and Fed PhDs) have been calling for… Even more concerning, Gallup notes, the drop in daily spending among all Americans can largely be attributed to upper-income Americans spending less in June. Even the 1% are cutting back?


As Gallup notes,

This $91 figure for June suggests a mixed bag for the economy. While it represents a much higher level of consumer spending than the $60 to $70 averages found for much of 2009 to 2012, it also represents the first decline in the monthly average since January of this year.

While Americans’ self-reported spending in June was generally on par or lower than their average May spending, this month’s $7 drop is one of the largest recorded by Gallup during this time of year since 2008, when June spending fell by $10. The June 2008 spending average of $104 is still the highest average for that month in Gallup’s six-year trend.

The drop in daily spending among all Americans can largely be attributed to upper-income Americans spending less in June. Americans living in households with $90,000 a year or more in income reported spending on average $189 a day in May, but this dropped to $157 in June.


As Gallup concludes, Americans’ average daily spending dropped in June from May’s levels. This indicator fits in the context of scores on Gallup’s other economic measures. Job creation remained flat, although maintaining May’s six-year high. Economic confidence dipped slightly from May, but remains higher than the economic confidence found several years ago in the depth of the recession.

That self-reported spending did not increase in June is important, given that consumer expenditures are a significant driver of the U.S. economy. While Americans are spending more than they did several years ago, spending has not returned to pre-recession levels.

*  *  *

By Bye Q2 GDP surge…

via Zero Hedge http://ift.tt/1mraVyF Tyler Durden

Earth to NSA: It’s Not ‘Inadvertent’ Collection of Private Data if You Know and Keep Doing It

"It depends on what your definition of 'definition' is."Because it’s been a year since
media outlets began reporting information from the documents
provided by Edward Snowden, it looks like that’s enough time for
Obama administration to declare, “Oh, that? That’s old
news,” to any new stories, despite having previously denied certain

Such is the response to this weekend’s
in The Washington Post that the
National Security Agency (NSA) has, indeed, intercepted and
collected all sorts of data from all sorts of people who were
American citizens and had no connection to terrorism.

Reason’s Nick Gillespie
pointed out
the latest story Sunday morning. Obama
administration officials wasted no time trying to declare the news
to not be news at all over at
The New York Times

On Sunday, Robert Litt, the general counsel to the director of
national intelligence, said in an interview that The Post’s article
cites “figures that suggest foreign intelligence collection
intercepts the communications of nine ‘bystanders’ for every
‘legally targeted’ foreigner.”

“These reports simply discuss the kind of incidental
interception of communications that we have always said takes place
under Section 702,” he said, referring to the law that governs the
collection of information on foreigners. “We target only valid
foreign intelligence targets under that authority, and the most
that you could conclude from these news reports is that each valid
foreign intelligence target talks to an average of nine people.”
The administration has made no secret of the fact that, as it
vacuums data from around the globe, it sometimes inadvertently
collects information from innocent people, including some

Old news, folks! Move along! A shame the NSA still has still
been unable to erase this pivotal exchange where Director of
National Intelligence James Clapper
to the Senate Intelligence Committee about it in 2013,
months before Snowden’s leaks began:


Clapper here used the “not wittingly” addendum to try to weasel
out of factual accuracy. The thing, though, is that once you know a
process of data collection is “inadvertently” or “unintentionally”
collecting private information from Americans unconnected to any
terrorism investigation and you keep on using that system, then it
is no longer “inadvertent” or “unintentional.” The NSA may
actually, genuinely not want the data, but it cannot say it is not
purposefully gathering it. Here’s some of the information The
Washington Post
has seen swept up from anybody whose paths
(both virtual and actual) crossed a target:

Among the latter are medical records sent from one family member
to another, résumés from job hunters and academic transcripts of
schoolchildren. In one photo, a young girl in religious dress beams
at a camera outside a mosque.

Scores of pictures show infants and toddlers in bathtubs, on
swings, sprawled on their backs and kissed by their mothers. In
some photos, men show off their physiques. In others, women model
lingerie, leaning suggestively into a webcam or striking risque
poses in shorts and bikini tops.

“None of the hits that were received were relevant,” two Navy
cryptologic technicians write in one of many summaries of
nonproductive surveillance. “No additional information,” writes a
civilian analyst. Another makes fun of a suspected kidnapper, newly
arrived in Syria before the current civil war, who begs for
employment as a janitor and makes wide-eyed observations about the
state of undress displayed by women on local beaches.

Last year: We’re not reading your e-mail! This year: What?
That’s old news!

from Hit & Run http://ift.tt/1qO97mB

Russia Rushes To Seal South Stream Pipeline: Lavrov Pays Bulgaria A Visit

As we remarked two weeks ago, when observing the recent developments surrounding the suddenly all-important South Stream gas pipeline bypassing Ukraine entirely, and instead traversing the Black Sea before crossing Bulgaria, Serbia, Hungary and terminating in the Austrian central European gas hub of Baumgarten, we said that all of Europe is suddenly focused on if and how Russia will make headway with a project that may be the most important one for not only Europe’s energy future but the impact Russia will continue to have over Germany et al. And of course, Ukraine. Because should Russia find a way to completely bypass Kiev as a traditional transit hub for Russian gas, it would make the country, and its ongoing civil war, completely irrelevant not only for Russia, but worse, for Europe, the IMF, and Ukraine’s staunch western “supporters and allies” as well.

Showing just how Europe perceives the Russian “South Stream” threat was a comment from a recent NYT article, in which Günther Oettinger, Europe’s top energy official, was quoted as saying that the Ukraine crisis “has slowed down our progress on South Stream considerably… We can’t just give in to the Russians every time.” Alas, since the Russians control the all important gas, Europe has zero choice.

This explains why even as the western media finally remembered over the weekend there was a Ukraine civil war going on following an advance by the Kiev army to retake some rebel strongholds in the Donbas region, with some curious what if anything Putin would do in retaliation, what Putin, or rather his envoy Sergei Lavrov were actually doing, was completely ignoring the Ukraine situation (where the West has long since conceded the loss of Crimea to the Kremlin) and instead focusing on securing the successful launch of the South Stream. And since Russia already signed another historic agreement with Austria in June, which positioned the AAA-country (with some surprising emerging bank troubles subsequently) squarely against its fellow European peers, it was the turn of the other South Stream countries, namely Bulgaria.

As Reuters reported, all construction timelines for the South Stream pipeline are on track and the European Union should restart talks about the project, Russian Foreign Minister Sergei Lavrov said on a visit to Bulgaria on Monday.   

Bulgaria has been an enthusiastic supporter of the Russian-backed project, whose construction has stoked tensions between the West and Moscow, especially in the wake of Russia’s annexation of Crimea.


But Prime Minister Plamen Oresharski’s government suspended work last month on its section of the pipeline at the behest of Brussels, pending a ruling on whether the project violates EU law.

Which maybe sheds some light on why in June Bulgaria also experienced the biggest bank run in 17 years, culminating with the nationalization of the 4th largest bank, and also led to the president announcing his early resignation.

So in the Bulgarian power vacuum, the domestic foreign minister Kristian Vigenin said that the “pipeline is of interest to EU, its construction must comply with European laws” during a briefing with his Russian counterpart, Sergei Lavrov. He also said that Bulgaria seeks a quick resumption of South Stream, something which means Europe will have to try harder in its try to prevent a pipeline bypassing its now very substantial Ukraine investment. 

Lavrov added that South Stream agreements were signed long ago, before EU adopted unbundling legislation; such laws can’t be retroactively applied. The Russian foreign minister said Russia expects EU to apply single standards to all pipelines.

And since it is not just Bulgaria but Serbia, we also got this:


In other words, the great cold war 2.0 fight for Russian sphere of influence in Eastern Europe is on. Because while on one hand we reported that during the weekend, it was none other than France which vocally came out against US Dollar hegemony and thus was forced to gravitate toward the Eurasian (China/Russian) camp, it is the events in Eastern Europe in the next several months that will define European energy geopolitics for the decades to come.

Look for many more fireworks in Bulgaria and the other South Stream countries over the coming weeks as the fate of the South Stream is determined behind the scenes.

via Zero Hedge http://ift.tt/1xGbEjk Tyler Durden

Jacob Sullum on the Downside of Marijuana Edibles

New York Times columnist Maureen Dowd wrote about a
bad experience with cannabis-infused chocolate last month, critics
of legalization have been highlighting the hazards posed by such
products. Jacob Sullum considers the downside of edibles, arguing
that variety and information are the best way to deal with the risk
of accidental overindulgence. 

View this article.

from Hit & Run http://ift.tt/1vRGTW4

Dow Loses 17,000; Catches Down To Bonds

We warned Thursday that there was something wrong with the picture of the equity market’s exuberance but it seems the July-4th-week-effect has run its course and equity markets – having read the jobs report over the weekend – have realized it is anything but strong. The Dow just lost 17,000 (however briefly) and equities are catching down to Treasury yield’s drop as USDJPY loses 102.00.


Dow loses 17k…


as Stocks catch down to bonds…


Charts: Bloomberg

via Zero Hedge http://ift.tt/1mqQ6U1 Tyler Durden