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Heavy spending on driver incentives pushes Uber to bigger-than-forecast loss | Uber

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Heavy spending to encourage drivers back to the road has pushed ride-hailing firm Uber into a larger-than-expected loss, despite the company than doubling its revenues as demand for its services increased.

Uber’s “take rate”, or its share of the fare, dropped in the last quarter as it faced elevated costs of getting willing drivers behind the wheel.

The take rate fell to 18.7% in the last quarter, down from 25.8% a year ago, hit by “elevated investments” in reviving driver availability, particularly in the US.

“In Q2 we invested in recovery by investing in drivers and we made strong progress, with monthly active drivers and couriers in the US increasing by nearly 420,000 from February to July,” said Dara Khosrowshahi, the Uber CEO.

Khosrowshahi told investors on an earnings call on Wednesday night that Uber had deployed “good old-fashioned phone calls to folks we haven’t seen in a while” to get drivers back, alongside new digital marketing and more attractive incentives.

He also acknowledged that in big markets such as San Francisco, New York and Los Angeles, demand “continues to outpace supply” and prices and wait times “remain above our comfort level”.

He said Uber is continuing to offer incentives to bring more drivers to the platform. Last week the company announced it would offer free language courses to drivers through a partnership with Rosetta Stone.

“The good news is drivers increasingly want to get back on the road,” said Khosrowshahi, adding that 90% of inactive drivers polled said they expect to come back eventually and 60% say they will come back in the next month.

In April, Uber announced a $250m spending package aimed at encouraging existing drivers to drive for it again, and to attract new recruits.

Some Uber and Lyft drivers have reported that pay rates have not increased in line with higher demand for rides as economies have reopened after Covid-19 lockdowns.

In a sign of confidence, Khosrowshahi reiterated a previous goal that Uber will reach profitability as measured by an adjusted metric known as Ebitda, which excludes taxes and other costs, by the end of 2021.

Under that yardstick – which is closely watched by some investors – Uber’s loss narrowed to $509m during the most recent quarter, down from a loss of $837m at the same time last year, but higher than the $325m loss Wall Street had expected.

Uber’s results also showed it is regaining some of the momentum it lost during the pandemic.

Revenue for the company’s most recent financial quarter doubled year-on-year to $3.93bn, beating analysts’ expectations and signallimg an emergence from the dismal conditions at the same point last year when the pandemic was keeping most people at home.

At the same time, Uber’s delivery service is still growing at an intense pace, indicating that some homebound habits may be here to stay, even though people are going out again.

In an even more telling sign of progress, Uber provided 1.51bn rides during the quarter – an 105% increase from the same time last year. Despite that big jump, the total rides for the period were still roughly 10% below the number given at the same time two years ago, before the pandemic upended the economy.

Uber has invested heavily in delivery services to weather the pandemic. It is increasingly offering grocery delivery and bought alcohol delivery service Drizly in February after acquiring delivery rival Postmates last year.

The company’s ride-hailing revenue also more than doubled from last year to $1.62bn.

Earlier this month, drivers in a number of big US cities including Los Angeles and San Francisco joined in a daylong strike protesting poor working conditions and calling for the ability to organise. Some drivers have characterised the record driver shortage, in which drivers are refusing to return, as a “silent strike”.

Uber competitor Lyft announced in its own earnings it had hit that same milestone in the first quarter of 2021, turning a quarterly profit on the adjusted basis for the first time since its founding.

With its lagging profitability and the growing headwinds posed by new surge in coronavirus cases, shares of Uber Technologies fell about 4% in pre-market trading on Thursday..

The Associated Press contributed to this report

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NFT trader OpenSea bans insider trading after employee rakes in profit | Non-fungible tokens (NFTs)

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A non-fungible token (NFT) marketplace has introduced policies to ban insider trading, after an executive at the company was discovered to be buying artworks shortly before they were promoted on the site’s front page.

OpenSea, one of the leading sites for trading the digital assets, will now prevent team members buying or selling from featured collections and from using confidential information to trade NFTs. Neither practice was previously banned.

“Yesterday we learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly,” said Devin Finzer, the co-founder and chief executive of the site.

“This is incredibly disappointing. We want to be clear that this behaviour does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough third-party review of this incident so that we have a full understanding of the facts and additional steps we need to take.”

NFTs are digital assets whose ownership is recorded and traced using a bitcoin-style blockchain. The NFT market boomed earlier this year as celebrities including Grimes, Andy Murray and Sir Tim Berners-Lee sold collectibles and artworks using the format. But the underlying technology has questionable utility, with some dismissing the field as a purely speculative bubble.

The insider trading came to light thanks to the public nature of the Ethereum blockchain, on which most NFT trades occur. Crypto traders noticed that an anonymous user was regularly buying items from the public marketplace shortly before they were promoted on the site’s front page, a prestigious slot that often brings significant interest from would-be buyers. The anonymous user would then sell the assets on, making vast sums in a matter of hours.

One trade, for instance, saw an artwork called Spectrum of a Ramenification Theory bought for about £600. It was then advertised on the front page and sold on for $4,000 a few hours later.

One Twitter user, ZuwuTV, linked the transactions to the public wallet of Nate Chastain, OpenSea’s head of product, demonstrating, using public records, that the profits from the trades were sent back to a wallet owned by Chastain.

While some, including ZuwuTV, described the process as “insider trading”, the loosely regulated market for NFTs has few restrictions on what participants can do. Some critics argue that even that terminology demonstrates that the sector is more about speculation than creativity.

“The fact that people are responding to this as insider trading shows that this is securities trading (or just gambling), not something designed to support artists,” said Anil Dash, the chief executive of the software company Glitch. “There are no similar public statements when artists get ripped off on the platform.

“If Etsy employees bought featured products from creators on their platform (or Patreon or Kickstarter workers backed new creators etc) that’d be great! Nobody would balk. Because they’d be supporting their goal,” Dash added.



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British home computer trailblazer dies aged 81 • The Register

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Sir Clive Sinclair died on Thursday at home in London after a long illness, his family said today. He was 81.

The British entrepreneur is perhaps best known for launching the ZX range of 8-bit microcomputers, which helped bring computing, games, and programming into UK homes in the 1980s, at least. This included the ZX80, said to be the UK’s first mass-market home computer for under £100, the ZX81, and the trusty ZX Spectrum. A whole generation grew up in Britain mastering coding on these kinds of systems in their bedrooms.

And before all that, Sir Clive founded Sinclair Radionics, which produced amplifiers, calculators, and watches, and was a forerunner to his Spectrum-making Sinclair Research. The tech pioneer, who eventually sold his computing biz to Amstrad, was knighted during his computing heyday, in 1983.

“He was a rather amazing person,” his daughter, Belinda Sinclair, 57, told The Guardian this evening. “Of course, he was so clever and he was always interested in everything. My daughter and her husband are engineers so he’d be chatting engineering with them.”

Sir Clive is survived by Belinda, his sons, Crispin and Bartholomew, aged 55 and 52 respectively, five grandchildren, and two great-grandchildren. ®

A full obit will follow on The Register.

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UN human rights chief raises concerns over AI privacy violations in report

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‘AI tech can have negative, even catastrophic, effects if they are used without sufficient regard to how they affect people’s human rights.’

The UN’s human rights chief Michelle Bachelet called for a moratorium on the sale and use of artificial intelligence technology until safeguards are put in place to prevent potential human rights violations.

Bachelet made the appeal on Wednesday (15 September) to accompany a report released by the UN’s Human Rights Office, which analysed how AI systems affect people’s right to privacy. The violation of their privacy rights had knock-on impacts on other rights such as rights to health, education and freedom of movement, the report found.

“Artificial intelligence can be a force for good, helping societies overcome some of the great challenges of our times. But AI technologies can have negative, even catastrophic, effects if they are used without sufficient regard to how they affect people’s human rights,” Bachelet said.

“Artificial intelligence now reaches into almost every corner of our physical and mental lives and even emotional states,” Bachelet added.

Japanese multinational Fujitsu caused a stir when it announced plans to implement AI facial recognition technology to monitor employees’ concentration levels during meetings.

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The report was critical of justice systems which had made wrongful arrests because of flawed facial recognition tools. It appealed to countries to ban any AI tools which did not meet international human rights standards. A 2019 study from the UK found that 81pc of suspects flagged by the facial recognition technology used by London’s Metropolitan Police force were innocent.

Earlier this year, Canada banned Clearview’s AI facial recognition technology after the company violated Canadian privacy laws by collecting facial images of Canadians without their consent.

Bachelet also highlighted the report’s concerns on the future use of data once it has been collected and stored, calling it “one of the most urgent human rights questions we face.”

The UN’s report echoes previous appeals made by European data protection regulators.

The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) called for a ban on facial recognition in public places in June. They urged EU lawmakers to consider banning the use of such technology in public spaces, after the European Commission released its proposed regulations on the matter.

The EU’s proposed regulations did not recommend an outright ban. The commission instead emphasised the importance of creating “trustworthy AI.”

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