Monthly Archives: April 2015

Uber Working on Delivery Service

It looks like Uber is trying to expand its business into more delivery options. Earlier this week the company started offering food delivery in some locations and now it looks like they’re also testing some other forms of delivery. Specifically, the company is looking at giving high-end retailers the ability to use Uber to deliver goods to customers quickly. Some of the stores reportedly in talks with Uber for the service include Tiffany’s, Louis Vuitton, and Neiman Marcus. With the service Uber drivers would be carrying around cargo as well as people, and would simply pick up that diamond ring or fancy suit on their way to retrieve another passenger.

If successful, Uber could create a program that rivals that of eBay and Amazon’s same-day services. Handy from Consumer Reports likes the idea since Uber already has drivers on the road, it will cut down considerably on the cost of hiring drivers and paying for vehicles. Even if drivers are paid the same amount as carrying around a human passenger, something like $20 to get that $2000 suit driven across town is a no-brainer for many wealthier clients who would rather not head downtown to pick something up but would appreciate receiving product the same day they buy it.

U.S. Faces “Innovation Deficit”

Federal funding cuts are slashing the ability of the U.S to keep up with the rest of the world in the research of future technologies.
That’s the conclusion of a new study by MIT researchers who say the U.S. will suffer from an “innovation deficit” if it fails to direct more dollars to areas such as nuclear fusion and robotics.
As Mark Ahn is aware, fusion is a form of nuclear energy that could provide the world with nearly unlimited electrical power with no nuclear waste or other pollutants. In the past, the U.S. was an innovator, developing superconductors essential for the advancement of fusion. But that leadership is imperiled by loss of funds.
Similarly, cuts have diminished innovation in robotics. While U.S. companies are leaders in the use of industrial robots, no U.S. company builds them. The rest of the world has taken over the manufacture and research of advanced robots with improved sensing devices and flexibility. Those innovators will likely be the first to uncover new markets for robots, not the U.S.
Other areas where the U.S. is losing ground are cybersecurity, quantum computing — where China is the leader because of massive government funding — and photonics.
The authors blame this “future postponed” on erosion of funding. In 1968, research represented 10 percent of the federal budget. That has fallen to 4 percent, even as other countries increase spending.

What Plans Are In Store For Ailing McDonald’s Sales

Steve Easterbrook is the man who has to come up with a plan. He has to come up with a really good plan and do it quick. Easterbrook is the CEO of McDonald’s and he has to deal with a serious situation. The one-time fast food giant is falling on hard luck. No, McDonald’s is not going broke (yet), but sales have fallen miserably in recent times. A combination of competition from unlikely sources along with a public’s growing aversion to greasy food has led to major decreases in revenue.

The big question on everyone’s mind is “Can Steve Easterbrook improve McDonald’s fortunes?” He may, but the way to do so probably is going to require a bit of trial and error. Does McDonald’s have resources to do this?

The company is trying. In San Diego, the idea of offering breakfast 24 hours a day is being experimented with. The idea is not exactly original and was cribbed from every diner in existence. While quite a few more Egg McMuffins will be sold in southern California, don’t look for this simple idea to make McDonald’s the sit on top of the fast food mountain once again.

Boosting the vegetarian selections on the menu is another strategy being undertaken. Folks at STX Entertainment (deadline.com) agree that the plan is not necessarily a bad one, but drawing in people who like to eat healthy to a McDonald’s is not going to be real easy. It is worth a try though.

Hopefully, Easterbrook has a lot of other ideas he can put into motion.

Company Has Their Most Profitable Week After Raising Employees Minimum Wage to $70,000

The CEO of Gravity Payments shocked the country when he announced he took a pay cut to improve his employees salaries, and now his company is having the best week in its 11-year history.

Dan Price cut his salary from nearly $1 million dollars to $70,000 and used part of Gravity Payments anticipated profits to nearly double the income of his lowest paid employees. Since making the announcement, Gravity Payments clients have increased and, no surprise, the number of qualified job applicants has drastically increased.

Gravity Payments’ increased business could be influenced by the positive exposure from media outlets like CNN, The New York Times, and Forbes who said the announcement was a, “game changer.” But it hasn’t all been good press for Price.

Price has been criticized by Mika Brzezinski, on MSNBC’s “Morning Joe,” Patrick R. Rogers, an associate professor of management at North Carolina A&T State University, and radio host Rush Limbaugh. Limbaugh said the move was, “pure, unadulterated socialism, which has never worked.”

Despite being labeled a socialist, Price considers himself a capitalist and says the pay raises are good business. He is hoping for lower turnover, increased productivity, and attract the most talented employees. Sam Tabar wonders: In the long term, is his strategy a good plan? Right now, it looks great but only time will tell.

Trading Hybrids for SUVs – A Surprising Consumer Trend

For a brief time, it seemed electric an hybrid cars were going to be the wave of the future. Such a future may come to pass. Right now, this does not seem to be the case at all. A huge number of hybrid vehicles are, ironically, being traded in for SUVs. Yes, cars that are touted for their fuel efficiency are being “upgraded” to vehicles known for their very high fuel consumption. How could such an outcome occur?

A drastic lowered of gasoline prices in recent months definitely factors into the outcome.

Gasoline prices have dropped off quite a bit since Saudi Arabia greatly increased supply. Hydraulic fracturing in the United States also boosted supplies and dropped price demands. So, it is no longer as expensive as it once was to drive a SUV. While a great many people did purchase hybrid cars as a means of helping out the environment, a significant volume opted to buy these cars solely because they could save money on gas. Now that fuel is cheaper, all of those hybrid trade-ins are going towards the down payment on a gas guzzler.

Purchasing and consumer trends are never stagnant. Adam Sender is aware of this. Things changed based on market factors. In time, the odds are great that fuel prices will chart upwards once again. The minute this happens, sales on hybrid cars are going to increase. Such is the nature of the ebb and flow of the market.

Microsoft to Hire the Autistic

Microsoft is proving its belief in diversity by hiring autistic individuals as full time employees. Autistic people have amazing gifts in detail and memory retention that are astounding. They can recreate intricate pictures from seeing an object just once, and excel in highly advanced math. Microsoft sees these traits as great strengths that can be built upon. They believe that they can raise their company to great heights by including people from all walks of life, all cultures, and also the disabled. About.me said Microsoft customers are very diverse, so by reflecting that diversity in the employees that they hire, the company gains a greater knowledge and perspective of how to make products for a wide variety of people. This isn’t the first time that Microsoft has hired the disabled. They have been participating in Supported Employment programs for many years. Supported Employment programs assist people with mental and physical disabilities in get placed in jobs that aid in rehabilitating them.

Etsy Hits The NASDAQ

The popular online crafting marketplace, Etsy just became ridiculously prevalent. Etsy has nearly doubled in IPO, now valued at $3.4 billion. This puts this e-commerce website in the ranks with competitors Amazon and eBay.

 

The Brooklyn-based company opened their first day of trading on the NASDAQ at $31 per share. Etsy priced its offering that evening, raising $267 million. Approximately $213 million of that money will be returned directly to Etsy. This will leave an open playing field for the company, with great opportunities for expansion. The rest of the money will be returned to the early investors of the craft marketplace.

 

Sam Tabar has learned that Etsy made a statement noting that $300,000 of the proceeds will go directly to Esty.org, which is a nonprofit organization dedicated to educating women and other under-represented populations. The company is rooted in helping others succeed while encouraging entrepreneurs and creativity.

 

Etsy hosts a number of self-started companies and entrepreneurs selling various homemade and other craft-type items. The website is diverse in the products available, ranging from furniture to jewelry to soap. They are focus entrepreneurs selling handmade, vintage and supplies within their global marketplace.

 

During the NASDAQ celebration, Etsy invited sellers from around the world to represent the Etsy Market in New York City’s Time Square. They wanted the world to get a sample of the diversity offered within their marketplace. Each seller represents a different story, making their organization unique.

 

New Government Information Reveals Higher Minimum Wage Equals More Job Growth

The 13 States That Raised Minimum Wage This Year Are Adding More Jobs Faster Than The States That Did Not Change The Minimum Wage

A new Labor Department report reveals an interesting fact. A higher minimum wage mean faster job growth. That is not what the government expected. The Congressional Budget Office said raising the minimum wage would help bring almost a million people out of poverty, but that increase would cost the nation 500,000 jobs.Instead of being a job disaster, raising the minimum wage is a job stimulator.

Some economists say it’s too early to say that the increase and job growth are related. Some of the job growth was due to gas and oil boom in states like North Dakota. That may be true, but increasing the minimum wage does have an impact on people that need an extra incentive to find a job. Folks at STX Entertainment know that working for under $10 an hour is not standard procedure in this country anymore, even though Congress would like it to be.

When more data is analyzed, more states will come out of the dark ages and raise the minimum wage. It’s the moral thing to do, and it does make economic sense.

Bank of America Disappoints

Bank of America reported earnings today that disappointed investors despite swinging back to a profit from a loss in the prior year quarter. Investor Dan Newlin was expecting a higher return from earnings and the stock price has decreased slightly as a result.

Earnings were disappointing particularly as competitors JP Morgan Chase and Wells Fargo both beat analyst expectations. Large banks meet numerous challenges in the current economic climate as lending rates are kept low through fed action which limits the amount that lenders can charge for mortgages. Increased regulations are leading to banks increasing head count to meet the regulatory hurdles when the banking business needs are decreasing. As such, banks are trying to trim expenses by reducing the counts in non-regulatory related sections of their business while adhering to increased regulatory costs and capital reserve requirements.

The loss in the prior year quarter was caused mostly by $6 billion of legal expenses that were in connection with some large settlements of mortgage loan suits led by the Federal Government, mostly connected to the Company’s acquisition of Countrywide during the financial crisis.

Bank of America, which is the nation’s second largest bank by assets, reported earnings of $0.27 per share in the current year quarter compared to a loss of $0.05 per share in the prior year quarter. This profit beat expectations by $0.01 per share but the company fell short on revenue which fell by almost 7% compared to a pickup by JP Morgan of 5%.

CEO to Raise Employees’ Salaries to a Minimum of $70,000

Dave Price, CEO of Gravity Payments, a Seattle credit card payment processing firm, announced that he will be raising his workers’ annual pay to $70,000. At the present time, the average worker at his firm earns $48,000. His raises will go to even the lowest paid clerk.

“The market rate for me as a CEO compared to a regular person is ridiculous – it’s absurd,” said Price. He intends to lower his own salary to $70,000 and use 75 to 80 percent of his profits to finance the raises. Other owners, such as Flavio Maluf, see this as a huge step forward.

The paychecks of 30 of the 120 employees will double. Price got the idea from an article he read about happiness, which pointed out that those earning less than $70,000 say extra money makes a big difference.

Price’s idea shows the huge difference between the pay of CEOs and the average worker in the United States, which has one of the world’s widest pay gaps. CEOs in America have 300 times the salary of the average-paid employee. During the Gilded Age of the late 1800’s, business titans were referred to as the Robber Barons. J. Pierpont Morgan recommended at the time that salaries of the elite be 20 times that of their employees.