France strikes. Again

Anti-Uber taxi drivers block Paris road : Source BBC news

The workers of France are at it again : yep, they are on strike where millions of teachers, health workers and air traffic controllers are protesting against reforms.

This taxi drivers are also joining in and protesting against Uber.

This sucks if you are traveling where not only are roads blocked but a fifth of flights at Paris airports were cancelled.

We’ve warned you before but you must factor in the strong possibility of some strike or protest if you are visiting or flying over France. It could completely screw up your plans. I’ll bet money this happens again when the weather warms up.

Seattle gives the needle to Uber and Lyft

The Revolutionary Che’ring economy.

Uber and Lyft are like good friends and black sheep family members, just because we are not talking about them directly, doesn’t mean we are not thinking about them.

Their business model is one where you call a ride from an app on your phone. The app matches you with one of their drivers and they pick you up/drop you off and you settle with credit card on file. Most people like the service where they consider them better looking and presented that the traditional taxi companies which was overdue for competitive overhaul.

However, the devil is in the detail and much of this comes down to the laws of how they do business. Each country, state, city jealously protects the terms and conditions on doing business. If you look at a map, how Uber and Lyft operates there is piecemeal. Some have welcomed them with open arms, some have banned them outright.

A major issue is one of Licencing: Traditionally in the US, cities have strictly controlled the capacity of the taxi industry with the ‘medallion’ system. Only taxis with the medallions are allowed to operate. After forking out large sums of money for such tokens, the taxi barons are not happy with the upstarts threatening their monopoly. The taxi system regulated the fares within their jurisdiction but also who could be a taxi driver. Most require an in depth criminal background check that may go above what Uber/Lyft are prepared to carry out on the ground that this is costly.

The business model assumes the drivers are ‘independent contractors’ and this is of importance as there is class-action lawsuit filed by a number of its drivers in California. They contend that they’ve been wrongly classified as contractors, instead of full employees, and that Uber has withheld some of their tips. [see Atlantic for more details]. Up to 160,000 drivers from 2009, could join this in California. A similar class action case is going on in Oregon.

So what does Uber, the company who railed against monopolistic practices do? It updated their driver agreement so that drivers must sign before being able to accept any new rides to require private arbitrators. Except that they tried something like this in 2014 where the updated driver agreement included an arbitration clause that stripped drivers of their right to sue the company in regular court. A federal judge in San Francisco recently threw out that agreement.

Another interesting development was in Seattle: the city council voted to allow the drivers to organize a Union. From NPR:

 Seattle on Monday became the first U.S. city to vote to allow Uber and Lyft drivers to unionize and negotiate issues such as pay and working conditions.

The National Labor Relations Act regulates the right to unionize, but it doesn’t guarantee that right for independent contractors like the Uber and Lyft drivers.

The Seattle measure directs companies like Uber and Lyft “that hire or contract with drivers of taxis, for-hire transportation companies and app-based ride-hailing services to bargain with their drivers, if a majority show they want to be represented,” the Associated Press reports.

It passed the City Council 8-0.

So what does the brave Mayor do? He bravely decides to do nothing.

Mayor Ed Murray says he will not sign the bill because of the potential cost to the city, but he won’t veto it so the measure will become law without his signature.

And what is Uber’s reaction. They don’t like it one bit.

“Uber is opposed to Seattle enacting O’Brien’s ordinance and has ramped up its engagement in the city in advance of the council’s vote. David Plouffe, a former political strategist for President Obama now serving as Uber’s chief adviser, visited Seattle earlier this month to promote the company and criticize the ordinance.”

Ah we wondered before what Mr Plouffe would be doing. Being a good Democrat and fighting for the workers rights and social justice or being a good government insider fighting to influence the laws against the proletariat.  Guess which path he seems to have chosen.

Pesky things those laws. Funny thing you can be all for changing them one day but the next week, you are the ones being changed.

Further reading

• Fox news “Seattle city council votes to allow Uber, Lyft drivers to unionize“
• Our prior posts.

The Sun : Sharm on you

Private Eye, a British satirical magazine, has a story which paints The Sun (the infamous UK tabloid) in an even worse light.

“NICK PARKER, chief foreign correspondent of the Sun, had shocking news on last Friday’s front page: “Security at Sharm el-Sheikh airport has been exposed as a shambles after guards let Brits jump queues for a £15 fee – without checking their luggage.”  Sharm el-Sheiikh is the airport from which the Russian Metrojet Flight 9268, flying from before it was brought down with a likely an explosive that was placed on board.

The Private Eye story is not that they published the article on bribing the guards it is WHEN they published it.

According to Private Eye they knew about it FIVE months ago but decided against going with the story for the reason that they didn’t want to be prosecuted for bribing foreign officials.

Nice. A bit of courage could have exposed this flaw before hand.

Feed the to the Lions.

Volkwagen : smoking guns

Roads-2-Roam was waiting for VW’s side of the scandal to make a call but some recent internal news leaks are very compelling against Volkswagen.

Two separate German ‘serious’ newspapers have identified sources that say VW knew about this many years ago but did nothing. They held out until they were busted recently.

Frankfurter Allgemeine Sonntagszeitung (What a name !) suggests that some VW technicians tried to blow the whistle in 2011.

The other newpaper, Bild am Sonntag, goes back even further with a letter from the supplier of the engine controller unit – Bosch – that warned VW back in 2007 not to use their software illegally.

Citing unidentified sources, Bild said Bosch had warned Volkswagen as early as 2007 that its software should only be used in company tests and not for normal driving.

Das Auto. Was ist passiert?

I’m afraid Volkswagen corporate management (Not sure we will feed the unrelated part of VW AG), it is time to feed you to the lions.

Now is the Winterkorn of our discontent

The front page of the Economist 23rd October edition

The repercussions of the Volkswagen emissions gets worse by the day. For those not following it:-

• The CEO, Martin Winterkorn, has resigned just as he was about  to renew his contract for 2 years. He was known as “Mr Quality”. More executives are likely to resign or be fired. The big question remaining is who knew and who sanctioned it.
• VW Stock market value has plummeted where it has lost 1/3rd of it value in just two days: ~$30B. Expect the stock to go much lower. You’d be foolish to buy with this amount of uncertainty.
• VW has said that European diesel cars have same software to fool the test.  In terms of impact, Europe has around 11 million out there compared to 1/2 million in the US.
• The talk remains about criminal charges. US Department of Justice, the EU and Germany prosecutors area all looking into it. Japan and India as also waking up.
• As predicted,  law firms have started to file class actions lawsuites under the rational that the consumers were duped. Some are also using for the ’emotional distress’ angle. The used car value of Volkwagen diesel cars is a big unknown. Who would want them?
• There is also likely going to a political fallout in Germany where it is being said that German Government knew about this back in July. VW, whose HQ is in Wolfsburg, are big political players in Germany due to the number of people they employ. The Volkwagon group that includes Porche and Skoda, were gunning for Toyota to be the biggest car manufacturer in the world.
• The regulators themselves are also coming under scrutiny. Many are asking how they designed and blessed off on these tests and allow each car manufacturer to run the tests themselves. It took a presure group and University in West Virginia to identify this. Regulators (Federal, Californian/ EU) were oblivious.
• The scandal is dragging BMW into the mess where it is also being reported that while it passed the ICCT test that busted VW, it’s cars are not as clean as their marketing is claiming.
• Knock on  business effects are also being seen areas from the commodity price for platinum which is used as a catalytic converter to reduce emissions, to the weakening of the Euro.

While Volkswagen has set aside reserves for the US fine, the overall consequential damages may bankrupt them. Even if it doesn’t initially, the brand is trashed.  It looks as if we are seeing the death knoll of “Clean Diesel” for VW as well as other players.  Emissions standards are going to get tighter and performance will drop off. Thus even if they survive, the demand for the product may not be there as people paid a premium for their diesel cars.

There is no good news whatever way you look at it.

• See also : “Dirty Secrets” opinion by The Economist.
• Sept 26: Added a link to FT primer on the issue.

Whose Exhaustive research determined VW were blowing smoke?

Secret photographs show VW’s plans to pass new emissions target.

In a follow on to “He who smelt it, dealt it“, we found out a bit more on who it was that grassed up Volkswagon cheating in their emission testing on Diesal cars. It was an organization called “ICCT: The International Council of Clean Transportation”. From their website, the mission  statement is:

The International Council on Clean Transportation is an independent nonprofit organization founded to provide first-rate, unbiased research and technical and scientific analysis to environmental regulators. Our mission is to improve the environmental performance and energy efficiency of road, marine, and air transportation, in order to benefit public health and mitigate climate change.

Bloomberg explains the background to how ICCT busted ’em. Continue reading..

He who smelt it, dealt it.

An old German road sign that indicated “Verkehrsverbot bei Smog” (No traffic allowed in smog conditions).

Volkswagen appears to be in big trouble where it is being reported that they have installed ECU software on their diesel cars which apply full pollution controls only when they are running emissions testing. When actually running in real life, they are bypassed. The result is a car that has much more efficient gas mileage but at the expense of nitrogen oxide emissions which are up to x40 than ‘legal’ limits.

The Environmental Protection Agency (EPA) is calling them out for cheating and are referring to this a ‘defeat device’. The State of California is also piling on. If you look at comments on New York Times, a bastion of liberalism, many drivers of VW Diesel are very upset and while they are thankful for the per mileage improvement, they are aghast that their green image is more dirty grey. Continue reading..

Faultly convictions due to GM ignition failure get overturned

Zachary Stevens’ 2007 Saturn after crashing head-on into a pickup truck. Source: Josh Davis Law Firm via Bloomberg

Imagine you are driving when your car unexpectedly goes out of control and the resulting wreck kills people. You say the car became unresponsive where power steering and the brakes do not work. While crashing, the airbags fail to deploy.

The police do not believe you and you get charged and convicted of manslaughter. You even spend time in prison.

That is what happened to a few people where some were teenagers. While they survived the accident, their lives were in many cases ruined.  Continue reading..

HailItalia airline: Another hail damaged jet has emergency landing

Alitalia plane after getting hail damage : Photo ShaneBEgan

I thought that the smashed up Delta flight 1899 due to hail the size of baseballs, was an anomaly. See Hail to the Chief.

I was therefore, surprised to see the picture of an Alitalia plane on it’s way from Rome to Milan that had to make an emergency landing in Naples. It looked very similar – crushed nose cone.

Not surprisingly some of the passengers decided to take the bus after their experience.

Hail to the Chief (pilot)

Wow. This was the damage to a Delta flight 1899 caused by hail the size of baseballs. The flight was going from Boston to Salt Lake City and had to divert to Denver.

Due to the cracks in the windshield, the pilot had to make a ‘blind’ emergency landing relying on the plane’s automatic guidance system.

That is impressive.  Continue reading..