Gaming Uber. A new app called “Cut the Surge” can predict ride-sharing app Uber’s surge prices during high-demand hours. The app tells passengers when the price is about to rise, when the surge price is likely to decrease, and what locations have a lower fare offering.
According a study commissioned by Uber, the app raises its prices during hours when the demand for taxis is high. Uber claims that the company’s goal is to make sure the passengers get their ride within minutes, even during the busiest time of the day. Benjamin Moreton, “Cut the Surge” app developer, told Crikey that his app used the Uber API to store the surge pricing in each city for every five minutes, enabling the forecasting feature to predict an average surge price. “Cut the Surge” draws a circle with a diameter of a three-minute walk around the user’s location, showing all the prices within the circle. When the user chooses the pick-up location, he or she will be redirected to the Uber app, with the address pre-filled and the price locked.
This 5000-user app has its limits. “[The forecast] doesn’t take into account special events (Christmas, sporting events etc.) or weather-related changes,” Moreton said in an email.
Even with the predicting app, not everyone accepts the fact that fares would be several times higher during the time when a car is most needed. People who reject Uber’s supply-demand curve theory expressed their anger on Twitter, hashtagging #DeleteUber, #UberHater and #UberRidePimping.
Changing prices have long been common among airline and hotels. As Uber boss Travis Kalanick wrote in defence of the Uber price surge, “marketplaces all over the world do it because it makes for more efficient allocation of resources”. But some drivers also hate the surge. Uber driver Suleman K. told CNET that he did not bother driving to neighbourhoods with high demands due to the frustration from the constantly shifting fares. “Many drivers I know would rather rely on a steady rate where they can make a living instead of chasing the surge,” he said.— Crikey intern Sunny Liu
China’s steel white elephant. On September 25, Baoshan Iron & Steel, China’s biggest steelmaker, started operations at the state-of-the art blast furnace it has spent years building in Guangdong Province. The new Baosteel furnace is to produce up to 10 million tonnes of steel a year (more than twice our annual production). The supply of semi-finished products and steel sheets will begin from the end of this year. The new plant will use iron ore from Australia and other sources. Now it seems quite odd that, at a time of rising oversupply and falling domestic demand for Chinese steel, a plant of this size would be built and start producing. But it was green-lit by the government back in 2011 when the world was in love with all things Chinese steel, and iron ore and coal prices were at record highs (thanks to floods and cyclones in Australia and Brazil).
The cost is enormous: US$11 billion back in 2011, higher now. Preliminary construction started in 2008 and the government took three years to give the final OK. It includes a power station, port facilities (for iron ore) and rail access — the full box and dice. Chinese steel mills are inefficient — at the moment capacity utilisation is running at just over 60% (the government wants to lift it to more than 70%, but that will need the wholesale closure of steel plants across the country). The only place the steel from this plant can go is into the export market where it will make life tougher for rivals from South Korea and Japan, as well as Taiwan, India, the US, Europe and all the way down here in Australia. — Glenn Dyer
Sensible Origin. In the wake of a $4.7 billion restructuring package, including a $2.5 billion issue to shareholders (which will fall short in the retail part of the raising), Origin Energy’s board has made a very sensible decision in scrapping nearly $5 million of share incentives for CEO Grant King and the company’s chief financial officer, Karen Moses. Origin had been seeking approval from shareholders at the forthcoming AGM for the granting of shares and rights to King worth more than $3.2 million, and a more than $1.5 million for Moses. The grants were part of its short- and long-term incentive plans for senior management. But the resolutions seeking shareholder approval for the grants have been withdrawn — a decision Gordon Cairns, Origin chairman, described as “appropriate”. — Glenn Dyer
Don’t tell the Germans. Economists at the New York Federal Reserve have shown how profits at the five big US banks have soared since the GFC. In research released overnight, the economists said that from 2009 to 2014, the combined net income of JPMorgan, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley annually averaged US$41.73 billion, up from annual average of US$25.08 billion from 2002 to 2008. Helping boost profits were trading revenues that they and other dealers have seen returning to the levels before the financial crisis seven years ago. The quintet dominates the so-called “bulge bracket” banks on Wall Street. Others in this group include Barclays (which has shrunk itself) and Deutsche, the huge German bank, which, we learned this morning, is about to cut or drop its 2015 dividend after revealing a massive third-quarter loss thanks to new management. Deutsche said in a statement on its website that it expects a net loss of 6.2 billion euros (around A$9.7 billion). The write-downs include the impairment of all goodwill and certain intangibles in corporate banking and securities and private and business clients of 5.8 billion euros alone.
Deutsche revealed plans in April to either float a majority stake in Postbank, its consumer division, or find a buyer. The bank is also taking a charge of 1.2 billion euros for legal provisions, and a 600 million euro write-down on the carrying value of a stake in a Chinese bank. And for shareholders, the bad news with the bank saying management board will recommend a reduction or potential elimination of its dividend for its 2015 financial year. And, by the way, those five big US banks have between them paid well over US$100 billion in fines and penalties for various rorts in US home mortgages, gold fixing, foreign-exchange fixing, interest-rate fixing, dodgy advice and other problems, and still made massive profits. — Glenn Dyer
Perhaps the new steel plant will actually produce steel? That is not what I would most of this metal form China. Chinese steel, especially galvanised in my experience, utter crap. My Godson says his company, which build bloody big bits for mines, avoids using Chinese steel like the plague. Gal pipe and square tube start corroding in about 6 months, and this is 500km for the salt water zone on the coast.
Somewhere in there I meant to say “not what I would call” Sorry.