Following Transport for London’s decision not to renew Uber’s licence to operate in London, Chief Executive Dara Khosrowshahi has apologised openly in a letter for the mistakes the company has made. TfL have refused to renew Uber’s licence within London, following concerns regarding their business practices, referring to four main areas of concern including their approach to reporting criminal offences, and carrying out safety and background checks on their drivers.
Uber’s licence is due to expire on 30th September; however, they are planning to continue business whilst pursuing a legal appeal that has the potential to last for a year. The Mayor of London, Sadiq Khan and Chairman of TfL welcomed the apology, and recognised the concerns that Uber have faced. Khan is aware of the legal process that is currently in place and has urged board members of TfL to meet with Khosrowshahi following his open apology.
Uber Executive, Fred Jones also agrees, however, he admits that he does not fully understand the issues and concerns that the London Transport regulators have. Jones explained that although Uber does not report criminal offences to the police, they do however, report any behaviour and offences to TfL. Jones admitted that a mistake has been made in the past following one incident of sexual assault – however, lessons were learnt following this and apologies were made to the individuals concerned.
Unfortunately, the driver at the centre of this ‘one-off’ incident was allowed to continue working on Uber’s books and went on to commit another offence, more serious than the original.
Jone’s defended Uber’s business practices and believes that they are not breaking any rules, and are abiding by them, saying, “As soon as we receive a serious complaint or we are alerted of it, we restrict the access to the app and immediately investigate and that would involve notifying TfL.”
Uber’s new Chief Executive has openly apologised for the mistakes the company has made in London, and has assured that changes will be made while the fight for the renewal of their licence goes ahead. The open apology included a description of how Uber have “revolutionised” transporting passengers within London and cities around the world, and how they admit that they have got things wrong along the way. An appeal will be made against the decision on behalf of Uber shortly.
Uber is also involved in a separate dispute. they are also contesting a court ruling relating to the status of their drivers. Lawyers have described the ruling as a “public safety issue”. Uber want to see a landmark ruling overturned, where drivers are classed as worker with rights to holiday pay, and paid a rate in line with the minimum wage in the UK.
It is believed that Uber have also ignored a ruling made back in October 2016, when lawyers representing James Farrar and Yaseen Aslam described Uber with damning phrases such as “dragging their tails”, and “kicking the can down the road”. Bates Wells Braithwate’s representative Paul Jennings, reported that the centre of the ruling is safety, and given the numbers involved and nature of the work there is a real potential safety risk if drivers, whether they be taxi, bus or train are not given paid holiday.
A recent cyber attack has left FedEx’s, TNT division with an estimated loss of £221 million during the NotPetya ransomware outbreak in June this year. TNT saw it’s computer systems severely disrupted early this summer, and have still yet to fully reinstate their IT operations. TNT admitted that deliveries and sales have continued to suffer as a result of the attack, and hope the situation will be fully resolved by the end of September.
TNT are not the only company to be hit; reports show that the incident also affected other international companies that have also suffered major financial losses as a result of the attack. The shipping company Maersk, announced losses incurred costing upwards of $300 million, whilst Reckitt Benckiser were due to announce losses of up to £110 million. Further announcements from the British based company in October will confirm the exact figure.
It is likely that the attack at TNT occurred during a tax software update by their Ukrainian office. The update is believed to have been infected, thus exposing TNT’s systems. While the company are struggling to recover following the attack, TNT have been keen to confirm that customer data had remained confidential and had not been exposed. It is believed that Ukraine based companies had been the key targets in this attack.
The attack also happened during already operational upgrades, when TNT’s systems were being upgraded inline with FexEx’s own systems. Since the attack, these plans have now moved forward as a priority whilst ensuring that the recovery and restoration of the existing systems have taken place across their global operations, and ensuring that attention to the systems that were not affected are given additional protection to prevent future attacks.
In August this year, there were numerous reports that TNT had been forced to use WhatsApp to communicate internally with staff due to having no access to their own email system.
Although, TNT saw tens of thousands of packages waiting to be processed at the end of each day following the attack, FedEx’s Chief Operating Officer refused to turn business away. He said “Our operational teams remain focused on serving our customers and we made a critical decision in the first 24 hours after the attack – keep our doors open for business, despite being reduced to manual processes for pick-up, sort and delivery,”
Teams of employees are in the process of trying to restore customer’s faith and confidence, and they plan to see their customer base to rise to normal sooner rather than later.
Do you want chips with that?
A £13.3 billion deal has taken place between US private equity firm Bain Capital and Toshiba, with an attempt to keep Toshiba’s semiconductor business above water as well as recovering losses amounting to billions of dollars that have been suffered by Toshiba’s US nuclear unit. Toshiba have also faced being delisted this year, following a delay with the late publication of their financial results.
It is believed that Bain Capital have joined forces with South Korean company SK Hynix Inc, as well as Dell and Apple who purchase Toshiba chips within the US. Rival bidders Western Digital, already running a joint venture with Toshiba in the United States were this week tipped to be the favourites to win the deal. However it has been reported that there is now some degree of uncertainty regarding the final outcome.
Pressure has been placed upon Toshiba to seal the deal in order to strengthen the balance sheets by the end of the 2017 financial year.
Toshiba lost billions of dollars as a result of problems with their US nuclear subsidiary Westinghouse. The organisation has seen cost over-runs and fluctuations in the global demand for nuclear energy. Westinghouse filed for bankruptcy back in March this year following the financial damage it incurred Toshiba fought against the auditors in order to have their finances signed off, which led to delays – the results were eventually released in May, although it wasn’t until the final published papers were released this August that losses of $8.8 billion were shown for that financial year.
With the sale of Toshiba Memory, their own finances will see a vast improvement, approximately £5 billion after taxes. If this were to happen, Toshiba would then be pulled out of negative equity thus enabling it to regain its staus as a listed entity.
Toying with bankruptcy
Toys R Us are in the doldrums following speculation that the toy retailer is facing serious debt, and seeing their bonds dramatically fall, leaving them on the verge of bankruptcy.
Since 2005, Toys R Us has withstood crushing debts and more than the odd hiccup. This month has seen a series of unfortunate events that have toppled the toy retailer in just over the space of a week.
It was only until recently that it was reported there was uncertainty whether a plan to rescue the company prior to the festive holiday shopping season would be agreed. Negotiations had started to take place with plans to restructure the business for approximately $400 million for the next financial year. Rumours mounted, and although creditors were sitting tight waiting for an offer, others with knowledge of the company’s problems reported that the retail legend had started to prepare for bankruptcy under the auspices of the Chapter 11 United States Bankruptcy Code, thus leading to a series of events that led to the company to buckle under the pressure and allowed its creditors to act with caution.
Within a week of the reported financial crisis, Toys R Us bonds were whittled down as low as 18% of their face value at one point. Hugh Ray, an attorney with McKool Smith based in Houston, described the bankruptcy as a “self-fulfilling prophecy”, and believes that credit managers and vendors have influenced each other about the crisis, thus facilitating the rumours.
Creditors would have been fully aware of the state of Toys R Us’ finances, and would have certainly known about the debt that it has operated within during the last 10 years. Its debt currently amounts to $5 billion, and reported to be costing the chain approximately $400 million per annum.
Senior Portfolio Manager at Leader Capital Corp, John Lekas, described Toys R Us as trying to hold the business together with the help of glue and sticky tape. Unfortunately, it now appears that the business has run short of cash, as well as falling behind its competitors and without the capability to invest in its future business.
With the hired help of Lazard Limited, Kirkland and Ellis LLP, and Alvarez and Marshal, Toys R Us are trying to initiate a major restructure of the business. In August, those discussions commenced requesting more time and breathing room, especially with the run up to the holiday season.
Some investors sensed that the company were trying to “win concessions” with additional timescales. The downfall of bond prices were a large concern to investors, as well as its creditors who in turn upped the ante in exchange for the approval to take losses on their assets in order for Toys R Us avoid going to court. Unfortunately, negotiations and talks were unsuccessful, and news of probable court papers were announced by CNBC in the US last week. Once this information had been leaked, suppliers were obviously alarmed with the news.
Following the announcements, within days it was reported that around 40% of toy vendors refused to ship toys and other merchandise to Toys R Us. Vendors started to demand full payment prior to shipment, while others requested that all outstanding financial obligations by Toys R Us were to be settled prior to shipments. Vendors also experienced extra pressures when the credit insurance companies and firms that financed them withdrew their services.
Following the considerations to extend their debt, the realisation was that it would have left the retailer in a worse financial situation, with additional debt and interests, and not adequate funds or resources to implement a complete financial turnaround. Towards the end of August, it became obvious that the odds were severely against the toy giant, so the preparations for a Chapter 11 filing commenced.