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Uber has already made billions from its exits in China, Russia and Southeast Asia – TechCrunch

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Uber’s exits from China, Russia and Southeast Asia were billed as failures from the company, but the ride-sharing giant has already made billions on paper from those moves, according to its IPO filing.

Uber released its much-anticipated S1 on Thursday U.S. time and reporters and analysts are frantically digging into a treasure trove of previously-unreleased details. A number of sections on Uber’s global divestitures begin to paint a clear picture of the strategy that Uber employed when leaving China, Russia and Southeast Asia in recent years.

In each case, Uber decided to leave the market but, upon doing so, take a stake in its rival business in exchange for the assets it had remaining. Today, those holdings are collectively worth a cool $12.5 billion on paper, with a least $3 billion in gains so far.

China: $7.95 billion

China was Uber’s first tactical exit and it saw the company sell to local giant Didi Chuxing in August 2016. 

The Uber filing shows the U.S. firm took an 18.8 percent take in Didi. That, Uber estimates, has since been reduced to around 15.4 percent due to subsequent fundraising from Didi, which last publicly announced a $5.5 billion raise one year ago — previously, it raised $4 billion at the end of 2017.

Didi’s $56 billion valuation means it is the third highest valued startup in the world behind only ByteDance, parent of TikTok, and Uber, which it counts as an investor

The really interesting part of the filing its Uber’s estimate for the value of its Didi stake: that was $5.97 billion as of the end of 2017, and $7.95 at the end of last year. That’s a $2 billion paper increase in just one year, although the Uber filing doesn’t provide a value for the initial merger deal. Didi is also in the money having invested $1 billion into Uber in exchange for

One notable piece is that an investigation into whether the deal constitutes a monopoly is still ongoing, some two and a half years after the transaction was first announced.

“It is not clear how or when that proceeding will be resolved,” Uber notes in its document.

Finally, the original deal included a clause forbidding Didi from making “certain investments outside of Asia” for a six-year period. The company breached that — it acquired Uber rival 99 in Brazil and expanded its business into Mexico, among other moves — which saw Uber take back some shares, although its net gain was only $152 million.

Didi has struggled over the last 18 months so safety concerns bubbled to the fore following the murder of two female passengers last year. Operationally, too, there have been challenges. Didi reportedly lost $1.6 billion last year — that’s more than Uber — and it reshuffled the organization by laying off 15 percent of its staff recently. Despite buying out Uber, it is up against increased competition after a consortium of automakers inked a $1.45 billion ride-hailing joint-venture while new government rules have made the business of ride-hailing, and in particular recruiting drivers, more challenging in China.

Still, as China’s dominant firm and with an increasingly global presence, you’d imagine that Uber’s stake is likely to become more lucrative in the future.

Southeast Asia: $3.22 billion

Uber’s exit from Southeast Asia in March 2018 never seemed a copy of its China play, where it was burning a reported $1 billion a year. Instead, I argued that the deal was actually a win for the U.S. firm because it took a decent slice of Grab as part of the agreement and Uber’s filings show that is already proving to be the case.

Uber noted that the exit deal saw it take an initial 30 percent stake for $2.28 billion, which has since diluted to around 23 percent following Grab fundraising, which remains ongoing with a goal of $6.5 billion for its Series H. (That may be why the Uber stake was initially announced as 23 percent rather than 30 percent.)

Grab’s most recent valuation was $14 billion, according to sources, which means Uber’s stake is already worth $3.22 billion, a nearly $1 billion jump on paper in just a year.

Uber’s investment in Grab has already made it a $1 billion profit in just over one year

With the company in a dogfight with Go-Jek, its Indonesia rival that’s backed by the likes of Google and Tencent, it seems unlikely that Grab and key shareholder SoftBank will do anything other than keep on raising. That’ll likely dilute Uber — which, as a shareholder rather than an investor, isn’t likely to invest again — but it’ll increase Grab’s valuation and thus the value of Uber’s stake.

That leads us to the next detail of Uber’s Grab investment: its stake is classified as “available-for-sale debt security.” That’s to say that Uber could potentially dispose of its stake in the future.

Indeed, the Uber filing notes a clause in the deal that would allow the U.S. firm to sell “all or a portion of its investment back to Grab for cash” if the company hasn’t gone public by March 25 2023, five years after the deal.

That’s the first real line in the sand that we’ve seen for a Grab IPO and, with a buyback already expensive as Uber’s stake is worth more than $3 billion, the clock is ticking.

Russia: $1.4 billion

Finally, Uber’s third tactical retreat is Russia, where it formed a joint venture with local rival Yandex.taxi in July 2017. The combined business covers ride-hailing and food delivery in over 127 cities in Russia.

That gives it a different kind of relationship to its deals with Didi and Grab, where it one of many minority shareholders, and Uber’s S1 gives fewer details of the Russia JV.

Yandex, like Uber, is testing self-driving vehicles that could used in its taxi service in the future

What we do know is that Uber estimates its share of the business is 38 percent, a slice that it says is worth $1.4 billion. That’s a valuation of around $3.68 billion which is on par with the $3.7 billion that the companies announced at the time of the deal. Like the other deals, the business is the dominant one in a huge market — Russia has a population of more than 140 million people — so it stands to reason that the business will grow and thus Uber’s value within it will increase.

Yandex, the parent of Yandex.taxi, also stands to gain and not just from the joint venture. Uber allocated the company two million shares (then worth $54 million) which, at a proposed $55 per share, would more than double to $110 million at IPO and that’s not counting its potential value in the future.

A change with Careem acquisition

Uber CEO Dara Khosrowshahi said that Southeast Asia would be the company’s last global retreat, and he seems to have been good to his word so far. Indeed, Uber announced its largest acquisition last month with a planned $3 billion purchase of Middle East-based rival Careem, which is present in 15 markets.

The Uber filing explains that the deal, which has not been completed, is $3.1 billion with around $1.4 billion in cash.

“We have structured the acquisition and proposed integration of Careem with the goal of preserving the strengths of both companies, including opportunities to create operating efficiencies across both platforms. We expect to share consumer demand and driver supply across both platforms, thereby increasing network density and reducing wait times for consumers and drivers in the region, while simultaneously achieving synergies from combining back-end support functions and shared technology infrastructure,” Uber wrote in a statement.

That’s certainly a new approach for Uber worldwide and, post IPO, it’ll be interesting to watch it actively play a role in consolidating other businesses into its own rather than going the other way. Still, those three global retreats are likely to pay off handsomely despite being billed as the result of failure.

A graphic from Uber’s filing shows its global presence, and the importance of its investments in China, Russia and Southeast Asia

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Damning report says broadband industry behind huge Net Neutrality astroturfing

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Around 1 in 5 of the 22 million comments submitted to the FTC about ending Net Neutrality were real, a multi-year investigation has concluded, intended to give the false impression that the public supported the idea. A newly-published report by the New York Attorney General’s Office blames the broadband industry for funding fake letters and impersonating real – and sometimes dead – Americans, in the hope of faking a wave of popular support.

Net neutrality effectively prevented broadband providers from prioritizing content that passed through their systems. The rules meant that ISPs could not charge more to deliver some company’s data faster, or conversely slow the data of others who didn’t pay for the best service.

In the US, the arguments for and against net neutrality laws have been underway since the 1990s. In 2017, however, renewed attacks from the FCC under then-chairman Ajit Pai saw the agency push toward removing the restrictions of ISPs when considered Title II “common carrier services”; instead, Pai’s FCC aimed to reclassify them as Title I “information services” and, in the process, potentially open up a lucrative new income stream for broadband providers.

It’s a complex issue, but the investigation led by the Office of the Attorney General found that “the nation’s largest broadband companies funded a secret campaign to generate millions of comments to the FCC,” it announced today. “Many of these comments provided “cover” for the FCC’s repeal of net neutrality rules.”

“The broadband industry could not, in fact, rely on grassroots support for its campaign because the public overwhelmingly supported robust net neutrality rules” the report claims. “So the broadband industry tried to manufacture support for repeal by hiring companies to generate comments for a fee.”

The lure for participants was one familiar to anybody who has spent much time on the internet recently without an ad-blocker active. Commercial lead generators relied on the promise of sweepstakes entries, gift cards, and more to encourage members of the public to join the campaign. However, “nearly every lead generator that was hired to enroll consumers in the campaign, instead, simply fabricated consumers’ responses.”

Other lead generators merely used previously-collected contact details to submit fake comments. One copied information that had been exposed in a data breach and published online. At the point the comments were submitted, some of the people whose names were attached to them had already died, and in some cases been dead for several years.

It resulted in more than 8.5 million fake comments submitted to the FCC, and more than 500,000 fake letters sent to congress. A further 9.3 million fake comments to the FCC were generated through the use of automated software by a single person.

In total, the investigation found, though the FCC received more than 22 million comments during its 2017 proceedings to repeal net neutrality, nearly 18 million were fake.

Three companies were found to be responsible for millions of the fakes, with Fluent, Inc., Opt-Intelligence, Inc., and React2Media, Inc. collectively facing more than $4.4 million in penalties. Meanwhile, broadband industry group Broadband for America – made up of trade groups and broadband company senior executives – funded at least some of the process, apparently spending $4.2 million, or more than half of its total campaign budget, on the ruse.

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Google responds to Apple App Tracking Transparency with new rules for Android

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Google released a notice today about the future of Android and user data transparency. While not a direct response to Apple’s update with iOS 14.5 – at least not explicitly – Google’s “pre-announcement” of an upcoming safety section in Google Play should effectively keep the two operating systems in-step on several privacy-centric fronts. The new section in Google Play for Android apps will “help people understand the data an app collects or shares, if that data is secured, and additional details that impact privacy and security.”

Suzanne Frey, VP, Product, Android Security and Privacy posted a note this week about how developers and users will be affected by the update to Google Play and Android. Android already has a system in place where apps alert users about what permissions they seek – location data, contacts, personal info, audio, storage files, and camera access. With this update, it’ll all be a bit more clear up front, listed in Google Play.

What will apps show?

Developers will be asked to share the following items with users in their app listing in Google Play: What type of data is collected and stored, and how the data is used. That should be simple.

• What type of data is collected and stored: Location, Photos & Videos, Audio files, Storage files, Contacts, and Personal Information.
• How the data is used by the app or the developer/group that makes the app. This could also include disclosure of data sharing with 3rd-party sources.

Google Play will also begin listing information as follows in a new Safety Section for each app. New elements will highlight whether:

1. Security practices are in play (data encryption, for example) for user data
2. Google’s Families policy is followed with user data
3. The app “needs this data to function or if users have choice in sharing it”
4. The app’s safety section “is verified by an independent third-party”
5. Data deletion is an option for the user upon uninstall of said app

When Safety Section will appear on Google Play

Here on May 6, 2021, Google first made their “pre-announcement” of this new policy. In Q3 of 2021, the policy will be “available” for the public and developers to read. In the fourth quarter of 2021, developers will be able to start declaring information in the Google Play Console as outlined above.

In the first quarter of 2022, users in the public will begin to see the new safety section in Google Play. At some point in the second quarter of the year 2022, Google will set a deadline for all new and existing apps to declare the information outlined above.

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This HP EliteOne 800 G8 AiO has video call talents every PC should steal

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HP has revealed its latest all-in-one PC, and we can’t help thinking it’s wasted in businesses. The HP EliteOne 800 G8 All-in-One comes with a choice of 23.8- or 27-inch displays, with a pop-up camera on top that includes video call-friendly face tracking.

In fact, the array that slides out of the top of the AiO PC has dual 5-megapixel cameras inside, plus an IR camera and a time-of-flight sensor that can track distance. With all that, and an extra-wide field of view compared to the average webcam, it means the EliteOne 800 G8 can use digital tracking to center you in the middle of the frame, cropping accordingly.

There’s also auto scene detection, to adjust the lighting automatically depending on ambient conditions in the room. HP has fitted its AI-powered noise reduction system as well, for the first time on a PC, with the ability to spot and filter out over 350 million types of voices and noises. The filters work on both outbound and inbound noise, so even if you’re talking with someone with a lesser microphone system you’ll still hear the benefit.

There’s HP Dynamic Audio for speech, music, and movie audio tuning to cut through background noise, along with Dynamic Voice Leveling to automatically adjust the volume of your voice so that it stays consistent even as you move closer to, or further away from, the microphone. Even the cooling system has been designed to lower the fan noise while you’re on calls.

It’s all wrapped up in a design that could be mistaken for just being a standalone monitor. Inside there’s a choice of Intel 11th Gen Core processors, up to a Core i9; they can be paired with up to 64GB of DDR4 memory and up to 6TB of M.2 PCIe storage. On the graphics side, there’s a choice of Intel UHD Graphics 730 or 750, with the display resolution offering up to 2560 x 1440 depending on panel.

As for connectivity, on the wireless side you can have WiFi 6 and Bluetooth 5.0. For ports, you get a lot more than a new iMac 24-inch offers: three USB-A, two USB-C, HDMI, DisplayPort, and ethernet are all included.

Clearly these aren’t the machines if you’re looking for serious graphical grunt (or gaming, for that matter). Still, the video calling systems HP has fitted could make a big difference if your schedule is still filled with back-to-back Zoom appointments. Meanwhile the EliteOne 800 G8’s design manages to step away from the norm in enterprise hardware, and wouldn’t look out of place in a home office instead.

No word on pricing at this stage, but HP says that the new all-in-one will go on sale later this month.

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