To Get a Ride, Uber Says Take a Walk

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The latest variation of an Uber ride will require a short walk.

In eight U.S. cities, the ride-hailing company is rolling out a service called “Express Pool,” which links riders in the same area who want to travel to similar destinations. Once linked, riders would need to walk a couple of blocks to be picked up at a common location. They also would be dropped off at a site that would be a short walk from their final destinations.

Depending on time of day and metro area, Express Pool could cost up to 75 percent less than a regular Uber ride and up to half the cost of Uber’s current shared-ride service called Pool, said Ethan Stock, the company’s product director for shared rides.

Pool, which will remain in use, doesn’t require any walking. Instead it takes an often circuitous route to pick up riders at their location and drops them at their destination. But that can take longer than Express, which travels a more direct route.

Uber has been testing the service since November in San Francisco and Boston and has found enough ridership to support running it 24 hours per day. Within the next two days, the around-the-clock service will start running in Los Angeles; Philadelphia; Washington, D.C.; Miami, San Diego and Denver. More cities will follow, Uber said.

The new service could spell competition for mass transit, but just how much depends on how well it works and how good the mass transit is, said Mark Hallenbeck, director of the Washington State Transportation Center at the University of Washington. If buses or subways are overcrowded and Uber can provide service for a similar price, that will help with mobility.

“If, however, you are cannibalizing transit that’s not over-subscribed, then that becomes a bad thing,” Hallenbeck said.

Also, if the ride-sharing service pulls people off mass transit and creates more automobile traffic, that will add to congestion, he said.

The service could complement Uber X, the company’s door-to-door taxi service — or draw passengers away from it.

Stock said the system should work well with public transit, providing first-mile and last-mile service for transit riders and by providing service to low passenger volume areas where it’s not cost effective for public transit to serve. He also says it will reduce congestion by cutting the number of personal vehicle trips.

Express already has ride-sharing competitors such as Via, which operates in New York, Chicago and Washington, D.C.

Express Pool will have normal-sized cars, at least initially, and optimally will carry a maximum of three passengers so riders aren’t crammed into the vehicles. It could be expanded to six-passenger vehicles, Stock said.

It will take one to two minutes for Uber’s computers to match a rider to a driver and other riders and select a pick-up point, Stock said.

The lower cost of the service should help Uber grow, Stock said. “More riders can afford to take more trips for more reasons,” he said. Already Uber Pool accounts for 20 percent of Uber trips in the cities where it’s available.

S. Korea official: GM 0ffers $2.8B Investment in S.Korea Over 10 Years

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General Motors has proposed $2.8 billion of fresh investment into its South Korean operations over the 10 years as part of its plan to restructure the embattled unit, a South Korean senior government official said on Wednesday.

The offer comes as the Detroit carmaker and the South Korean government discuss restructuring options at loss-making GM Korea, one of GM’s largest offshore operations.

The official with direct knowledge of the matter said GM had also asked South Korea to inject funds into GM Korea in which the country’s state bank also holds a stake. However, the official added that a close look into GM’s proposal was necessary to determine whether the investment plan was sufficient to rescue the unit, which directly employs some 16,000 workers.

“We need to have a closer look through the audit,” the official said.

South Korea’s trade minister said the government has also asked for an audit into GM’s “opaque” management in the country.

“By opaque we mean the high rate of profits to raw material costs, interest payments regarding loans and unfair financial support made to GM’s headquarters,” said Minister Paik Un-gyu told lawmakers in parliament.

Last week, the U.S. automaker announced it would shut down a factory in Gunsan, southwest of Seoul, and said it was mulling the fate of its three remaining plants in South Korea.

A South Korean lawmaker said earlier that GM had put forward a proposal including the investment plan and a debt to equity swap of the Korea unit’s borrowings to the parent company.

In return, GM requested South Korea to take part in financing the investment and raising capital, according to a statement by Jung You-sub, the lawmaker from Bupyeong where GM runs its biggest factory in South Korea.

Jung’s office was not immediately available for comment.

On Tuesday, Reuters reported GM had offered to convert debt of around $2.2 billion owed by its ailing South Korean operation into equity in exchange for financial support and tax benefits from Seoul, four sources with direct knowledge of the matter said.

 

S. Korea’s Cryptocurrency Industry Welcomes Regulator’s Dramatic Change of Heart

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South Korea’s cryptocurrency industry is anticipating much better times as the market regulator changes tack from its tough stance on the virtual coin trade, promising instead to help promote blockchain technology.

The regulator said Tuesday that it hopes to see South Korea — which has become a hub for cryptocurrency trade — normalize the virtual coin business in a self-regulatory environment.

“The whole world is now framing the outline [for cryptocurrency] and therefore [the government] should rather work more on normalization than increasing regulation,” Choe Heung-sik, chief of South Korea’s Finance Supervisory Service (FSS), told reporters.

FSS has been leading the government’s regulation of cryptocurrency trading as part of a task force.

Cryptocurrency operators have drawn a new optimism from Choe’s comments, seeing them clearly indicating the government’s cooperation in their plans for self-regulation.

“Though the government and the industry have not yet reached a full agreement, the fact that the regulator himself made clear the government’s stance on cooperation is a positive sign for the markets,” said Kim Haw-joon of the Korea Blockchain Association.

Wednesday’s news is a stark reversal of the justice minister’s warnings in January that the government was considering shutting down local cryptocurrency exchanges, throwing the market into turmoil.

Instead, South Korea banned the use of anonymous bank accounts for virtual coin trading as of January 30 to stop cryptocurrencies being used in money laundering and other crimes.

Bitcoin, the world’s most heavily traded cryptocurrency, is now changing hands at a three-week high of $11,086 on the Luxembourg-based Biststamp exchange after falling as low as $5,920.72 in early February.

South Korean electronics giant Samsung has already started production of cryptocurrency mining technologies, local media reported in January.

S. Korea Signs Free Trade Deals With 5 Central America Countries

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South Korea said on Wednesday it is signing free trade agreements with five Central American nations aimed at boosting market access for the Korean auto sector and electronics makers.

Trade minister Kim Hyun-chong will meet representatives from Costa Rica, El Salvador, Honduras, Nicaragua and Panama in Seoul on Wednesday to sign five separate bilateral pacts which will eliminate duties on about 95 percent of traded goods and services, Korea’s trade ministry said in an e-mailed statement.

The agreements are subject to parliamentary approval in each country, and is likely to take effect at different times depending on the ratification process.

The five trade pacts open South Korea to key Central American countries after its deals with the U.S., the European Union and China helped boost exports.

“The South Korea-Central America free trade deals will enable the countries to build a more comprehensive, strategic partnerships going forward,” Kim said.

The ministry expects the five deals to accelerate South Korea’s economic growth by an overall 0.02 percent in the next 10 years, by boosting exports of cars, steel, cosmetics products, and auto components.

Artificial Intelligence Poses Risks of Misuse by Hackers, Researchers Say

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Rapid advances in artificial intelligence are raising risks that malicious users will soon exploit the technology to mount automated hacking attacks, cause driverless car crashes or turn commercial drones into targeted weapons, a new report warns.

The study, published on Wednesday by 25 technical and public policy researchers from Cambridge, Oxford and Yale universities along with privacy and military experts, sounded the alarm for the potential misuse of AI by rogue states, criminals and lone-wolf attackers.

The researchers said the malicious use of AI poses imminent threats to digital, physical and political security by allowing for large-scale, finely targeted, highly efficient attacks. The study focuses on plausible developments within five years.

“We all agree there are a lot of positive applications of AI,” Miles Brundage, a research fellow at Oxford’s Future of Humanity Institute. “There was a gap in the literature around the issue of malicious use.”

Artificial intelligence, or AI, involves using computers to perform tasks normally requiring human intelligence, such as making decisions or recognizing text, speech or visual images.

It is considered a powerful force for unlocking all manner of technical possibilities but has become a focus of strident debate over whether the massive automation it enables could result in widespread unemployment and other social dislocations.

The 98-page paper cautions that the cost of attacks may be lowered by the use of AI to complete tasks that would otherwise require human labor and expertise. New attacks may arise that would be impractical for humans alone to develop or which exploit the vulnerabilities of AI systems themselves.

It reviews a growing body of academic research about the security risks posed by AI and calls on governments and policy and technical experts to collaborate and defuse these dangers.

The researchers detail the power of AI to generate synthetic images, text and audio to impersonate others online, in order to sway public opinion, noting the threat that authoritarian regimes could deploy such technology.

The report makes a series of recommendations including regulating AI as a dual-use military/commercial technology.

It also asks questions about whether academics and others should rein in what they publish or disclose about new developments in AI until other experts in the field have a chance to study and react to potential dangers they might pose.

“We ultimately ended up with a lot more questions than answers,” Brundage said.

Illicit Financial Flows Outpace Development in Africa, OECD Says

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Through medication and narcotics smuggling, ivory and people trafficking, oil theft and piracy, Africa is, by conservative estimates, losing about $50 billion a year in illicit financial flows — more, in fact, than it receives in official development assistance. 

A report by the Paris-based Organization for Economic Cooperation and Development offers a bigger look at the illegal economy behind the losses and how African and richer nations can fight it.

The OECD report zooms in on West Africa, and one sector in particular stands out. Catherine Anderson, who heads governance issues as the OECD, said 80 percent of illicit financial flows from West Africa are generated from the theft of natural resouces, principally oil.

But West African countries aren’t the only ones losing out from illicit flows, Anderson said. So are developed nations. Migrant trafficking, a hot-button issue in Europe, is a case in point.

“One of our case studies is on al-Qaida in the Islamic Maghreb, which is benefiting from the kidnap-for-ransom activities,” she said. “They are interdicting the trade and passage of goods across the Sahel, levying protection fees and revenues from the population. These have significant implications, not just for West African populations but for OECD countries, for Europe, in terms of insecurity and instability.”

She said illegal resource flows need to be tackled holistically — not only by the countries of origin, but also by those where the finances are transiting, and those where they finally end up, including developed countries. Doing so can be particularly tricky in West Africa, where a huge informal economy blurs the boundary of what is legal and what isn’t.

Ambassador Según Apata of Nigeria is a member of a U.N. high-level panel looking into illicit financial flows from Africa. He said some African governments are beginning to tackle the problem, but they don’t always have the capacity to do so.

“We have not made giant strides yet,” Apata said. “We are still at the elementary, at the mundane level of implementation.”

Apata said that if the $50 billion in losses from illegal activities were channeled into development in West Africa, it could help check the illegal migration that European countries worry about.

Fearing Tourist Drought, Cape Town Charts a New Relationship with Water

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When Markus Rohner flew into Cape Town’s airport this month, he found an unexpected line at the men’s washroom.

With the city facing an unprecedented water shortage, airport authorities had turned off all the sink taps but one, leaving visitors to wait in line to wash their hands, under the watchful eye of a bathroom attendant.

“In Johannesburg, there were a lot of jokes about the situation. People were saying to each other: ‘Let’s go to Cape Town for a dirty weekend,'” said Rohner, who visited both cities recently for his job as a sales and marketing director for a Swiss machinery manufacturer.

Cape Town, which is battling to keep its taps flowing as reservoirs run close to dry following a three-year drought, declared a national disaster this month. Without rain, Cape Town could run out of water by July 9, city authorities predict.

For visitors thinking of flying into one of the world’s tourism hotspots, threats of a water “Day Zero” raise a range of questions: Will a visit waste scarce water local people need? Will I be able to flush my hotel toilet and have a shower? Should I come at all?

Sisa Ntshona, who heads the tourism marketing arm of South Africa’s government, has the answer you’d expect: Tourists — who support an estimated 300,000 jobs in South Africa’s Western Cape province — should come but they should be prepared to help out and “Save like a local,” as the slogan goes.

In a city where residents now are expected to use no more than 50 liters of water a day — enough to drink, have a 90-second shower, flush the toilet at least once and wash a few clothes or dishes — tourists “don’t have special privileges,” he said.

That means no baths, swimming pools now sporting salt water instead of fresh, sheets and towels changed less regularly, and signs urging visitors to flush toilets as infrequently as possible.

At one Cape Town hotel, visitors who insist on a bath — which takes 80 liters of water — now have to conspicuously carry a large rubber duck placed in their bathtub to reception to exchange it for a bath plug.

With climate change expected to bring worsening water shortages to cities around the world — from Sao Paulo to Los Angeles to Jakarta — such changes are going to be needed in many places in years to come, said Ntshona, the CEO of South African Tourism.

“How do we recalibrate the norm for global tourism?” he asked, on a visit to London to reassure potential visitors. “Tourists are aware of recycling, carbon emissions. But now it’s water.”

“This is the new norm,” he said. “Even if it rains tomorrow, we can never go back to the old way of consuming water.”

Tourist cash

For Cape Town, keeping tourists flowing through the city is an urgent priority.

Foreign tourists represent only about 1 percent of the people in the city even at peak times, but tourism — foreign and South African — contributes $3.4 billion to the province’s economy each year, said Ravi Nadasen, deputy chair of the Tourism Business Council of South Africa.

Any tourism drop-off in Cape Town also hits the rest of the country, Ntshona said. With many visitors booking itineraries that start in Cape Town and move east, he said, a loss of visitors to Table Mountain also means fewer people at the country’s game parks, vineyards and beaches.

“If South Africa falls off the tourism radar screen globally, to get it back on will take so much attention and focus,” he said.

Bookings for the first quarter of the year have so far not fallen, Ntshona and Nadasen say, though they have been fielding inquiries from worried potential visitors.

“We’ll get a better sense by the end of March, when we look at forward bookings for the next six months,” Ntshona said.

Tourism officials are well aware of the potential threat, however. In 2014, an Ebola crisis in West Africa — a six-hour plane flight away — led to a 23 percent drop in visitors to Ebola-free South Africa as tourists shunned African destinations, Ntshona said.

To try to prevent a repeat of that disaster, government and business leaders are rushing to shore up water supplies — and confidence.

Organizers of dozens of big conferences held in Cape Town each year are making plans to ship in water from other less thirsty parts of the country, Ntshona said.

Hotels have installed low-flow showerheads, turned off fountains and replaced cloth napkins with paper ones.

A Cape Town subsidiary of leading hotel chain Tsogo Sun is this week taking delivery of a pioneering desalination plant, to suck seawater from Cape Town’s harbor and churn out enough fresh water for the chain’s 1,400 Cape Town hotel rooms.

Cape Town itself is also making plans to bring in desalination plants — though not quickly enough to deal with the impending “Day Zero,” now pushed back to July after a successful campaign to cut the city’s water consumption by half.

Political obstacles

Experts have warned of water risks in Cape Town for years, but political infighting has gotten in the way of action, Ntshona admits.

Cape Town is run by an opposition party to the ruling African National Congress — and even the ANC saw its embattled leader, President Jacob Zuma, pushed out of office last week.

“Part of the lesson we’re learning as a country is that when you have a crisis, stop bickering and focus on the issues,” Ntshona said.

Another lesson, he said, is that water shortages — predicted to become longer and deeper across southern Africa as climate change strengthens droughts — cannot be seen as a passing problem.

Winter rains are expected in Cape Town starting in May or June. If they arrive, the current crisis will ease, officials predict.

But, regardless, “we need to recalibrate our relationship with water as a country,” Ntshona said.

Off-grid Power Pioneers Pour Into West Africa

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Standing by a towering equatorial forest, Jean-Noel Kouame’s new breeze-block house may be beyond the reach of Ivory Coast’s power grid, but it’s perfectly located for solar power entrepreneurs.

Buoyed by success in East Africa, off-grid solar power startups are pouring into West Africa, offering pay-as-you-go kits in a race to claim tens of millions of customers who lack reliable access to electricity.

At least 11 companies, including leading East African players such as Greenlight Planet, d.light, Off-Grid Electric (OGE), M-KOPE Solar, Fenix International and BBOXX, have moved into the region, most within the last two years.

With a potential market worth billions of dollars, major European energy companies such as French utilities EDF and Engie are taking notice too.

“It’s important to be there now, because the race has already started,” said Marianne Laigneau, senior executive vice president of EDF’s international division.

The main challenge facing smaller companies now is how to raise enough capital to supply the expensive solar kits in return for small upfront payments from customers.

Mobilizing funding for firms providing home solar systems is also part of the U.S. government’s Power Africa initiative.

Major power generation projects have been slow to get off the ground so Power Africa has partnered with startups such as OGE, M-KOPE and d.light, among others, to accelerate off-grid access.

In Abidjan, Kouame doesn’t know when, or if, the national grid will reach the outer edge of the urban sprawl, but thanks to his new solar panel kit he has indoor lighting, an electric fan and a television.

But it’s the light bulb hanging outside his front door that he values the most.

“At night we were scared to go outside,” the 31-year-old taxi driver says as his pregnant wife watches a dubbed Brazilian soap opera. “Where there is light there is safety.”

Some 1.2 billion people around the world have no access to a power grid, according to the International Energy Agency (IEA).

Lighting and phone charging alone costs them about $27 billion a year and some estimates put their total annual energy costs at more than $60 billion.

While governments in much of the developing world are extending access to national networks, Africa is lagging, with less than 40 percent of African households connected, IEA figures show.

But what has long been decried as a major obstacle to Africa’s development is viewed as an opportunity by entrepreneurs such as Nir Marom, co-founder of Lumos Global, the Dutch startup that built and sold Kouame his kit.

“I read an article about people paying 50 cents a day for kerosene and candles, and that just didn’t make sense,” said Marom. “I said I can give them four kilowatt hours for the price of kerosene. And that started everything.”

Off-grid expansion

Lumos Global’s kits, which cost about $600, include a solar panel linked to a battery that supports power sockets, a mobile phone adapter and LED light bulbs.

Kouame, who paid 30,000 CFA francs ($57) upfront for his kit, is now leasing-to-own. A digital counter on the yellow battery pack tells him when he needs to top up his account using his mobile phone.

If he doesn’t pay, the kit, which also houses a global positioning system, shuts down. But in five years, he’ll own it outright and his solar power will be free.

“Five years is nothing,” he says, already weighing the option of another system to run a large freezer sitting empty and unplugged in the corner of his living room. “So my wife can do a little business.”

Pay-as-you-go solar home systems (SHS) like Kouame’s have been the main driver of off-grid power expansion in Africa.

In 2010, when most purchases were limited to simple lighting systems, customers spent $30 to $80 on average over a product’s lifetime, according to GOGLA, an independent off-grid industry association.

Now it’s $370 to $1,120.

Global revenues from the pay-as-you-go SHS sector were $150 million to $200 million in 2016, GOGLA estimates. That should jump to $6 billion to $7 billion in 2022.

Most of the main players in West Africa cut their teeth in East Africa, drawn by the widespread use of mobile money transfers, a key element of the pay-as-you-go off-grid model.

Success there drove annual sector-wide growth of about 140 percent from 2013 to 2016. But as the East African market becomes more crowded and mobile money services spread across the continent, many are now heading west.

“I remember doing a market sizing very early on and from a number of metrics West Africa was a better market,” said Xavier Helgesen, CEO of Tanzania-based Off-Grid Electric (OGE), one of the sector leaders.

About half of the overall African off-grid population are in West and Central Africa, according to the IEA. Nigeria, sub-Saharan Africa’s biggest economy and most populous nation, is  alone home to roughly 90 million people with no grid access.

Lumos is an outlier to the extent it picked West Africa as its first market. It launched in Nigeria in 2016 and by the end of 2017 had sold 73,000 kits and was averaging 16 percent month-on-month revenue growth. Late last year, it expanded into Ivory Coast, French-speaking West Africa’s largest economy.

Still, despite the rapid growth to date, off-grid solar startups say more must be done to improve the capacity of solar home systems and to bring down their cost so the sector can reach its full potential.

“I don’t believe off-grid electrification is a stop-gap,” said Jamie Evans, director of partnerships with d.light.

“I believe it’s here to stay. If the price of batteries starts dropping precipitously, then it will almost certainly change the face of the industry,” he said.

Capital  intensive

The need to provide consumer financing for the relatively expensive kits means expansion requires significant capital.

But banks, lacking expertise in the new sector, often shy away from lending to off-grid companies, said Rolake Akinkugbe, head of energy at Nigeria’s FBNQuest Merchant Bank.

“There’s also a size issue. Most of the off-grid solutions, particularly those that deal with pay-as-you-go, from a funding perspective, are not within the threshold for banks,” she said.

That means startups have largely relied on venture capital, impact investors looking to generate social benefits as well as a profit, and development finance institutions. But the model has its drawbacks.

“Right now off-grid companies are having to constantly fundraise,” said Lyndsay Handler, CEO of Uganda-based Fenix International.

In what was considered a milestone in the African off-grid sector, Engie bought Fenix in October.

With access to Engie’s capital, Handler says Fenix aims to become a pan-African off-grid leader, serving millions in the near term and tens of millions further down the road.

“Hundreds of millions of dollars of investment are needed to have the impact we want to have,” she said.

Facing stagnating customer growth in their home markets, European energy companies such as Engie are increasingly looking abroad. Africa’s underserved, growing population is seen by many as the future.

The number of Africans without grid access actually increased by nearly 14 percent between 2000 and 2016 to 588 million people. By 2030, the IEA estimates that some 80 percent of the global off-grid population will be in sub-Saharan Africa.

Raphael Tilot, Engie Africa’s head of customer solutions, likens off-grid solar to the rise of the mobile phone, which leap-frogged landline networks on the continent.

“Today, no one is thinking about putting telecom wires to individual houses in these places. You can look at energy in the same way today,” he said. “Mini-grids or solar home systems are a far better solution.”

In addition to Engie, French giants Total and EDF also hold stakes in off-grid startups, or are partnering with them. Italian utility Enel and Germany’s E.ON are investing in solar mini-grid companies.

Evidence of the market growth is on exhibit on Kouame’s hillside in Abidjan, where several rooftops, including his neighbor’s, are now crowned with solar panels.

“He asked me how it worked,” Kouame smiles. “Then he went and bought one of his own.”

Macron’s State Reform Tsar Looks to Technology to Cut Red-Tape

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France is ready to invest in artificial intelligence, blockchain and data mining to “transform” its sprawling bureaucracy instead of simply trimming budgets and jobs, its administration reform tsar said.

The 39-year old former telecoms executive whom President Emmanuel Macron has charged with reforming the public sector said he believed technology would win support from government employees and in the end produce less costly public services.

Macron himself is coming under pressure from budget watchdogs and Brussels to spell out how he plans to cut 60 billion euros ($74 billion) in public spending and 120,000 public sector jobs to fulfill pledges made in his election campaign.

Chatbots – software that can answer users’ questions with a conversational approach – or algorithms helping the taxman to target potential tax evaders, were some of the possibilities offered by technology, Thomas Cazenave told Reuters in an interview.

“The state … must not fall behind, get ‘uberized’ and shrivel up,” Cazenave said.

“The potential created by digitalization, data and artificial intelligence will help put fewer employees on some tasks, while reinvesting in others,” he added.

A 700-million-euro ($864-million) fund will help invest in IT projects over the next five years to help modernize administration in the highly centralized country and automate some activities.

‘Macron boy’

Cazenave is one of the ‘Macron boys’ whose mix of top civil service pedigree and private sector experience is being used to shake up France’s 5.5 million-strong army of government employees and cut one of the highest public spending ratios in the world.

Only two months younger than Macron, the two met over 10 years ago when they joined the highly selective corps of finance civil servants after graduating from ENA, a graduate school of public administration for the French elite.

Cazenave then became the number 2 human resources executive at telecoms firm Orange, a company which transitioned from government monopoly to globalized private champion. In 2016, Macron prefaced Cazenave’s book, “The State in Start-Up Mode.”

“Like me, the president feels very deeply that these are no longer times where public services can be reformed with small tweaks. Major transformations are needed,” Cazenave said.

Sensitive subject

However, despite frequently referring to transformation and revolution, Macron has taken a cautious approach on belt-tightening measures, with very few details given so far on where the ax will fall.

His budget minister said this month a voluntary redundancy plan could be on the cards, but did not elaborate. More details are expected to be announced in March/April but legislation is not expected before early 2019.

Cazenave said taking time to consult employees was necessary to get government employees on board and to review which public services still need to be ran by government, and which can be outsourced or even abandoned.

He also said previous spending cut plans, such as former conservative leader Nicolas Sarkozy’s decision not to fill one in two vacancies left by retiring baby-boomers had failed to curb spending because the state’s remit had not been changed.

Outsourcing some public services is currently being considered, he said, but the example of British outsourcing firm Carillion’s collapse showed it could not be replicated everywhere.

“There is no place for ideology on the outsourcing debate, in one way or another. The private sector doesn’t have a definitive superiority to the public sector,” he said.