WWN#29 – Sydney’s Tent City is coming to an end

What’s Been Happening?

In June, police and council workers dismantled a homeless camp in Martin Place, Sydney CBD which houses about 50 people in tents. The so-called “tent city” has been a subject of debate between the State Government and Sydney Council for months as both sides have accused the other of shunting responsibility over tent city (State vs. Local).

Since then, many residents have returned with some of them having been on the streets for a few months while for others it has been decades. NSW Premier Gladys Berejiklian claims that the homeless people have been offered accommodation and are simply refusing to help themselves. The residents have countered that the offered accommodation is “not safe, nor affordable, nor acceptable”. Some of them say that the accommodation is only offered on a temporary basis as well. So far negotiations between the City of Sydney and the homeless tent dwellers to vacate the Martin Place campsite have failed.

What Now?

A bill that was introduced by the government on Tuesday was passed in the upper house without amendments on Wednesday evening. The bill authorises police to remove people from crown land if the land minister deems there to be a public safety issue. The legislation only affects crown land within City of Sydney and does not extend to other councils. It effectively resolves the long-running stoush between the government and the city albeit by employment of force.

Following the change in legislation, the residents of the controversial tent city in Martin Place prepared to leave the site today. The NSW Police are monitoring the exodus which has remained peaceful although some residents admitted that they are “traumatised by what’s going on, and had no idea of where they would go”.

What’s Next?

Although the bill is seen as progress towards a solution, it is certainly not the end solution with more steps to come. The lack of affordable housing in the city is the underlying issue here and forcing the tent city dwellers to leave Martin Place will only result in them relocating to another public place.

It is also likely that some residents will remain opposed to leaving a place that has been known to them as a safe haven for many months or years. Some residents will have to be forcibly evicted by police, a move which the Premier said she was reluctant to do.

Lanz Priestly, dubbed the “mayor of tent city”, has said that they are considering all options, including the lodgement of a last minute legal appeal to allow the residents to stay. Having consulted three different groups of lawyers, the law introduced to NSW Parliament was reviewed as weak and therefore they might decide to challenge the law.


WWN28# – Is this justice? Michelle Carter receives verdict in texting suicide case

What’s Been Happening? Conrad and Michelle

In June 2014, 18 year old Conrad Roy III started sharing suicidal thoughts with Michelle Carter over text messages. Carter initially urges Roy to seek medical help and discourages him from harming himself. Later on, she changes tone and successfully convinces Roy to commit suicide. Roy was found dead near a compression pump that had filled a pick-up truck with carbon monoxide. His death was initially deemed a suicide but police have subsequently charged Carter with involuntary manslaughter after investigating text messages that were sent between Carter and Roy. In one exchange, Carter had told him to stay in the vehicle from 30 miles away after Roy exited the vehicle because the carbon monoxide was “working and he got scared”.

On June 16 2017, Massachusetts judge Lawrence Moniz found Carter to be guilty of Roy’s death and announced that she could face up to 20 years of prison time.

What Now?

Moniz has sentenced Michelle Carter to a 2.5 year term but has said that only 15 months is mandatory. He also sentenced her to five years of probation. If she violates the terms of her five year probation, she will have to serve her full sentence in jail.

Terms of Five Year Probation

  • No contact with Roy’s family and classmates who acted as witnesses for the prosecution
  • Cannot leave the state of Massachusetts
  • Must submit a DNA sample
  • Must have a mental health evaluation
  • Banned from using social media

Carter’s lawyer, Joseph Cataldo successfully petitioned to have her sentence stayed which means that she will not go to jail yet until all of her state appeals are exhausted and denied. Cataldo has asked the judge to spare his client from going to prison at all and require her to receive mental counselling while in probation instead.

Following the sentencing, the prosecutor Assistant District Attorney Maryclare Flynn said that he was disappointed the judge chose to stay the sentence. He had recommended a sentence of 7 to 12 years for Carter who he said has not shown remorse or accepted responsibility for her actions.

What’s Next?

It was certainly unexpected. A 2.5 years sentence is a much shorter sentence than the potential 20. In addition, Carter is appealing the sentence so it could result in only probation time and no time in jail at all. Regarding the sentencing, it is possible that the judge was trying to rehabilitate and not punish and relied on the fact that she was aged 17 when the crime was committed and tried a juvenile court.

The case has drawn a lot of attention to the issue of whether “words encouraging suicide” is a criminal act. In the U.S, criminal law typically punishes physical action and this case could set a new legal precedent in which words and not just actions are deemed to cause death. At this stage, it is unlikely to be used as precedent but the verdict indicates a shift in legal landscape where it may ultimately lead to changes in the way we communicate with others (some say in a more careful manner and with limited freedom).

Postponing the case is also not in the best interests of anyone involved. It offers no peace to Roy’s family and shows a refusal by Carter and her parents to accept responsibility for her actions. The appeal process is likely to drag on for a while and there is no doubt that Carter’s lawyer will surely try to stretch out the process. While some may say that Michelle needs our sympathy and help, I say that she needs to take ownership and accept the consequences of her actions as well.


WWN27# – Ride-Sharing Battle in Southeast Asia Intensifies: Grab vs. Uber

Uber vs Grab.jpg

What’s Been Happening?

In 2016, Uber did the unthinkable – it conceded defeat in a costly battle that it has been waging for a year with its local rival Didi Chuxing in China. Uber had been reportedly spending $1 billion a year in its effort to compete with Didi whilst the latter was offering driver and passenger subsidies to stay dominant in its home country. Uber Technologies will sell its brand, business and data to Didi. As part of the deal, Uber Technologies and its other shareholders will receive a combined 20% stake in the combined company.

With China settled, the arrangement is seen to benefit Uber in the long run as it cuts its losses in China and focuses on other opportunities such as gaining market share in other countries in Southeast Asia, India and America.

What Now?

Grab, the ride-hailing company competing with Uber in Southeast Asia has successfully raised $2 billion in new financing from existing investors Didi Chuxing and SoftBank. Grab operates in 36 cities across seven countries in Southeast Asia where it claims to have 50 million downloads from users and 1.1 million drivers on its platform.

This spells trouble for Uber as they had previously lost the battle against competitor-turned-partner Didi in China. Uber only began to see profits shortly before its exit from China last year, approximately three years after it entered the region via Singapore.

In a bid to establish a stronger foothold in Southeast Asia’s ride hailing market, Grab is likely to use the new financing to further develop a mobile payments platform as Grab sees the revenue growth as being “stuck” due to the country’s outdated banking system.

What’s Next?

Uber is under increasing pressure from strong challengers such as Grab in the South East region. By providing financial support to Didi, Grab will inevitably further hurt Uber’s expansions, forcing it to leave Southeast Asia too, rather than burning more cash. Although Grab entered the market as a challenger rather than the first mover, they have been growing at a much faster rate than Uber due to its excellent knowledge and adaptation of local customs.

Some examples are:

  • Subsidizing internet and smartphones for economically disadvantaged drivers
  • Allowing cash payments from customers rather than card payments

Despite the growing list of problems at home and abroad in Southeast Asia, a rumour is circulating that SoftBank is looking to take a multi-billion dollar stake in Uber as it tries to acquire a wider share of the Southeast Asian ride-hailing market. If this holds true and takes place, it may be a much needed silver lining for Uber to continue its operations and expansion plans in the region.


WWN26# – PM Sharif and Family: Forgery and Calibri

What’s Been Happening?

Last year, the infamous Panama Papers were leaked. 11.5 million documents from a Panama law firm called Mossack Fonseca were released to the public which included details of eight offshore companies that have ties to the family of Nawaz Sharif, the incumbent Prime Minister of Pakistan.

The controversy surrounds the purchases made by these offshore accounts, one of which were luxury apartments in London’s exclusive Mayfair area. In the subsequent trial that has taken months so far, opposition leaders have alleged that the money used for the real estate purchases was obtained through corruption.

After some months of deliberation, it was determined by the Supreme Court of Pakistan that further investigation needs to be conducted into corruption allegations. As a result, a six member Joint Investigation Team (JIT) was formed under the supervision of a three-member special implementation bench on 20 April 2017

What Now?

On the 10th of July, the JIT presented a scathing 275-page report that charged Sharif and his family members of engaging in irregular finances, forgery and perjury. It also recommended that the Sharifs be tried for corruption.

Some documents that were submitted by Sharif’s family appeared to be tampered with:

  • A trust deed provided by the prime minister’s daughter Maryam Nawaz and executed in 2006 was written in Calibri font which was not commercially available till 2007. It was also notarised from an office in London on Saturday which is officially an off day, raising concern about the authenticity of the document.
  • The documents of Gulf Steel Mills provided by the prime minister’s son Hussain Nawaz were confirmed to be forged by the government of Dubai as they held no record of those documents.
  • A letter sent by a Qatari Royal supposedly verifying the business dealings of the Sharif family is alleged to be fake. Further supporting this allegation is the failure of the key witness to agree to record his statement via video link to JIT and was unwilling to visit the Pakistan embassy in Doha.

It is a criminal offence to falsify documents which carry a penalty of up to seven years of jail if the person is found guilty. Sharif dismissed the JIT report as the “sum of hypotheses, accusations and slander”. Upon the release of the report, the opposition leader Imran Khan hopes that next week will be (Mr Sharif’s) last week.

What’s Next?

The report highlights the failure of the Sharif family in providing a money trail for its London apartments.  All eyes will be on the Supreme Court who may disqualify him as Prime Minister. Another scenario could be that the Supreme Court expresses no confidence in the findings released through the damning JIT report. At this stage, it is very unlikely that Nawaz Sharif will step down as Prime Minister as he is adamant that no wrongdoing has been proven and so the case continues…


WWN25# – A Chinese Start-Up Story: Umbrella Sharing Gone Rogue

Sharing E Umbrella.jpg

Sharing E Umbrellas – Credits 

What’s Been Happening?

China is in a sharing economy boom. Car-sharing, bike-sharing and even basketball-sharing have been some of the latest ventures that have prompted more innovative businesses. Over the past month, three umbrella sharing start-ups have raised financing of several million RMB despite critics questioning the viability and profitability of such business models.

What Now?

Sharing E Umbrella is one of those start-ups that was launched in April with an investment capital of 10 million yuan ($2 million AUD~). Customers use an app on their smart phone to pay a deposit fee of 19 yuan to borrow an umbrella from stands mostly found at subway and bus stations and for every half hour of use they paid a fee of 0.50 yuan. Within a few weeks of rolling out umbrellas in 11 cities in China, the company had lost nearly its entire supply of umbrellas due to people borrowing the rain protectors and not returning them. According to South China Morning Post, there were approximately 300,000 umbrellas that have gone missing. There is unfortunately no way to track where each umbrella went.

Although it costs the company about 60 yuan or $11 AUD for each umbrella lost, the company founder and CEO Zhao Shuping is determined to press ahead with 30 million of them to be available across the country by the end of the year. He’ll do it in a slightly different manner this time by spending the next few months devising a way of adding GPS to the umbrellas to keep track of them.

What’s Next?

Even if Sharing E Umbrella succeeds in their second round release of umbrellas later in the year (and preventing them from being stolen), maintaining a steady operating cash flow and profit for the company may prove to be challenging.

  • China receives most of its rain in the summertime only and in regions with frequent rain, it is likely that people would buy their own umbrellas which would make it impossible to maintain a positive cash flow in drier months
  • Based on the low rates and likely low margins, it would be hard to turn a profit especially when there is an extremely high rate of theft (the deposit fee of 19 yuan barely covers the cost of the actual umbrella)

A third point is that cheap umbrellas are already sold everywhere in subway stations and public locations on rainy days. The price of the umbrellas range from 10 to 40 yuan, so there is an implied price ceiling on how far profit margins can grow and rise before alternative options become more attractive to consumers.


WWN #25 – A Revolution Led by Volvo: Going Electric All The Way


Concept 40.1 (SUV)  for  New All Electric Platform – Credits

What’s Been Happening? A Personal Best

In 2015, a luxury vehicles company set a global sales record for itself when it sold more than half a million cars for the first time in its 89 year history. Volvo subsequently announced plans in April 2016 to sell 1 million electrified vehicles by 2025 which is a cumulative total of sales from 2012 to 2025, not a yearly figure. Its first fully electric vehicle is expected to reach dealerships by 2019.

What Now? On Track

On Wednesday, the automaker announced that all future models will use some form of electric propulsion, whether in hybrid form with a gas engine or all-battery models. It will be the first broad luxury brand to announce plans to electrify all of its products, ditching the combustion engine only models. Luxury brands have traditionally relied on V-8 engines for power amongst their prestigious models but Volvo has already adopted to an exclusive four-cylinder line-up. At this stage, Volvo is remaining secretive about what percentage of future products will be conventional hybrids, plug-ins or pure battery offerings.

Three new mainstream products are set to roll out between 2019 and 2021. Electrified products will be produced in Europe, China and in a new plant that is currently being constructed in South Carolina.

Volvo’s announcement has received a mixed response. Industry analysts in the U.S say the strategy to become fully electric is risky, given that sales of all forms of electrified vehicles slipped last year, partly due to a decrease in a gasoline prices. However, several factors such as the declining cost of batteries and improved vehicle range may start to attract more customers.

What’s Next? Convenience & Support is Key

Although innovations in battery technology will increase range and reduce costs, it does not negate the need for regular charging. Whilst owners could easily accomplish this at home, it may be more difficult when they are looking to travel long distances. Additional investment in a network of remote charging stations needs to be done to overcome this issue. It remains largely uncertain as to who is going to bear the costs of doing so as well. Japan is already one step ahead, where there were more charging stations than filling stations as of April 2016.

An increase in electric cars on the road will need to be adequately supported by power companies that are able to cope with the increased demand. As reported in the Sydney Morning Herald, “A recent Morgan Stanley report found that a typical electric car requires the same amount of power as the average British home over the course of a year.”


WWN #24 – Blue Apron: A Disappointing Debut on the Stock Exchange

Blue Apron is the largest food delivery business in the United States. Its focus is on delivering refrigerated, portioned ingredients for particular recipes which is similar to its rivals HelloFresh and Plated. It was founded five years ago and has never made a profit although its revenue increased by more than twofold to $795.4 million last year.

The company intends to list on the New York Stock Exchange (NYSE) under the symbol “APRN” at a price of $10 a share, down from the previous forecasted share price of $15 to $17. The revised price was determined amid growing concerns of the impact of Amazon’s pending acquisition of Whole Food Markets in a $13.7 billion deal announced earlier this month. The new pricing range implies that the business is worth up to $2.08 billion compared with $3.2 billion earlier. According to Dealogic, this is highly unusual as only 4% of internet IPOs have revised their range downward since 2010.

With an offering of 30 million shares, the company is looking to raise about $300 million in its initial public offering (IPO). The proceeds from the listing will go into investing in automation and supply chain technology says the CEO Matthew Salzberg.

What Now?

Upon its listing on Thursday, the IPO yielded quick returns as it reached $11 before retracing back to the IPO price of $10. It’s a disappointing if not depressing start for many Blue Apron investors who were expecting the standard 20 percent “pop” on the first day of trading to kick off the company’s public debut in good terms. In contrast, another highly anticipated IPO Snap (the parent company of Snapchat) rose 44 percent on its first day of trading earlier this year.

The lacklustre trading in Blue Apron reflects an understanding that this is a business where quite a few challenges would need to be overcome before substantial growth and profits can be realised. It does not necessarily mean that the business model is poor, said Neil Saunders from GlobalData.

What’s next?

Whilst Blue Apron has failed to meet investors’ expectations of a quick return, the company is well positioned in a market that could potentially boom. Darren Seifer at the NPD Group stated that “it makes perfect sense that as online grocery shopping grows, it will drive the adoption of meal kits”.

They are not alone in the meal delivery space though and as the market grows, there may be new entrants and competition may intensify between existing businesses. Another big challenge for Blue Apron is finding loyal customers. According to the purchase-analytics firm Cardlytics, more than half of meal-kit subscribers cancel their subscriptions within the first six months. As a result, Blue Apron has been spending more and more on marketing to attract enough new customers to offset cancellations. It was revealed that $144 million was spent on marketing in 2016 which is roughly 18 percent of total revenue.

Given all of these challenges and uncertainty, it is difficult to heed Matt Salzburg’s advice to not worry about whether the stock price is “up, down, left or right” and remain focused on the long –term picture.

Blue Apron whiffs on first day of trading