Day: June 17, 2017

U.S. farm groups criticized President Donald Trump’s decision to retreat from his predecessor’s opening toward Cuba, saying it could derail huge increases in farm exports that totaled $221 million last year.

A trade delegation from Minnesota, one of the largest U.S. agriculture states, vowed to carry on with its planned visit to Cuba next week. 

“We’re going to continue to beat the drum and let them (the Trump administration) know that trade is good for agriculture,” said Kevin Paap, a farmer in the delegation.

Trump signed a presidential directive Friday rolling back parts of former President Barack Obama’s opening to the Communist-ruled country after a 2014 diplomatic breakthrough between the two former Cold War foes.

Farm groups saw the move as a step backward in what had been an improving trade relationship between the two countries, which are 90 miles (145 kms) apart, even though agriculture is not directly targeted.

U.S. law exempts food from a decades-old embargo on U.S. trade with Cuba, but cumbersome rules on how transactions were executed have made deals difficult and costly.

Since Obama’s detente, substantial headway has been made with shipments of U.S. corn and soybeans to Cuba soaring 420 percent in 2016 from a year earlier to 268,360 tons, U.S. Department of Agriculture data shows.

Through the first four months of 2017, total shipments of U.S. grain and soy were 142,860 ton, up from 49,090 tons during the same period of 2016.

While the quantities are dwarfed by total U.S. exports — nearly 56 million ton of corn alone last year — the added volumes were welcome as farmers face a fourth year of languishing grain prices and crimped incomes.

“At a time when the farm economy is struggling, we ask our leaders in Washington not to close doors on market opportunities for American agriculture,” Wesley Spurlock, president of the National Corn Growers Association, said in a statement.

The group sees an opportunity for $125 million more a year in trade to Cuba.

Trump’s move could cut off near-term sales and stymie economic development that would drive longer-term demand growth, said Tom Sleight, president of the U.S. Grains Council, a grain trade development organization, in a statement.

“Neither of those outcomes is favorable for the U.S. ag sector or the Cuban people,” he added.

Paap said the United States should be doing more to encourage exports.

“It’s frustrating because we’ve made some advances and built those relationships,” he said. 
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The key to success for ride-hailing providers like Uber is keeping drivers happy so they run their app, ensuring that enough cars respond to passenger demand.

Estonia upstart Taxify is hoping to win over drivers and take on Uber Technologies Inc., the industry leader, by offering a larger share of the profit.

Upstarts across the world, such as Lyft Inc. and Ola, are trying to catch Uber in the on-demand car-ride market by securing brand loyalty.

But Uber has gathered critical mass and reached a valuation of more than $60 billion in eight years, despite a lack of profits. It has kept rivals at bay, partly by offering incentives to drivers to stay online.

Taxify hopes to lure drivers

Taxify, a minnow compared with Uber, cannot afford these perks but believes that by taking a smaller share of fares, 15-20 percent compared with Uber’s 20-25 percent, it can steal market share from its San Francisco-based rival.

It also hopes that allowing drivers to take cash as well as credit card fares will also help it attract more passengers.

“Taxify’s biggest advantage is the focus on good service by treating the drivers and riders better than other platforms. This means having higher pay for drivers, thanks to lower fees,” Chief Executive Markus Villig told Reuters at Taxify’s headquarters in Estonia.

An Uber spokeswoman declined to comment but the company has said it had fare revenue of around $20 billion last year. Villig said Taxify generated fares worth “tens of millions of euros” each month. Taxify runs in just 25 cities in Europe and Africa, while Uber operates in nearly 600 cities worldwide.

Its basic business model is identical — both connect passengers with self-employed drivers. Many incumbent cab companies in Europe have developed apps to operate in a similar manner but most have focused on their domestic markets.

Markets not Uber dominated

But Taxify is unusual in launching in about 18 countries, mainly smaller markets in Eastern Europe and Africa, where Uber is absent or not yet dominant.

Uber usually takes market share by giving drivers money to sign on to its app, paying them even if they are not driving passengers. Then, as it becomes more popular with passengers, it withdraws the inducements. Analysts say Uber aims to build a customer franchise and stable of drivers to dominate the market.

“The way I see it, Taxify is cheaper than Uber,” said Tumelo Malatjie, 33, a former truck driver for a logistics firm turned full-time Taxify driver in Johannesburg. “Taxify takes 15 percent and Uber about 25 percent or 30 percent,” said Malatjie, who nonetheless is on a waiting list to become an Uber driver.

Taxify has avoided expensive head-to-head battles with its much larger rival but its model will soon be tested as Villig plans to launch in London, Uber’s biggest European market in the coming months.

“We are coming in as a second wave,” Villig said.

Small but growing

Founded 3½ years ago, Taxify has 140 staff worldwide, a third of whom are based in Estonia. It says it has 2.5 million active passengers in 18 countries. Uber says it has more than 12,000 people across the world and millions of passengers in 70 countries.

In Africa, Villig said Taxify has hired away 20 former Uber executives, helping its expansion in cities like Lagos, Cairo and Johannesburg.

The start-up has raised 2 million euros in outside financing from local venture capitalists. Like Uber, it is losing money, although it was “close to profitability for the past six months,” Villig said.

Uber reported in late May that its net loss, excluding employee stock options and other items, narrowed in the first quarter to $708 million, from $991 million in the fourth quarter.

Same challenges

Taxify and Uber face many of the same regulatory and commercial challenges.

Uber was dealt a major setback to its European ambitions in May when the lead advocate for Europe’s highest court said it should be regulated like a transport company rather than an online electronic intermediary.

Taxify could face the same legal treatment, which would make it more susceptible to new regulations being introduced by a growing number of European cities.

Similarly, bans on ride-sharing in cities such as Brno in the Czech Republic, apply to Taxify as much as Uber.

Uber has faced complaints from its drivers in London, France and the United States who were unhappy about compensation.

But Taxify has also had protests from drivers in Estonia unhappy at how the company had slashed fare rates. Villig declined to comment.

While analysts do not expect Uber to be dethroned by Taxify anytime soon, the Estonian company’s lower commission model may put pressure on Uber’s margins in countries where it is seeking to cut fares or increase its share of fares.
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Colombia on Friday reached a deal with public school teachers to end a 37-day strike that has kept millions of children out of classes, amid criticism the government has failed to keep its promise to improve public education after a peace deal with Marxist rebels.

Union members participating in the nationwide walkout held near-daily marches, often blocking busy roads in the capital Bogota to demand more funding for school maintenance, supplies, student meals and salaries.

President Juan Manuel Santos says he is focused on combating inequality and improving education now that a peace deal with the Revolutionary Armed Forces of Colombia (FARC), an end of more than 52 years of war, is under way.

But educators said improvements are nowhere to be seen and their salaries, some as low as 1.8 million pesos per month (about $610), are not adequate compensation for work that requires extensive and expensive higher education.

“The government’s priority was always to reach an agreement that recognizes the work of teachers and the indispensable role of education in the development of the country and, at the same time, be responsible with public finances,” Education Minister Yaneth Ghia told reporters.

The deal, among other things, will improve salaries through progressive bonus payments and allow bigger union involvement in how money is spent on education, she said.

The powerful Colombian Federation of Education Workers (Fecode) union, which represents more than 350,000 teachers, agreed to the deal after meeting with Finance Minister Mauricio Cardenas.

“The president said the money that went to the war would go to education but now there’s no FARC, no guns and we don’t see the funds,” said high school teacher Jose Escobar, 36, earlier on Friday during a protest in Bogota’s main square.

Places at his school, Colegio German Arciniegas in Bogota’s poor Bosa neighborhood, are in such high demand that it has been impossible to implement the government’s goal of full-day classes, Escobar said. Instead, 4,800 students in grades nine through 11 attend half-day, or six hours.

Friday’s deal will push toward the aim of full-day study.

Santos has weathered a wave of strikes in recent weeks, reaching agreements to halt protests in the port city Buenaventura and a strike by public workers.

“If the government truly is working for peace, they need to start here,” said Adriana Tunjo, a fifth-grade teacher in southern Bogota, who like other protesters decried problems which included electricity outages and sporadic provision of meals.
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McDonald’s Corp ended its 41-year-old sponsorship of the Olympic Games three years early, the International Olympic Committee said Friday, reflecting the U.S. fast-food giant’s focus on its core business as well as rising Olympics sponsorship costs and declining TV ratings.

McDonald’s deal would have run through the Tokyo Olympics in 2020, and bowing out will likely to save it hundreds of million of dollars if it had continued into the next four-year Olympics cycle and beyond.

McDonald’s has been trying to hold down costs as it invests in improving food quality, restaurant service and online ordering to woo back U.S. diners. Intense competition has gnawed away at sales.

“We are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities,” said McDonald’s Global Chief Marketing Officer Silvia Lagnado.

Sponsor since 1976

The company, first involved with the games in 1968 and a sponsor since 1976, was the Olympics’ food retail sponsor. Despite pulling out with immediate effect, McDonald’s will continue at next year’s Pyeongchang winter Olympics as a domestic sponsor.

The company’s move may also reflect a rising view among consumer brands that exclusive Olympics sponsorship deals do not offer the marketing impact they once did. Some companies find it is much cheaper to work directly with athletes or specific countries than the IOC.

Moreover, in a trend that began after the Beijing games in 2008, shrinking television audiences for the games could be diminishing the value of sponsors’ ads. With the Rio de Janeiro games in 2016, many viewers turned to social media alternatives like Twitter and Facebook.

In the United States, Comcast’s NBCUniversal said it had attracted 8.6 percent fewer eyeballs for Rio than it did for London in 2012.

$1 billion every four years

The fast food chain has been part of the IOC’s top sponsors program that contributes more than $1 billion in each four-year cycle for the games.

While terms of Olympic sponsorship are not disclosed, a source who negotiated previous IOC sponsorship deals said that top global sponsors like McDonald’s spend about $25 million a year or about $100 million for a four-year period that includes a summer and winter games.

Reuters previously reported that the IOC had wanted to roughly double fees to $200 million per four-year period starting in 2021.

While it is unusual for an Olympic sponsor to leave early, sponsors change regularly within the IOC’s top program. The most recent addition was China’s Alibaba Group Holding Ltd., which signed a deal in January for a partnership through 2028.

The next three Olympics take place in Asia, and this could turn off U.S. sponsors trying to reach a U.S. audience. The U.S. Olympic Committee also has lost recent sponsors such as AT&T and Citigroup ahead of the 2018 winter games in South Korea.

The IOC said it was not planning a direct replacement for McDonald’s, but it is expected to announce a new global deal with Intel next week, according a source familiar with the matter.

Intel did not immediately respond to a request for comment.
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President Donald Trump’s Washington hotel saw almost $20 million in revenue during its first few months of operation, a period that coincided with his election and inauguration as the 45th president. His Mar-a-Lago resort in Florida, which he’s visited seven times as president, pulled in millions of dollars more than it had previously.

The new details are included in a financial disclosure that Trump voluntarily submitted Friday to the Office of Government Ethics, the first snapshot of the Trump Organization’s finances after its longtime leader became president.

When he took office in January, Trump turned over the reins of his global real estate, property management and marketing empire to his two adult sons and a senior executive. 

But Trump did not divest, instead placing his enormous portfolio of financial assets in a trust controlled by the executive and Donald Trump Jr. He can take back control of the trust at any time, and he’s free to withdraw cash from it as he pleases.

Disclosures’ added importance

His latest financial disclosure covers January 2016 through this spring.

The documents have added importance because Trump isn’t following the long tradition of presidential candidates and office-holders making public their tax returns. Those returns provide more complete financial information than the financial disclosures, which include mostly broad ranges for income and debts.

The report shows Trump resigned from more than 500 positions, stepping down from many on the day before his inauguration. Trump listed at least $315 million in liabilities, about the same as in a report he filed last year.

The president still owes more than $100 million to Deutsche Bank and a similar amount to Ladder Capital Finance, a New York-based real estate investment trust.

Debt load unclear

What is unclear from the disclosure is whether Trump added to his debt in any significant way to help pay for his presidential campaign. Because the ranges required for disclosure under federal ethics laws are so wide — Trump’s disclosure lists five separate liabilities each at “over $50,000,000’’ — it is impossible to tell whether his debt load has changed appreciably.

Even in the thick of his presidential campaign, Trump earned at least $594 million from his businesses, properties, books and other products. That’s in line with what he reported for 2015 and the first few months of 2016. 

Some of Trump’s businesses appear to earning more money than they had a year earlier.

His book The Art of the Deal is having a comeback of its own. Royalties from the 1987 autobiography ranged between $100,000 and $1 million, according to the new report. The 2016 report listed royalties as being between $50,000 and $100,000, and the 2015 report put them at $15,000 to $50,000.

Trump’s management fees from Indonesian companies tied to two planned resorts there more than doubled. The latest disclosure puts the fees $380,000, up from $167,000 he reported in 2016.

Trump is partnering with a billionaire Indonesian, Hary Tanoesoedibjo, on the two ventures. One is planned for the tourist island of Bali, the other near Jakarta.

Mar-a-Lago, where Trump played host to several foreign dignitaries during his seven weekends there this winter, has improved its finances. Trump listed the resort’s income as about $37 million, up from about $30 million it had taken in before his May 2016 financial report.

His golf club in Bedminster, New Jersey, on the other hand, produced almost $20 million in revenue, about what it had during the previous reporting period. Trump recently began decamping to that property some weekends.

The Trump International Hotel, housed in the Old Post Office building down the street from the White House, has seen a burst of activity since opening its doors last fall. In addition to serving as a hub during the inauguration festivities, it has hosted numerous events for foreign diplomatic and business interests.

The hotel is cited in three separate lawsuits arguing that Trump is violating the Constitution’s “emoluments’’ clause, a ban on foreign gifts and payments. Trump and the Justice Department have called those claims baseless.
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