FTI Consulting News Bytes – 6th May
It may have been a short week for some, but it has been a busy few days for tech news. We kick off this week with a strong first quarter performance from Uber, who unlike their rival Lyft, provided a rosier outlook. Next up is the Buy Now Pay Later clampdown which might be welcomed by many as they become more responsible for customers taking on more debt. China suffers from missing out on trading NFTs due to their own crypto trading restrictions and instead find alternatives in the “collectibles” space. Femtech suffers from a lack of funding despite success in its innovative approach to closing the female health gap. Finally, the Queen will no longer announce additional powers for the CMA to regulate internet companies.
This week’s news
Uber comes back strong
The same can’t however be said for Lyft, Uber’s smaller rival. This week, the two announced their first quarter earnings with Uber offering a rosy outlook on growth following the pandemic. As reported in the FT, underlying profits were also likely to grow ahead of Wall Street’s forecasts for the second quarter. Lyft however reported revenues and profits lower than investors’ expectations. There is a clear shortage of drivers which has caused issues since restrictions were eased across countries from the pandemic. It is said that Uber’s food delivery business helped sustain the business throughout the pandemic but now the two businesses are more or less equal in size.
BNPL under the hammer?
The largest Buy Now Pay Later (BNPL) platform Klarna announced this week that from the 1st June customer debt will have to be reported to credit agencies. This move comes off the back of ongoing talks over the last two years with the likes of Experian and TransUnion, in response to pressure from MPs and campaigners who say they should prevent customers taking on more debt than they can afford. The change will not affect credit ratings until 2023 by which time, we might see competitors like ClearPay follow suit?
China’s FOMO on NFT’s
According to an article this week in TechCrunch, China’s Big Tech companies are suffering from the Fear Of Missing Out when it comes to purchasing Non Fungible Tokens. Crypto is banned in China, which is constraining the purchase of NFTs in the country – usually traded with cryptocurrency. Rather than NFTs, tech companies are calling them “digital collectibles” and are comprised usually of artworks like an ancient Chinese Buddhist statue or something of cultural and historical significance. Despite the restrictions on what and how they can buy, tech giants are becoming major players in the space.
The female Digital Health gap
Charlotte Lynch, a patent technical assistant at intellectual property firm Mewburn Ellis, shared her opinion in UK Tech News this week on the continued short funding of female technology (femtech) despite a booming market which is rich in innovation. There is an evident female health gap which femtech companies such as Elvie are looking to close, but these tech companies are facing barriers to growth due to a lack of investment. According to PitchBook, women’s health only receives 4% of healthcare R&D funding. With 90% of men making the decision, they lack the understanding of the actual health issue and therefore cannot envision its full potential.
New UK tech regulator unit shelved
The Queen’s Speech due on the 10th May outlines the government’s legislative plans for the year. This will no longer include a bill to provide the Competition and Markets Authority with regulatory powers to curb the dominance of internet companies. The unit was established in ‘shadow form’ last year and is operating with around 60 staff who are working on some of the CMA’s existing probes and investigations. Julian Knight, Tory chair of the Commons digital, culture, media and sport committee, said to the FT, that if legislation to empower the tech regulator was not in the Queen’s Speech it would “damage the credibility of the whole enterprise”….“It would be a hammer blow to the capability of the UK to regulate these sectors,” he added.
Top Tweets of the Week
- Noah Williams, a professor of Economics plots a Phillips curve using data of Google searches of “inflation” and “unemployment” over the past two years.
- Adam Mastroianni a post doc fellow at Columbia University asks whether original movies have gone extinct – has an oligopoly conquered all of popular culture?
- DALL.E 2 – an AI system from OpenAI that can generate photo-realistic images and artwork from simple text descriptions in natural language.
Number of the Week
200 – million estimated annual passengers to use the new Elizabeth line (24th May launch)
What’s happening next week?
- 9 May – Meta opens its first ever physical store in California
- 10 May – Sony and Nintendo full year results
- 11 May – Google’s Input/Output annual developer conference.
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