Forbes Daily: Uber’s Short Profitable Streak Comes To A Sudden Stop

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Good morning,

If you’ve been on social media in recent days, you may have heard about the beef between rappers Kendrick Lamar and Drake. On the charts alone, Kendrick Lamar is winning the rap battle with his diss tracks, but the feud between two artists who have worked together in the past also offers key career lessons.

While it’s a good thing to have a friendly relationship with coworkers, don’t forget to be mindful of professional boundaries, especially in cases where two personalities collide. Be aware that what you share with colleagues can be used against you.

The dispute has also likely boosted the careers of both Lamar and Drake. And while conflict in a workplace isn’t usually a good thing, having a constructive debate (which probably doesn’t involve writing diss tracks) can improve your problem-solving and conflict resolution skills.

Let’s get into the headlines,

FIRST UP

Uber stock flailed Wednesday, wiping out $12 billion in market value for the ride-hailing firm after it reported a surprise quarterly loss. The quarterly results ended Uber’s first-ever streak of consecutive profitable quarters, and in its earnings release, the ride-sharing company attributed the loss to a writedown of the company’s equity investments.

Some 75% of full-time office workers are now using AI at work, according to a new survey from Microsoft and LinkedIn, and more than three-quarters are turning to their own tools rather than company-provided ones, a phenomenon Microsoft calls “BYOAI.” But just over half of employees who use AI at work are reluctant to admit it, with many worrying that using it on critical tasks makes them look replaceable.

BUSINESS + FINANCE

A criminal probe into Tesla’s claims that its partially automated vehicles are self-driving is centering on potential charges of securities and wire fraud related to concerns that the company and its CEO Elon Musk have oversold their cars’ self-driving capabilities, Reuters reported. Over the years, Musk and Tesla have hailed the cars’ “self-driving” capabilities—a video on the Tesla website, for instance, claims “the person in the driver’s seat is only there for legal reasons” and “the car is driving itself”—but the vehicles still require human supervision and for drivers to remain alert with their hands on the wheel.

FIS Global, a 56-year-old financial technology provider for banks, has launched a new platform called Atelio to help its regional bank clients offer modernized financial products like deposit accounts and online invoicing to other businesses. For regional banks trying to survive in the digital age, an increasingly popular strategy is to partner with nonbanks, enabling them to offer financial products, a trend FIS is trying to ride with its new Atelio software.

WEALTH + ENTREPRENEURSHIP

Shares of Shopify tanked 20%, the most in the stock’s history, in midday trading Wednesday after the e-commerce giant reported a surprising first-quarter loss and warned that last year’s sale of its logistics business could shrink revenue growth this quarter. The losses wiped out more than a billion dollars from the net worth of billionaire CEO Tobias Lütke, worth an estimated $5.7 billion.

TECH + INNOVATION ​​

As Elon Musk doubles down on plans to turn Tesla into a robotaxi powerhouse, he’s adamantly shunned the use of laser lidar that’s standard gear for autonomous cars and trucks—but that hasn’t prevented the electric carmaker from buying lots of the high-tech 3D imaging devices this year. Luminar revealed on Tuesday that during the first quarter, Tesla’s purchases of the devices were a key driver of revenue, even as Tesla’s impulsive billionaire has likened lidar to useless organs such as the human appendix.

MORE: Musk’s artificial intelligence startup xAI is close to closing a funding round that would value the company at $18 billion, Bloomberg reported on Thursday, funds that could boost the billionaire’s project as it works to gain ground on rivals like OpenAI and Anthropic.

Companies are increasingly turning to AI to generate important, often legally binding, employment documents—from company handbooks and workplace policies to contracts like offer letters and separation agreements. But in several cases, these documents, spun using AI tools like ChatGPT, overlook key clauses and crucial issues putting employers at serious legal and financial risk, HR consultants who have directly worked with such companies told Forbes.

MONEY + POLITICS

President Joe Biden said in an interview with CNN on Wednesday that the U.S. will not supply Israel with weapons if Prime Minister Benjamin Netanyahu orders an offensive on the city of Rafah in the southern Gaza Strip, marking a potentially major turning point in the U.S.’ collaboration with Israel in its war against Hamas. According to CNN, Israeli officials have expressed “deep frustration” to U.S. officials over the paused shipment and U.S. media briefings on the decision.

The House of Representatives decidedly voted to table—effectively killing—a motion brought by far-right Rep. Majorie Taylor Greene to remove Speaker Mike Johnson (R-La.), with both Republicans and Democrats voting to keep the speaker in place. “Hopefully, this is the end of the personality politics and the frivolous character assassination that has defined the 118th Congress,” Johnson said following the vote. “It’s regrettable and it’s not who we are as Americans.”

SPORTS + ENTERTAINMENT

Ippei Mizuhara, the former interpreter for Los Angeles Dodgers superstar Shohei Ohtani, has agreed to plead guilty to stealing nearly $17 million from Ohtani’s bank account to pay off his own gambling debts. Mizuhara agreed to one count of bank fraud and one count of subscribing to a false tax return, which together hold a maximum sentence of 33 years in federal prison.

Disney and Warner Bros. Discovery announced Wednesday they will launch a streaming bundle with Disney+, Hulu and Max this summer, marking the latest shift in the streaming realm toward bundling top brands. Disney’s current bundle, which includes Disney+, Hulu and ESPN+, is $14.99 a month with ads and $24.99 a month without ads, suggesting the newly announced bundle including Max could have a higher price tag.

TRENDS + EXPLAINERS

As expected, TikTok and parent company ByteDance filed a lawsuit against the federal government on Tuesday challenging the constitutionality of a new law that requires ByteDance to sell TikTok’s U.S. operations or face a ban of the app in the U.S. The company revealed in the complaint that the TikTok app is inextricably tied to the rest of ByteDance’s systems, which would make separating them effectively impossible, and that the Chinese government would prohibit ByteDance from selling its famous recommendations algorithm.

Gas prices are plateauing just in time for Memorial Day weekend travel, as the national average price per gallon sits at $3.64, according to data from GasBuddy and AAA. Andrew Gross, a spokesperson for AAA, said last week he expects gas prices to remain “somewhat flat for the immediate future,” citing dropping oil prices.

DAILY COVER STORY

How Crypto Giant Tether’s New CEO Is Remaking The Company For The Apocalypse

TOPLINE While much of the crypto world crashed and burned during the recent market downturn, reeling from the collapse of FTX and other giants, Tether has thrived.

The market capitalization of its stablecoin, USDT, ballooned to $111 billion—triple that of its nearest rival, USDC, issued by Boston-based Circle. Thanks to higher interest rates on U.S. Treasurys, which form the bulk of the reserves backing its digital stablecoins, Tether is in an enviable position because its source of capital is effectively free. Unlike traditional banks, customers who deposit hard currency with Tether in exchange for the digital tokens earn no interest.

For the first quarter of 2024 alone, Tether reported unaudited company wide “financial results” of $4.5 billion and a net equity of $11.4 billion. In 2023 the company reported a net profit of $6.2 billion, likely making it the most profitable company in crypto today. Coinbase, the largest U.S. crypto exchange, earned $95 million on $3.1 billion in revenue in all of 2023 and for the first quarter of 2024 it had net income of $1.2 billion, thanks largely to the rise in crypto prices. Approximately 20% of Coinbase’s 2023 profits were generated from the interest it received from the reserves backing stablecoin USDC thanks to a partnership with Circle.

Flush with capital, Tether is now looking beyond stablecoins for growth. Last month, the company, headquartered in the British Virgin Islands, announced a strategic restructuring, branching into three new divisions beyond stablecoins, bitcoin mining, artificial intelligence and education.

“There is this concept of removing intermediaries in crypto that can be applied to many other things,” says Tether’s new chief executive Paolo Ardoino, who had served as its chief technology officer and spokesperson since 2018.

WHY IT MATTERS “Crypto’s largest stablecoin issuer and arguably its most profitable company is expanding into bitcoin mining, AI and education,” says Forbes staff writer Nina Bambysheva. “For Tether’s new CEO Paolo Ardoino, it isn’t just a matter of prudent diversification—it’s philosophical. He believes Tether will play a big role in creating what he describes as resilient sovereign technologies.”

MORE This Crypto Darling Burned Through $2 Billion. Here’s Its Survival Strategy

FACTS + COMMENTS

Hundreds of thousands of children in the U.S. lost a parent to a drug overdose between 2011 and 2021, according to a new report published Wednesday in JAMA Psychiatry. The report reveals the impact of the worsening opioid crisis on families:

More than 321,000: The number of children who lost a parent to a drug overdose during the study period

41 to 64: The age group of parents with the highest rates of drug overdose

134%: The increase in the rate of children who lost a parent to a drug overdose during the course of the study

STRATEGY + SUCCESS

Workplace gaslighting, a form of psychological manipulation in the workplace, can have serious consequences on an employee’s mental health and well-being. One common sign is the trivialization of an employee’s concern, which can often lead them to doubt their perceptions and feelings. Another is affliction, or influencing how an employee feels about themselves, which encompasses a wide range of negative emotions that a gaslighter can direct onto their target.

VIDEO

QUIZ

Peacock ordered an unnamed TV series that will follow a midwestern newsroom working to revive itself. It’s set in the same universe and style as which popular 2000s TV show?

A. “The Office”

B. “Parks and Recreation”

C. “30 Rock”

D. “Arrested Development”

Check your answer.

BEYOND THE NEWSROOM

Registration is now open for the 2024 Forbes Under 30 Summit taking place September 22-25 in the ascendant innovation hub of Cincinnati, Ohio. Secure your spot now for this unique immersive experience at an exclusive Early Access rate of 85% off. This rate expires June 1, so act fast to get the best deal available!