The Gig Economy Regulation Takes A U-Turn
Check out everything that happened in financial markets this week
💰📈 The United States posted the largest gain in private payrolls in 7 months, pointing at a strong early second quarter. This was driven by a surge in demand due to COVID vaccines and government aid.
📱🛑 Facebook must decide if their ban on Trump will remain in effect permanently or if he will be allowed back on the platform with concessions, after their independent review board gave the company 6 months to make a final decision.
🚴♂️📉 Peloton finally announced a recall after just a few weeks ago saying there was “no reason” to stop using the machines. This recall comes after multiple injuries were reported and a child’s death.
🛰💸 Elon Musk is making news again with over 500,000 preorders for Starlink, Musk’s venture which provides satellite internet service through an army of SpaceX satellites. Each preorder includes a $99 non-refundable deposit.
🌐✈️ Jeff Bezos’ space company Blue Origin announced their first suborbital sightseeing trip for July 20th, 2021. They’re also auctioning one of the seats on this trip, however it does not include any form of insurance.
The Biden Administration Takes A U-Turn
On Wednesday this week, President Biden blocked a rule from the Trump-era that made it easy to classify gig workers as contractors rather than employees. This could be the start of his administration creating more worker protections and trying to help gig workers.
Immediately after the announcement, shares of Uber, Lyft and Doordash dropped for the day. Uber lost 3.2% while Lyft was down %5.8 and DoorDash 5%.
Uber and DoorDash have both recently spoke on the issue, with Uber saying that they are willing to work on making changes to the labor system as currently, it is a “binary choice” between being an employee or contractor. They want to work to update the employment system that we currently use. DoorDash had similar remarks, stating that most of their workers valued the flexible schedules and hours.
However, not everyone was pleased by the blocking of this law. The U.S. Chamber of Commerce said that it does not want the Biden administration to continue going after more regulations around independent workers. They believe that it should be easy to be an independent contractor and not be something a worker has to jump through hoops to obtain.
Chip Shortages Continue Globally
In the world there is currently a massive shortage for semiconductors. This is affecting industries across the board including automakers and tech giants alike. This has been affecting consumers and companies alike for almost a year and there is no end in sight.
A big factor in this shortage has been the COVID pandemic as it has pushed more people home and using devices for work or entertainment. This has meant that more and more semiconductors are being used in everyday products. Another reason is the increase in profitability in cryptocurrency mining, which has seen a massive surge and demand for computer components.
The shortage has led to gaming consoles like the PS5 and the Xbox Series X be sold out since launch and both Sony and Microsoft have made statements that the reason they cannot keep up with demand is due to the lack of semiconductors. It also led to a 3 week waiting list for the new iPhone 12 Pro.
However, not only are consumers being affected, many manufacturers are being hurt by the shortage. Automobile producers decided to idle their factories when the shortage started thinking they could ride out the wave, however, it has continued and left car companies scrambling.
Nissan decided they are not going to include navigation systems in thousands of their vehicles since they cannot get the parts needed at a reasonable price. Ram stopped selling its smart mirrors in their pickup trucks. This is a huge test for the automobile industry as they have been racing to get the most technologically advanced car; they now have to take all of that out to maintain their sales.
India’s Covid Crisis Rages
India has become the largest hotspot of COVID in the world and is continuing to get worse. It was originally predicted that the cases would peak on Wednesday, however, over the past 24 hours a record 412,262 cases and 3,980 deaths have been reported. The healthcare system there is already overwhelmed with a limit on hospital beds and medical oxygen.
While the cases have been mainly focused in New Delhi and a few other major cities, there has been little spread to rural communities until now. These communities house 70% of India’s 1.3 billion people and have extremely limited access to testing facilities or any healthcare. In Susner a town in Madhya Pradesh they do not have hospitals or a place to treat people, so they are treating them outdoors under trees.
India is also one of the world’s largest producers of vaccines so they welcomed the news from the US that they would release the intellectual property behind the vaccine. However, they are still struggling to produce enough vaccines as they are currently only producing 80 million per month.
One of the large causes for the spike in cases has been the relaxed restrictions that Modi had in place. There were many religious festivals and political rallies in the past month that have had over 10,000 people in attendance and became super-spreader events. Some states have placed restrictions on social gatherings and mask wearing, however, the government is resisting imposing a national lockdown.
