With the World Cup heating up, most of the world is having an absolute blast. When summer is in full swing and good times are to be had, it’s quite easy to forget any problems you might be facing. But let’s avoid our own issues for a little bit longer. In the meantime, let’s see what this week in financial blunders has to offer us. I heard it’s about the World Cup and Uber, the up-and-coming taxi service.
The biggest sporting event in the world is officially underway: the World Cup. Hosted in Brazil this year, the beloved event and the organization that runs it, FIFA, are picking up a lot of controversy over the way finances are being handled. According to The Guardian, Brazil has already paid over six billion to set the country up for the World Cup (although that’s the priciest amount listed amongst news sources), putting the country in unrest over the lack of public funding. The favelas (Brazilian ghettos) have been protesting over the use of government money; police even had to shoot tear gas at protestors on the opening day of the World Cup.
The bigger story behind this is the misuse of finances from FIFA. The organization is never taxed by the host country, and some accuse FIFA of making more profit than the country hosting the games. Possibly the craziest use of power demonstrated by FIFA was that it can change laws. Brazil has had a ban on alcohol sales in soccer stadiums ever since it became a public health issue, but one of the biggest sponsors of the 2014 FIFA World Cup is Budweiser. So FIFA worked out the so-called “Budweiser Bill,” which allows beer sales in soccer stadiums, effectively endangering the public and overturning a standing law for the sake of profit.
Many are regarding Uber as the new age of taxi services. After downloading the Uber app, you can request a cab at the click of a button, have the driver use GPS to come straight to you, drive you to wherever you like and then pay (with tip included) on your phone. And while passengers love Uber for its convenience, formally-trained taxi drivers hate it. Uber drivers require no formal training (just a GPS device on a smart phone to navigate), and the service is taking away business from cab companies.
That’s why earlier this week in London, cab drivers staged a protest against Uber by creating a traffic gridlock on some of London’s busiest streets. The demonstration backfired in the worst way possible for the cabbies: the protest made an untapped demographic aware of Uber, boosting their sign-ups by 850%. Andre Spicer, professor at Cass Business School, described it as “PR Gold,” adding that “Journalists – and even the leaders of the protest – are now talking about the app on the news, and explaining how it works. It gives it 1,000 percent more credibility than if the company did it themselves.” A judge will rule later this week on whether or not Uber can continue to operate as is in the UK, but in the meantime, Uber has offered to include London’s black cabs in their service to end the protest and any ill will between the groups.
That’s all the financial blunders we have this week. If there’s any we missed that you’d like to discuss, please comment below.