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Business Highlights

Tuesday - 7/8/2014, 6:19pm  ET

The Associated Press

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Soda tax's last stand? Bay Area preps for showdown

WASHINGTON (AP) -- If two of the most progressive U.S. cities don't pass a tax on sugary drinks, will the idea finally fizzle out?

Sugary drinks have been under fire for years, with many blaming them for rising rates of obesity and chronic diseases. Yet efforts to curb consumption by imposing taxes and other measures have failed, in part because the beverage industry has spent millions to defeat the efforts.

Now, the question of whether a bottle of Dr Pepper with 64 grams of sugar should be treated like a pack of cigarettes is being considered in San Francisco and Berkeley, with the two California cities aiming to become the country's first to pass per-ounce taxes on sugary drinks.

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Crumbs shows dangers of focusing on single product

NEW YORK (AP) -- Turns out, being a one-hit wonder is risky.

When Crumbs, the New York City-based chain that built its business around cupcakes, shuttered several dozen of its remaining locations on Monday, it seemed like an abrupt ending for a company that opened a decade ago to ride the wave of popularity of the sugary treat sparked by the TV series "Sex and The City."

But Crumbs' rise and fall isn't surprising when considering the company's dependence on a fad. In fact, it's the latest cautionary tale for businesses that devote their entire menus to variations of a single product.

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EU's united front on Russia falling amid gas needs

VIENNA (AP) -- A clutch of countries is breaking ranks with the EU's efforts to put economic and diplomatic pressure on Russia over Ukraine and building a pipeline meant to carry huge amounts of Russian gas to their doorstep.

Their defiance of a European Union stop work order is more significant than just another missed chance for Europe to call out the Kremlin. Russian natural gas already accounts for around a third of the EU's needs. The South Stream pipeline could increase Russian supplies to Europe by another 25 percent, potentially boosting Moscow's leverage long after the Ukraine crisis fades.

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After Detroit, another city ponders bankruptcy

FLINT, Mich. (AP) -- As Detroit struggles to climb out of bankruptcy, another Michigan city with strong ties to the auto industry may be about to fall into the same hole.

Flint, the birthplace of General Motors that once had 200,000 residents, has also endured a spectacular drop in population and factory jobs and a corresponding rise in property abandonment, much like its insolvent big brother an hour's drive south.

If a judge rules against Flint's effort to cut its retiree health care benefits, the city is expected to join about a dozen cities or counties that have sought help from the courts since the start of the recession.

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Car-hailing service Uber takes on taxis with sale

NEW YORK (AP) -- The car-hailing service Uber is taking on New York City's taxis, temporarily dropping some of its prices by 20 percent.

The company says the price of its UberX lower-end service is now cheaper than the rate charged by the city's famous yellow cabs. For instance, a ride from Grand Central Terminal to the financial district would now cost roughly $22, down from $28 before the sale. Uber said a similar ride in a yellow taxi costs $24.

The sale in the nation's largest city -- one heavily dependent on taxis -- comes following similar temporarily reductions in the past month in Atlanta, Boston, Washington D.C., Los Angeles, Chicago and San Francisco. Uber says if the reduced fares attract more passengers, it's more likely to keep the prices low.

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NY reaches price limit deal with car service Uber

ALBANY, N.Y. (AP) -- The car service Uber has agreed to limit prices during emergencies, natural disasters or other unusual market disruptions consistent with New York's law against price gouging, the company and state attorney general said Tuesday.

Uber, which uses a mobile application to connect riders with vehicles for hire, has its rates rise and fall with demand, but it has been criticized for "surge pricing" that's sometimes exponentially higher than base fares. Prices usually increase weekdays during rush hour in New York City, on Saturday nights, special occasions like New Year's Eve and during bad weather.

Under the agreement signed Tuesday, Uber will set a cap during "abnormal disruptions of the market," limited to the range of prices charged in the preceding 60 days and excluding the three highest prices.

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