Uber secretive about Hub details

Uber, the private car service app taking Boston by storm, is so shrouded in secrecy that company officials won't answer basic questions such as how many complaints were made against drivers, how many have been fired for misconduct — or even how many are working in town.

The young tech company's spokesman, Taylor Bennett, even refused to answer how many trips Boston riders have taken with Uber, and instead emailed marketing copy on the benefits of the service.

"While that is proprietary, we've done hundreds of thousands of trips since launching back in 2011," Bennett said in an email. "Overall, we've received overwhelming support from both riders and drivers since our launch."

According to Bennett, the number of Uber rider complaints is also kept secret, including gripes about surge pricing, a controversial feature that temporarily hikes fares during peak ridership.

Bennett declined repeated requests for an interview with Uber leadership and insisted the Herald send all questions via email. He did not respond to several follow-up questions yesterday, including whether the company plans to increase transparency.

The red-hot tech startup last month raised 
$1.2 billion in venture capital funding that had investors estimating the worth of the smartphone app transportation service at a whopping $17 billion.

The cash infusion was reportedly led by Fidelity Investments and other backers including Wellington Management, Summit Partners, BlackRock Inc., venture capital firm Kleiner Perkins Caufield & Byers, and existing investors such as Google Ventures and Menlo Ventures.

Uber has also come under fire from cab companies beefing that the service is unregulated. A local class-action lawsuit filed last month alleges the company classifies certain drivers as independent contractors, illegally forcing them to pay for gas, insurance and other expenses.

The app service boasts of a "two-way street" feedback feature that allows drivers and passengers to evaluate one another on a five-star rating system after each ride. While riders can see a driver's rating, riders can't see how drivers rate them unless they email customer service.

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Casino hopefuls launch effort to fight repeal of gaming law

High-rolling casino developers, intent on protecting their Bay State investments, are planning to throw their weight behind a new political committee aimed at fighting the anti-casino ballot question, adding to the potential for a fundraising arms race toward the November vote.

"We are definitely part of trying to send a message of all the positive the legislation brings and we'll be active in that. I'm sure we'll be active and involved in strategy," said Mitchell Etess, chief executive officer of Mohegan Sun, which with Penn National Gaming and MGM Resorts, will help fund and support the newly created Committee to Preserve Jobs Associated with Casino Gaming Law, according to people with knowledge of its efforts.

"We'll obviously form a budget and there will be a campaign. As far as the extent of the budget ... we want to get a positive message out there and it's whatever it takes for that," Etess said.

Penn National won the right to build a slots parlor in Plainville, and MGM won the Springfield casino license. Mohegan Sun, which wants to build a casino in Revere, is competing with Wynn Resorts' Everett proposal for the sole Boston area license. A Wynn spokesman could not be reached yesterday.

"We look forward to a statewide education campaign to share with Massachusetts voters the benefits of the proposed resort casinos including more than 10,000 good-paying construction and permanent jobs with benefits and hundreds of millions in revenue annually to our cities and town," read a statement released by attorney Thomas R. Kiley, the committee's chairman.

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GFC builds striking, sustainable condos

It's not easy to get contemporary architecture built in the area's traditional neighborhoods of two- and three-family houses.

But one local development company has created a niche by hiring architects to create housing to attract design-conscious buyers. For Charles Aggouras and Daniel DiPierro of GFC Development, progressive design along with a focus on sustainability differentiates their condos from others on the market.

"We've developed a successful niche by appealing to buyers who want a contemporary look with stylish details and high-efficiency green systems," said GFC president Aggouras.

Aggouras thinks contemporary design is "cool," and he sees it going hand-in-hand with sustainable development.

Aggouras said designing green does more than just save energy: "You build with better windows, insulation, roofing, and in the end create a better product." At 57 Endicott Ave., just off Teele Square in Somerville, GFC built a contemporary-style three-unit eco-friendly building whose exterior was clad with red corrugated steel in a neighborhood of two-family wood homes.

"The neighbors were aghast, but the project sold out very quickly," said architect Jim Zagewitz of MZO Group, who has designed a number of GFC's developments. "A lot of this is driven by millen­nials looking for something different, and there's also a lot of buyers from overseas who feel more comfortable with contemporary design than our traditional gables."

Aggouras' belief in sustainability led him to do a zero net energy house, one that produces more energy than it uses, on city-owned land at 64 Catherine St. on the Jamaica Plain/­Roslindale line. The two-unit project, part of Boston's E+ demonstration program, had to have optimal south-facing roofs for solar photo­voltaic panels, making for a nontraditional shape.

GFC's 15-unit Maxwell's Green townhouse condos near Magoun Square and the five units at 6-8 Beacon St. in Somerville had contemporary design and sold quickly at high prices. They are designed with what's become GFC's signature look, an exterior that combines corrugated metal, cedar, Hardieplank and architectural stone block with very tall windows.

The three/four level interiors have high ceilings, staircases with glass railings, flex rooms for third bedrooms, private balconies and attached one-car garages on the bottom floor. And they include home auto­mation, music systems, Euro-style appliances and fixtures and tankless water heaters — along with such touches as showers with linear drains.

"When we come to the neighborhoods with our designs, they aren't drawn on a cocktail napkin," Aggouras said. "A lot of thought goes into the design of each one. It's a lot more work and takes more time. But we do it because we want to be proud of what we do."

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Experts see job growth for CEOs, other execs

Massachusetts executives are on track to switch jobs at a greater rate than last year as the companies prepare to emerge from their recession-induced hibernation and start expanding again, experts said.

"As a general rule, when there's a lot of management change, (the economy is) actually better," said Richard Jacovitz, senior vice president of Liberum Research. "It's starting to trend up again,"

So far in 2014, 126 executive positions in public companies have been filled either through promotions or new hires, compared to 221 over the entirety of 2013, according to Liberum.

CEO changes around the country this year have also outpaced 2013, with 661 through June compared to 1,246 in 2013, according to Challenger, Gray and Christmas, an employment research firm. Massachusetts companies account for 19 of the CEO departures.

Included in the departures this year are William Swanson, former CEO of Raytheon, Robert Kauffman, chief medical officer for Vertex Pharmaceuticals, and James Malerba, executive vice president of State Street.

"You've got an economy that has stabilized," said Rick Cobb, executive vice-president of Challenger, Gray and Christmas. "The company management team tends to shift from maintenance to, 'Let's see if we can up our game and take it to the next level.' "

As the economy has improved, companies are moving away from stopping losses and saving every penny to looking for potential investments and longer-term growth opportunities.

Since the beginning of 2014, the unemployment rate has dropped .5 percent and the S&P 500 is up 6.73 percent. The Dow Jones Industrial Average has risen nearly 2.5 percent.

Companies are willing to make changes and make a different, strategic change," Jacovitz said.

Retirements are not necessarily related to the economy, but lately many have been, Cobb said.

"There's a lot of people who took the reins in 2008, 2009," Cobb said. Those executives who put off retirement to bring their firms through the recession are now stepping down, in part because their jobs seem to be done, but also in part because improvements to the stock market make various stock options and their pension more lucrative.

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Aereo tries a new legal approach in effort to survive Supreme Court defeat

Following its loss at the Supreme Court last month, Aereo is pursuing a new legal strategy in an effort to keep its broadcast streaming business alive.

In a letter to U.S. District Judge Alison Nathan on Wednesday, Aereo's legal team is claiming that it is eligible for the same statutory license that cable companies pay in providing broadcast transmissions to their subscribers.

Aereo cites the Supreme Court majority opinion, which was rooted in the idea that because Aereo was "substantially similar to" a cable system, it fell under provisions of the 1976 Copyright Act that target such multichannel distributors.

"The Supreme Court's holding that Aereo is a cable system under the Copyright Act is significant because, as a cable system, Aereo is now entitled to the benefits of the copyright statutory license pursuant to the Copyright Act," the company's lawyers said in their letter to Nathan. "Aereo is proceeding to file the necessary statements of account and royalty fees."

Broadcasters, however, object to Aereo's shift in strategy, noting that Aereo previously said that it did not fall under the definition of a cable company. The issue came up during oral arguments before the Supreme Court, but Aereo's attorney David Frederick said it was an equipment provider, not a cable service.

"Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court's decision automatically transformed Aereo into a cable system under Section 111 given its prior statements to this court and the Supreme Court," broadcasters' lawyers wrote.

But Aereo said that it was taking the approach because the Supreme Court "has announced a new and different rule governing Aereo's operations last week."

Other broadcast streaming services have pursued such an approach, but have lost in court. In 2010, ivi Inc. claimed that it should be eligible for a statutory license because it was functioning like a cable company, but the 2nd Circuit Court of Appeals rejected that approach. The company ceased operations.

Aereo contends that the Supreme Court's decision essentially overturned the 2nd Circuit's ivi decision. That would have tremendous implications for all sorts of over-the-top services, but broadcasters are likely to argue that the Supreme Court's ruling was limited in scope.

Aereo also suggests that if Nathan rejects their effort to qualify for a statutory license, their would seek to limit any injunction to the simultaneous or near-simultaneous streaming of broadcast signals. "The Supreme Court did nothing to prohibit -- and indeed reaffirms the vitality of -- non-simultaneous playback from copies created by consumers," Aereo's lawyers wrote.

Several days after the court ruling, Aereo announced that it was pausing its operations. The company's founder, Chet Kanojia, sent a message to its users on Wednesday that linked to the letter and was headlined, "Our Path Forward."

"From the beginning, it has been our mission to build a lawful technology that would provide consumers with more choice and alternatives in how they watch television," he wrote. "We believed that providing an innovative cloud-based individual antenna would provide consumers with a convenient way to use an antenna to watch the live, free-to-air signals broadcast over public spectrum that belongs to them."

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Sun Valley: Barry Diller goes biking, Rupert Murdoch makes it a family affair

Summer camp for billionaires is back in session as media and technology barons were out in force at the Allen & Co. conference in Sun Valley, Idaho, on Wednesday.

UTA chairman Jim Berkus and IAC/InterActiveCorp chairman Barry Diller biked through the resort's mall area despite signs asking guests to stick to walking, not wheels.

Google executive chairman Eric Schmidt and Resolution founder Jeff Berg chatted amiably while leaving one of the morning sessions.

Wences Casares, CEO of Bitcoin startup Xapo, searched for a bar or restaurant in which to watch the World Cup match between his native Argentina and the Netherlands.

Twenty-first Century Fox chairman Rupert Murdoch made it a family affair, walking into the conference flanked by sons Lachlan and James.

And Discovery CEO David Zaslav and his wife, Pam, walked hand in hand past the media cadre, while former New York City Mayor Michael Bloomberg made a sort of swatting gesture at the assembled press.

Other guests glimpsed in and around the exclusive confab were Walt Disney Co. chairman Bob Iger, Amazon CEO Jeff Bezos, ESPN president John Skipper, the Weinstein Co. co-chairman Harvey Weinstein, Facebook CEO Mark Zuckerberg and Apple CEO Tim Cook.

Not seen: drones, despite a Bloomberg report that the event's security team were looking to the skies in the off-chance any unmanned crafts appeared to photograph or imperil guests.

The outfits screamed vacation. Venture capitalist Peter Thiel sported a crisp white polo shirt, Imagine Entertainment co-founder Brian Grazer showcased camouflage shorts and NBCUniversal vice chairman Ron Meyer expressed his institutional pride with a black "Fast 5" T-shirt, in what appeared to be Portuguese.

It can take work to appear so casual. Alice + Olivia CEO and creative director Stacey Bendet Eisner, resplendent in a silver dress, confessed she changed into three outfits a day, crediting her husband, Eric Eisner, a film producer and son of former Disney chief Eisner, with carrying all her luggage.

Guests listened to presentations by basketball great Phil Jackson and Google's Larry Page, but the main event will take place on Friday when Secretary of State John Kerry is slated to take the stage.

Part of the appeal of the conference is that it unfolds behind closed doors or, in this case, massive hedges, away from the prying eyes of the press. Reporters, with the exception of the New Yorker's Ken Auletta and Charlie Rose, are prevented from attending the discussions or crossing hastily assembled barriers. That gives the moguls' entrances and exits into the conference events the feeling of an informal red carpet, one that features shorts and T-shirts instead of haute couture.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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China inflation eases to 2.3 percent in June

HONG KONG — China's inflation rate eased to 2.3 percent in June as politically sensitive food prices softened, government data released Wednesday showed.

Inflation remains below the 3.5 percent annual target set by the ruling Communist Party. That gives authorities room to cut interest rates or use other measures if needed to shore up the slowing economy in order to meet the official full year growth target of 7.5 percent.

Food costs rose 3.7 percent in June after surging 4.1 percent the month before on a rebound in prices for pork, a staple meat in China.

Excluding food costs, June inflation was 1.7 percent, according to the report by the National Bureau of Statistics.

Inflation fell from 2.5 percent in May, the highest rate since January, when it was at the same level.

Economists said they expect Chinese consumer prices to remain largely stable this year, which will ease pressure on leaders in Beijing who are grappling with the slowdown in the world's No. 2 economy as they try to nurture growth based on domestic consumption and wean it off of trade and investment.

"Inflation will likely stay at benign levels" in the low 2 percent range, said Haibin Zhu, chief China economist at JP Morgan. "This provides room for policymakers to focus on the growth stabilization and structural reforms in the near term."

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Government made $100B in improper payments

WASHINGTON — By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them — tax credits to families that didn't qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary.

Congressional investigators say the figure could be even higher.

The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more.

"Nobody knows exactly how much taxpayer money is wasted through improper payments, but the federal government's own astounding estimate is more than half a trillion dollars over the past five years," said Rep. John Mica, R-Fla. "The fact is, improper payments are staggeringly high in programs designed to help those most in need — children, seniors and low-income families."

Mica chairs the House Oversight subcommittee on government operations. The subcommittee is holding a hearing on improper payments Wednesday afternoon.

Each year, federal agencies are required to estimate the amount of improper payments they issue. They include overpayments, underpayments, payments to the wrong recipient and payments that were made without proper documentation.

Some improper payments are the result of fraud, while others are unintentional, caused by clerical errors or mistakes in awarding benefits without proper verification.

In 2013, federal agencies made $97 billion in overpayments, according to agency estimates. Underpayments totaled $9 billion.

The amount of improper payments has steadily dropped since 2010, when it peaked at $121 billion.

The Obama administration has stepped up efforts to measure improper payments, identify the cause and develop plans to reduce them, said Beth Cobert, deputy director of the White House budget office. Agencies recovered more than $22 billion in overpayments last year.

"We have strengthened accountability and transparency, saving the American people money while improving the fiscal responsibility of federal programs," Cobert said in a statement ahead of Wednesday's hearing. "We are pleased with this progress, but know that we have more work to do in this area."

However, a new report by the Government Accountability Office questions the accuracy of agency estimates, suggesting that the real tally could be higher. The GAO is the investigative arm of Congress.

"The federal government is unable to determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them," Beryl H. Davis, director of financial management at the GAO, said in prepared testimony for Wednesday's hearing.

Davis said some agencies don't develop estimates for programs that could be susceptible to improper payments. For example, the Health and Human Services Department says it cannot force states to help it develop estimates for the cash welfare program known as Temporary Assistance for Needy Families. The program is administered by the states.

The largest sources of improper payments are government health care programs, according to agency estimates. Medicare's various health insurance programs for older Americans accounted for $50 billion in improper payments in the 2013 budget year, far exceeding any other program.

Most of the payments were deemed improper because they were issued without proper documentation, said Shantanu Agrawal, a deputy administrator for the Centers for Medicare & Medicaid Services. In some cases, the paperwork didn't verify that services were medically necessary.

"Payments deemed 'improper' under these circumstances tend to be the result of documentation and coding errors made by the provider as opposed to payments made for inappropriate claims," Agrawal said in prepared testimony for Wednesday's hearing.

Among other programs with large amounts of improper payments:

—The earned income tax credit, which provides payments to the working poor in the form of tax refunds. Last year, improper payments totaled $14.5 billion. That's 24 percent of all payments under the program.

The EITC is one of the largest anti-poverty programs in the U.S., providing $60.3 billion in payments last year. Eligibility depends on income and family size, making it complicated to apply for the credit — and difficult to enforce, said IRS Commissioner John Koskinen.

"EITC eligibility depends on items that the IRS cannot readily verify through third-party information reporting, including marital status and the relationship and residency of children," Koskinen told a House committee in May. "In addition, the eligible population for the EITC shifts by approximately one-third each year, making it difficult for the IRS to use prior-year data to assist in validating compliance."

— Medicaid, the government health care program for the poor. Last year, improper payments totaled $14.4 billion.

Medicaid, which is run jointly by the federal government and the states, has seen a steady decline in improper payments since 2010, when they peaked at $23 billion.

The program is expanding under President Barack Obama's health law.

—Unemployment insurance, a joint federal-state program that provides temporary benefits to laid-off workers. Amount of improper payments last year: $6.2 billion, or 9 percent of all payments.

The Labor Department said most overpayments went to people who continued to get benefits after returning to work, or who didn't meet state requirements to look for work while they were unemployed. Others were ineligible for benefits because they voluntarily quit their jobs or were fired.

—Supplemental Security Income, a disability program for the poor run by the Social Security Administration. Amount of improper payments: $4.3 billion, or 8 percent of all payments.

Social Security's much larger retirement and disability programs issued $2.4 billion in improper payments, according to agency estimates. Those programs provided more than $770 billion in benefits, so improper payments accounted for less than 1 percent.

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Online: http://www.paymentaccuracy.gov/about-improper-payments

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Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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World stocks stumble as gains reassessed

TOKYO — Asian stocks fell for a third day Wednesday and European markets traded tepidly as caution spread ahead of corporate earnings and after record highs on Wall Street.

The just-started U.S. earnings season as well China's second quarter GDP figures, due next week, will help investors determine whether the recent run up in stock valuations has been justified. The Dow Jones industrial average last week topped 17,000 for the first time in its 118-year history.

"Investors globally have become a bit more cautious," said IG strategist Ryan Huang in a market commentary.

European markets were muted in early trading. The FTSE100 in Britain lost 0.3 percent to 6,717.02 while France's CAC-40 was little changed, edging up 0.1 percent to 4,345.37. Germany's DAX gained nearly 0.1 percent to 9,779.13.

In Asia, Japan's Nikkei 225 recouped some of its losses from earlier in the day to close down 0.1 percent at 15,302.65. Hong Kong's Hang Seng shed 1.6 percent to 23,176.07.

Seoul's Kospi dropped 0.3 percent to 2,000.50 and China's Shanghai Composite fell 1.2 percent to 2,038.61. Markets in Australia and Southeast Asia also fell.

"Investors headed for the exits on negative overseas leads," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"In a glass half-empty trading environment, investors ignored higher iron ore prices, benign China inflation and a strong start to the US reporting season by Alcoa."

The U.S. earnings season got started after the closing bell Tuesday when aluminum maker Alcoa reported results that were better than investors expected. Wells Fargo, the No. 1 home mortgage lender in the U.S., reports on Friday.

The immediate attention of markets is likely to be on the release of minutes later Wednesday from the U.S. Federal Reserve's last policy meeting.

CMC Markets said in a commentary that the minutes are likely to sound more "dovish" than current economic conditions warrant since the Fed's last meeting was before June's strong jobs numbers were released.

In energy markets, benchmark U.S. crude for August delivery was down 5 cents at $103.35 a barrel at 0805 GMT in electronic trading on the New York Mercantile Exchange. The contract fell 13 cents to close at $103.40 on Tuesday.

In currencies, the euro rose slightly to $1.3615 from $1.3612 late Tuesday. The dollar rose to 101.66 yen from 101.52 yen.

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Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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FCC names teams to review Comcast-TWC, AT&T-DirecTV mergers

Two lawyers formerly with the Justice Department's Antitrust Division will lead FCC review teams looking into the proposed mergers of Comcast and Time Warner Cable, and AT&T with DirecTV.

Hillary Burchuk, trial attorney with the FCC's office of general counsel, will lead the team reviewing Comcast's plans to acquire Time Warner Cable, as well as a related transaction in which Charter Communications will acquire 1.4 million Time Warner Cable subscribers. Another 2.5 million Comcast subscribers will become part of a spinoff company controlled by Charter.

Burchuk was formerly an attorney in the Justice Department's Antitrust Division, and was among the team that worked on that department's review of the Comcast and NBC Universal merger in 2011. Government regulators approved that deal subject to a number of conditions.

Jamillia Ferris, who served in the Justice Department from 2010 to 2013, will head the team reviewing the AT&T-DirecTV transaction. Her tenure at the Justice Department included a stint as chief of staff and counsel to William Baer, assistant attorney general of the Antitrust Division. Among the cases she oversaw was the Apple ebook price fixing lawsuit. She most recently has been in private practice with Hunton & Williams.

In an interview in May, before her appointment to the FCC, she told Variety that the government would likely look at a number of potential impacts from the mergers. "Horizontal competition won't be the only way they look at market dynamics and the competitive effects of the transaction," she said. "For example, you can expect that they will examine whether the combined company will have enhanced buying power that results in less or lower quality output when negotiating with content providers. DOJ may also analyze whether that power harms competition with other media companies trying to access content."

The FCC also announced that its general counsel, Jonathan Sallet, will chair a steering committee that will oversee both of the transactions, with members including William Lake, chief of the Media Bureau; Mindel de la Torre, chief of the International Bureau; Julie Veach, chief of the Wireline Competition Bureau; and Roger Sherman, chief of the Wireless Telecommunications Bureau.

William Rogerson, a professor at Northwestern University, will serve as senior economist overseeing the transactions. He argued against the Comcast-NBC U merger in 2010, after producing a study commissioned by the American Cable Assn. Shane Greenstein, professor at Northwestern's Kellogg School of Management, will serve as senior economic consultant on the transactions.

Wall Street analysts said that the announcements signaled that the FCC was about to start its 180-day clock to review the transactions, although that time frame is informal. In a report issued on Monday, Bernstein Research's Paul de Sa wrote that the selections of team members signal a coordinated, efficient review process with the Department of Justice, which also must greenlight the mergers. Bernstein's analysts predict that both transactions will be approved with conditions early in 2015.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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