Daily Tech Snippet: Friday, January 22

• Facing a Price War, Uber Bets on Volume: The U.S. operation cuts fares while promising imminent profit. It’s becoming a bit of a holiday tradition for Uber: ringing in the new year by lowering fares. Amid a price war with rival Lyft, the ride-hailing leader reduced its rates by 10 percent to 45 percent in 100 cities across North America. In Detroit, Uber drivers’ per-mile rate is less than it takes to cover their gas and the depreciation of their cars, according to IRS figures. “It’s depressing,” says Bill Scroggins, an Uber driver in Indianapolis. “I’m not even sure I want to drive anymore. It feels like I’m doing it for free.” This is the third year in a row Uber has discounted fares in January. It calls the cuts seasonal but says they could last indefinitely. Last year rates never rose again in almost a third of cities; only in two did they return to precut prices. Uber has instituted temporary hourly wage guarantees to limit drivers’ earnings declines. It’s assured Scroggins and other outraged drivers they’ll come out ahead by making more trips an hour thanks to increased demand. That may be what Uber is telling itself, too. A few months ago, Chief Executive Officer Travis Kalanick told employees that North American operations would turn a profit in the second quarter of this year. The goal sounds less realistic in light of the price cuts. “Uber has to sacrifice profits for growth,” says Evan Rawley, a professor at Columbia Business School. Uber is also churning through cash a lot faster than Lyft, having said it will spend billions to push its way into China, India, and Southeast Asia. In the first quarter of 2015, Uber lost $385.1 million on $287.3 million in revenue, according to leaked figures published by the Information, a tech news site. And losses are growing: In the third quarter, Uber lost $697 million on $498 million in revenue, according to a person briefed on the numbers. Over the first three quarters of 2015, Uber lost $1.7 billion on $1.2 billion in revenue. For perspective, during Amazon.com’s worst-ever four quarters, in 2000, it lost $1.4 billion on $2.8 billion in revenue. CEO Jeff Bezos responded by firing more than 15 percent of his workforce.

• Google Paid Apple $1 Billion to Keep Search Bar on IPhone: Google Inc. is paying Apple Inc. a hefty fee to keep its search bar on the iPhone. Apple received $1 billion from its rival in 2014, according to a transcript of court proceedings from Oracle Corp.’s copyright lawsuit against Google. The search engine giant has an agreement with Apple that gives the iPhone maker a percentage of the revenue Google generates through the Apple device, an attorney for Oracle said at a Jan. 14 hearing in federal court. Rumors about how much Google pays Apple to be on the iPhone have circulated for years, but the companies have never publicly disclosed it. Kristin Huguet, a spokeswoman for Apple, and Google spokesman Aaron Stein both declined to comment on the information disclosed in court. The revenue-sharing agreement reveals the lengths Google must go to keep people using its search tool on mobile devices. It also shows how Apple benefits financially from Google’s advertising-based business model that Chief Executive Officer Tim Cook has criticized as an intrusion of privacy. Oracle has been fighting Google since 2010 over claims that the search engine company used its Java software without paying for it to develop Android. The showdown has returned to U.S. District Judge William Alsup in San Francisco after a pit stop at the U.S. Supreme Court, where Google lost a bid to derail the case. The damages Oracle now seeks may exceed $1 billion since it expanded its claims to cover newer Android versions.

• Seeking Twitter's territory, Facebook launches real-time sports platform: Facebook Inc is tackling the sports arena with a new platform called Facebook Sports Stadium, which the social media site said will provide real-time updates on games, popular posts from fans, statistics and commentary from experts. "With 650 million sports fans, Facebook is the world's largest stadium," it wrote in a post on Wednesday announcing the feature. The new service appears to be an effort to encroach on Twitter's territory. The micro-blogging site has long been a popular destination for so-called "live-tweeting" games. MichaelAaron Flicker, president of XenoPsi, a New York City-based marketing firm, said the new product is Facebook's attempt at capturing "in the moment" engagement. "They don't have that piece of the puzzle," Flicker said. "The challenge for Facebook is there are already a lot of communities (like Facebook Sports Stadium). This is not a unique offering."

• Jack Dorsey Juggles Twitter and Square, Both Caught in Downdraft: It is not shaping up as a happy new year for Jack Dorsey and his two companies. Even as the stock market’s volatility has dragged down many businesses, Mr. Dorsey and the public tech companies that he runs as chief executive — Twitter, the social network, and Square, the mobile payments company — have been particularly buffeted.Shares of Twitter hit a record low early Wednesday before going on a wild ride and rising 4.1 percent for the day. The gain did little to erase Twitter’s negative trajectory, with its shares off 25 percent this year. Square, which went public last November, fell below its initial public offering price of $9 for the first time on Wednesday before recovering. In total, the stock is down 28 percent this year. Square faces its own set of difficulties. Naysayers have long questioned the profit margins on the company’s payments processing business. Square takes a small cut of every credit card payment it processes, a cut that is split with banks and other financial intermediaries. The company has expanded into other areas in recent years, such as food delivery and capital extensions to small businesses. Square also is dealing with a relatively small proportion of shares available for trading, since the company sold less than 10 percent of itself in its public offering, in what is known as a “small float” offering. Also, many of Square’s executives and major shareholders are still held by the so-called lockup period after the offering, which prohibits them from selling their shares. Companies with relatively few shares outstanding tend to get whipsawed during volatile market periods because it becomes harder to adequately match the small amount of supply for the stock with the demand, or lack thereof. “Those tiny-float I.P.O.s come back to haunt you,” Mr. Wolff of Manhattan Venture Partners said.