Waze, an Israeli mobile satellite navigation application, is seen on a smartphone in this photo illustration taken in Tel Aviv May 9, 2013. Nir Elias / Reuters

Google Inc. is considering buying Israeli mobile satellite navigation start-up Waze Inc., which may lead to a bidding war with Facebook Inc., Bloomberg news reported, citing people familiar with the matter.

Waze is seeking more than $1 billion and is fielding expressions of interest from multiple parties, Bloomberg cited a source as saying.

Maps and navigation services have become a key asset for technology companies as consumers increasingly adopt smartphones and other mobile devices.

Other media have reported that Facebook Inc has held talks to buy Waze for as much as $1 billion

Google and other parties approached Waze after the Facebook talks became public but none of the bidders are close to clinching a deal, Bloomberg said, adding that the start-up might decide to remain independent.

Apple Inc, which distributes a competing map tool, is not part of the discussions, Bloomberg said.

Waze could not immediately be reached for comment. Google did not immediately respond to requests for comment.

Waze uses satellite signals from members’ smartphones to generate maps and traffic data, which it then shares with other users, offering real-time traffic information.

The four-year-old company has 47 million users. It has raised $67 million in funding from firms including Kleiner Perkins Caufield & Byers, Blue Run Ventures and semiconductor company Qualcomm Inc.

Waze has 11 of its 100 employees based in the United States, with the remaining staff in Israel.

Copyright (2013) Thomson Reuters. Click for restrictions.

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The third-biggest U.S. city and its Aviation Department are requiring the companies to guarantee payment of rising facility construction costs and other expenses, according to a complaint filed yesterday in state court in Chicago.

The companies called that process “legally deficient” and are seeking a court order delaying a May 24 bid deadline.

If forced to choose, “they will either become parties to a defective public bidding process and illegal contract, or forfeit their substantial on-site operations at O’Hare,” according to the complaint.

Joining the suit are the Chicago unit of Enterprise Holdings Inc., the biggest U.S. car rental operator, and Dollar Thrifty Automotive Group Inc. The four companies account for 97 percent of U.S. airport rental car business according to the complaint.

Roderick Drew, a spokesman for the Chicago Department of Law, declined to comment immediately on the allegations, saying the city had not yet been served with the complaint. The Aviation Department’s media relations staff did not immediately reply to a voice-mail message seeking comment.

Cost estimates for the consolidated rental facility project have climbed to $765 million this year from $397 million when the project was announced in 2010 and may reach $817 million, the companies allege.

“The city, through the consolidated facility bidding process, seeks to use unlawful means to put the rental car companies on the hook for those ever-expanding costs,” the rental firms said in their filing.

The case is Enterprise Leasing Co. of Chicago LLC v. City of Chicago, 13CH13269, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

–Editors: Charles Carter, Andrew Dunn

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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Elon Musk speaking at a Tesla factory in Fremont. Noah Berger / Reuters

Call it Elon Unchained.

With the early repayment yesterday of Tesla Motors Inc.’s loan from the U.S. Energy Department, Chief Executive Officer Elon Musk is free to run the electric-car maker for the benefit of himself and other shareholders.

As a co-founder of PayPal, CEO of rocket maker Space Exploration Technologies Corp. and chairman of solar power company SolarCity Corp., Musk has proven he’s a free thinker who can turn those ideas into billions. What happens with Tesla now that he can do anything he wants? The possibilities are broad.

“I do feel as if it’s a weight off our chest,” Musk said yesterday in his first interview after the repayment was announced. “We did get criticized quite a lot for taking government funding, even though during the first several years Tesla was privately funded — mostly from me. I put my last money into Tesla in late 2008 just to keep the company alive.”

Tesla yesterday paid the Energy Department $451.8 million remaining on the Advanced Technology Vehicles Manufacturing loan Tesla was awarded in 2009. Settling the debt earned taxpayers $15 million to $20 million, Musk said. The Energy Department puts the profit closer to $26 million.

Conditions of the loan issued through a green-cars program created under President George W. Bush and implemented by President Barack Obama included keeping officials apprised of business plans. Musk, Tesla’s top shareholder, couldn’t sell more than 65 percent of his stake as of Tesla’s 2010 initial public offering, nor could he merge it with another company.

Repayment gives Tesla more flexibility and “removes some operational covenants that are in place,” said Elaine Kwei, an equity analyst for Jefferies Equity Research in New York, who rates Tesla a buy. “Not to mention it’s also great for P.R.”

Hot stock

Tesla slipped 0.4 percent to $87.24 yesterday at the close in New York. The shares rose 158 percent this year through yesterday, outstripping the 16 percent gain for the Russell 1000 Index. Gains for Tesla shares, along with SolarCity, have raised Musk’s fortune to $5.4 billion, according to the Bloomberg Billionaires Index.

Some investor interest in Tesla, which counts Daimler AG and Toyota Motor Corp. as shareholders and customers, is that the carmaker will win more tie-ups, said analyst Ben Kallo of Robert W. Baird & Co., who rates Tesla outperform.

“Expanding relationships they have with Toyota and Daimler and possibly even adding new relationships is always at the forefront of investors’ minds,” he said. “More so now than ever after they get this loan behind them.”

Daimler has 4.87 million Tesla shares valued at $425 million, while Toyota has 2.94 million shares valued at $257 million, according to data compiled by Bloomberg.

Remaining independent

Musk, 41, said earlier this month that he wouldn’t anticipate stepping away from Tesla for “several years” and that an acquisition by another carmaker isn’t likely.

To a large, established automaker, “Tesla just seems very expensive,” Musk said on May 2, when the company was valued at $6.24 billion. “How many cars do we make? What’s our market cap? It seems nutty to them.”

After selling 4,900 Model S sedans in the first quarter and reporting its first three-month profit this month, Tesla’s market valuation soared above $10 billion, bigger than Fiat SpA, which sells 1 million vehicles a quarter, including those of Chrysler Group LLC, which it controls.

Still, an acquisition is “one of the possible outcomes, I suppose,” he said. Rather than an auto company, “I’d guess it would come from outside the auto industry. It would be a buyer with a very large cash position,” he said.

While he declined to speculate on possible buyers, he did acknowledge that Apple Inc. qualifies as a company with a lot of cash.

Steve Dowling, a spokesman for Apple, declined to comment.

‘Compelling, affordable’

In the interview yesterday, he said he hasn’t had any discussions with Apple beyond iPhone integration, and isn’t looking to be acquired by anyone until he can produce “a compelling, affordable car” that is less expensive than the Model S and nicer than Nissan Motor Co.’s electric-powered Leaf.

“With the Model S, you have a compelling car that’s too expensive for most people,” he said. “And you have the Leaf, which is cheap, but it’s not great. What the world really needs is a great, affordable electric car. I’m not going to let anything go, no matter what people offer, until I complete that mission.”

Musk’s surprising success up to this point with Palo Alto, California-based Tesla, including this month’s $1 billion in fundraising, “is a perfect example of ‘don’t give up too early,”’ said Elaine Eisenman, dean of executive and enterprise education at Babson College in Wellesley, Massachusetts.

Jobs influence

“He was single-minded in his vision that the car would work, and it would be the right thing, but didn’t shut himself off and insulate himself from all the criticism,” Eisenman said.

South African-born Musk shares similarities to Apple’s late co-founder Steve Jobs, an executive he has cited as an influence, Eisenman said.

“He has the creative spark that Jobs had, and he has the vision and willingness to stick with the core of it that Jobs had,” she said.

The rapid change in Tesla’s fortunes also presents risks.

“The danger becomes, now that the market is applauding him, taking him seriously, that he decides he doesn’t have to keep listening to the marketplace,” she said.

Automotive casualties

Musk has beaten odds that felled John DeLorean and Preston Tucker. The Model S sedan, priced from $69,900, snagged Motor Trend magazine’s Car of the Year and a rave review from Consumer Reports. Should Tesla remain a going concern, it would be the first new U.S. automaker to do so since Walter Chrysler founded Chrysler Corp. in 1925.

“Long-term sustainability is the toughest thing for a car company,” Joseph Phillippi, principal of consulting firm AutoTrends Inc. in Andover, New Jersey, said in a telephone interview. “Look how many crashed and burned over the years. Most didn’t even get up to the point where they could crash.”

Casualties of the capital-intensive, highly regulated auto business include DeLorean Motor Co. and Tucker Corp. Fisker Automotive Inc., a would-be Tesla rival in the luxury green-car segment, hovers near bankruptcy while seeking a buyer for its plug-in hybrid car business. Fisker fired most of its staff in April, stopped making $103,000 plug-in Karma sedans last year and missed its first federal loan payment in April.

At Tesla, it’s about as different as can be. Even after paying off the loan, the company has said it would have more than $600 million remaining from the sale of shares and debt to develop an electric sport-utility vehicle due in 2014, followed by a model priced below $40,000 a few more years later.

“They have a very solid balance sheet after this capital raise to fund their growth,” said Kallo, the Baird analyst.

Industry iconoclast

“One of the things that’s been occurring as Tesla stock has run up is the Tesla brand is beginning to be given a value as an automotive company and a technology leader,” Kallo said. “Tesla has separated itself from other electric-vehicle manufacturers and other battery makers as really the leader in technology for electric vehicles.”

Musk is an irreverent auto-industry figure who shares qualities with outsize personalities such as former General Motors Co. Vice Chairman Bob Lutz and Honda Motor Co. founder Soichiro Honda, Phillippi said.

“He’s as iconoclastic as Bob Lutz, shaking up everything, which is what Bob tended to do at Chrysler and GM,” said Phillippi, a former equity analyst for UBS Warburg. “Honda was another company driven by a visionary founder with a level of intensity rivaling Musk.”

Overconfidence is a potential hazard, he said.

“The biggest risk is that he reaches too far, too fast,” Phillippi said.

‘Moral’ concern

Restrictions on Tesla by the Energy Department weren’t too burdensome for the company, Kallo said.

“Shareholders and people that shorted the stock, and there’s still quite a considerable amount of people who are, are bigger critics than the DOE would be,” he said.

Musk said ending the government oversight wasn’t as much of a financial issue as a “moral” and commercial one.

“There are a lot of people that criticized us for having a government loan at all, even though we received the smallest loan of anyone,” he said. “We received a lot of flak for it, and it was held against us. For some people, that was an issue in buying a car.”

With assistance from Angela Greiling Keane in Washington and Adam Satariano in San Franciso. Editors: Jamie Butters, John Brecher. To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net. To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net.

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Approximately 31.2 million Americans plan to drive to their destinations, up from 31.1 million who drove last year, according to Heathrow, Florida-based AAA, the biggest U.S. motoring organization. The number of air travelers will fall 8 percent to 2.3 million, a four-year low.

AAA estimated 34.8 million Americans will travel 50 miles or more from home during the four days ending on the May 27 holiday. That’s down 0.9 percent from 35.1 million a year ago, a drop attributed to consumer unease about the economy.

“American travelers are experiencing fee fatigue and frustration with everything from higher fares to airport security,” Robert Darbelnet, AAA president and chief executive officer, said in a statement today. “As a result, many are choosing road travel in higher numbers due to the lower cost and convenience it offers.”

The average price of regular gasoline at the pump was $3.66 a gallon yesterday, according to AAA data, versus $3.68 a year earlier. Prices have climbed 13.8 cents in May.

A survey of intended travelers found that gasoline prices would have no impact on plans for 62 percent of travelers.

Memorial Day marks the traditional beginning of the summer travel season and the peak period for gasoline use. This year, the holiday falls a day earlier than in 2012. Weekend holiday travel tends to be more robust when the holiday falls later in the month, AAA has said.

The average distance traveled will be 690 miles, up from 642 a year earlier. Median spending will fall to $659 from $702, AAA said.

The projections by AAA are based on research and forecasts from IHS Global Insight.

–Editors: Richard Stubbe, Charlotte Porter

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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Thus, at the upcoming confirmation hearing, members of the Senate Commerce, Science, and Transportation Committee should ask Foxx the following 10 questions…

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A Greyhound bus breaks down in the desert on the way to Los Angeles. Eva / Flickr

Greyhound, the iconic U.S. bus brand, has turned to pricing models used by the airline industry as it seeks a ticketing system capable of boosting profitability by charging more for travel during peak periods.

FirstGroup Plc, the U.K. company that owns Greyhound, will spend as much $40 million on computerized yield-management technology to replace Greyhound’s flat-rate charging plan, and has engaged a U.S. carrier to help with the design, Chief Executive Officer Tim O’Toole said.

“No longer will a trip on Greyhound cost the same on July 17 as the day after Thanksgiving,” O’Toole said in a telephone interview from London. “Pricing will be much more dynamic.”

Yield management was introduced in the airline business in the 1980s, when Robert Crandall, CEO of American Airlines, began employing mathematicians to develop models able to predict demand during given time periods and price tickets accordingly. It has since become a critical tool for most of the world’s carriers, as well as in other businesses such as hotels.

O’Toole declined to say with which airline Dallas-based Greyhound is working as it bids to lift its $1 billion in annual sales. The plan also includes an airline-style loyalty program.

Founded in 1914, Greyhound operates 1,700 buses to 3,800 destinations and carries almost 25 million passengers a year — making it 10 times the size of its nearest rival — yet lacks a system able to analyze who is getting on where and when.

Rights Offer

FirstGroup, which acquired Greyhound via the $3.4 billion purchase of Naperville, Illinois-based Laidlaw International Inc. in 2007, has already applied yield-management tools at the Greyhound Express service introduced in late 2010 with routes serving Chicago and other cities in the U.S. Midwest.

The Express unit, pitched between the traditional brand and the BoltBus unit that FirstGroup runs in the northeastern U.S., increased passenger numbers 10 percent last year, faster than the old Greyhound, and serves 900 cities after entering markets as far apart as California, Louisiana, Delaware and Canada.

“You’re selling seats on a bus,” O’Toole said. “The trick is to take your management system and graft it onto the bigger Greyhound, which requires a lot of computer work. You need algorithms to constantly be balancing the business.”

The introduction of yield-management technology comes as O’Toole seeks to steady FirstGroup following the loss in October of a 5.5 billion-pound contract to run Britain’s West Coast rail line, one of the busiest in Europe, after the U.K. Department for Transport discovered flaws with the bid-assessment process.

Mexican Foray

Aberdeen, Scotland-based FirstGroup said yesterday it would raise 615 million pounds from a three-for-two rights offer, helping it to retain an investment-grade credit rating, remove balance-sheet constraints and ease spending plans.

The company plans to invest 1.6 billion pounds over the next four years across five divisions that include First Student, operator of more than 50,000 yellow school buses in the U.S. Some of that money will go towards an overhaul of its information technology systems.

Greyhound, which already has routes in Canada, is gearing up to commence operations in Mexico after becoming the first U.S. bus company certificated there, O’Toole said.

“We’ve always moved people in partnership with Mexican bus lines, but now we can actually go into Mexico,” he said. We’re completing a terminal and we’ll be initiating the service soon.”

The first route will start this summer, with 10 buses running from Nuevo Laredo, across the border from Laredo, Texas, to Monterrey, Mexico’s third-largest city, about 140 miles away.

Leather, Wi-Fi

The Greyhound brand was introduced to Britain in 2009 as FirstGroup sought to tap demand from motorists no longer willing to get behind the wheel on crowded roads.

The U.K. buses, given women’s names from American songs including “Sweet Caroline,” “Peggy Sue” and “Jolene,” have more in common with the Bolt fleet and are fitted with power sockets, leather seats and air conditioning. Passengers get a complimentary newspaper and free wireless Internet access.

Similar upgrades will be soon rolled out across the main Greyhound fleet in the U.S., according to O’Toole.

“You’ll notice the old Greyhound white bus being replaced by a blue and gray one,” he said adding that the makeover will include features such as wi-fi access. “I hope we’ll make substantial progress over the next two years.”

FirstGroup shares fell 30 percent yesterday after it halted dividend payments to focus on the rights offer, saying the next award will be for the six months ending March 31 next year.

Chairman Martin Gilbert will also leave when a successor has been found, after 17 years on the board.

Editors: Chris Jasper and Heather Harris.

To contact the reporter on this story: Andrea Rothman in Toulouse, France, at aerothman@bloomberg.net. To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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This week’s SkiftSeedlings speaks to that breadth of opportunity by including everything from a media company looking to launch the world’s largest consumer travel event to a small device that tracks employees’ driving behaviors.

GET YOUR DAILY DOSE OF SKIFT: SUBSCRIBE TO OUR NEWSLETTER, RSS, TWITTER OR FACEBOOK.

FOR ALL OF OUR SKIFTSEEDLINGS COLLECTION, CHECK OUT OUR ARCHIVES HERE.

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A woman rushes to catch her cab in New York City. David Thompson / Flickr

New York City’s much-anticipated e-hail app program was cut short by a temporary restraining order (TRO) just days after launch, but that hasn’t halted the operations of the two startups that were already approved for participation.

Hailo and Uber‘s cab drivers continue to pick up passengers via the companies’ mobile e-hail apps every day.

Why do they continue to operate even after the pilot program was so clearly blocked?

That’s an answer that no one seems able to agree on, or in some cases, even answer.

New York’s Taxi and Limousine Commission is tight-lipped as it works out what will happen next. Uber is similarly quiet, while Hailo is taking another approach that includes court sessions and courting Prince Harry.

Uber and Hailo in NYC

Even though Hailo and Uber are similar in allowing customers to use their respective apps to hail yellow cabs in New York City, the startups have reacted very differently to the TRO.

Uber spokesperson Matt Mittenthal declined to comment to Skift’s inquiry, but he did note that its competitor, Hailo, “is also operating at the moment under the same conditions.”

Hailo continues to aggressively pursue its entrance into the New York City market. The startup sent out an email on May 10 asking early Hailo Beta testers to “Tweet a pic of your first ride and tag it with #SaveOurSoles to score five Beta invites to share with your friends.”

It announced its open Beta via email on May 14 and tweeted a picture of Prince Harry receiving a brief tutorial of the app from co-founder Russell Hall the next day.

Hailo co-founder Russ showed Prince Harry how to use Hailo to get home after a big night at the @uktiusa Tech event: hailo.to/l4naQ

— HailoNYC (@HailoNYC) May 15, 2013

Hailo heads to court

Hailo CEO and co-founder Jay Bregman went to court on May 6 to argue that the startup doesn’t need a pilot program to run in New York.

Bregman’s affidavit (embedded below) estimates that Hailo is losing some $18,000 every day that the Pilot Program remains ordained. He also said that several of Hailo’s key employees have deferred payment, and six city launches have been delayed as a result of the changing situation in New York.

Bregman tells Skift, “The TRO enjoins the Pilot Program, not Hailo. In fact, we specifically went to court to clarify that point and the judge said unequivocally we were not affected by her ruling. The City has consistently maintained that absent the Pilot program e-hailing is legal – that there are no rules or laws preventing it.”

Stance of the Taxi & Limousine Commission

As Bregman points out in the affidavit, the Taxi & Limousine Commission‘s approval of the Pilot Program is key to eliciting cab drivers’ participation.

“It is apparent that many taxi drivers are wary of using e-hail applications without the express endorsement of the TLC, which is now tied to the fate of the Pilot Program,” Bregman writes in the affidavit.

TLC Commissioner David Yassky was bullish on the eventual success for the pilot program even after the pilot program was cut short.

Yassky is quoted as saying “The Supreme Court was absolutely right that taxi-hailing apps are not only good for the riding public, but perfectly legal as well.  It is appalling that narrow commercial interests continue to try to block passengers from using the latest technology….We’re confident this program will move forward.”

The Taxi & Limousine Commission; however, has been less forthcoming about its current position since the pilot program block.

The TLC was scheduled to meet on May 16, and although the meeting was ultimately cancelled, the e-hail app program was not on the agenda.

“I don’t expect it to be relevant to this meeting, other than a mention of the TRO during the chair’s report at the start of the meeting,” TLC spokesman Allan Fromberg responded in an inquiry from Skift.

New York City’s statement

The quotes captured from what appears to be New York City’s main spokesperson on the topic over the last three weeks make it difficult to deem the city’s official stance on the issue.

On May 1, the TLC cites Michelle Goldberg-Cahn, Senior Counsel of the NYC Law Department as saying, ”It’s unfortunate that taxi riders will not be able to continue to test this innovative tool for hailing taxis.”

One week later, Goldberg-Cahn confirmed in a statement to the New York Daily News, “There are no regulations that prevent e-hailing per se.”

When Skift asked TLC spokesman Fromberg on May 14 if Uber or Hailo were allowed to operate outside of the pilot program, he could only reply:

From City attorney (Senior Counsel) Michelle Goldberg-Cahn: “The City is fully complying with the TRO.”

The fate of New York City’s e-hail apps is still pending, but we could have an answer by Monday evening.

A final decision on whether the restraining order will stand or be appealed will be issued on May 20 when a full panel of Appellate Division judges decides on the petitioners’ motion for an injunction.

Below is the affidavit of Jay Bregman, CEO and co-founder of Hailo, which outlines the impact of the pilot program’s delay on the plausibility of an eventual launch.

Download (PDF, 1.89MB)

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The five men face charges including soliciting or accepting a bribe as a public employee and soliciting or accepting an unlawful gratuity as a public employee.

The defendants, all employed as Ground Transportation Unit agents at Logan and known as “cab starters,” are accused of allowing drivers to skip the sometimes lengthy wait at the airport’s taxi pool in exchange for cash.

The defendants are scheduled to be arraigned May 24.

Massport CEO Thomas Glynn says the agency will “not tolerate abuse of the public’s trust.” The workers have been suspended without pay.

Copyright (2013) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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A car with the RelayRides magnet in central San Francisco in August 2011. Michael Andersen / Flickr

With a still small, but growing, market around people that want to rent out their personal cars to their neighbors, some consolidation seemed inevitable. On Tuesday startup RelayRides, which was one of the first companies to jump into the neighborhood car sharing market, announced that it has acquired Wheelz, a startup that had originally focused on building car sharing communities at universities.

RelayRides says it will acquire, among other things, Wheelz’s DriveBox technology, which enables Wheelz users to unlock and drive away in a rented car, without having to meet with the owner and get a key. Picture it basically like one of Zipcar’s unlocking and verification systems.

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