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tv   Bloomberg West  Bloomberg  December 3, 2015 11:00pm-12:01am EST

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>> this is a look at our top stories. asian markets extending the global selloff. janet yellen signaled left off is near. chinese stocks paring their weekly advance. uneven economic data. out conduct -- honda, drivers can pursue claims under warranty and civil racketeering laws.
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shares already down 37% this year. sources telling us group or -- uber is seeking a new finance round. a quick look at the markets. hong kong and china closed for lunch. this is a picture for singapore, tokyo, and mumbai. nikkei up by over 2%. i am back at the bottom of the hour.
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emily: i'm emily chang and this is "bloomberg west." uber shifts into high gear with a new funding round. a closer look at mark zuckerberg's decision to donate nearly all of his facebook shares. yahoo! has acquired over 40 companies in less than four years. have investors gotten their money's worth? uber is exhilarating the race to global expansion, looking to raise as much as $2.1 billion in a new round of funding. in four years, we have seen the valuation surge from $60 million in 2011 to $62.5 billion today. uber has been spending aggressively to expand throughout asia, particularly in china.
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as part of the current funding round, uber has closed investments with tiger global. ofer global also backed some uber's competitors. us, jay ritter, finance professor at the university of florida. with me in the studio is eric newcomer. $62.5 billion? >> that is huge. it was uber before g.m. -- it puts uber before g.m.. it is a private tech company, but it is bigger than twitter. >> they are profitable in more
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than 80 cities now. ofy have a revenue run rate $10 billion, which compares to lyft's $1 billion. 200% revenue growth in the past year, 250% trips growth. emily: you have a bullish and the bearish argument. >> bearish, they still have regulatory issues in specific cities and countries. the taxing lobby is fighting them, sometimes successfully. there are issues in terms of drivers, are they contract workers or employees? fringe benefits, minimum wage, etc. comes into play. they are planning to spend a lot in china, but there is some serious local competition there and in india as well. in many countries they are
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likely to be successful, but two very big markets, it's not at all clear they're going to prevail. emily: let's talk about the bullish argument. investors like microsoft have put 100 and we dollars into uber. i ask, why make this huge investment in uber? >> we realized that there will be others, both car companies as companies like uber that have deep interest in mapping and we want to partner with them. we will be customers as well as partners with mapping providers. that is what led to as having an investment and a strategic partnership with them. emily: this mapping idea is part of your focus. >> travel from point a to point b, is growing rapidly.
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you have a network where people are going to want to take whatever service gets them their fastest without a long waiting time. the really big potential is in the not-too-distant future when we are all using autonomous vehicles where they could be the platform that everybody uses, and that can be a potentially massive market. once you get the drivers out of taxis, the cost to consumers comes way down. a company that has a big market share will be able to get vehicles to the users very quickly. you pull out your smart phone and press the uber icon and you get a message. is it going to take 11 seconds or 73 seconds before the vehicle
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is in front of you and cheaply take you to your destination. i can see this being just a massive market that they can own. emily: interestingly, uber's competitors formed a partnership today outside the united states. i've spoken to and uber investor who believes it is a winner take all market, and uber is going to win. take a listen to his remarks. >> lyft goes away. emily: what do you think of that statement, based on what you know about how the company is doing? >> lyft and uber are both spending aggressively. it's too soon to say whether there will be one or two competitors in each country. it is a huge market.
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chris has a financial interest in saying it will only be uber. i would not write off lyft yet. they are still spending aggressively to grow market share. emily: i was in beijing yesterday and i ask a lot of drivers what they think about it. they seemed interchangeable to the drivers. what do you think, is it a winner take all market are is there room for several competitors? >> i think it is a winner take all situation, but different markets might have different winners. uber might not prevail in china or india of -- but in many other countries, uber is likely to be the winner. >> i think china and india are big questions right now. it's a growth case, they can
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spend less money than they need to in the future and not let competitors gain ground. there are investors who are investing on the belief that uber will make a lot of money. emily: how long can uber continue to raise money without going public? >> the ceo compared the company to an eighth grader being asked to go to the prom. and said an ipo is years away. they continue to raise money on the private markets. if there is pressure for an ipo, it will be something like employees wanting to get liquidity. travis has started to say, maybe we could do that. emily: how far away is an uber roadshow? >> it could be a year are two from now but as long as there's so much private equity money
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available, they can burn through a lot of money building market share, becoming the platform without needing to tap public markets. emily: what do you make of tiger global investing also in their competitor? >> it's fascinating. you have a set of investors who have invested against uber and now they are saying they should hedge with uber as well. it's pretty crazy. uber has been very protective of their data. emily: you can imagine they would've had to give a lot of information in order to get that money. >> so many accredited investors are getting in to this round.
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i cannot give an answer on how much information tiger has right now. emily: thank you for joining us. speaking of the sharing economy, it's one that's one thing to share and uber pool and another to share an apartment with your coworkers. in china, thousands of millennials are embracing the idea of coal living spaces. why buy it when you can rent it together? and mark zuckerberg's advocacy group takes on donald trump. can they influence the 2016 presidential election? ♪
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emily: mark zuckerberg's advocacy group is taking on donald trump. here's donald trump laying out his controversial immigration policy. donald trump: i will build a great, great wall on our southern border and i will have mexico pay for that wall. mark my words. i will immediately terminate president obama's illegal executive order on immigration. emily: taking issue with that call to -- with me in the studio is my guest. when you hear that again, what is your reaction? >> this is not about one candidate. there have been a number of candidates who proposed the astronomical costs that come with rounding up and deporting 11 million undocumented
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immigrants and 5 million citizens with undocumented parents. one candidate is getting a lot of the oxygen in the debate right now. it's our job and a real opportunity to say at the end of the day, there's 11.5 million people who are here. are you going to round them up and send them out of the country, which is terrible, or can we have commonsense immigration reform? this is a fundamental violation of american values and people really see it that way. when you frame it as, are you going to round up and do a mass deportation plan, or use commonsense immigration reform. only 18% of people support it and 75% of people are with us that that is the way to go. emily: you have launched a new
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website, immigration vote or. >> we think it's critical that people stand up and support immigration reform. we want people to go and say i care about this issue today and for the next year. we think if we do that, we will pass immigration reform right out of the gate in 2017. emily: which candidate has the best immigration plan? >> we are focused on separating it into two buckets right now. it's around the question of mass deportation. senator cruz was asked nine times on monday what would he do with the 11 million, and nine times, he didn't answer the question. emily: how does mark zuckerberg feel about donald trump? >> we were excited to be one of the groups that the initiative has funded in the past. emily: are you going to be a beneficiary of any of these
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funds? >> we are honored and look forward to continuing to be part of that in the future. emily: what have you talked with mark about most recently as it pertains to that? what is he saying? >> we think we have a real opportunity over the next year and it is important to lay out our goals, spend the year building support and making people answer the simple question, what are you going to do with the 11 million? emily: talk about progress you've had with getting business and tech leaders behind you, aside from mark zuckerberg. >> we have 460,000 people taking
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action, go to our website, but more important than that, i was down in san mateo and we had five startup founders talk about problems they're having. emily: people keep saying donald trump will be out of it at some point, it not going to work out, but the reality is, he is not losing momentum. what is your plan if he is the nominee? >> our plan is just to make people understand the astronomical human and political costs here. we're talking about breaking up millions of families. also the economic cost. the conservative think tank pegged it. to put it into context, the apollo program was $100 billion in public spending. you talking about something that's six times the cost of putting a man on the moon and destroying lives in the process.
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emily: thanks so much for stopping by. google is expanding its energy portfolio. the biggest corporate buyer of renewable energy just bought 781 megawatt of solar and wind power, nearly doubling its renewable energy capacity. the deals were made with power producers in the u.s., chile, and sweden. the agreements run for up to 20 years. it looks like france is also going green. the country's ecology minister has announced the competition to build an electric car that costs under $7,000, but it won't be easy. almost half the price of the indian car that has hit some beatbox in sales due to safety and power concerns. china's sharing economy takes a page from mao's little red book.
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later, mark zuckerberg says he's giving away almost all of his facebook stock, but how much will actually go to charity? ♪
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emily: if you could rent it, why own it? that's what thousands across china are thinking. chinese entrepreneurs are taking a page from the communists playbook. they are clamoring into co-living spaces. a tech reporters with us to talk about this phenomenon. explain to me how the sharing economy is doing in china. >> if you look at it, china or has a -- 90 people are more
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accepting of the concept compared to the u.s.. many of them lived in communes when they were growing up at some point in their lives if you look at china, the west and east are very different. especially the larger cities, beijing and shanghai, property prices are on that sheet. as china's economy slows people try to do all kinds of things to try to adjust to that and that's where a lot of the sharing takes place. emily: it sounds like a modern-day commune. how does it compare to the united states, where we do have communes? we don't put them in the sharing economy bucket.
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lulu: the difference between the old day communes coliving places these days is that people are living in these places voluntarily. they can actually separate their ownership and access rights. even though they look the same, there's a different fundamental philosophy underlying this phenomenon. emily: how does it affect china's transition to a more consumption driven economy which companies like alibaba are driven by? lulu: on the surface it might seem counterintuitive. you would think they would consume less wasteful consumption, but it actually helps china transition to a more sustainable consumption pattern. they can invest the money back into their own entrepreneurial ideas and that's where a lot of the innovation is going to take place.
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emily: we were talking earlier about the money uber is trying to raise globally, and airbnb has its own counterpart in china, its own competition in china. describe how much power the airbnb of china has compared to airbnb itself in china right now. lulu: there is definitely a lot of opportunity in this market. they've all said that china is one of the most important markets for them outside of the u.s., but they're running into some steep competition in china. these companies are growing at a very fast pace. it's not an easy market to take over and they will be facing an uphill battle. emily: i was surprised at how deeply penetrated uber already
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is in beijing. it seems that chinese consumers, if it's cheaper, they will go for it. lulu: absolutely. there is an understanding towards wealth, social status in the country right now. they don't see having a car as a symbol of status anymore. the fundamental philosophy is that if you can rent it, why own it. that's why more people are embracing the services in china. emily: plus anything to cut down on traffic in beijing. thanks for joining us today. coming up, silicon valley has stepped into the highly controversial arena of gun control. the future of firearm safety, next. if you like bloomberg, check us out on the radio. ♪
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mario draghi announcing a $393 billion boost of stimulus. even that did not meet investors expectations. ecb expressing concern about euro area inflation. the common currency jumped 3%. honda sliding in tokyo after a judge announced they must face lawsuits. ata shares already down this
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year. new challenge a as four of its rivals team up. will let international travelers use their home country cap to book rides -- country app to book rides. growing division in the ranks over outputs. indonesia rejoins opec today. the finance minister telling bloomberg the price does need to rise. >> it is very low. maybe $80.-
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markets.check on the it is a down day. of that opec meeting in the n a, we are seeing commodities related stocks vienna, downward -- in we are seeing commodities related stocks down. shippers leading the declines, session laws now at the moment. -- session lows now at the moment. we are seeing reaction to that mario draghi disappointment. financial sitting lower for the first time in five sessions. we are expecting news to come
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out about a circuit breaker. we are counting down to the reopen in hong kong and china at the top of the hour. >> gun control, new debate after the second mass shooting in the u.s. in a week left 14 people dead in san bernardino, california. we want to explore the tech innovations that might help keep firearms out of the wrong hands. ron conway told "60 minutes" he has invested in 60 different startups and searching for the mark zuckerberg of guns. what is smart gun technology and will it help? joining me to explain is margot hirsch, president of the tech
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foundation which supports smart gun technology, and omer, the ceo of the startup sentinel which makes the identilock. margot, i want to start with you. what does smart gun technology really mean? margot: what a smart gun is is a personalized gun or firearm that only -- it incorporates safety features that only allows it to fire by an authorized user. these types of technologies are not only -- can be integrated into firearms, but also safety devices like the one omar will be discussing later on. what these do is provide an additional layer of safety to a firearm so it helps to prevent the firearm from falling into the wrong hands. emily: to be clear, it would not have stopped a mass shooting like what happened yesterday, right?
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margot: not necessarily, no. these technologies will have significant impact in preventing, helping to prevent accidental death and suicide. if a firearm, for example, is stolen from a home and has smart technology incorporated, then if it falls into the hands of someone who is not authorized, it cannot be used. emily: omer, tell me a little that about your company -- a little bit about your company and how it works. omer: we have an accessory that allows instant access to a firearm with fingerprint technology. it clasps the trigger guard preventing unauthorized access to the gun. a child or anyone else cannot access the gun until the correct fingerprint is used to authorize
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the firearm which at that point authorizes instant access. emily: you have such a compelling personal story, omer. when you were younger, you were shot accidentally in the face. you have strong opinions about how smart technology can impact gun violence, maybe not like the mass shooting we saw, but elsewhere. omer: not only that, my personal story, i have also been -- the majority of my career has been airbags which is a very simple device. as an engineer, i'm applying a logical solution to the problem of accidental shootings, suicides, teen suicides. that is definitely a big part of what i am doing here. emily: when ron conway says something like this will happen outside the gun industry, why they are not investing in this baffles me -- that is what he said. what does he mean? margot: i think smart gun technologies are new. two years ago when we started the foundation, there had been
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minimal development around these technologies so we launched a $1 million incentive challenge to draw innovators to this space. we had over 200 applications from 30 countries around the world. clearly, there are people who are interested in developing these technologies and addressing these problems. i think the time is right for these technologies to move forward and be funded by investors to not only -- who not only want to make money, but really want to help solve the problems. emily: what are some of the roadblocks to the implementation of this technology and how widely implemented is it right now? omer: we are launching in the first quarter of next year, it will be available to mass-market. we have done beta testing already and we have gone to enough gun stores and the
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experience of gun users to validate the reliability. the roadblock right now is more on the marketing and distribution front. we will be at the show which will resolve most of the issues. emily: who do you think is the mark zuckerberg of guns and what does that really mean? omer: i think the mark zuckerberg of this industry is quite some ways away. but, i think what ron has done is he has planted the seed which will grow out. you can see more and more innovation coming about in a whole variety of aspects. in a car, you have systems protecting a life. in the firearm industry, there is a lot of technological innovation that will keep people safe. emily: all right, omer, thank you for joining us. as well as, margot hirsch, thank
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you so much for joining us. now, my "studio 1.0" interview with investor sir michael moritz generated a lot of outrage today. in part of the interview, i asked him about the lack of female partners at his firm. he said, "we look every hard. we have hired someone from stanford. if they are more like her, we will hire them. we are not prepared to lower our standards." that last sentence cause a huge backlash. ellen pao, who sued her firm for gender discrimination, tweeted -- pipeline and standards are lame excuses. another woman tweeted -- moritz e-mailed me this morning saying there are many remarkable
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women. we are working hard to find them and would be ecstatic if joined. coming up, charitable foundation or investment vehicle? we will take a closer look at mark zuckerberg's new initiative. ♪
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emily: some say mark zuckerberg's plan to donate 99% of his facebook shares over the course of his lifetime is setting a new standard for philanthropy. we break down the estimated $45 billion gift and how much he is worth without the stock. caleb: in a letter to his newborn daughter in which he shares his hopes for the future, mark zuckerberg announced he
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will give away 99% of his facebook stock over the course of his life. that is a lot. he is worth $46.8 billion according to bloomberg billionaire index. $1 billion of that is in facebook stock. quick math -- that is $45 billion for the chan zuckerberg initiative. to put that into perspective, that means the initiative will have access roughly equal to the melinda gates foundation. unlike that foundation, it is structured as a limited liability corporation which means zuckerberg could invest in companies or startups that he thinks can make the world a better place. zuckerberg will not become poor overnight. he will not give over $1 billion annually. he will maintain control of facebook for the foreseeable future. 1% of his facebook stock today
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is worth $450 million. he also has $1 billion in cash and slightly less than $200 million of real estate. shares have grown 180% since they first debuted in 2012. they could continue to grow. 90% of analysts currently think they will. that could mean more fund for the future beneficiaries of zuckerberg philanthropy. emily: that was caleb melby talking about the chan zuckerberg initiative. on the surface of the announcement, it seemed to place them firmly in the pantheon of great american philanthropists like andrew carnegie who donated $350 million to charity during his lifetime. or rockefeller who gave away $530 million in the course of his life. and of course, bill gates. they have already made donations of more than $44 billion. you can see zuckerberg and his wife are not required to give a single penny of the $45 billion in facebook stock. joining me with more is jesse and here is sarah frier.
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mark zuckerberg just released a statement today clarifying some of this. sarah, what is he saying? sarah: he is saying, yes, this is an llc. it is a corporation, as we heard in caleb's video. they can do more than just give to charity. he is not moving the money into, like, a tax-exempt vehicle. a charitable foundation would be a tax-exempt vehicle. this is something where he can also invest in maybe young companies, lobbying in d.c., things you may be what not be able to do with the foundation. emily: now, jesse, it pains me to question this because it sounds so great. is it really not as great as it sounds? jesse: it is great.
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there is really no question -- well, i don't think there are questions about the merits of the things mark zuckerberg is interested in. the question is clarifying what exactly is he has announced. they are not giving away their money to charity. what they are doing is essentially taking their money from one pocket putting it into another and announcing they will spend it for things that are important to them like curing disease, doing things about inequality. but, they are not setting up a nonprofit, a foundation. that means the money can go to whatever they want. that is fine. there is nothing wrong with that, but they are not giving way all their money to charity which i think is what the impression a lot of people had. emily: they never said they were going to give it to charity. they said they would invest in certain causes. sarah: they are making a promise so we have to evaluate this as a promise.
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we cannot evaluate it as a legally binding document where they don't give it all to charity, we can start picketing. this is a goal he is setting for his future and the future of his proceeds. yeah, it may not all be, you know, donations but some of the problems he wants to solve our things he things will be hard to solve by just giving money away. emily: jesse, if the llc starts making money on its investment, where does that money go? who pays the taxes? jesse: there would be capital gains taxes potentially owed by mr. zuckerberg. i think, i want to finish one thing i was about to say before, i think one of the issues here, the biggest issue here is raised even if this was a true foundation -- we have a situation where we have some of the wealthiest people in the world are amassing these
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unbelievable fortunes. they are doing them in ways -- not doing anything illegal -- where they generally are not paying much, if any, income taxes. while it is great they are devoting these fortunes to philanthropy, we're entering a situation where people have tens of billions of dollars who are not contributing to the tax system. sort of withdrawing from the political system. most people pay taxes and they give money and a direct money to be spent on certain services by electing people to make those decisions. what these folks are doing is withdrawing from the tax system by not paying income taxes or capital gain taxes, and withdrawing from the political system in how their money is being spent. they are making the decisions,
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not their representatives. i am not saying this is a terrible thing, but i think it is important to examine for the political system where you have a weak class that is withdrawing from the system the government typically pays for and deciding they will make the decisions themselves. emily: thank you for taking us into the details. jesse and sarah of bloomberg news. i month after youtube lost its $10 a month subscription service, youtube red, it is seeking rights for tv shows and movies. could you to be a competitor to netflix, hulu and amazon? lucas shaw is here. can they? lucas: they can but it will take a lot of money. you look at what the competitor spent on shows and movies, it is hundreds of millions of dollars a year. youtube has not had to spend a
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lot of money to acquire the rights to anything. their challenge has been getting advertisers to spend money to make the operation profitable. emily: how effective are these kinds of licenses? lucas: take disney and netflix. they have a relationship where starting next year, netflix will get first run disney movies. that is supposed to be several hundred dollars a year. you look at what netflix spent for house of cards, that was $100 million. that is how much you to best spent on an entire initiative in the past. emily: does this reflect a change in strategy for youtube? lucas: youtube said the selling points was there would be features where people could listen and watch without ads, and they would be funding original programming. they previously dabbled in trying to produce original programming with traditional hollywood stars which did not go well. most of the companies i spoke
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with were dubious about licensing just clips. but the idea of licensing entire shows did not seem to register. some of the people i spoke with are not sure who youtube is reaching out to because they did not reach out to them. emily: all right, lucas shaw, thank you for joining us. coming up, yahoo! has more than 600 million monthly active users. so why can't marissa mayer catch a break? we will discuss. ♪
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emily: since she started as ceo in 2012, marissa mayer has been $4.3 billion to purchase companies. she bought a news aggregator for $30 million. and then tumblr.
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the next year in 2014, yahoo! snatching up flurry and brightroll for $640 million. her biggest acquisition of the year has been an e-commerce website which she bought for an undisclosed amount. has any of these actually paid off? brian has been digging through the deals. have they? brian: some people -- let's go back to tumblr -- and that is the biggest one. it actually delivered a lot of users. it gives yahoo! an audience that is younger. it goes away from the middle america that yahoo! usually has. other people hate that because it has not delivered a lot of revenue. we are waiting for actual numbers on how it is doing. you have some people saying it is good, others are saying where is the revenue?
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emily: what about these other companies? brian: flurry and brightroll, they seem pretty positive on both that people want to see revenue and interest. it has given yahoo! a stronger voice with some developers and in mobile and video. those have done better. again, yahoo! is in a lot of trouble right now. emily: we know the board has been meeting. what is the latest update? do we know anything about the conversation? what is the likely path forward? brian: we are all waiting. yahoo! is always the center of attention. i think when we do find out, we will know soon enough. it is very clear that yahoo! is under a lot more scrutiny, even since a couple of months ago. people are saying, hey, board, what are we doing about this? what do you think about these
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activists? let's get some clarity. emily: there were suggestions that marissa mayer should leave the board. will that happen? brian: she seems very engaged. she is talked a lot about her future and what she wants to do with the company. the google deal. there are some real things she wants to do. she has said nothing along those lines. emily: we talked a lot about executives leaving. who is left? does she have a strong team still there? brian: we will have to find out. they still have a lot of folks like lisa and the cfo. they lost some key people. a year from now, we will know if they do have a good team. emily: all right, brian, thank you for keeping us up-to-date. i'm sure there will be another chapter in the soap opera tomorrow. that does it for this edition of "bloomberg west."
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happy thursday. we will see you tomorrow. ♪
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