tv Best of Bloomberg Technology Bloomberg May 13, 2018 6:00am-7:00am EDT
♪ emily: i am emily chang, and this is the "best of bloomberg technology," where we bring you all of our top interview from this week in tech. coming up in the next hour, chamath palihapitiya of social+capital joins us for an extended conversation on the biggest issues facing tech and venture capitalists right now. plus, uber predicts customers will hail flying taxis. we will hear from uber ceo dara khosrowshahi ahead. and more questions swirling around tesla after a bizarre earnings call. ceo elon musk is now reportedly putting contractors on notice
and sparring with warren buffet. ♪ emily: this week, officials from top tech companies, including google, amazon, and facebook, attended a meeting at the white house on artificial intelligence. this ai summit was held amidst rising concerns about jobs, and the influence of china. it was not just tech. officials from goldman sachs, boeing, and cbs also got an invitation. we covered the details thursday ahead of the meeting, and bloomberg news' ben brody and spencer soper joined us. spencer: there are some signs of those tensions easing, and in addition to this invitation, there was even the first lady, melania trump, unveiled her initiative, be best, this kind of anti-cyber-bullying and anti-opioid campaign. amazon even got a shoutout during that unveiling, and the
trump tweets at amazon have kind of settled for now, along with that little gesture with the first lady's initiative. it seems like there could be a cooling of the tensions. emily: is there a signal from anyone other than the president himself, from within the administration that amazon in particular has something to worry about? spencer: there is regulatory concerns about big tech, and so concerns about big tech, and so amazon always gets lumped in with that. and on the postal service thing, it seems to have settled, but who knows, it can be so erratic, and it seems we are one "washington post" headline away from another trump tweet. emily: so ben, on that note, what do we know about this meeting? ben: we got about 40 companies from all kinds of sectors, some of those high-tech sectors, but lots of industries that are going be implementing this ai, and the message they are hearing right about now from the white house is, look, we are not rushing in to regulate what you guys are doing. go out there, develop. i think the quote was, "we
didn't cut the first phone line before alexander graham bell made the first phone call." now we are a little bit past that, but that is the message that they are hearing. emily: what are we expecting them to talk about, especially with regards to u.s. competitiveness when it comes to other countries like china? ben: i think, you know, china is in a lot of ways sort of the thing animating this whole conference. it is a little unclear to me how much that is going to be the focus of these individual breakout sessions. the agenda focus is on applications and particular sectors like energy or logistics. there is no question the white house is feeling pressure here to make sure america stays competitive. we feel we are first, but the pressure that you and i hear a lot from industry is we are worried that we are going to lose our advantage in the coming years. emily: spencer, when it comes to ai in particular, talk about what amazon might be pushing for here with respect to other tech companies like google and facebook and apple.
spencer: amazon, they really want to steer the conversation towards how ai is beneficial and get it away from this notion of job-killing robots. in particular what they want to do is try to impress upon the government, the need for ai in health care and health care innovation. they have a lot of cloud solutions that are embraced by health care startups and health care technology companies, and that is an area that will be subject to heavy government scrutiny and regulation. in that part, they will try to make a message how ai will be used to save lives, prolong lives, reduce health care costs, those sorts of things.
emily: ben, talk about the state of ai regulation or the lack thereof. part of the problem is that real regulation could be years away, if it happens. right? ben: i think that is exactly right. almost everybody i have talked to -- democrats, republicans, people in industry, people in academia -- they say this is years away. what i think a lot of these companies are looking for is two things. the first is standards, how good does the ai need to be? what does it need to do? the other thing they are looking for is to understand the current regulatory environment. spencer mentioned health care, things like hipaa, the health care privacy law, how is that going to apply if ai is making decisions about your health or aiding in a diagnostic? i think what the industry wants to know is how exactly to think about those issues before they look at any kind of new, broad-based ai regulation act. emily: you know so much about how much these companies are lobbying congress, what they're asking for, and what kind of money they are spending. talk to us about how lobbying efforts have changed or evolved over the last year under the trump administration. ben: i think you see this interesting aspect of lobbying in the trump administration. there are a lot of people who go
straight to the white house in a way they didn't -- even under president obama, who certainly had a lot of friends in the tech sector -- but you see these companies increasingly going to the white house and going to the vice president's office. i think that is a major issue. you, of course, are always seeing increasing spending in these things. the other thing you are seeing is they are going to the white house and looking at these core issues. ai regulation training is a huge place where i think the white house and technology really get together, even as you see the things that spencer was talking about, the "washington post" tweets and the concern that tech and the white house are going head-to-head on issues like immigration or other social policies. emily: two of the richest people in the world are showing no love to bitcoin. bill gates told cnbc that he would short the crypto currency if there was an easy way to do it. he added that bitcoin is "an
asset class. you are not producing anything." it's a reversal for gates who called bitcoin "exciting" just four years ago. the other titan weighing in? none other than warren buffett, saying the largest crypto currency in the world is "probably rat poison squared." buffett is echoing the words of his business partner, charles munger, who in 2014 also compared bitcoin to rat poison. coming up, we head to the uber elevate summit in los angeles and talk uber's flying car ambition with uber ceo dara khosrowshahi. that is next. and if you like bloomberg news, check us out on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
♪ emily: uber is getting an out-of-this-world boost to get cars off the ground and into the sky. the ride-hailing company announced a partnership with nasa to study urban manned aircraft. uber will share its data with nasa in an effort to move the world closer to developing air traffic management systems for a world with flying cars. uber is not building these flying cars, but is working with manufacturers in conjunction with its ride-hailing network to possibly develop flying taxi-like vehicles. meantime, uber is hoping to get its self-driving cars back on track soon. testing was halted in march when one of its self-driving cars hit and killed a pedestrian near phoenix. ceo dara khosrowshahi spoke with "bloomberg tech's" brad stone at an uber conference in los angeles. >> i think for us, it really brought home this idea that safety has to come first, and as
it relates to that tragedy, we have grounded our autonomous fleet, and that was a decision that we made. brad: any sense for when you will start driving again? dara: it will be within the next few months, i don't know, and the time will be right when the time is right, because we are doing a top-to-bottom safety review, both internally and with independent folks coming in to take a look at our culture of practices, etc., so that when we get back on the road, we all know as a team that we are getting back on the road in as safe a way as possible and as responsible a way as possible. it is just one more way that it hits home how important safety is and how important it is to engage with our regulatory partners and various aeronautics players, etc., who have played this game and have worked in the safety environment for a very long time and have established a long track record of success here. we have got to learn here. brad: can you tell us anything about the status of the ntsb investigation? dara: it is ongoing.
we have been working hand-in-hand with them, and we have been giving them the data that they need. we will not be tweeting ahead of their findings. [laughter] brad: elon, take note. dara: i don't know what you are talking about. [laughter] brad: right. there have been media reports that this was a group moving that was moving fast, in part to impress you, to meet benchmarks and deadlines by the end of the year. what do you take away from that as you move forward, and also as you set these very ambitious goals that we have heard about here for uber elevate? dara: you can't sacrifice safety. that is easy to say, right? there are trade-offs in life, and i do think that you have to beware of unintended consequences in everything that you do, and there is a balance which is you want to push teams to be ambitious. you want to push teams to innovate at the fringes. you want to get teams to be uncomfortable, but at the same time, you really have to check
yourself and go back to the first principles and ask yourself, you know, are we doing the right thing? are we pushing too hard? and is it coming at the cost of safety? if it is, then you have to take a step back. one of the unique characteristics of uber is we are at our core a technology company. that is our root. we will win because of the talent of the technical people that we have in our offices. but what makes us different as a technology company is that we don't just deal in bits and bytes. we are at this intersection of the digital and the physical world, and it is hard enough to create a delightful digital experience -- push a button and something happens. what is harder is when you push a button and a car shows up. traffic can get in the way, a
driver may decide to do something else, or when you push a button and a burger shows up. to make that experience delightful, dependable, affordable, is a very, very big challenge. that is where this idea of being a company that pushes forward and a company that challenges the status quo but then understands that we don't just live in a digital world, we also live in the physical world. that comes with compromises, and that comes with responsibilities that we have to be aware of. emily: elon musk reportedly locked out all contractors who could not find a current tesla employee to vouch for their work. a recent email obtained by website electric was sent out to tesla employees warning that all outside workers worldwide would be denied access into tesla factories. part of the email read, "by default, anyone who does not have a tesla employee putting
their reputation on the line for them will be denied access to our facilities and networks on monday morning. this applies worldwide. time to scrub off the barnacles." this comes just days after a bizarre earnings call when musk cut off "boring wall street analysts" asking about cash-burning companies' finances. "bloomberg businessweek's" max chafkin brought us all the details on monday. max: they are scrambling to make these model 3 sedans. it seems like, perhaps, the stress of the moment is beginning to show. emily: he has referred to workers as "barnacles" before, but isn't the goal to make more cars, not less? max: well, there was a memo that leaked a couple of weeks ago where elon musk basically said that tesla was spending too much money, and that they needed to find ways to reduce costs. i think he called it a russian nesting doll, so another fun metaphor for this, but the idea being that tesla was relying on these outside contractors, basically acting too much like a normal car company.
he, in that memo, said he wanted to ask everyone to justify their use of contractors. now we have this memo where he is basically saying you have to personally vouch for these people. emily: is this because contractors are not living up or something? is it because of the production problems? max: well, we do not really know. the fact is there have been production problems. tesla has been spending a lot of money. i guess you can read into that and say that that is what is going on. on the other hand, it is sort of surprising, if you are trying to make as many cars as possible that you want to cut staff at this moment, so it is kind of a head scratcher. emily: investors are still talking about this bizarre earnings call. so to refresh our memory, let's take a listen to what his exchanges included with analysts. elon: we are going to go to youtube. sorry. these questions are so dry. they are killing me. we are talking about, like, a 3%
to 5% difference. it is something we will solve, like, within a basic -- it is not like we need to make a federal case out of it. next. boring, bonehead questions are not cool. next. i think that if people are concerned about volatility, they should definitely not buy our stock. i am not here to convince you to buy our stock. do not buy it if volatility is scary. there you go. >> so i am also wondering, are you guys going to let porsche beat you to market with a 350-kilowatt hour supercharger? because i know you have mentioned -- elon: i told you guys to ask questions that aren't boring. emily: now, when you heard elon at the top of the call say "we are going to go to youtube," he is talking about going to a 25-year-old post of a millennial-focused channel called hyperchange television, who ended up getting into 23 minutes of q & a with musk. take a listen. galileo: so i set up a campaign, and i had a couple hundred of my viewers email into tesla's i.r. team representing 21 million worth of shares to get a voice for retail investors on a conference call, and so i sort of crowd sourced a bunch of question from viewers and subscribers and pitched it to
elon and tesla. they let me on the call. vonnie: i am wondering why you particularly wanted on the earnings call. if you are speaking on behalf of shareholders, couldn't you have waited for a shareholder day or an annual meeting, which is where shareholders' voices are heard? the earnings call is typically for analysts. galileo: i think of myself as an analyst as well, and although shareholders do get a question -- or do get a chance to ask questions at the shareholder meeting, you know, the quarterly conference calls are also for updates on the business. in the 12 to 18-month timeframe going into the financials. i would say i could have dived more into the financials. trajectory ofhe operating expenses. i do think there is a place for this more strategic questions on the conference call. the analysts were just not addressing them. the huge energy stores project in australia, which elon musk referenced here and they are
working gigawatt hours projects because of that success. vonnie: do you feel a little used by elon musk? he gave you 25 minutes that could have been used by analyst. galileo: no, i think it is a bit of a win-win. it is developing a long-term storage. there is a ton of news that you are seeing coming out of tesla energy and storage. emily: galileo russell. to be fair, max, he did ask a lot of questions people would love to ask. they don't often get asked on these earnings call. that said, this is a company that has not turned a profit in its 15-year history, so analysts are right to wonder if and when that might happen. max: part of the concern when you saw the stock price fall in the wake of this call is what -- not about having a youtube personality, a fan boy analyst on the call, it was more about the reaction and the seemingly erratic demeanor of elon musk.
you have a company that is totally dependent on this one person, and that is why people are paying attention to his eccentricity so closely. emily: a deal that will shake up the tv and broadband in europe -- vodafone challenging deutsche telecom on its home turf. we will hear from deutsche telekom's ceo. later, one of the biggest startups and e-commerce is speaking out for employee benefits for all. we will hear from rent the runway ceo jennifer hyman. this is bloomberg. ♪
supremacy is gearing up in india. walmart is paying for a 70% stake in india's largest retailer, flipkart, as walmart looks to fend off amazon in the nation. speaking of deals, vodafone is shaking up europe's fragmented telecom market with an 18 billion euro deal to buy a house -- almost one third of liberty global, taking assets from germany, the czech republic, and romania. it is part of a global push for scale from digital players. it is causing waves throughout the industry, particularly in germany, where vodafone is reshaping industry trade we spoke exclusively to deutsche telekom's ceo tim hottges about the tie up. take a listen. tim: i think the deal is totally unacceptable. there was a time where deutsche telekom was not able to sell
their cable businesses in one piece. it was sold in three pieces, and now they are coming together under the roof of vodafone. second, we are building, let's say, the rural germany with infrastructure. now let's see where vodafone is now going. are they willing to invest in the rural areas? nothing is seen in the business case today on this subject. the media industry is almost 60% of our tv market is monopolized by this cable operator in the future. is this good for democracy or is this good for the media companies in society? so i question that. the last thing, 25% of our households in germany are insufficient, and there is no access for deutsche telekom. my last point is we have a fully regulated deutsche telekom in the whole market where we are building infrastructure on an annual basis.
vodafone is investing less, is nonregulated, and they have claimed that they are on eye level with us on future. something has to change in the regulatory environment, because if they are a giant in this environment, as they are claiming today, what does it mean for regulation? therefore, we are asking for more deregulation for deutsche telekom going forward. we are fighting for fair competition for the industries of our customers. matt: what are you specifically going to do about this? are you going to go to regulators with these complaints? are you asking to buy some of those assets? you are already purchasing some things from liberty global. tim: i think there is no m&a possibility in the market we are operating. that is for sure.
what i would do is to make sure that politicians and the leaders, the authorities deciding on this deal understand the economic situation created by this transaction. i am not asking for the next telecom, something specific for our company, i am asking for a fair competition and possibility we are able to fight with the same weapons and with the same pricing and with the same network infrastructure investment as they are going to be able to do so. matt: let me ask you about your t-mobile unit merger you are pursuing in the u.s. with sprint. $26.5 billion acquisition. regulators in the past had an issue with this combination, why do you think it will go forward this time? tim: the market has totally changed. if you see today, all the cable companies, from comcast to charter, are announcing that they are going to a market that
is having a fixed and mobile combination and shows the market is not just a pure mobile or pure fixed market, it is a converged market. the second one we see is there is a need that rural america is getting competitive and very well installed 5g infrastructure. if a small player is going to be able to create this efficiency, we need scale and the capability to utilize this infrastructure. our commitment is to build a 5g infrastructure not only for big cities but especially for rural america on top of that. emily: that was deutsche telekom ceo tim hoettges. coming up, we will hear from one of technologies most influential and provocative voices, chamath palihapitiya. all episodes of bloomberg technology are now live streaming on twitter. check us out weekdays, 5:00 p.m. in new york at 2:00 p.m. in san francisco. this is bloomberg. ♪
emily: welcome back. i'm emily chang. as we have been discussing, executives from alphabet, amazon, and facebook attended a meeting at the white house on thursday on artificial intelligence. it was the first meeting between amazon and the white house since president trump began targeting the company via tweets in march. we talked to chamath palihapitiya, who left facebook when it was a year old and began his own firm. he is making big ways in how business gets done in silicon valley. take a listen. chamath: it is too nuanced to really understand from so far away. i think the good news is these meetings probably say there is some amount of effort being given.
but the reality is people in silicon valley don't understand what ai is. the idea is that until we really grapple with what it really means, fact versus fiction, it will take many years before government understands what is at risk and what is at play. emily: we saw mark zuckerberg testify before congress and lawmakers did not seem to understand how facebook work. that said, do you think tech can be regulated and you think congress can design the right regulations? chamath: the right way to think about this is when technology was a small part and it was best left alone and we did a good job of self-regulating. now the reality is technology is pervasive and there's no industry that isn't being remade or re-factored by something new using technology at its core. with that should come a natural expectation that we need to live by the same rules as everyone else does.
emily: a few months ago, you talked about how you feel tremendous guilt about what you built at facebook. it caused a bit of a stir, as some things, you say, do, and he later said you genuinely believe facebook is a force for good in the world. that was before cambridge analytica. there might be many more cambridge analyticas. we have no idea how many millions and billions of people had their data compromised. how does that impact your level of guilt now? chamath: the reality is facebook is probably going to be the company that leads the way out, but the reality is there is a bigger problem, which is not a facebook problem. it is among all of us as consumers. we have grown addicted to things that are free, and we very rarely pay for things when asked to on the internet. it is not an expectation. but in the rest of our lives, we expect to pay for things. ford does not give us free cars, whole foods does not give us free grapes. we have to pay for these things. and that gives you expectations,
rights, privileges, etc. as consumers, we have to ask ourselves, how much of this do we want to have for free? if we want rights, how much are we willing to pay for those rights, and that should extend to things like data privacy and etc. that is the solution to future versions of this problem. emily: so you think facebook can do a subscription product? chamath: i think that is too tactical of a solution. we all assumed the only way to make a commitment on the internet is they get software for free and advertising makes up the difference. the problem is we have a very weird and undefined gray area between who is the customer, who is the consumer, and how much of a product are you a part of. i think that is where you have to introduce things like payments and subscription so those markets are clear. for example, when you look at netflix's business model, it is
unambiguously clear. there is a bi-partisan relationship between netflix and consumer. spotify has the same thing. apple, in many ways, has the same thing. when you are a customer of amazon prime, you have the same thing. i think there are many examples now of the evolution of the internet business models. in my organization, a lot of what we talk about is advertising. how do we move away from relying on ad supported businesses and think about embracing subscriptions, because it clarifies a lot of these problems? emily: let's talk about something we do not get for free, and that is a tesla. you once thought apple should buy tesla and make elon musk ceo. that was a long time ago, and in the past few weeks we have seen elon musk calling analyst questions "boneheaded" and "boring." the bad april fools' day joke. what you think about that kind of behavior? is that ok?
chamath: unlike most people who read the peanut gallery version of the call, i listen to the call, and i would tell you that i think a lot of this stuff is overblown. in fairness to public market investors, they provide critical liquidity for his companies. specifically in tesla's case, they are at a critical point where they might need more money. i think it makes sense to ensure that you have the right kind of exchange. i am not sure whether quarterly earnings calls are the best ways to get at them. i think they are too perfunctory in general. and as far as new business at tesla, there are no opportunities to ask the right
questions. what i would rather see elon musk do is take before or five analysts that understand the business, and bring him under the tent and say let me explain these businesses to you, and have him articulate that to the rest of wall street. that would bridge the gap between people's interpretation of the call and the frustration with the actual content of the call. emily: let's talk about apple. in the past, you have talked about how they have a problem with innovation. we have seen apple's earnings, and i know you do not love quarterly earnings, but defy expectations by being stable and defining the smartphone market swamp. does apple still have an innovation problem? chamath: apple has a fantastic cash machine, but they have not demonstrated what the next lily pad is. why that is critical in technology is because the underpinnings of your business model are constantly changing. if we move him as supported businesses to subscriptions, we might move from subscriptions to something else. there might be something that comes after a phone, like a vr headset. in all of this is a lot of change. in order to accommodate change, the best course of action is to try many things. be ok with failure, do not be embarrassed by it, and it will help you find the ultimate thing that works. i as an investor would love to see more public facing experimentation.
that said, we know that the iphone business is not going to be around forever and we are going to try some things that fail. they have tried some things that are exceptional. air pods are fabulous. everyone who uses them loves them. emily: but not the price point of an iphone. chamath: it will not be a thing that replaces the iphone business. you need to find multi-hundred dollar, billion dollar, trillion dollar markets. and those are health care, autos, education, housing.
they have to try something big, i think. emily: you talked about public market stock you think is undervalued, like box. what else? what opportunities do you see that public market investors are not seeing? chamath: if you go back to where we started, over the next 15 or 20 years, consumers are waking up to the realization that they will want to be the ultimate customer. what that means is i believe businesses like netflix, spotify, and many others that are subscription-based are going to do incredibly well. i think they will massively over perform other kinds of business models. in part what that means is that other kinds of businesses, ad supported businesses, will be revalued and re-rated in my opinion. there will also be the sector of regulation, privacy risk. where we are spending a lot of time is finding companies that expressed that view. subscription-based relationships with customers. emily: that was chamath palihapitiya. coming up, about 60 million cars on the road come with blackberry software. we will speak with blackberry ceo john chen about how the company went from a hardware firm to a software provider for the auto industry. plus, alphabet putting their best foot forward at the google i/o conference, rolling out features and upgrades.
♪ emily: an activist firm representing tesla shareholders wants the electric carmaker to shake up their board. the investment group opposes the reelection of three board members who are up for vote. the board claims tesla has veered off the path to profit. they said the board is beholden to ceo elon musk. and this week, google introduced new products and tech upgrades at their annual developers conference, pushing the limits of artificial intelligence and augmented reality. we caught up with alphabet's vice president of vr and ar. take a listen. >> the big thing we highlighted today were updates to google lens, a capability that lives inside the camera that lets you search what you see, basically. >> yeah. talk a little bit more about -- you had something called a visual positioning system, and that is something you are all familiar with.
you get off the subway, try to find where you are going, and everyone turns to google maps. the frustration there is you are not sure exactly where you are going. >> the situation is familiar. you get out of a taxi or off the subway and you try to figure out where you are. you walk 10 feet that way, see if your dot moves, and move back. in urban settings, gps does not always work reliably enough to really figure out exactly where you are. we have been working on what we call vps, a visual positioning system, that like you and i would use, landmarks in the environment to find out where we are, it uses similar visual features in the environment help figure out where you are and where you are going.
>> google has been sitting on this massive asset of maps for a long time. was it technically difficult to integrate the work you are doing with augmented reality? why has it taken such a long time to put that out? >> we showed some early exploration of enhanced walking navigation. that is about the culmination of a number of technical investments coming together, from computer vision to make sense of signs and things like the visual positioning system to infer exact location, and building out our massive data set. that has been years in the making. >> today's announcement was focused on mobile. we did not see any vr, ar headsets. are you taking more time thinking about the capability of mobile phones instead of headsets? >> we really believe in the long-term potential for both virtual and augmented reality. we think good things will happen in both in the coming years. what we are seeing is, because everybody has a smart phone, everyone has a smart phone camera, there is an enormous opportunity to improve products and user experiences using the devices we already have. google lens is about that, and some of the explorations we
showed, walking directions are about that, and you will see more development in the next coming days. >> do you think the vr market is 5, 10 years away from really picking up? >> i do not have a crystal ball. i think we are seeing promising early adoption of it, especially in enterprise and education, and in pockets with consumers as well. we believe in its long-term promise. last week, in partnership with lenovo, we unveiled our first stand-alone headset running daydream. emily: that was alphabet's vice president of vr and ar. blackberry is in the midst of their second act, moving toward software. a big part of their future is automated technology. connected and automated cars are shaping the future of transportation. like pcs, tablets, and smartphones, autonomous cars will come with their own operating system, and that is where blackberry comes in. their qr software is used in a few million cars made by honda and bmw, to name a few. we caught up with john chen, ceo of blackberry, on thursday.
john: i find it almost laughable to talk about, why don't we put a passenger or person there to manage a self driven vehicle? i think most of all fatalities or accidents are caused by humans today. as i pointed out in my writing, 1.3 million fatalities every year around the world, 50 million people getting hurt, and 90% of that is because of people, people's errors, human errors. we need to perfect the technology. rather than saying let's do a patchwork and put a driver in the car to manage a self-driving car -- it just sounds funny to me.
emily: clearly, the technology is not safe enough yet, but not having a driver there sounds a lot scarier. john: true. first, let's talk about the big picture a little bit. it is never good to have a fatality, especially with a self driving car. but the statistics show that today's car is still very unsafe, so to speak. on the other hand, it saves a lot of lives. cut the vitality down by half. it has saved their lives. we ought to focus on making the technology safer than arguing about some kind of stopgap solutions for now and so forth. if it takes longer, it takes longer, but you just have to go full steam ahead on the safety and security side. emily: is the idea to not have drivers in there at all, make it safer so drivers are not in there at all? supposedly, even if they are, there should be no driver in the car? john: they do not need human intervention. yes, i hope that is the case. emily: can we get there? john: yes, it might be 2021 or 2025. people were talking about that, the different manufactures talk
about when they will release the car. i think we should take time, as a technology and automotive sector, should take the time to get it right. emily: you also think that there are privacy concerns. john: yeah. one of the arguments was doing some monitoring, driver monitoring. i think that is a deep cause for concern. anytime you put data on an accessibility, whether it is on the internet or telematics or whatever it might be, it creates that hole. it has been talked about big-time for the past three to six months. i think that is also an area of concern, but i am back to the original thing. it is a great idea. it is a when and not if on where the cars will be driven safely. there will not be zero
accidents, but we hope it will cut down a majority of auto fatalities. emily: i want to ask you about this statement on regulation. take a listen. >> you need a federal standard because that will get away from a lot of the states coming up with with different initiatives and how they work towards it. caution is the name of the game, because we are talking about people's lives. that is what we have always said and that is what we continue to say. emily: what would you like to
see happen with regulation? john: i think first of all, i'm a big-time, making sure the private sectors themselves regulate first. i think it is up to us to develop standards that we should adopt, these bodies will adopt. we will self regulate first, and then have a partnership or relationship with the government, whether it is the department of transportation or whatever the agency is, and to create a standard that establishes a minimum safety standards so that the consumer can trust it. that is what we would like to see happen. emily: blackberry ceo john chen. coming up, rent the runway ceo jennifer hyman talks to us about how she ensures all employees at the start up are treated fairly. this is bloomberg. ♪ emily: just last week, we reported that the chinese
emily: just last week, we reported that the chinese smartphone maker xiaomi could be the biggest ipo in four years. now that valuation may not be so high. xiaomi might be looking at a valuation between $60 billion to $70 billion, and while 70% of their revenue comes from selling smartphones, their cofounder insists their real goal is to be an internet services company, making money off ads and online games. the united states is in the midst of unprecedented strength in the labor market. the u.s. unemployment rate dipped below 4% for the first time in 17 years, but the workplace is changing. in 1960, only 20% of mothers worked. today, 70% live in households where all adults are employed. meantime, the majority of workers spent more than 40 hours a week on the job. productivity has increased 400% since 1940 while benefits like leave and health care are not guaranteed.
and in the tech industry, there is a rising split in the workforce. competitive pay and great benefits for salaried workers, while warehouse and hourly employees can be left with little to no incentives. jennifer hyman wrote about this in a new york times op-ed, saying the warehouse employees have to face life events like the birth of a newborn, grieving after the death of a loved one, or taking care of a family member without the same level of benefits. jennifer hyman joins us now in new york. jennifer: the change is that we decided to equalize benefits across the company, across all functions. meaning that parental leave and sabbatical policies and pay family sick leave and bereavement are the same for corporate employees as they are for the warehouse employees. emily: at the outset of your op-ed, you said you were not doing this and that was a mistake. why? because it was always done that way? because it was cheaper? jennifer: yeah, when you found a business, you take your cues from corporate culture from already successful companies. i just looked to what companies that i admired were doing. they were doing incredible, generous things for their employees in corporate. they had very standardized, more skimpy policies in their warehouse and customer service teams.
i just followed suit. and it really took me the consideration of now having a team of 1200 plus people with a company that is doing extremely well. understanding that i am in the position i am in because of my entire team, not just my corporate team. so why is it that my pregnancy is more important than someone on my seamstress team? it is actually not. like, a life event is as important for any person in my company. emily: this is going to be expensive, isn't it? and how do you account for that expense? jennifer: first of all, while it might be an expensive upfront cost, i do think it will all come out in the wash in terms of higher retention rate, having more productive employees. the cost of bringing in and training new employees is extremely high. and then the loyalty that all employees will have towards rent the runway. what is remarkable about these
changes is we did not change that much as it related to corporate employees, because our benefits were already really generous for that population. so we equalize the benefit. the people that had the most positive reaction were our corporate employees, because people want to work at companies that exemplify their values. 70% of millennials, the majority of the labor force right now, say they will not work at a company unless it example of ice a value set they have -- exemplifies a value set they have. this value set of treating everyone with respect and equally is something that is extremely important to the younger generation. emily: let's talk about some other companies with these two-tiered workforces like amazon or starbucks. how does what you are doing compare to them? jennifer: it is very different from them. so as an example, we have a policy that is four weeks of bereavement leave.
now, those four weeks of bereavement leave are for anyone on the team that is grieving for a family member. and that is a really generous benefit that sheryl sandberg put in place at facebook and lots of other companies followed suit after she did that, but they did that for their corporate team. you know, why is it that a death in the family is more important for someone who works in corporate? it really -- it's just not. the thing that was really important to me was thinking through the opportunity to arrive in a corporate job. what has given me the privilege of being able to be a founder and ceo? yes, i worked hard, but i also grew up on the right block with the right parents. and a lot of people who work on my operations team, in my customer service team did not have the same educational opportunities, they certainly did not have the same career opportunities. they work just as hard as i have.
emily: what is the call to action here? what should companies like amazon, like starbucks be doing? jennifer: i think if someone works for your company, whether they are salaried or hourly, they should be treated equally. and you should do whatever is financially viable within your company and stage. so i'm not making the claim that rent the runway's benefits are the most generous out there, because we are still growing. we are not a company the size of amazon, but i am making the promise that everyone is equal and as rent the runway continues to grow, i will continue to deliver more and more values to my employees. emily: thanks to jen hyman, ceo of rent the runway. that does it for this edition of "best of bloomberg technology" tune in next week, and we will
carol: welcome to "bloomberg businessweek." jason: and i am jason kelly. carol: we always talk about saudi aramco, we have a story on other big oil giants. jason: that is right, headed to abu dhabi. we have a look at mexico and a controversial presidential candidate could be leaving the country soon. carol: and to the caribbean, many of the islands coming back after the hurricanes last year. jason: all of that ahead on "bloomberg businessweek." ♪