tv Bloomberg Best Bloomberg March 29, 2019 10:00pm-11:00pm EDT
>> coming up on "bloomberg best," the stories that shaped the week in business around the world. >> revocation to avoid the eu deal. >> brexit hangs in the balance as lawmakers scramble to approve a plan and the prime minister plays her last political card to get a deal. anyhere's no majority for brexit option. >> the u.s. and china hold another round of trade talks. uber buys a key competitor, begins life as a public company. more bad news for boeing -- sale. clinches a huge
bond markets send out recession signals as central banks make dovish moves. >> basically have policy on hold until fall 2020. >> i did not have any rate increases for 2019. it does not mean that i could not change my mind. >> top officials speak frankly about the global rate outlook. >> i think the turning point came of it earlier than expected. >> this is a car that is moving in a predetermined direction at a slower pace. >> it's all straight ahead on "bloomberg best." hello and welcome. best," youromberg weekly review of the most important business news, analysis, and interviews from bloomberg television around the
world. let's start with a look at the top headlines. last friday, special counsel robert mueller delivered his report on the 2016 election to the u.s. department of justice, the attorney general's summary of the findings was causing a stir from capitol hill to wall street. >> president trump claiming victory after the special counsel found no evidence of andusion with russia attorney general william barr saying there's not enough evidence to charge the president with obstruction, but the are far fromhts over. top democrats are demanding a complete release of the report. >> i think both barr and mueller made it clear they did not find sufficient evidence that there was a conspiracy within the trump administration to collude with the russians to interfere with the government, so there is going to be a controversy over barr basically stepping in and
making the determination that the president did not commit a crime. bob mueller decided not to reach a conclusion on of suction of justice. he led that with barr and rosenstein to decide, but the truth the tricky thing about came into the justice department with a preconceived view on obstruction . i think it would have been useful for bill barr to withhold judgment until more people have more access to the underlying information. that did not happen, and now this has become a political football. >> there is a political story, there is a legal story, and i do wonder what the market story is. >> a think the market generally had anticipated no real meat coming out of the investigation because the market has been so strong this year. if anything, this may provide a tiny degree of solace or support your risk tolerance because it removes a degree of uncertainty if there was that, but in
general, the market seems to be trading on a lot of other things as opposed to political risk in the united states anyway. >> apple, the world's biggest tech company, is reinventing itself as a digital services provider. a highly anticipated event, tim cook announced a range of new offerings in video, gaming, payment, but the new services push has not impressed absolutely everyone. wall street was pretty nonplussed, closing lower on the day. >> feels like they went to all their major divisions and said, "what is a new situations of his we can come up with for your service area?" they have a new gaming subscription service. makes sense. gaming is the most popular type of app on the app store. a video cisco concern is coming out in the volcker. news, they have this new magazine subscription service. -- a video subscription service
is coming out in the fall. >> another big defeat for the prime minister in the u.k. parliament has taken control of the brexit process from her. these indicative votes are due to happen on wednesday. they are nonbinding, so what do they actually mean for the brexit process? so far they have just taken back control of the timetable. that means we will have these indicative votes on wednesday. it seems to me parliamentarians will be given a piece of paper with a lot of options so all the voting can be done in one go and not too much time is taken. so far the government disappointed they lost 30 votes to the other side. they actually lost three ministers in the process. >> breaking news out of london -- u.k. parliament has filed back into the building. parliament voting against a no deal brexit. they have been voting on a different alternatives to
brexit. this, of course, on the back of prime minister theresa may theyg she would resign if voted for her deal. what is at stake right now? >> what is at stake is how long brexit might take, what options are left on the table and when we might see the resignation of the prime minister, theresa may. we are finding out slowly but surely what if any can garner some sort of majority in the house of commons instead of prime minister may's own withdrawal agreement. these are all intricately worded types of votes, but generally speaking, we can see there's no majority for any brexit option. will we therefore see her exit may 22 and finally the u.k. leave the e.u.? >> just got some breaking news
on wells fargo at the moment. it looks as if ceo tim sloan is set to retire. saying that we will instead have alan parker as the interim ceo new boardent and the selects, but tim sloan select to retire from wells fargo. >> if you think that to what has happened at wells fargo since 2016 when the fake account scandal interrupted, it has been a never-ending nonstop drumbeat of scandal after scandal after scandal, in addition to the bogus accounts, we have had inappropriate mortgage fees, people being put into car insurance and pet insurance that they did not sign up for, altered documents in the wholesale lending business that spurred a justice department , incorrect pricing and fees for foreign exchange in the wealth management business, people being foreclosed upon because of computer glitches. this stuff is just almost beyond belief when it comes to a bank
and while sloan has been insisting time and again that he and the rest of his colleagues at the bank are doing the right things -- they brought in a new chairman, a former fed governor, they turn over almost all of senior management -- just simply not enough. >> let's turn our attention now to the house of commons where we're getting the latest results. 344.es >> theresa may effectively bringing her deal back for a third time. once again, we have seen a significant rejection, this time a little lower in terms of numbers that voted against it. she lost this time by just 58 votes, but nevertheless, that is still a big defeat. what she said subsequent to that in the house of commons, that we are reaching the limits of this process in this house, either she is hinting at the possibility of a general election or she's hinting at the possibility of a second referendum, but it does now feel
as if theresa may's deal is dead for the third time and is unlikely to come back. that means probably we are headed for a long extension and that the u.k. is going to take part in the e.u. wide elections taking place in may. theresa may promise that neither of those things were going to happen. they are now becoming a reality. given those realities, do we think theresa may will step down any time in the near future? >> she has already indicated that she will do that. >> still ahead as we review the week, conversations with central bankers from frankfurt to the fed. plus, lloyd's of london's ceo to adjustold steps sexual-harassment claims. up next, more of the week's top is in his headlines.
>> this is "bloomberg best." tour continue our global of the week's top business stories. in paris, where the french president hosted the chinese president, the leaders crafted a major deal for aircraft. a $35 billion deal with china during xi jinping's visit to france. the 300-plane order is a blow to boeing and since a not-so-subtle trade war message to the u.s. >> this is a bigger contract done what was a discussion between the countries last year.
definitely a very big blow to -- big blow to boeing but a definite win for airbus. >> how political is this deal? it can be nothing other than political i suppose. >> it's very political. just from a technical point of goes down wella for the french president because he spent the day yesterday in two-away trader with china. he does not think europe should be just a takeover target with china. you also have the chinese perhaps sending a message to the united states of america. you could argue the chinese are you have to play nice. >> boeing says it will submit a final software fix to the faa by the end of the week and says the update has already been flight tested. however, the max airworthiness
certificate has been suspended. tell us what china and regulators are looking into? china come quickly out of the gate after that ethiopian air crash a couple of weeks ago. it was among the first to ground 737 max planes. this seems to be taking it further. the airworthiness certificate has been suspended, so it does suggest these groundings could go on for some time and that the chinese really do want to make their own checks, not just the faa, before they allow the plane to fly in their airspace again. >> boeing's legal and political woes are deepening. it is being sued on behalf of a passenger who was killed in the ethiopian airlines crash earlier this month over claims the 737 max was not designed safely. >> a claims the 737 max was unsafely designed and that boeing failed to warn of the
defects, which is interesting because we know boeing was -- workingit makes on a fix even before the ethiopian crash happened. if that -- if they are found damagingt could prove because they would be shown to have been aware. >> the identity of the next government still is not known. officials say the promilitary party gained about 8.5 million votes while the opposition won 7.9 million. >> we're getting a more constructive tone on trade talks. steven mnuchin posting on twitter that the u.s. trade reps and he concluded constructive
trade talks in beijing and he looks forward to welcoming china's vice premier to continue important discussions in washington next week. have tabled text of a potential agreement and are looking at both sides to see if they match up. the u.s. apparently worried chinese officials are translating u.s. texts differently than they intended. there is still work to be done. the question is we do not know what is in it and how much progress it makes and if it is a faith -- face-saving compromise. they need to wait until next week. >> when you talk to people, is there a sense investors have been sitting on their hands waiting for this to culminate before making a move one way or the other? >> there he much. i think the question will be if trade is the put -- is what pushes people to go back into equities. we have been seeing a slide into safer assets this quarter. >> turkey's lira led declines in em currencies as government
measures made it almost impossible for foreign investors to shore up ahead of key elections. turns out it is now something turkish swap rates. >> they went from 23% last week which is aday b stupid number because it essentially shuts off the rate. any trade rate will be unable to hedge their trade level. it keeps them exposed and i have to look for alternatives, so other currencies are getting hit today because it is a proxy hedge. >> the u.s. housing index showing mixed signals this year with a decline in starts numbers casting a shadow on the real estate market. give us the latest data showing these mixed signals in the real estate market and what it is .elling us
>> today we had housing starts, and unfortunately, it is another negative sign for the housing market. in 2018, sort of the year that home builders and home buyers and sellers would rather forget. we expected to come right back up out of that, or at least economists expected that. we start with housing starts this morning and another decline. most concerning is the decline in single-family home starts. homebuilding for single-family homes, the lowest in about four years. also it tends to be the less volatile category. in the past, we have had declines in condos and apartment buildings. up ton chalk that volatility, but single-family homes tend to be pretty reliable. >> saudi aramco is acquiring a 70% state -- steak and sarah stake in aramco.
explain the journey we have been through here and why this outcome is different and why is it different for the ipo? abic aramco. in s >> it is a way of transferring a part of cash from one saudi arabia to another. the saudi crown prince announced he wanted to sell a stake in a giant idea to finance his economic transformation program, he could not do that in the end. evaluation was too rich for investors, so he needed another way to find that money and this deal is it. it uses aramco's balance sheet to pay the sovereign wealth fund in cash for this stake in the chemical company, so instead of $100 billion in an ipo, they will have $70 billion to make investments inside and outside saudi arabia as part of mohammad bin salman's economic
transformation agenda. bank has beenthat dismissed. she will be replaced by the .hief financial officer this is just one day after a raid by prosecutors. sweden's oldest bank is in the grips of a money-laundering scandal or at least allegations of misleading investigators. how much of a surprise is it that they finally dismissed as ceo? >> this is the point. so much of a surprise that it has come so late in the day and i guess given what we heard yesterday and the multiple investigations of bankers now facing from the u.s. the fort investigation at home, and insider trading investigation at the, that is pertaining to management's handling of the scandal as it broke, which is a guess more alarming to investors than perhaps the scandal of the allegations themselves, which dates from earlier years, but it
seems management has lost the confidence of shareholders handling that now. >> michael avenatti charged with nike p >>extort michael avenatti was charged criminal complaint in california and in new york, and in new york , he was charged with trying to extort nike of as much as $20 million. he claimed to represent a former aau basketball coach who had once worked for nike but no longer worked for nike, and that he had damaging information about nike and how they had paid off the families of several promising basketball players. he then entered into the negotiations with nike, and nike said that he threatened the company with economic and reputational harm, essentially saying he would go public with some very damaging allegations
unless they paid him him .mmediately a lot of money nike then contacted law enforcement, which proceeded to surreptitiously record have a ti making avenat several statements and separately, we understand it, there was a criminal complaint filed in los angeles charging 1.9with stealing at least million dollars from a client, which appears to be unrelated to the nike case. ♪
accommodative policy stance and also said he is ready to take measures to soften the impact of negative interest rates. after he spoke in frankfurt, bloomberg said down at ecb headquarters with chief economist peter press. >> what is clearer now is that the perspective of low rates for longer has triggered a debate about the side effects of negative rates, so i think it is fair to say that this issue has , but analyzed carefully find ad in any case to works.y policy that i think it's fair to say we have to go into this issue, but we need to have a convincing monetary policy case to do that. when you look at policy today in the lending channel, we do not see any particular problem in the linda's channel today, but as we know, with the weakening economy, it may happen in the
future, so you have to be ready to look at the possible instruments or decisions you may need to take in case, so, readiness, yes, but i think do not rush to quickly to conclusions, but it's fair to say that the conversation has started. a conversation has started, doesn't mean that interest rates will stay low for even longer? >> i think it is difficult to say today. and you look at prices, market prices, yes, i'm in the days of the first lift off have been pushed further by market participants. the debate has been coming. >> does tiering make the tool of negative interest rates less effective? >> negative rates have been very helpful because you push people either to spend or to go into
the risk in supporting economy, going into investment and all that, so we have seen big effects of the negative rates on the economy, which is good also for the banks themselves because of customers do better, it is also good for them. the question that comes today is with a slowing economy, because of international and geopolitical factors, you get lower growth and also the negative effect of the rate situations on the intermediation margin. on the economy, you have to see other things will evolve. >> coming up, more perspectives on monetary policy. the seal the japanese bank says the fed's dovish u-turn took him by surprise. after bloomberg reports on a culture of sexual misconduct of lloyd's of london, the ceo promises to make changes. >> it is sickly not acceptable
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♪ welcome back to "bloomberg best." this week, bloomberg help the business and equality summit in new york with global leaders discussing critical issues of diversity, inclusion, and gender balance in business and in society at large. and along with these discussions came news of change. lloyds of london focus of a recent story in bloomberg "business week," which found a deep-seated cultural sexual misconduct in the london insurance market. the company has responded with a plan to address the allegations. the ceo spoke exclusively with nejra cehic. ♪ not the lloyds that i
want to be part of, and not the lloyds that many of my colleagues feel they want to be part of, either. if these occurred 10 days ago 10 it isago, i don't care, not acceptable in this day and age that any woman should not deal safe. you go through the actions even announced, one of them is important, which is to understand through an independent cultural survey what we are doing well, but what more we can do. what i am clear on is whatever we say, we are not doing enough. we have to ensure that everybody, whether it is a woman or a man, should feel safe at any time of day doing anything associated with lloyds. i'm determined that will be the case. >> how can you actually manage to convince people they will feel safe out of the lloyd's of london building? it is one thing to police behavior while people are at work, but that didn't happen within the building itself. >> and you are right, because
lloyds operates globally, not just in london. we have been clear that we will impose our own sanctions. whatever anyone of the constituent companies choose to do. if anyone is found to have acted inappropriately, we will be incredibly decisive, and that could include lifetime bans. we are being as clear as we can that we will not accept any form of that behavior. >> a skeptic might say that this is a form of crisis management, or even closing the door after the horse had bolted. will you really be able to bring about an overhaul of culture that your predecessor, with all her work on diversity, didn't manage to do in five years? >> i think she did a fantastic job in bringing the marketplace forward. i think the inclusion pledge, the changes in the market, have been incredibly significant. everyone i've spoken to has been shattered by the article, so i have no doubt whatsoever that
everyone wants to redouble their efforts to ensure that these events cannot occur. ♪ >> fears of a global recession cast a shadow this week after the u.s. yield curve inverted 2007he first time since and the federal reserve said it wouldn't hike rates in 2019. several prominent figures in finance assessed the signals, whoting with koji fujiwara, spoke exclusively with bloomberg at the milken institute symposium in tokyo. ♪ >> my impression is the global landscape has started changing as 2019 has begun, the reversing of yield curve symbolizing trends. as you recall that happened in 2007. i think we have come to a time when we raise the level, there is a timeline. in 2007 it came about your half later. furthermore, responses by central banks have become more
sophisticated. i don't think we need to be overly optimistic. >> the fomc has downgraded the outlook for the economy and interest rates, will the boj is sticking to the price target. what do you say about the policies? u.s. policy terms in the economy aside, i think the turning point came earlier than expected. i also think u.s. monetary policy came too early, as rates would have had more room if they have been raised more. the boj policy has brought the japanese economy to inflation. this is a big compliment. on the other hand, we have to raise monitoring levels. 2% inflation target is a means, not a goal. the goal is stable economic growth. if there comes a time when we have to consider whether the
policy is appropriate against this goal, considering the impact of reversal rates. i think the boj people know these things very well and are doing a difficult job of navigating monetary policy. ♪ was the fed's decision to strike a more dovish tone and to hold off on rate hikes in 2019 an appropriate response, given some of the challenges we are facing? year we came out of last at the turn of december in the beginning of this year, there was great uncertainty that emanates from the trade talks between china and the u.s., between north korea and the u.s., within europe, with brexit, all those elements of uncertainty saying, what's the rush? we have to let the dust settle, and as chairman powell announced, one will be patient
. that does not mean a u-turn, but there is a clear trend for normalization, remaining the goal, and there is an expectation indicated, where 2020 will be another rate hike. i would say this is a car that is moving in a predetermined direction of a slower pace. >> there is, of course, a discussion by some that we may be looking at a rate cut at some point in 2020. what do you think would be the catalyst? >> well, i would say i would hope it would not bring today, because there are discussions that are exceedingly low, and it will also indicate that another distortion will remain, central banks remain the only game in town. ♪ >> the federal reserve's latest expression of dovish nash certain -- dovish nash had an
impact, into fed officials appeared on bloomberg to offer insight into the policy part. let's start with the federal reserve bank of chicago president charles evans, who told rishaad salamat why he softened his stance on rate hikes between december and march. ♪ we had more restrictive financial conditions at the end of last year and strong growth. then you get into the first part of this year, and markets rebounded after we communicated a little more carefully that we think policy is in a good place and we can monitor and policy for a time. but the economy ended up slowing down a little bit with the first quarter. now we are trying to figure out how this plays out. financial conditions still seem to be quite reasonable, and is the first quarter going to be a temporary slowdown, or will it be something more than that? i am optimistic. i think we will finish the year around 2%, that is pretty good.
but i'm a little nervous about inflation. i think inflation is close to 2%. that's good, but i'm worried that it still takes accommodation to keep inflation at that level. i marched down my path for policy rate increases, i basically have policy on hold until the fall of 2020, so we can see how the economy is going. just a little bit of additional accommodation or not impart any restrictiveness, rising above 2%. i have inflation rising to 2.2% by the end of 2021, consistent with the symmetric inflation objective, helping to solidify the belief that we will get inflation on target, and we will have as much capacity to cut rates in the time we really need it. but at the moment things look at. >> so you are pausing. >> that's right. ♪ >> it is now happening. we are not sure how much, i'm
not sure how much growth will slow. my best judgment is we will slow down 1.25% to 2%. but the bond market eight is adjusting it could be worse, but that is what you are seeing in the bond market. and sluggish expectations for future growth. >> is interesting, rob, that this buy rally got started after the fomc met in tacoma 2019 rate hikes off the table. it could be moving in either direction. the bond market has increasingly inrted racing in -- pricing the chance of at least one rate hike this year. is that a possibility, or is the bond market getting ahead of the fed? >> i will give you my own view. and i't, in my dot plot, have been saying this for some time, i didn't have any rate increases for 2019.
it doesn't mean that i couldn't change my mind. it means as i sat there in the march meeting, that was my base case for 2019. but it is always subject to change. what my main goal is for monetary policy right now is that we are flexible, that we are patient. want to see how growth is going to unfold for the next several months in 2019, and based on what i see -- and for me i look not only at the economy hard data that corporate earnings reports,, whole range of factors, particularly the fixed income markets in the treasury curve, and based on all that, as we get through later in the quarter, i want to be flexible to have a policy where we can move appropriately. i don't know where that will be yet. could be no actual.
♪ this is "bloomberg best." let's resume our roundup of the weeks top business stories with a focus on company news, starting with another chapter in the ongoing legal battle between apple and qualcomm. ♪ says it is pleased by an international trade commission ruling that qualcomm's case against an apple patent is invalid. they escaped a potential import ban, but faces that penalty in a separate patent ruling. bloc is through these two cases and what they could mean for the ongoing battle over patents between the giants. >> only have seen today is we have two similar cases that i
different stages. the case that was closer to the point where it might actually affects the import of the iphone into the u.s. was shut down, and that was definitely a defeat for qualcomm. the second case has basically gone through another stage on its protest, from qualcomm's perspective to hopefully have the same result, stopping the iphone from being imported into the country. ♪ >> uber has confirmed it is buying a dubai-based rival, korean, in a deal worth $3.1 billion, its priciest purchase ever. >> they will be paying for it in a mixture of around $1.4 billion in cash, the remaining $1.7 billion in auctions for stock. this is coming ahead of the ipo later this year, which will value the company at $120 billion. this deal -- the context is that this is an attempt by uber to
stop some of the cash burn going on in the middle east, where the rivalry between uber and kareem has been intense. this is a big market. uber wants to be on top of this market and be the dominant player before it goes ahead for the ipl that is expected in a few months. ♪ >> samsung fell after issuing a surprise profit warning, saying first-quarter results will fall short of marketing occasions because of the slump in memory chip prices. what exactly are the global implications of this morning from samsung? >> samsung came out today and warned the financial results for the first quarter would be weaker than expected. that was a surprise in part because investors were already anticipating revenue was going to decline about 12% this quarter, and operating profit would fall by about half.now they are warning it will be worse than that , and that is because of declines in the prices of memory chips and displays, the screens
that going to smart phones for customers like apple. samsung has said they anticipate the second half of the year to be better for competitors that have echoed those positive tones. that may be why investors are reacting relatively calmly to this profit warning from the world's biggest chipmaker. ♪ >> africa's most valuable company is spinning off its main internet asset. they are planning a secondary listing in amsterdam as part of a plan to reduce exposure to the johannesburg stock exchange and focus on its fast-growing online investment. tell us a little more about why you are making this move. have european investors told you they want to see this? spinoff,actually not a but a primary listing of all our global consumer internet assets, and that is what we think an extremely exciting portfolio of we believe global tech investors will be very keen to access, and we think euro next will be the one to do it.
♪ >> india's jet airways is extending gains after the boarding. resignation of two executives. it will get 114 million new shares in the company and provide the carrier with immediate funding. does this exit remove a potential obstacle for creditors? >> he has been running fo company for 26 years, and some of the principal investors wanted a free hand in running the company. they are not sure about that. toks have been urging him step down from the board and his exit gives an opportunity to approach new investors, to see if new funding can come to the travel company. ♪ is said to & beyond
be launching a campaign to replace the retailer's entire board. partners -- how successful might these combined be? >> i think it's a good first that. they can have the same management they've had for a long time, with many initiatives, none of which have proved successful, to the point where operating margins have fallen over 600 basis points. great ift would be they are able to get a few board seats, i'm not sure if they will be able to get the whole board. but i think you had with the initiatives they have planned it will be hard for them to completely turn bed bath & beyond around, since it is far behind its competitors. ♪ >> let's talk about mcdonald's. this weekend, a big bet on tech in its largest acquisition in 20 years. it is spending more than $300 million on a company called dynamic yield force.
attack will help provide more personalized customer experiences by varying outdoor digital drive-through menu displays. what does this dynamic menu offer? >> i think it is a way to get you to buy more food, which is what mcdonald's wants to do. the average person who drives up to address their has a general sense of what their go to order is, but it is cold today, so how about adding coffee? how about fries if you didn't get fries? that's really the difference for them. they are using tech to customize this. ♪ -- at $15insurance million in cash and stock. why does this deal makes sense? two it combines >> companies that are intensely focused on government run health care programs at a time when those businesses are in flux.
you have president trump proposing to get rid of the affordable care act, and then you have democrats pushing medicare for all. it's a defensive move that combines these companies, make them more diversified, and gives them a lot of growth potential if these initiatives either don't happen or take a while to come into effect, which based on the history of health care, that does seem like a decent that. ♪ >> shares really the most in more than a decade after an external investigation into fraud allegations found that irregularities words material. the payment processor acknowledged some employees may face criminal liability. this is quite a limited report in the sense that only covers specific transactions. some investors may want to see something more. any plan for anything from her? >> yes, there have been some findings, and we are addressing
them, and i think we already have implemented varies wrong additional oversight measurements starting last year. on the other side i think we can strongly recheck in rebuttal some of the severe allegations put forward in the public. i think everybody sees it was immaterial. yes, there are findings, but on the other side, what should be a game is the strength of this company. ♪ >> despite being at the center of global scrutiny, huawei earnings surged 25% last year as it rose out of the global smartphone market. >> it is still uncertain, looking ahead, whether the u.k. came out the scathing report. >> by think the market for huawei equipment is very dicey at the moment, but bloomberg
♪ after the second round, this new leaderboard -- dwight anderson is number one right now after he picked a perfect sweet 16. he is the only one of the top five right now that has the carolina tar heels winning it all. you can follow along with those titans of business and finance online, and check out our [in bracket and yours.
>> there are about 30,000 functions on the bloomberg, and we always enjoy showing you are favorites on bloomberg television. maybe they will become your favorites. here's another function you will find useful, ipo go. it will give you detailed information on initial public offerings, past and present, from around the world, including this week's highly anticipated offering by lyft.they made their public trading debut on the nasdaq on friday, and the founder spoke about it on friday. ♪ beating yourre, biggest rival to going public. how does that feel? >> it feels pretty amazing, and there's nothing better than having all our earliest investors. a lot of them have been with us since we started in 2007. >> you are here at the new driver center in a way why was it important to do it this way? >> we wanted to make a point that you can invest in
communities and build a great business. our driver community has done a lot to be here at this point. many of them are participating in the ipo, and it is the start of how we partner. >> and you are giving drivers -- >> we are giving a cash bonus, and ability to participate through the friends and family program. >> let's talk about cost. there's a lot of questions of bringing cost down. $2.2 billion in revenue last year, but you lost $900 million. how quickly can you bring those costs down? >> we are going after the trillion dollar market opportunity. every here in the u.s., americans spend $9,000 owning and operating their car, using it only 5% of the time. this massive market shift, like entertainment, is happening with car ownership, and we are
investing to take advantage of that. we are very confident in the past. >> so in your risk factors you say you may never be profitable. how do you convince investors that they should be betting on the optimistic? >> if you dig in on the numbers, every year the economics of the business improve, and we are confident that the business will be very profitable. there are of course risk factors, but we are making tremendous progress, going after this once in a generation shift, for this entire industry, potentially, a $1.2 trillion market, could flip their ownership model to a service model. ♪ >> you can find a lot more ipo information on the bloomberg. you can also get analysis and updates at bloomberg.com, along with all the latest business news and commentary 24 hours a day. that will be all for "bloomberg best" for this week. thanks for watching. i'm juliette saly.
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♪ emily: i am emily chang in los angeles and this is "bloomberg technology." we have liftoff. lyft soaring in its debut after raising over $2 billion in an ipo. i sit down with the cofounders to talk about how they get costs down. plus, we hear from ben horowitz. he compares the rise to that of rocky balboa. and, lyft's public debut sheds