tv Best of Bloomberg Technology Bloomberg March 30, 2019 4:00am-5:00am EDT
♪ emily: i'm emily chang and that this is the best of bloomberg technology will bring you the interviews from this week in tech. up, lit officially have the markets in the biggest listing of the year so far. meets hollywood, after months if not years of speculation, the iphone maker unveils its trading plan a .tar-studded event a lot of excitement and a lot of questions.
boat, thisg the conversation is sounding the call to protect 2020 collections from foreign interference. we discuss his plan about getting it right. first to our top story, the biggest lift -- listing of the year, lift hitting the public markets and officially trading under the ticker lyft. ,n the roadshow leading up investors packed a standing room only luncheon to hear the pitch and the offering was oversubscribed. we parse through all of the details after the company listed. >> it is important to have a context that we are going after the trillion dollar market opportunity. in the u.s., american spent $9,000 owning and operating cars. so this massive market shift, just like entertainment, it is happening with car ownership, and we are investing to take advantage of that. our economics are improving and
we're very confident. emily: 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 come up we are making tremendous progress going after this once it a generation shift , a 1.2e entire industry trillion dollar market conflict from an ownership model to a service model. put it this way. if you focus on margins one-day, does that give over an opportunity to call back? >> we are not focused on competition, with focus on what we can control. every day, we're thinking about how to serve drivers and passengers and build a long-term model, pushing down operating costs.
that is what has allowed us to go from over 20% market share to nearly 40%. we don't focus on market share, we just execute and serve our constituents. getting to 50% market share more important than expanding internationally? >> our focus is always on taking focus onustomers we delivering the world's best transportation to our customers. do think about international, every year, we sit down and make the trade-off can we go deeper on this 1.2 trillion dollar market and deliver better transportation to our customers? or is it time to go abroad? a little over one year ago that we launched in canada and that has been a great experience. we will continue to consider international opportunities. we think it is a great option. emily: what do you mean? >> there are many future growth opportunities in this business,
whether we are deeper in north america or internationally. so we look at that as an option for the business, and we may choose to do that someday, but we don't have current plans. founderet's talk about control, you have 50% voting power but only own 5% of shares. what is your argument that that is the best way? >> we put a lot of thought into this with the board and investors wanted to set the company up to go after the long-term. to seize this long-term opportunity. we think that will be necessary to deliver the largest shareholder returns over time. it was an important peace of it. john and i together still have less than a majority control. we have selected an independent share, stephanie and on the board. board fromincredible
a diverse set of backgrounds set up to guide the company. we think of that is collectively the right package. there are concerns that this will not lead to the appropriate checks and balances you need on the company. but if we see in google and facebook where founder made decisions were made that were maybe not the best, have you respond -- how do you respond? >> we have been balance and how we put this together. an independent share, a diverse board of a broad set of shareholders. and we talk to the investors, would let them know that we care deeply about their views and incorporating them in our track record shows that. emily: you have been investing heavily in self driving technology. how much and how fast do you think it will bring your costs down? >> i think we are still years away. emily: how many? >> i wish i knew myself. conceptiond of a
that there going to be a magical vehicle that will appear wednesday. the way we see it playing out from all of our work is that the first generation of vehicles will only be able to do a subset of rights i think it is critical that they are rolled out on a platform like ours where you can count on drivers to fill requests it may be a long time for security reasons before autonomous vehicles are allowed to pick up at an airport, let alone drive and extreme weather, drive it night, drive at certain speeds. they're all sort of restrictions the first generations of vehicles will have said think a network application will be the majority case. meantime, i know you are focused on changing transit and car ownership, and many cities that you are seeing an increase in cars on the road. you're actually seeing more car ownership.
what evidence have you seen that car ownership -- >> we have seen peter carr ownership, and if you look at national numbers of people purchasing or deciding not to purchase, if you look at millennial's coming of age and not getting their license, and if you look at our growth, there is a pretty obvious trend. last year, over 300,000 customers got rid of a car. some families are going from two cars to one car, but it has begun. emily: in your roadshow, you talked about how you don't do abouteliveries, you are focus. that said, you are getting into new businesses. what is going to be your biggest source of new revenue? about? don't know >> we compete with car ownership.
when you open up the app, we want to provide you every possible option you can be trading on. whether that is public transit or connecting you. whether it is a bike or a scooter, a shared ride. we want to provide you with any possible options. we will be competing with the car park in your driveway as your primary goal. speaking about the future of drivers, i know self driving technology is very urgent and long-term, as he said. so much of this is about the values of trading customers and drivers well. if you are investing in self driving technology, does that mean all the jobs go away and it undermines? >> i don't think those jobs go away, we will need many more drivers heard today, the entire rideshare market is just 1% of miles traveled if that goes to 10%, you would need either 10 times the number of drivers if we were at nearly 2 million now,
we talking 20 million drivers. obviously, there is room for increasing the number of work opportunities. emily: where are you in five years? you toive years, we want -- subscribing. the same way you have a cell phone, we want people to completely get rid of their car and jump in the world of transportation. that you don't have to think about each trip, you are just wholly on board in one ecosystem. emily: is this like a monthly thing? shape,ill have to take but i think people will be subscribing. emily: boeing says they were very close to a software fix when the ethiopian airlines jet crashed on march 10 the
playmaker has spent months working with regulators and refining software and flight data -- refining software. theht data has showed system repeatedly tip of the nose down before losing control. the boeing update says the update is more obligated than initially estimated. they pressed the acting administrator at a hearing about its oversight heard the playmaker remains under. -- under scrutiny. coming up, apple goes hollywood, their plan to take on the streaming world. and if you like bloomberg news, check us out on the radio. this is bloomberg. ♪
emily: after weeks, actually years of chatter, appellee ,inally revealed their all in unveiling a news magazine service, a video gaming platform, and with a parade of hollywood elite from jennifer aniston to steve carell, and opera, a new premium video service to rival the likes of netflix and amazon. our vision for apple tv is to bring together your favorite news, movies, sports, and and make them available on all of your devices. so you can spend less time looking for something to watch and more time enjoying it. perhaps the key is apple's brand-new credit card in partnership with goldman sachs to facilitate payment. the car is tied to apple pay, which a marketer claims has been adapted by 39% of mobile payment
users. news,cuss all of this bloomberg's mark gurman who covers apple joined us monday along with research president bob o'donnell. >> we knew which shows were coming every time it went in the development was closing in on filming, apple or the producers would a very publicly announce these deals. we knew that this was going to be some sort of subscription service. we knew it would be premium, what we did not know was two basic things, how much would they charge, and which devices it would be supported on >. apple did not come out and saying, but i expect it will be available on smart to these in addition to roku boxes, but no word on amazon arrangement we also did not know price. i'm not sure there will hundred
percent certain. they did not really discuss pricing for the apple channels, and by the way, same name as amazon channels will be waiting on those. apple is also offering a bundle of tv channels which will , theye hbo, showtime obviously pulled out all the stops with this announcement. it is cool and it shows the amount of priority they are putting on these new services. >> absolutely, and it was a big, splashy event. the question is how are we going to feel tomorrow? wait a minute, what exactly are we getting from this? are plenty of other options to get everything except apple's original content. it is going to boil down to how compelling can they make this total package, not as from a feature perspective, but pricing
so the lack of pricing to me was very disappointing to me and others as well. and ironically, i do think the tv service was the biggest or best announcement. i think it was the credit card. emily: that is kind of a big deal. they unveiled this credit card, listen up. >> anytime you pay using apple card, you get daily cash. not a month from now, but every day. , cash is you spend added to your apple cash card, which is also in the wallet at -- app. it is cash, real cash, you can do anything with it. anytime you pay with your iphone or apple watch, you'll get 2% of the amount in daily cash. emily: aside from oprah, that was my favorite line. it's cash, like real cash. this is something we were not
necessarily expecting from apple is getting into the credit card business and a lot of things they are offering make a lot of sense and consumers are probably going to be pretty excited. no late fees? >> a hit a lot of the pain points. transaction fees, late fees. you can cycle through tons of credit cards get the best bonuses in different cash back percentages. when we are seeing here is 2% flat rates through apple pay, and of ashley the highest in the industry from what i believe, that is only from using it from your phone. card,ve the physical which looks like it comes right from apple with the titanium and laser etching. if you are in an environment with lots of apple pay high cash back i don't think there is a battle card -- better card on the market for this. emily: how impactful could
discard be given that the hope is you are charging a lot of new apple services on this card? >> it will take a while. he will have to get used to paying with their phones, that's why we see adoption still relatively modest but the joke i made with a couple of folks is that the credit card approves apple is still the best hardware , because that was the coolest thing. having a car -- card with no numbers, it reshapes the way you think about them. that to me was apple at its very best, taking something that is hard and making it simple through the apple magic. how many other capabilities are we going to see them do this on? that will be a bigger story, but i think it'd a great job of showing how you do with paying and thinks people want to know your -- want to know. emily: let's talk about the news building on service
what apple has already done. take a listen to roger rose. >> over 300 great magazines, wall street journal, l.a. times, those great, premium digital subscriptions, there has literally never been an offer like this before. if you are to subscribe to all of these individually, it would cost to over $8,000 per year. with apple news plus, you pay 999 per month. month. per emily: if you look at the subscription for the wall street journal alone, is over $20 a month. so make sense of this for me, mark. >> there is some debate online. apple is selling some people that you get full access to the wall street journal, where is the wall street journal said that a memo earlier indicating the subscription service would not cover the journal in its
totality, that some business news would be exclusive to people pay higher rates. so until that is sort it out, i cannot comment completely. but i think apple will probably get its way here. these magazines, they look amazing on the ipad, but you are talking about an industry that is already resource starved. today have the resources and staff to build out an entirely new experience to make it worth it? >> great question. and like you said, they showed some great demos with the floating city and all these cool things. but there's a lot of work involved. but people have had the opportunity to get digital magazines before, and it has not become a huge business i think this is a good thing they are doing, i think it is interesting. i'm not sure is a huge hit.
emily: the idea is certainly attractive. >> is attractive, but apple bought a company that was essentially offering the service before. mind you, they were not apple. but there's a question of how much they really will get from the wall street journal and from other magazines how long they can sustain the interactive version of their magazines, and frankly, how many are willing to pay for that, because at most, you will read a couple anyway. that was bob o'donnell and bloomberg's own mark gurman. youtube is said to have canceled their plans for a slate of high-handed dramas and comedies, a step back from the company's designs on a pay service that features hollywood quality shows. bloomberg has learned this is reportedly due to the high cost it would take to compete with the deeply entrenched players and without it, youtube is still
emily: just one day after apple's big services of event, they have barely escaped and import them on the iconic smartphone the international trade commission rejected a patent infringement claim. ,pple is not out of the woods the decision coming just hours after a separate judge says they have infringed a different patent and recommended a ban. the cases subject to review by
the full commission which is expected to complete the investigation. on tuesday, we spoke with the cofounder of the ventures. it will play out over the small bumps in the road country by country, unfortunately. this, isme context on headlined some most concerning, sound is the important work. the substance is that this is purely noise. yourately, to answer questions, how will this play out? we will see very degrees of announcements but that does not change where the trajectory of the relationship is going. that relationship is moving in a different direction with a will eventually be separate. you can point to some of the where theyhave had have started to build their own ships internally. they want to do the same thing around technology.
they have an option of moving in that direction. simplebig picture, the reason why this is noise is that, in the future, apple will not be dependent on qualcomm. in this irritation in the courts only accelerates that move. emily: the iphone has been banned in other countries in other rulings retaining to qualcomm. i know that it mostly involves older models. even if it is just older models being banned, you think that is still just noise? is, and there is, and there's some dispute about which models are going to be banned. chips, and mark your point, if you think about the simple explosion -- exposure
, said iphone 7's are banned the u.s., the probably has a 5% headwind to the overall business. so it is a measurable peace of the business, but importantly, we come back to the central theme. that these customers likely are not going to make a decision based on a price point that is unavailable for 50 or $100 to jump to an android phone. has retention that has been steady for the iphone between 90-95%. i think that availability, or lack thereof, is not going to materially change the number. loup ventures cofounder gene munster. 2020 elections from foreign influence, and was silicon valley's role? -- what is silicon valley's
♪ welcome back to "the best of bloomberg technology." special counsel robert mueller's investigation of interference and the election is wrapped though the political fight may continue. there is still plenty of work to do prior to the presidential vote. "completely preventing the injection of foreign government propaganda into our discourse is impossible, but we can ask our tech industry to reduce the amplification of such messages and quickly request quarantine and report to u.s. officials."
onongressman spoke to us tuesday. rep. khanna: the russians hacked into our emails. they manipulated social media. they clearly wanted donald trump to win. we want to make sure they never do that again, and there are simple things we can do. technology companies can form a consortium to share information about bots or bad actors and make sure they are removed. second, our law enforcement agencies can better coordinate with tech companies, who do not have all the resources to do the intelligence work. third, we need to label these ads. our consumers seeing an ad that was paid for by a foreign entity? emily: is there anything
congress can do legislatively to make sure that coordination happens between the u.s. government and intelligence and the tech companies? it seems like a lot is falling through the cracks. rep. khanna: we can give funding to these law-enforcement agencies to specifically help private companies with cybersecurity and with fighting foreign interference. we do this all the time. we do not expect facebook to be responsible solely for their security. they have private security, but still have the protection of our military and police. they should also have the assistance from our intelligence than they havep a responsibility to remove those bad actors or make sure they are not spreading propaganda. other people on this side of the aisle, i have talked to about
the need for congress to step in so it does not happen again. emily: we just saw this live video of a mass shooting in new zealand go up on facebook's platform and nobody caught it for 17 long minutes. it diminishes faith in the tech industry to take action on these things. are we better prepared now then we were in 2016 to prevent this interference from happening on tech platforms? rep. khanna: i think we are better prepared. many tech leaders take this seriously and have instituted far greater safeguards into their platform to make sure they are ready to act. you mentioned the new zealand shooting, which was atrocious and awful, and it took a few hours to remove the video from every site, but ed is a hard problem. once the video is out there, it is not easy to remove it.
and is a difficult issue will require investment in artificial intelligence, better coordination. many of the leaders understand their responsibility. tech: do you think big gets how big an issue this is? is there truly the will to invest the human and technological resources to make this happen? rep. khanna: i do. they are citizens of our democracy and want these platforms to enhance democracy. they will talk about how proud they are of the black lives matter or parkland kids having social media as a platform, or how excited they were about the arab spring. i understand these platforms have been abused, so they want to solve this. they know they cannot do it alone. they need the help of law enforcement and the government
to invest in resources. they have a responsibility and there are things they can do themselves, such as disclosures of ads and making sure they limit the virality of propaganda or hate speech. emily: big tech is getting bipartisan screw me -- scrutiny as of late, elizabeth warren calling for the breaking up of big tech and ted cruz supporting her. is that the way to go? rep. khanna: i do not agree with them. i do not watch china to have the only big tech companies. it would be ironic if alibaba, tencent, and baidu were dominating the world. the paradigm should be the microsoft case. -- the government said they could not tie internet explorer and they prohibited that, but they did not break
that up. we see in technology that the giants of the past like aol or yahoo! are often not the giants of the future. strong antitrust protection, yes. breaking up big companies, no. antitrustt kind of protection would you advocate? rep. khanna: you should not have anticompetitive platform privilege. it means you should not be able to prioritize your own product. let's take a concrete example. amazon should not be able to say that when you search for a detergent, the first thing he will see is amazon basics. everyeed to make sure competitor has access to their platforms. ande reasonable steps strengthening antitrust laws is a good thing. that does not mean that we break up these companies into
multi-parts and then allow alibaba to succeed and become the world's platform. emily: you represent silicon valley. have any of the representatives reached out to you to express their concerns about government regulation? rep. khanna: we have conversations all the time, and there are times they think i am going to far with my -- too far with my internet until of rights and enforcement, but also a dutch ultimately they -- ultimately they understand that. they do not like painting with broad brushes a policy of demonization. tech her mains very popular when you go -- remains very popular when you go around the country. tim cook said it best, that we
need well-crafted regulation. emily: the mueller investigation has wrapped and we have the attorney general summary. are you satisfied, or do you want the full report to be released to the public? do you think congress should move on? rep. khanna: we definitely need the fold report released. -- full report released. the taxpayers paid for it. bob mueller did not make a conclusion as to whether the president obstructed justice. barr to makented that conclusion, he would have put it in. we need to see the full report. emily: that was congressman ro khanna of california.
hiring 800 additional engineers in texas, amazon says it will distribute the 2500 jobs applely bound for the big among offices in north america. regulating google, the president met president trump to ease concerns over the search giant and its practices. is it enough to keep individual stakes happy? we ask the attorney general of louisiana. this is bloomberg. ♪
google and alphabet are still being targeted by lawmakers. elizabeth warren has called for their breakup and ted cruz says google silences conservative voices. a group of state attorneys general are laying a dutch groundwork for a probe. we talked about all of this with the attorney general of the state of louisiana, jeff landry. a.g. landry: i was not privileged to the discussion the president had and i would guess it mainly surrounded google's activity in china. i have not heard that they discussed any of its practices as it relates to data mining, the use of data mining, the manipulation in the digital ad space, and content suppression. what we have here are different layers of problems surrounding big tech as a whole.
these are issues attorney general's around the country on both sides of the aisle have been discussing for quite some time. this is not new to us. this is a discussion we have been having as we not only are the chief officers of each of our states, but we are tasked with protecting consumers. emily: what are the issues you are most concerned about, and what kind of action needs to be taken? a.g. landry: i think all of the issues that have been brought up concerned me equally. i would tell you that each of them have a different take. some of them have an antitrust avenue and others have an unfair trade practices avenue as well. we were prepared to discuss these issues with the ftc but that meeting has been postponed and my understanding is they are rapidly trying to reschedule.
when it comes to the digital advertising space, that could be both an antitrust and an unfair trade practice area. emily: are you part of this inquiry i mentioned where attorneys general are looking into whether google warrants a probe on antitrust and privacy issues? have had a: look, number of discussions with additional attorney generals on both sides of the aisle. each of us are looking at some of the same things and some additional issues. you mentioned content suppression as well. we are looking at big tech as a whole to determine what avenues may be appropriate to ensure our consumers are protected. emily: google has responded to this preliminary exploration saying privacy and security are built into their products and
they will engage constructively with state attorneys general on policy issues. republicans and conservatives have historically not wanted to regulate big business. how serious do you think conservatives are now about regulating big tech, and what makes the situation different from historical situations? a.g. landry: let's not confuse what google said. google, as well as everyone out there in the industry that collects data on consumers, is concerned about the privacy of that data. that is not at all what the bigger picture of what attorney general's around the country are looking at. , whatestion to google is are you doing with the data you are collecting? does the consumer know what you are collecting? are they getting a benefit? should consumers be getting more out of what you collect from
them? is the data that google is collecting from the consumer proprietary to the consumer? that is one field. the next question is whether or not google is manipulating the digital ad space. are they controlling it in a way that would be unfair? when you look at the big fixture in the digital advertising space -- picture in the digital advertising space, would chase or goldman sachs be allowed to own the nasdaq? absolutely not. yet that is exactly what google does in the digital advertising space. emily: what do you think about privacy in particular and what role states should play in enforcing a federal privacy bill? a.g. landry: again, when you talk about privacy, that is a very broad subject. are you talking about how
individual companies protect the data that they already have, or are you talking about being openly transparent with the consumer as to what you are collecting from them? emily: when it comes to political bias, attorney general jeff sessions when he was attorney general called a meeting of you and your peers to talk about conservative bias on tech platforms. do you believe some of these platforms are deliberately diverting conservative voices? a.g. landry: some of the actions i have seen on the big tech lot for raise that issue -- platform raise that issue. we have seen it time and time again where they have suppressed conservative content. we reported to them and take action or inquiry, and it is always an apology from their standpoint. at some point in time when the
mistake is made again and again, there is evidence of content suppression. the concern that senator ted cruz has raised could be real. that is what we are hoping to find out. emily: speaking of senator ted cruz and senator elizabeth warren, elizabeth warren advocated for the breakup of big tech and ted cruz said she has a good point. you said about not wanting goldman or j.p. morgan to own the nasdaq reminds me of that. what do you make of their arguments? a.g. landry: it is certainly a possibility. i think it may be a road that may have to be traveled on. leaving generals are all the tools in the toolbox to cure some of the problems we are seeing. we are talking about a virtual marketplace that the average consumer has a hard time wrapping their heads around.
when you go to the digital ad space, i will give you an example. i was trying to purchase a cover for a dog bed i have. i did not need the mattress, i just needed the cover. i went in the field and searched dog cover and the manufacture. what i got on the first page is the covers were out of stock and i had to buy the bed. i went to the second and third page and found the cover i was looking for. the question is, is google purposely doing that? are they driving consumers to more expensive avenues but they are not looking for? consumers have come to have an expectation that when you search for a particular product, what they are getting is quality and maybe quantity and service. that is what we are trying to determine, whether or not the consumers expectation is meeting
emily: facebook is already the target of the federal trade commission for privacy thursday, and on housing and urban development charged the social network with essentially violating -- by restricting those who view housing related ads on things like religion and race. ben carson says -- facebook is discriminating on people based on where they are and where they live. that can be just as
discriminatory as slamming a door in someone's face. we discussed this with alina wang and naomi next. facebook settled lawsuits , saying they would over fall that adsplatform so will not be able to do this micro-targeting on areas like gender and sex. hud is arguing that does not go fast enough and they are arguing that facebook allows discriminatory add. they could target based on where they lived, using a redline. they could enable off-line data to enable with machine learning what the characteristics part of these people based on protected groups.
even if they are not explicitly allowed to target those. we arefacebook says -- surprised by hud's can sit -- concerns and have taken steps to prevent add discrimination. last year we eliminated thousands of targeting ads that could potentially be misused. we will continue working with civil rights experts. agobook a couple of weeks changed a bunch of their ad targeting practices because of complaints around the issues. they said they worked with civil rights groups about these issues. why is hud taking this action? naomi: i think it is just another symptom of a washington regulator continuing to ask questions about social medias -- media's target advertising. the democrats have made it clear
they are intending to seek more answers to questions about adsher targeting discriminate against minority communities. , ass clear that washington the hud secretary made it clear, washington is putting the heat on facebook around this issue. emily: when you look more closely at the categories that advertisers were allowed to take it is interesting thinking about what was going into these products decisions by facebook and why they thought this was a good idea. selina: it is interesting because these policies are only as good as their enforcement. facebook is not required to hand over their algorithms so clearly a data mechanism told them these
are interesting targeted groups that would be beneficial to advertisers and get them more clicks. emily: the government has reached out to google and twitter about their ad targeting progress -- processes. google saying -- we have had processes in years that prevent the targeting of certain categories. our policies are designed to protect users and make sure advertisers are using our platforms in a responsible manner. is there any indication that googles targeting practices are vastly different from facebook, or how the government may proceed in these other cases? naomi: google says it is not discriminating in the same way, but it is clear that google has not been as open with its algorithms and behind the seam -- behind-the-scenes mechanisms it uses. more access to that information
has been a top concern in washington, so it remains to be seen whether there are ways that google is not certifying internally that those advertisements are compliant with housing discrimination laws. emily: nasa's historic all-female face -- space walk has been put on hold for a lack of fitted space toots -- space suits. bothding to the agency, need a medium-sized spacesuit and only one is readily available. nasa spokeswoman stephanie shire holds told the washington post and all-female spacewalk is inevitable. it better be. that does it for this edition of "the best of bloomberg technology. you can tune in every day, 5:00 p.m. new york, 2:00 p.m. san
scarlet: i'm scarlet fu. this is "etf iq," where we focus on the access, risks, and rewards offered by exchange traded funds. ♪ scarlet: big shift at the big board. doug youngs joins us to discuss some etf's. when you invest in canada's companies, is it that are to go active or passive? ready, set, ipo. with lyft and uber