tv Bloomberg Technology Bloomberg August 29, 2019 5:00pm-6:00pm EDT
♪ emily: i am emily chang in san francisco. this is "bloomberg technology." , regulatory and health concerns for juul. the u.s. food and drug administration is investigating the link between e-cigarettes and seizures. ceo.terview with the uber he comments on the path to profitability, how the ride-hailer will fair and a
trade war. we also have a bloomberg exclusive. we will hear from a top huawei executive as the telecom giant remains on the blacklist. dropping all tria after the dow jones reported the u.s. federal trade commission is investigating the marketing practices of juul. invested $13 billion into the popular e-cigarette maker. regulators are investigating whether juul engaged in deceptive marketing. in addition, juul was named in documents by the u.s. food and drug administration as it investigates whether e-cigarettes can trigger seizures. joining us is our bloomberg news andth care policy reporter
a reporter who covers juul. what is the fda investigating? >> they have gotten reports from people that this has happened to who say they have had seizures of thet juul was one e-cigarettes that some of these .eople putting reports in used they said recently, the fda, that there have been 120 seven reports of seizures possibly linked to e-cigarettes. what they have not said is what devices were used in this, and what we found out is that to start this investigation, the reports they were looking at were linked to the juul devices. emily: obviously this is coming at an interesting time. investigating,a but the ftc. what does this mean for juul?
>> this is the latest in a series of scrutiny of this company. with theust came out damaging report showing 190 three cases of serious lung disease and one death that they vaping cause. ftcave the cdc, fda, and looking closely at this product which until now has gone largely unregulated, with deadlines being pushed year to year. this comes one week before a bunch of new devices will hit the market. emily: phillip morris, big tobacco, has its on products. they are coming out with the range of new devices. >> exactly. they did get approval in april.
splitp morris and altria from each other a decade ago. now just after all these reports this week, it became clear, and they acknowledged they wanted to recombine forces to help launch this new type of e-cigarette device. since 2014 inied other markets around the world. emily: just yesterday, we interviewed a researcher who was part of a study that concluded safer-cigarettes are no than traditional cigarettes. take a listen to what we had to say. >> to know whether it causes lung disease, you have to wait 30 years, especially with those young kids taking the risk. there is a strong association between lung disease and those levels, and it increases those
levels, so they are at risk of lung disease. emily: lung disease is one thing. seizures are another. tell us about the reports the fda has been getting about seizures. them thewere three of fda focused on early on when they were just starting to look at this in october that we learn from these internal fda documents. there were two from parents of 16nagers, both boys, 15 and -- they were separate reports, but the gist of them was the boys had been using a juul. they inhaled. said her sonther felt a shadow coming after him, then started convulsing. she ran upstairs to help him. the ambulance came and they
found a juul under the unconscious child, so those of the kinds of reports they are seeing. she said they went to the er and have talked to a lot of people in the health care community and a lot of them agreed that juul was the reason this happened. emily: two moms here shaking their heads. >> it is curious listening to what she was saying there. approved aas the fda new type of device, which had held back from giving full approval, saying it was safer than cigarettes. the fda went out of its way making two statements in approving it, which is, number one, it will not say it is safer ,han cigarettes, and number two because it is similar to cigarettes, they will not allow phillip morris to advertise it
on tv and radio. spoke with a north carolina attorney general who has sued juul, multiple e-cigarette companies, specifically with regards to their marketing and attempts to get young people to use these products. take a listen. fda should ban these products when they are not targeted to adults. if an adult wants to buy it, i have no problem. that is their right. fine. what is happening is children are buying a large number of these products. what are they investigating when it comes to the marketing of these products? ftc, it ist just the also the fda, the health committee in congress is looking into marketing practices. they want to know whether they targeted kids.
kids got interested in these devices. they are extremely popular among under age vapers. they are trying to find out how much juul targeted them, if they did it all, and they knew that this is something kids might pick up. emily: lots to follow. i know both of you will be doing that. thank you both. regulation, the head of france's antitrust unit has largely played second fiddle to her eu counterparts and she was appointed in 2016, but with a shuffle of top technocrats on the horizon, that is about to change. we have the story from paris. >> over the years, she has become known as the nemesis of big tech in europe. she find google more than $9 billion. her term is about to end in the next few weeks, but the new
woman could become the most feared antitrust regulator on the old continent. old, and she has been the head of france's antitrust regulator since 2016, entere is about to another phase of her mandate. speaking to bloomberg at her paris office, she said she has set her sights on facebook and apple and online payments. aboutso has big concerns asital assistants such google home and amazon echo. she said her team is planning active investigations by the end of this year or early next year into online advertising, which could impact u.s. internet giants.
france has started targeting those so-called companies with the 3% tax on national digital revenues, a tax that will remain in place until a global agreement has been reached at the oecd level. that is why emmanuel macron told donald trump that the weekend at 7 that. targetedtech could be faster in france than at the eu level. in paris, bloomberg news. emily: coming up, two years since the new ceo took the helm at uber. he tells us as the company has changed, his vision for the future as the stock trades at an all-time low. you can check us out on the radio, the bloomberg app, and in the u.s. on sirius xm.
♪ ago, travisears kalanick was supposed to resign due to scandals. a former executive, dara khosrowshahi, was brought in to clean up the company's reservation. since then he has pushed the company beyond ridesharing. it hasn't been an entirely smooth ride. an ipo sparked excitement, but investors were not. i sat down with the uber ceo with an exclusive and and-ranging conversation, begin by asking the question if he made the right choice and taking the job. >> we have resolved the governance conflicts.
there were many legal issues the company was involved with as well. we had softbank as a partner. you want them as a partner in investor. we have a great investor base. companytaken the public. revenue has grown 75% since i joined. we have a path to profitability. while we have had bumps on the road, i'd like the position we are in now for the next years. emily: there have been bumps on the road. , ridesharing companies have been transformational. the asnuber -- can uber transformational as it has been over the next decade? >> i think it can. uber has brought transportation an opportunity to a small segment of the population.
we have 4 million driver partners all over the world, which is a huge number, unparalleled, but we want uber available to everybody. ,e are going into the next step introducing other transportation choices to uber. for example, we are testing buses in cairo to bring the cost of uber down. we are introducing bicycles and scooters for personal electric mobility. anyway you want to get around your city, we will be there for you. goods, be mostly uber but we will have third parties, transit, lime. if you want food, local commerce, uber eats and other services will be there for you as well. emily: can uber the transformational and stop losing money? the prices sound attractive, but can you create a good business
dollar,share for one $1.50? >> yes. if you look at our rideshare business, it covered our million, sos $100 the rideshare business itself is turning quite profitable and we believe the prophets of the rideshare business will grow not only topline, but bottom-line as well, and there are other --inesses, eats, autonomous these are extraordinary opportunities we are funding. i believe we will prove to investors that we can take on a serial basis big parts of our business, turn them profitable, use those parts of our business to find investments in other areas. emily: there are execution issues. loss,st had your biggest $5.2 billion. the stock is trading below the ipo price. you have hiring freezes on
various teams. you have fired some of your top hires. can bed you believe uber possible, but how confident and quickly can uber be profitable, and how quickly? >> i am very confident. the losses we reported was a 5 billion dollar loss from an accounting perspective. i live in the real world. in the real world, our ebida losses were lower than q1 and were on a good path in terms of our ebida losses as well. you are right. none of this will be easy. all of this will take excellent execution from all of her teams, marketing, et cetera,, and we would demand our employees do more with less, and to execute incredibly effectively to grow topline and bottom-line. emily: is pricing the main lever you pulled to profitability or
other drivers? >> scale. scale. it is getting big when you have over one billion rides a quarter . we think we can use technology to be more efficient. emailingle, instead of call center agent or calling a call center agent if you have issues, you can do it in the mobile app. these are technology innovations that allow a better experience and bring down costs, so the culmination of growing topline over 30%, technology innovation to delight the customer, and good old-fashioned efficiency making sure costs don't grow as fast as revenue. all of those together are the formula for profitability. emily: coming up more of my exclusive conversation with uber ceo dara khosrowshahi on trade, and charges against the next employee -- a former employee,
♪ week, aarlier this former uber engineer pled not guilty to charges of stealing self-driving technology from googles waymo unit. it adds a new criminal chapter to the saga. this is one of many legacies dara khosrowshahi inherited when he took the top job. i ask him if he still feels the weight of previous leadership. ofyou need different kinds management for different times in the element of a company. every management has their faults. i have my faults, but they built a great company, and now they have handed it to me. i have to take that great company and make it greater. i think i am that for the job. while they made their mistakes they built a great brand that
had weaknesses, but incredible strengths. it is my job to take it to the next level. emily: the guy who ran the trucking business that uber bought was just charged with stealing self-driving technology, stealing trade secrets. what do you make of those charges? when we wasn't here brought anthony on board, but what i do know is we went to incredible depths to make sure any information anthony might have acquired from google, and it sure looked like he did come and did not make it over to our company. , andwas our responsibility we were incredibly diligent making sure that we were not guilty of anything that could be nefarious one way or the other. we think you build the right way. anthony is an incredibly talented person. it did not work out, but we did the right thing. the person who
spearheaded that acquisition is still on the board, travis kalanick. i ask you this and have to ask it again, do you question his position on the board? i am going tot live in the here and now. amounthas an incredible of historical knowledge about the accompany. -- the company. he is incredibly bright, as are other board members. i use him at the board. he is a strong advisor. his background is incredibly useful, and he is supportive. ultimately, we are a public company and the shareholders will get to pick their own board and that governance process will take care of itself going forward. emily: you talk to him often? >> during board meetings and offline. emily: he is on the board for now? >> he is, and he will be on the
board tomorrow. emily: let's talk about the future. those who say uber is a ridesharing and food delivery company, what is the next big idea? >> the ideas we have right now in this building are plenty big ideas, ridesharing, food delivery, micro mobility, autonomous, freight revolution zing how truckers move around. we have elevate as well. we have enormous ideas, and now is execution time. emily: where is the technological innovation happening at uber? >> it is happening all over. we are a combination of the digital physical, and the two come together in unique ways. we have interesting machine learning algorithms looking at live supply and demand in the are lookingiders
for and where they are located, and giving our drivers guidelines of where to go to meet that demand. this matching of supply and demand in a dynamic way in the pricing we have is unique. we continue to innovate their, and we innovate in different spots, such as elevate, how we can bring together different modes of transportation and type them together. emily: you are in charge of not just visualizing the future of transportation, but to get there and create that future. when you look into the future, what does the future of transportation look like? you have google, tesla, traditional automakers, flying cars, and helicopters -- how will this come together and be different? >> we believe we can bring it together. i believe we can have that singler app, when you wake up in
-- singular app, where when you wake up you can get what is relevant to you with live pricing, et cetera. we will tell you mass transit you can take the subway, a bus, and uber, and you can take and elevate as well. we are uniquely positioned as a company to have all that information together, the same thing for transportation, local commerce, and we can do the same thing for logistics. emily: we will have more of our exclusive interview with uber ceo dara khosrowshahi after the break, including how uber will fare in a possible recession, a trade war, and the future of uber eats. that is next. this is bloomberg. ♪ from the couldn't be prouders
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emily: this is "bloomberg technology." earlier the show, we brought you the first two parts of my ceo.rsation with uber's in this final part, we talk about the newer areas of business like uber eats, autonomy, e scooters, but how re if the fair -- fa economy slows down? >> the consumer in the u.s. is very strong. we're a very global company. the majority of our transactions
actually are outside the u.s., so we look at global growth. to the extent global growth slows down, that could be negative for us, but if mobile growth slows down, we will have more partners wanting to come up with a platform because we expose very flexible labor opportunities. i think the growth of the company is such we will be relatively resistant to any macro slowdown and we're certainly not seeing any slowdown with the u.s. consumer as of yet. if we aret his plan b in a full-blown trade war? we have heard about investing in vietnam or brazil. what is the backup plan? >> we are an asset-like company. we don't have to go out and buy cars, etc. -- we are an asset-light company. we will make sure partners can source vehicles in an economical way. many of them source vehicles secondhand. they will source used vehicles,
so to speak. parts of the business where we are importing bikes, for example, there's some additional specs, but it's not having any material effect on the company and we are confident of our growth over the next few quarters, trade war or no. emily: you have a food business, trucking business, he bikes, scooters, buses, self driving cars, flying cars. transportation of every kind. emily: you asked the public to think about uber as the amazon of transportation, but amazon was a bookstore for a long time before it evolved into other stuff. is now the time to focus on the core? >> we have been in the ridesharing business a long time as well, and that is ms. is absolutely developing and its profitability developing -- and that business is absolutely developing. generally, we are either holding or taking share in businesses.
we have a core business that provides the framework or us to build multibillion, and i think it would be criminal if we don't take advantage of that. you are seeing more and more apps and companies building ecosystems. the super apps are winning and we can be the super app of transportation, so to speak, that allows us to acquire customers at much cheaper rate than competitors. it allows us to keep customers because we have a deeper relationship with them, and we think long-term if you can acquire comfort -- customers and keep them longer, that is a winning formula. emily: uber eats is what he percent, 30% of the business now? >> yes, and growing quickly. bookings grew over 90% in a year and year basis. we are the largest global player out there and we continue as a
category. food, we believe can be as large or even larger than the ridesharing category. we love that business and continue to invest in it. emily: there are so many competitors that do exactly what you do in this market and other markets. what if you are just subsidizing our meal and you don't and market share and this is just a giant, hungry money pit? >> early on, people could have accused the rides business of the same. business is the moving toward a path of profitability. as you build these businesses where the potential is so big, there is some subsidization that goes into the marketplace in order to create efficiencies. eaters, set of restaurants, and there is investment early on. there is always competition in the categories. we have the advantage because we have hundreds of millions of
consumers on the rides side that we can essentially introduce to our brand and let them know that there is more to uber than just writing, but there's eating and other areas to enjoy -- more to uber than just riding. emily: have not heard a lot about scooters lately. what is the likelihood you are going to pull out of these businesses? >> every business is going to have to execute and carry space, so to speak. we are a big believer in micro mobility. it is an early days. in early days. increasingly, i think mayors of large cities around the world will be interested in moving ways that do in not pollute, that do not create traffic, and we believe micro mobility can be part of the solution. reaction, i more want to get to new york where bloomberg's eric newcomer is standing by.
curious what stood out to you there. i found it interesting that he did not indicate uber would be pulling back anywhere, but that scale thate and more would lead them to profitability. : yeah, it is the fundamental challenge, that it needs to be a growth company to excuse the great losses, but thoset needs to cut losses at the same time. face.s the challenge they clearly, the hope is that the ridesharing business starts to contribute more in spending elsewhere. they talked about being more like amazon, but we just have to see that happen. gaapas a $5 billion plus net loss in the first quarter and that is on everybody's mind. emily: over has said over and over that that was an unusual quarter, that we will not see those kind of losses.
have been shares trading at an all-time low. they rose slightly today, but why are investors not buy into this? >> i think especially with the economy being uncertain, stocks down overall over the last there'sf weeks, i think some concern about there's a lot of belief that goes into over. you have to believe other investors are going to give it a long leash to complete its .ision in a time of uncertainty, is there the appetite to bet on over when there's so many risks? emily: do you buy the argument ? at uber is recession proof eric: i think he makes a smart that if customers want to spend less, drivers might work less, but there's the question of how little can you pay drivers? there is already so much pushback on uber. in california, we are seeing movement from uber to suggest
its own legislation. in places where uber is locking in the minimum bound of how much you can pay drivers, how responsive you can be unemployment, and as he brought up, there are still concerns. drivers have to get quality cars to provide the service and of those cars cost more money in it'seconomic times or harder for drivers to buy those cars, it shortens labor supplies , so this all sorts of factors. uber has seen this play out around the world, so they know a little bit more than us looking at one country or the next, but i do not think it is a certainty that they are recession proof. emily: this is the first time we since theg from him charges against andrew 11 dusky. -- andrew 11 eric: i was certainly surprised
he said it seemed like andrew files from google. ,t was a pretty blunt statement and he also made the point that this happened before he was ceo, but it is amazing. now years since his resignation, that this is going to hang over uber. this trial will be covered, and this is a big silicon valley moment which does signal to me uber's pastpast -- is not over, the controversy could still come back up. emily: what are the things you will be watching to see if uber is delivering on its promise to be profitable? not immediately but eventually. eric: i think we need to see more data on the ride-hailing
business. nobody should expect them to be businesse in each right now. i think the real question is -- provide enough granularity to understand that it's old businesses can be as profitable as is said? i don't think we truly understand that. there is not the breakout in the perspective of heroes london. here is when it started to modernize. -- we have been here at number of years. here is when it started to monetize. can they show in the core old business that it works? much forank you so that analysis. coming up, president trump has promised to relax restrictions on quality -- on huawei. the company explains why it a blacklist. on
is wheneptember 10 apple is unveiling new iphones and potentially a slew of other products. they will go down at the steve jobs theater of the company's headquarters in cupertino. bloomberg has reported three new iphones will be unveiled. earlier this year, president trump blacklisted chinese smartphone maker quality -- escalating trade tensions. as a result, multiple u.s. businesses stopped doing business with the company immediately. fuoline hyde and scarlet asked what the u.s. is losing out on with restrictions in
place. look at the global smartphone market and you talk to their loyal smartphone customers, you will find the products we are offering our superior products with high quality and the features and functionality of all the other at a competitive price. and that is something consumers are missing in the u.s., both in the smartphone area as well as other products and technologies we sell and support. scarlet: if you could be more specific on that. one big issue we have is the lack of broadband access for people in rural parts of the country, partly because companies do not want to pay for it. why is it advantageous for rural communities in particular to use huawei gear? well, there's a few reasons. frankly, there's over 24 million
consumers in the areas that huawei covers. we provide technology and capabilities for operators in these regions. because of our experience, many, many years of experience in rural china, building up the rural chinese technology -- or the communications networks. as we go forward, we are able to provide that expertise, both in the product dilutions that we both toat are scalable, high levels to large customers, but also to the small customers. along with our services and support that we customize based on the needs of the customers. the rural customers aren't the small customer base themselves and are limited in their funding and capabilities and resources, so we help fill that gap. scarlet: a headline that crossed
a couple minutes ago is u.s. prosecutors are investigating huawei,-- investigating potentially expanding their probe. caroline: this wraps into the issue of intellectual property, which is the main accusation. the new additional instances of alleged technology theft -- is this something that is new to you? how are you responding to prosecutors? in touch with prosecutors in the u.s. government? >> i cannot really comment on .ngoing litigation i believe that information is related to those investigations. what i can say is huawei is a leader in ip. we have over 90,000 patents globally. we have 20% of the global 5g essential patents, and we are a proponent of fair and equal licensing and so on.
over $6 billion worth of ip from other companies, and --also sublicense our ipo to our ip to other companies. we are concerned about ip theft as much as anyone because we do hold a significant number of patents, and we would like to see those issues addressed, but we are a proponent of, you know, of due process and handling of ip in appropriate manners. scarlet: we have seen many u.s. suppliers finding loopholes, ons to get around the ban selling to you. what sorts of negotiations are you having with these u.s. suppliers? primarily, our ongoing communication with our u.s. suppliers is just that, our
continued partnership with these suppliers. i think the concern we have going forward is related to the impact this will have on the u.s. economy. we're talking about $11 billion annually spent by huawei on goods and services in the u.s. with u.s. companies. oft is a significant amount dollars in the u.s. economy, but it also translates into a large number of jobs. if you look at economic indicators, that is equating to somewhere between order thousand and 50,000 jobs. and these are not typical manufacturing. these are highly paid, highly skilled jobs in the american there are a time when questions about the stability of the american economy. emily: that was huawei's vice management and
emily: two of the biggest names in the technology world sparred -- on issues ranging from ai to the future of education. jack ma took a shot at elon musk's mars dream. >> i think it's easy to go to mars when you go on the top of the hills of the building. just one step, you go to mars, but you will never be able to come back. >> that's not how it works, sir. like you, butoes we need more heroes like us, working hard on the earth, improving things every day. that's what i want. emily: on the subject of
artificial intelligence, jack ma bets humans will prevail over machines while elon musk fears doomsday is coming. facebook is already the biggest social network on the planet, but could it be the number one name in e-commerce? ace book marketplace has more than 800 million visitors per month, more than the number of amazon, andalibaba, ebay, and its secret weapon may be instagram. feature hasshopping surpassed $1 billion in its first year. couple that with a survey that says 10% or 20% of internet users are willing to shop directly on social media platforms. to discuss, kurt wagner, who covers facebook for us, is here. how has progress been thus far? kurt: we don't know. they rolled out this check out each are just a few months ago. the idea is not even that facebook is taking a cut of .hese sales
the hope is advertisers will then spend more on advertising if they feel they can convert a sale on the app. that has always been facebook's thing. leads to more at dollars for them. emily: when you open instagram, you are doing something different than when you open amazon. it go to amazon, you are intending to buy. when you are just checking a seed. to 10 just similar in that it is more of an inspiration play. maybe you are not actually shopping that you are in a mindset where you are ready to explore something new. -- it is similar to pinterest. specifically there to buy something. at the same time, you might be convinced based on the feeling you have going through your feed that those shoes or that sure looks cool. emily: we have talked about facebook market place, which is sort of like craigslist on facebook, but you're dealing with friends and friends of
friends, and that appears to be going well. kurt: i have heard the same. i go on there, it does look a little bit like a yard sale situation, but i have sold rings on there and actually had incredible success in getting people to reach out, much more than craigslist -- i have sold things on there. i don't know how much is the social dynamic of being able to see someone's photo, use a service like messenger that feels more familiar than emailing some random email, but it does seem to hit a need, which is there's a lot of people with extra stuff, and a lot of people looking to buy stuff in the neighborhood. might as well put them together if we already know who they are. emily: facebook has been trying to unify the infrastructure of its messaging services. how with these commerce services potentially come together? kurt: i think there is a huge customer service play to this. any time you buy something
online, you usually get an email receipt. if you have customer service issues, you have to go to the website, figure out who to call, who to message. it is a little bit disjointed. imagine if you could go to a retailer, you can pay, and basically have the whole process through a messaging service. i think that is part of vision. i think they do see the potential for taking it from parts of the online shopping experience and putting them into a place you are already familiar with. emily: could this be a good news story in a sea of bad news stories? moreght now, it creates use cases for advertisers. we will see if they put some at some point.it emily: thank you so much. interesting context. that does it or this edition of "bloomberg technology." we are live streaming on twitter. be sure to follow our global news network, tictoc, on twitter. this is bloomberg. ♪
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paul: welcome to "daybreak of shrill you." kathleen: i'm kathleen hays at bloomberg world headquarters in new york. inina: i'm selina wang beijing. we are counting down to asia's major market opens. : here are the top stories we are covering in the next hour. president trump indicates new trade talks after china said it will not hit back on tariffs. on.ings season rolls