tv Best of Bloomberg Technology Bloomberg December 22, 2018 4:00am-5:00am EST
emily: i'm emily chang and this is "the best of bloomberg technology." we bring you our top interviews. facebook hit with a bombshell, the new york times reports the network cut deals with 150 companies to share more data. is filed big suit against facebook over cambridge analytica. apple versus qualcomm, both sides of the showdown way in after china supports a ban on
the sale of iphone models. to hittingtion hell model three milestones, we look back on the year that was tesla. after a scandal erected over facebook's open borders overuse or information, those are under scrutiny again. the new york times reported that after facebook tightened rules the information that could be linked to outside apps, it revealed that facebook cut special deals with companies. gave spotifys -- the ability to read and write. signsok helped apple hide that it was asking users for data. access tork times got enable article sharing. 100 50 companies had access to more data than
disclosed, impacting users. this comes as it faces a fresh legal challenge over the cambridge analytica scandal. talkeduss the latest, we to rich greenfield who has a buy rating. facebook gave spotify and netflix the ability to read and write my personal messages? what does that mean? trying tocebook is allow you to do is to use facebook in a way that is better integrated with those apps. to a friend a show and you do not have to copy and paste. it is integrated. you need to have the permissions , if you delete a message, it would delete it in your chat history. go in could spot if i
there and read something i sent to a friend in 2013? >> that is unclear. what i want to know is, there is a big difference between allowing you to do that kind of messaging and being able to read all of your personal messages with people who are not using spotify and it is not clear where this falls. what matters is that facebook downpost 2014, it wound those deals to share data with third parties. this is an example of how that was not true. emily: one of these was ongoing with yahoo! as recently as this summer. facebook has a post today. features gave companies access without people's permission nor did they finally our settlement with the sec.
partnersis saying that did not use this data inappropriately even though there is no way to verify that. do you think that all of this bad news is going to impact growth? >> i go back to what sarah said. you think about a consumer, you take a song and you want to share with a friend. copying a link in going into facebook and looking up your friend and pasting it in is cumbersome and not user-friendly. be thek has wanted to social layer that connects you and everyone that you are friends with across the internet. many of the things who are talking about, or that the new york times are talking about, tie back to wanting to be that social conductivity, share content with your friends.
this was to make your life better. that easy in the maelstrom facebook seems to be stuck in now that the company had evil intentions. standpoint, this was done to make life easier and usersin part why the liked using facebook and instagram. the reality is -- emily: i do not think, yes, this is making it easier but they problem is not so much what they did but how they talked about it. they were telling people they had full control over their data, that they could opt out of these things. yet, we hear that they are. this is something consumers want, was facebook being clear about how it worked? there are several examples that they were not. >> the article also says netflix
was accessing personal messages and facebook said that was not true. just because you put words on paper does not mean every word was correct or that capabilities were being utilized. it takes two sides to utilize data inappropriately. aspects to this and we are focusing on facebook and not the third parties that were trying to leverage this and were they leveraging it or was , which,it was available i agree was an issue. let's talk more specifically about what facebook got out of this. some of the data they got back from these companies enabled to power the people you may know feature and i have seen creepy, it feels
psychiatrists and patients being connected to each other when there is no reason facebook should have that information or that those people would want to be connected publicly. talk to us about what facebook got out of this. >> facebook is collecting data from every avenue a can and even -- every avenue eight can and story, location data, there were users on media who posted a story about how they turned off location data and yet they were getting location-based ads. said, that is one way to turn off your location. your locationget and there is no way to opt out and that does not sound like what they were explaining about how you have control over your
data. they should be clear with people about how this works because in confusion, there is fear. emily: facebook has been suffering, the market cap as it rose to the middle of this year and it started to decline significantly which, i know you happen more optimistic about the idea this will not impact growth significantly, that this bad news will not be good at -- not be bad for growth. as a user, these revelations bother me. i have thisl information when i signed up. are you changing your opinion that this will hurt growth? at themight want to look cookies tracking you on every days -- every device you use. i would argue you have hundreds of cookies tracking everything you do, everything you click on
is being tracked by some site. the premise of internet advertising is tracking you and everything you do, pictures you look at, everything you do is tracked and used to target. this is a broader issue that goes beyond facebook. and sarahh greenfield frier. versusup, it is apple qualcomm, in a battle around the world. we will hear from the attorneys representing both sides. if you like bloomberg news, check us out on the radio, listen on the app. this is "bloomberg." ♪
ruled in qualcomm's favor, banning sales of iphones. we caught up with don rosenberg tuesday who says that apple needs to take this seriously. in 2017. case started apple and its attorneys have then involved in every process going on. they were aware that a preliminary injunction was being sought and it was ordered. it.s not and if or will this became effective immediately. it affects older iphones. throughts the iphone 6s x and the only reason it does not apply to later devices is because when we brought the suit, it did not exist. emily: when do expect this to take a bite out of sales? don: it should have been taking a bite and should be right now in china.
the order requires them to stop selling, and stop importing any devices between those model numbers i suggested. the new models will be coming soon. we are in the process of seeking an order covering new models as well. developments in this global patent showdown every day. mollenkopfth steve in august. take a listen to what he had to say to were he hopes to get back to. no betters opportunity for qualcomm then to work with apple. it makes sense the technology leader should be partnered with the product leader and those things tend to work out. the way we think is that you get the disputes figured out and you move on. i hope to be in that period
according to the schedule we have laid out. emily: this seems to have gotten uglier. is that possible? don: as steve has said, this will resolve one way or the other, either through the court and rulings such as this recent china ruling or through some kind of settlement process. that is the way these things terminate. it will end. do we want to do business with apple? absolutely. iny are a significant player the mobile communications market and if we were to get there through settlement or because one of these mini milestones of these many-- milestones have occurred and that brings parties together, so be it. emily: there seems to be
confusion on the pathway to resolution. are the companies in talks? we are not talking about whether we are in talks. the companies having gauged in the past and continue to on some level. there is apparent to everyone they can watch this that the companies are involved in extremely difficult litigation processes and were bound by certain confidentiality requirements, were bound by the things going on in court. the process of negotiation is something we are open to the. emily: the sec has brought an antitrust case against qualcomm. qualcomm has said you are in settlement talks with the ftc. what are the chances these cases go to trial? don: there is a pretty good
chance they go to trial. we are anxious to go to trial in san diego where we can prove that apple and its contract manufacturers, have breached their agreement. they have not paid us in close to two years for intellectual property that they have been paying us for in some cases for 10 years. apple has told those andfacturers not to pay us they are obeying. we would like that to get to trial and we would like to establish our right to have those royalties paid both for the past and going forward. the case with the ftc, we have been in settlement discussions. we hope to resolve that case. if we do not, that is scheduled to go to trial in january. we believe we have strong defenses. the ftcve the basis of
case, like other cases, is unfounded, and we think we can prove that. emily: the general counsel there. a lawyer for apple contract manufacturers has a different perspective. i spoke for a lawyer representing those manufacturers about the global patent showdown. that relatesrder to software, does not have anything to do with the technology at issue in the lawsuits we have against qualcomm, where we are seeking about $9 billion in damages. from what apple has been saying, they have an easy software work. qualcomm has been engaging in distraction techniques meant to take attention away from the fact they are facing three big lawsuits in the united states that challenge their business model. emily: qualcomm is not happy response, the
general counsel telling us they are obligated to immediately cease sales and prove compliance in court. you are representing manufacturers. what happens if apple cannot sell its most popular devices on the chinese market? >> i do not think that is going to come close to happening. qualcomm is exaggerating. isis deceptive, their ceo saying there is a settlement on the horizon which is false. is something the sec looks into. that order is not going to affect contract manufacturers i represent. qualcomm is trying to take away from the fact that the united states government is taking them to trial, arguing and claiming ,hat their business model monopolistic practice and the
abuse of the law, must stop. that is what this is about. the patents they are claiming in china is not something they created, it is something they bought and has nothing to do with the legal hurdles they face in the united states. emily: what would it take for all sides to get serious about a settlement? ted: qualcomm would have to cease its illegal practices. qualcomm took an early lead in technology and it obtained a monopoly and they use that power to tax innovation, to add a double price, something no company could ever get away with when they sell chips to product manufacturers. to stop that, it needs to compensate the contract manufacturers for the injury and harm.
has been talked about as apple versus qualcomm but it is more than that. the buildersnts, of the devices, the united states government, regulatory authorities around the world, china, europe have found this conduct to be illegal and have imposed fines. illegal needs to cease activity and to treat competitors and consumers fairly. its behavior is injuring consumers around the world. that was the lawyer representing the contract manufacturers that assemble apple products. on itsfuture may rest food delivery service and more. after new reports on russian hackers heavily targeted black users, the naacp is returning a
emily: in november, gruber released a limited set of financial information, a move each quarter.kes it offered a glimpse into his food delivery business for the first time. billions generated $2.1 in gross bookings, 17% of its $12.7 billion in gross bookings last quarter. emergence of uber eats has been good news as the company prepares to go public. it at awas asked about conference earlier this year. >> lots of companies would kill for 41% growth. and we havee number businesses like uber eats that are growing at 150%.
there are some businesses that are going to mature as a scale. as they are scaling, we demonstrate in markets that contribution margin is positive. we are in a battle with lyft. that is a challenge. emily: i caught up with the vice president monday. >> i joined the company four and a half years ago to help figure out what other businesses uber could get into. is about how to use its urban logistics platform to launch new businesses and for people to connect with citizens -- cities. we said there are a lot of things we can do and let's look at the things we can move. let's call it a vision for everything. food was a big part of it. it became about 95% of what we
do on a regular basis. we were not expecting food would be as big as we thought. at the beginning, we thought there were a number of businesses. we decided to focus on that. we do uber eats. of gross is 17% bookings, that means all food orders, not just what uber is taking. give us an idea of how fast the business is growing. say when wed to would get to half. hard for me to speculate and the reason why is we just take our three-year anniversary. inlaunched the business 2015. it is $2.1 billion. it is growing faster than what we thought. it is hard to say.
been if weh has focus on the customer and restaurants and markets and what people want, it will end up being what it is and it is bigger than what we thought and it will continue since -- continue to surprise us. emily: it is profitable anywhere in the world? jason: we have a number of profitable markets. we are focused on growth. we wanted to make sure we could get the economics in shape and we did that. will you get more specific than the ipo filing? jason: he has said we are going public next year. i'm going to leave it to him to talk about the specifics. emily: the ceo has expressed interest in delivering groceries. where does that stand? and, we areof that, staffing a team in toronto to address that opportunity. foode grocery and prepared
on a bit of a collision course, if you will. grocery store,a you have got prepared food and a lot of the movement on the restaurant side of things since fast casual started picking up is people are trading that prepared food as a replacement to grocery. you are going to see those move together and we are making a bet. we are starting to look at it. emily: looking at delivering prepared food from grocery stores? jason: we do that today. full-fledged grocery that is adjacent to the eats business. emily: the uber everything vice president. coming up, we speak with derrick johnson, naacp president, why the organization is asking congress to further investigate
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"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. emily: welcome back to "the best of bloomberg technology." i'm emily chang. one of the oldest civil rights organizations and is calling on users to boycott facebook for one week after a report shows russian hackers targeted black users leading up to the 2016 election. derrick johnson joined us from baltimore. why are you asking users to logout, not just to facebook but to instagram? derrick: they are part of the same company. we are concerned with the pace at which facebook has responded
to the reality that a foreign nation sought to subvert democracy by suppressing black votes. that is something that no u.s. corporation should tolerate, especially a company like facebook, where african americans are over indexed in terms of their usage. we should be protected and our corporation should make sure tomography is safe. emily: you have returned a monetary donation you received from facebook. you say as much in a tweet. how big was that and what was the response from facebook? inrick: we have been communication with facebook. our goal was to make sure they hear our concerns. facebook sought to be supportive of the naacp. value system was a line. any time a corporation refuses to support democracy by making sure citizens are protected, the
nature of a company using racial hatred to divide this nation is something that should not be tolerated. our mission fights against that so we could not accept any donation at this time. emily: was it sizable? derrick: i prefer not to get into numbers. donation that we would have accepted but at this juncture, anytime you have this itnario, compounding it is was targeted by a firm hired by facebook did began to do research. what would have happened if that would have been me or the naacp? with thisn solidarity company. facebook says they have undertaken an audit by a key civil rights leader to work on these issues you are raising.
expanded their voter suppression policies, added resources when it comes to safety. facebook iserg says committed to working with leading civil rights organizations to it civil rights on our service. i am grateful for their guidance. we know we need to do more to listen and take action to respect rights. have you gotten to speak with sandberg or mark zuckerberg? derrick: i have spoken with cheryl a couple of times. i agree with her, facebook needs to do more. one of the things i raised was the audit, it cannot be an audit in the media and individuals three levels down are responsible. it needs to have a level of importance to ensure that change -- that facebook changes its
culture and maintain a positive relationship with the african-american community. emily: what was sandberg's response? derrick: she was nice and heard what i had to say. for us, it is a matter of seeing next steps. going to take the recommendations in the audit and theyment those and are going to ensure that african-americans are not used in a proxy fight for political gain? emily: you are not the first person to complain about the black experience on facebook. we spoke to a former employee who raise concerns about the treatment of african-american employees at facebook and how the company treats black users. take a listen. of the do not think black experience which is a shame because black users are over performing on the platform. a missed opportunity,
missed financial opportunity, for facebook to not engage with those users. emily: what is interesting is that tech companies and even facebook may not realize the power of black users on their platform and yet russia does. what does that mean for the future of your advocacy and the naacp advocacy? derrick: it is important for facebook and the tech industry to appreciate and respect the of the black community and that is reflected in not doing more ads, it is reflected in their corporate hires, whether there is enough diversity in decision-making that where a critical opportunity presents itself, they can seize upon time,while at the same recognize there may be cultural sensitivities and avoid those. emily: talk to us about what you
are calling for. derrick: we want to bring attention to the urgency of facebook taking action to ensure african-americans are not targeted by foreign nations, that racial hate is not used on their platform, that they look at their diversity in terms of their decision-making and on the board. , that they arers towards african-american organizations or our community. emily: what do you want users to do? is a temporary boycott enough? derrick: what we're doing now is we asked our members and supporters to log off and not use facebook for a day or a week and our goal is to make sure facebook understands the nature of what has taken place. intolerancet racial has grown is something that we
are confronted with an some people are living in fear. on facebooktered and the fact that platform was used to suppress votes needs to be addressed, the fact that facebook hired an outside firm in that firm begins to target african-american organizations, that needs to stop. to own up to the fact that diversity is important and their leadership should ,eflect a diverse population particularly a community that over index their products. emily: derrick johnson. u.k., uber has lost a bid to overturn a court ruling that allows drivers to get a minimum wage and holiday paper the court of appeals dismissed the challenge. it is the third time uber has lost.
dozens ofiewed current and former tesla employees and a certain amount of love-hate is expected. what surprised you most? chaotic and became in the company over the last two years. about elon musk talking the model three as some of the most difficult times of his life. what we did not understand was how difficult it was for everyone inside the company. people talked about it as being a year that was so challenging that many of them ended up leaving. everyone inaid that the company ended up being in an abusive relationship with elon. it was a year that was transformative. they got through the process of making the model three. you had such a huge exodus of talent. emily: they talked about him in
your piece being 95% genius and 5% mad. one of the anecdotes was this idea of rage firings, where he would say i have to fire someone today. i just do. the biggest challenges inside the company was that mr. and ife is passionate you happen to encounter him and you could not answer his question right away, and answer he was looking for, you might be fired. one executive told me she had forbade her employees from walking close to the desk that musk used because she was terrified that some random encounter might result in them being let go. it is a play where you elon musk -- were elon musk's personality
impacts every aspect of the company. eccentricities, has a hugeemper impact on the company and it is a reflection of who he is. emily: we cannot ignore the fact that tesla hit some huge model three production milestones. i have this chart showing how many more cars have been produced every quarter. tell us about the successes. reported, this was a year for everybody. you saw dozens of executives leave and yet they recorded this profit in the third quarter and everyone is waiting to see if they will do it again. emily: take a listen to this from "60 minutes." a roller coaster year, the sec issue seems to be resolved.
sec.do not respect the >> your abiding by the settlement? >> because i respect the justice system. emily: what is your reaction? dana: i was not surprised. this is someone who had to settle because of stock prices. the settlement says they have to appoint two directors. they are within that window. he is not abusing the settlement degree. he is not following the spirit in terms of his public statements but he is not out of compliance. executive turnover, there has been a lot. do you think musk can continue to lead the company without turnover? continuehe is going to whether anyone wants him to or not. he is the largest shareholder.
it would be the largest package in history. nobody can force out elon musk and the board is not inclined to do so. it is a board that does what elon musk tells them. can they maintain this position in the marketplace? investors andand counterparties in this industry, trust is everything. we buy a car because we trust it is going to do what it is supposed up. suppliers hand over parts without asking for cash on delivery because they trust they are going to get paid. one of the challenges is that mr. musk has said he signed an agreement but he does not respect them. there is a question, at what point to people run out of trust, how much rope to they give an executive before they start to say, we are worried and when that happens, once the
trust is gone, it is hard for a company to hit full speed. do youhow much rope think current and potential employees will give him? charles: the line worker, there is a long list of people and their seeing record number of college graduates who want to work at tesla. francs, that is where the challenges. when i talked to -- executive ranks, that is where the challenge is. level talked to executive people, they did not want to work at tesla the way they wanted to at one time because they knew the environment was such a challenging one. tesla has been ahead of the curve in terms of their technology, on the cutting edge of the market. car companies, companies
that know how to manufacture at scale, are catching up. car, is tesla going to have the people in place to beat the other companies that know how to do this at scale? uber self driving cars are hitting the road again. death of a after the pedestrian in arizona, uber has received the all clear from the pennsylvania department of transportation to resume testing in pittsburgh. testing will resume with more limitations and safety measures, including improvements to breaking and monitoring. they will also be deployed in san francisco and toronto to be driven in manual human mode. what has uber been doing since that accident? reassessing on every level,
looking at the safety of drivers, looking at what technology they use, what is on, what is off, what they maintain. they get this technology and they couple it with their self driving technology. of work and changing prophecies and saying we are going to drive slower and do it on a smaller circuit. where they're going to be driving in pittsburgh is smaller. emily: one or two is not many. where else? eric: the sense i got is there is not a lot of room on this course. it is so small. in toronto and san francisco, they are manual which means a human being is striving but the cars -- is driving but the cars taken this data which uber can use.
getting them back in manual is one step towards getting them back towards autonomous. emily: what is the importance with the ipo coming up? eric: it is a major cost center. hundreds of millions. that is a risk for them. we talked to the ceo and he said they are going to look at ways they can spin it out or different financial vehicles for the program. that is an open question, what they do with the autonomous program. what they want is an upside. whenever these vehicles are ready, we are in the business of autonomous vehicles. how -- where is it uber in terms of lyft? lyft had more partnerships and started later.
trying togressively catch up with the idea they can as time passes, it becomes easier to catch everybody else, that once was novel is easier for a company to play catch-up. emily: eric newcomer, thank you. google will invest more than $1 billion to expand its presence in new york city. the company will move into new building spirits the move could allow google to more than double its staff in new york, 7000 people. coming up, doordash. the company is growing faster than any competitors. we speak to the ceo, next. this is "bloomberg." ♪
as itmpany was struggling struggled to differentiate its product. things turned around. doordash started turning a profit minus overhead expenses. granted, that is a generous definition of they were profit but it was enough. there was a fresh round of investment totaling $500 million. tony xu joined us to talk about the turnaround. i'm going to double down on the fact that that is a generous definition of profit because salaries and rent are a part of everyday operation. how well is the business doing? tony: we have tripled sales in one year, we are north of a billion in net revenue. there are a handful of businesses that can say that and no one can say they are growing that fast in the industry we serve, the restaurant delivery business.
gaining share faster, we are growing faster, and we are on track to being the largest platform. emily: how do translate that into profit? a playbook onhad how to turn businesses from investment into growth into cash flow positive. it is only after that playbook was developed that we decided to raise the financing in march and in august. emily: we had the head of uber eats who also said business is growing faster than they expected. they are exploring grocery delivery. they have deep pockets too. how do you stand up to the competition? tony: we have. emily: what are you doing to differentiate yourself? tony: a lot of the work that led to the results of 2018 happened before 2018.
since day one, we have had a strategy of focusing on merchants by building more services like doordash drive which bills channels for merchants to deliver their own merchandise. we have 97 of the top 100 merchants signed up. we are also delivering other types of meals. we started with food, which is the hardest. our partnership with walmart started in april and has reached over 500 stores and we deliver the majority of walmart groceries. emily: where do think businesses going? do think there will be a few players, some smaller players will go out of business. it does not seem like this many players will survive. tony: you are starting to see some of that. it is a vast market.
ago, 5% to 10% of pizza sales were delivered. today, over half of pizzas are delivered. outside of pizza, only a percent 8% to 10% only of food is delivered. talent,seeing that both capital, merchants, partnerships are accruing to a couple of national players. emily: where are we going to see you expand, use this money? started the year with 600 cities. we are in 3000. we are ahead of goal. that said, we have a lot of the u.s. left to serve. we serve the largest coverage today. to 30% ofstill 25%
households we do not serve. we have to get to more cities. deliver with partners like wing stop and walmart. there are many other businesses for them to survive the next decade. have are other products we to continue on our merchant first approach that will give customers more selection at higher quality and that is what keeps customers coming back. emily: tony xu there. that does it for this edition. we will bring you the latest are out the week. tune in every day at 5:00 p.m. in new york. streaming on bloomberg. this is "bloomberg." ♪
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