WEBVTT - Uber Partnering With Lucid, Nuro to Launch Robotaxis in 2026 

0:00:02.720 --> 0:00:10.600
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

0:00:10.640 --> 0:00:14.600
<v Speaker 1>Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

0:00:14.640 --> 0:00:17.880
<v Speaker 1>Eastern on Apple, Cocklay and Android Auto with the Bloomberg

0:00:17.960 --> 0:00:21.080
<v Speaker 1>Business app. Listen on demand wherever you get your podcasts,

0:00:21.400 --> 0:00:23.120
<v Speaker 1>or watch us live on YouTube.

0:00:23.840 --> 0:00:26.479
<v Speaker 2>LEAs Matteo and Paul Sweeney live here in the Bloomberg

0:00:26.520 --> 0:00:29.240
<v Speaker 2>Inaract the Broker Studio in Midtown Manhattan, streaming live on

0:00:29.280 --> 0:00:30.600
<v Speaker 2>YouTube as well.

0:00:30.680 --> 0:00:31.560
<v Speaker 3>So I check us out there.

0:00:31.800 --> 0:00:35.519
<v Speaker 2>You can search Bloomberg Live Radio all right. Uber is

0:00:35.560 --> 0:00:39.560
<v Speaker 2>partnering with Lucid neuro to launch robotaxis in twenty twenty six.

0:00:40.920 --> 0:00:43.640
<v Speaker 2>I'll do a ROBOTAXI I mean, I get into car

0:00:43.680 --> 0:00:46.320
<v Speaker 2>every morning with a dude I do not know, true,

0:00:46.520 --> 0:00:48.000
<v Speaker 2>and I trust him to get me from point.

0:00:48.040 --> 0:00:49.280
<v Speaker 4>But there's someone behind the wheel.

0:00:49.760 --> 0:00:51.279
<v Speaker 2>Yeah, but I don't know who this dude is. But

0:00:51.800 --> 0:00:54.200
<v Speaker 2>I mean, I don't know. There's like twenty seven thousand

0:00:54.200 --> 0:00:56.880
<v Speaker 2>censors on these things. It's I don't know, man deep

0:00:56.880 --> 0:00:59.240
<v Speaker 2>saying he knows he does this stuff. Senior tech industry

0:00:59.240 --> 0:01:05.080
<v Speaker 2>analis for Bloomberg Intelligence. What's Uber strategy for robotaxes? Because

0:01:05.080 --> 0:01:09.160
<v Speaker 2>you could argue that boy that would totally impact their

0:01:09.200 --> 0:01:11.920
<v Speaker 2>business model Uber if I don't need to share my

0:01:11.959 --> 0:01:12.479
<v Speaker 2>money with them.

0:01:12.800 --> 0:01:17.480
<v Speaker 5>I mean Uber's strategy under this CEO, Dara Koshershahi, ever

0:01:17.520 --> 0:01:20.399
<v Speaker 5>since he has taken over, is to build scale when

0:01:20.480 --> 0:01:25.720
<v Speaker 5>it comes to both supply and that translates into adding

0:01:25.760 --> 0:01:29.080
<v Speaker 5>more services. So that's why they expanded on their delivery

0:01:29.120 --> 0:01:30.920
<v Speaker 5>side in such a big way. You know, they added

0:01:30.959 --> 0:01:33.720
<v Speaker 5>food delivery, grocery delivery. It was all.

0:01:33.600 --> 0:01:35.200
<v Speaker 2>About drizzly which is the.

0:01:37.160 --> 0:01:40.880
<v Speaker 5>Look. And now they're doing the same way the adonomous

0:01:40.959 --> 0:01:43.720
<v Speaker 5>vehicles supply. So they have a partnership with Weimo in

0:01:43.760 --> 0:01:46.600
<v Speaker 5>two cities, but then they are at the mercy of

0:01:46.760 --> 0:01:50.760
<v Speaker 5>either a Weimo or Tesla partnering with them. What they're

0:01:50.760 --> 0:01:54.000
<v Speaker 5>doing here is because they don't have their own av

0:01:54.240 --> 0:01:59.440
<v Speaker 5>efforts really doing this minority investment in Lucid that makes

0:01:59.480 --> 0:02:04.040
<v Speaker 5>about hoousand vehicles a year, Premium evs and also Neuro

0:02:04.160 --> 0:02:09.920
<v Speaker 5>which is software maker similar to Wevemo in terms of

0:02:10.040 --> 0:02:14.240
<v Speaker 5>you know, autonomous driving. They provide the actual technology and

0:02:14.320 --> 0:02:17.600
<v Speaker 5>sensors and software for the vehicle to drive itself on

0:02:17.680 --> 0:02:21.120
<v Speaker 5>its own. And it seems to be a sound strategy,

0:02:21.520 --> 0:02:24.360
<v Speaker 5>you know, just to hedge their bets. What if the

0:02:24.440 --> 0:02:28.200
<v Speaker 5>Weymo partnership doesn't pan out or get bigger as they

0:02:28.240 --> 0:02:31.440
<v Speaker 5>hope to be. And that's where you know, having this

0:02:31.560 --> 0:02:33.320
<v Speaker 5>investment does make a lot of sense.

0:02:33.440 --> 0:02:35.679
<v Speaker 4>So how does this deal all work? I mean break

0:02:35.720 --> 0:02:38.960
<v Speaker 4>it down for it's certain like SUV Lucids, Like, how

0:02:38.960 --> 0:02:39.520
<v Speaker 4>does it?

0:02:39.600 --> 0:02:42.960
<v Speaker 5>Yeah, I mean look Lucid, like I said, compare that

0:02:43.000 --> 0:02:45.799
<v Speaker 5>to Tesla making one point eight million cars a year.

0:02:45.919 --> 0:02:49.359
<v Speaker 5>Lucid makes ten thousand vehicles a year, so it's a

0:02:49.520 --> 0:02:52.920
<v Speaker 5>much smaller company in terms of the number of vehicles.

0:02:53.320 --> 0:02:56.640
<v Speaker 5>But at the same time, everyone who owns a Lucid,

0:02:56.639 --> 0:02:59.280
<v Speaker 5>they like the experience. It's one of that premium EV

0:03:00.120 --> 0:03:04.280
<v Speaker 5>cars that never took off. And that's why adding that

0:03:04.360 --> 0:03:08.119
<v Speaker 5>sensor technology for autonomous driving on top of Lucid does

0:03:08.200 --> 0:03:11.480
<v Speaker 5>make sense. Because Uber, like I said, it's all about

0:03:11.520 --> 0:03:15.280
<v Speaker 5>adding more supply. They want to cater to every segment,

0:03:15.639 --> 0:03:19.040
<v Speaker 5>premium segment who wants to use AVY vehicles as part

0:03:19.120 --> 0:03:21.760
<v Speaker 5>of their daily routine. And that's where you know they

0:03:21.760 --> 0:03:25.400
<v Speaker 5>are thinking long term, Okay, do we have AVY supply

0:03:25.639 --> 0:03:28.240
<v Speaker 5>for all types of segments and this could be something

0:03:28.320 --> 0:03:31.320
<v Speaker 5>that we have an investment in. And I think it's

0:03:31.360 --> 0:03:34.120
<v Speaker 5>not a big amount. It's not an outright acquisition that

0:03:34.160 --> 0:03:34.720
<v Speaker 5>they're making.

0:03:34.760 --> 0:03:36.400
<v Speaker 4>Well, you know, Paul, they said the Lucid was the

0:03:36.440 --> 0:03:40.160
<v Speaker 4>car the Hamptons, Like, that's really now? Yes, yes, well you.

0:03:40.160 --> 0:03:42.120
<v Speaker 2>Never know, very good. I'm not sure what the car

0:03:42.200 --> 0:03:44.520
<v Speaker 2>the Jersey sure is. It's the vestment you see me

0:03:44.640 --> 0:03:45.120
<v Speaker 2>cruising on.

0:03:45.400 --> 0:03:45.680
<v Speaker 3>All right.

0:03:45.720 --> 0:03:48.440
<v Speaker 2>The market cap of Uber Technologies one hundred and eighty

0:03:48.440 --> 0:03:52.680
<v Speaker 2>eight billion dollars, it's up fifty percent this year. What's

0:03:52.760 --> 0:03:53.280
<v Speaker 2>driving that?

0:03:53.720 --> 0:03:56.160
<v Speaker 5>I mean remember the time when Lyft used to be

0:03:56.240 --> 0:04:00.640
<v Speaker 5>thirty percent of Uber. That has changed completely. Now Lift

0:04:00.680 --> 0:04:03.720
<v Speaker 5>is like three percent of Uber's market cap. So that's

0:04:03.800 --> 0:04:08.600
<v Speaker 5>where that scale strategy under the CEO has worked for them.

0:04:09.000 --> 0:04:12.560
<v Speaker 5>That really has been the key differentiator between Uber and Lyft.

0:04:12.960 --> 0:04:15.880
<v Speaker 5>And what explains that, you know, almost two hundred billion

0:04:15.960 --> 0:04:18.920
<v Speaker 5>dollars in market cap for Uber And look, I think

0:04:18.920 --> 0:04:22.400
<v Speaker 5>they're doing the right thing here by adding more scale,

0:04:22.480 --> 0:04:26.400
<v Speaker 5>because otherwise you run the risk of getting disintermediated, especially

0:04:26.400 --> 0:04:29.039
<v Speaker 5>at Tesla, which wants to go on its own. They

0:04:29.080 --> 0:04:30.760
<v Speaker 5>don't want to partner with anyone, all right.

0:04:30.880 --> 0:04:35.159
<v Speaker 2>Darrek Kastoshahi, the CEO of Uber, he got his twenty

0:04:35.839 --> 0:04:38.799
<v Speaker 2>most recent year comp four point two million cash compensation,

0:04:39.040 --> 0:04:41.880
<v Speaker 2>thirty nine point eight million of non cash competition each

0:04:41.920 --> 0:04:45.119
<v Speaker 2>stock that stock since he got that is up twenty

0:04:45.120 --> 0:04:47.280
<v Speaker 2>three point eight million. So is current pay value for

0:04:47.320 --> 0:04:50.800
<v Speaker 2>that year sixty eight million dollars. This dude's worth every penny,

0:04:50.920 --> 0:04:53.720
<v Speaker 2>right the shareholders. I mean, I'll pay this guy whatever

0:04:53.720 --> 0:04:54.119
<v Speaker 2>he wants.

0:04:54.160 --> 0:04:57.440
<v Speaker 5>Right, Well, his fartues have really turned around this year

0:04:58.440 --> 0:05:01.559
<v Speaker 5>up until twenty twenty four. This dot in do that well,

0:05:01.600 --> 0:05:05.440
<v Speaker 5>so really this year with Bill Ackman taking a steak

0:05:05.680 --> 0:05:07.800
<v Speaker 5>and you know about that. So there have been a

0:05:07.800 --> 0:05:10.919
<v Speaker 5>lot of catalysts that have played out in favor of Uber,

0:05:10.960 --> 0:05:13.840
<v Speaker 5>and like I said, Lift not performing because of their

0:05:13.920 --> 0:05:18.280
<v Speaker 5>lack of scale really validated Uber strategies. So I do

0:05:18.400 --> 0:05:20.599
<v Speaker 5>think he has had a good run. Yeah.

0:05:20.680 --> 0:05:22.279
<v Speaker 4>Well, Paul makes fun of me because I only have

0:05:22.400 --> 0:05:24.440
<v Speaker 4>the Uber app, I don't have the list, and he

0:05:24.520 --> 0:05:27.160
<v Speaker 4>kalls me all the time. The quick thirty seconds that

0:05:27.200 --> 0:05:29.920
<v Speaker 4>we have here left ROBOTAXI fleets. We don't know where

0:05:29.920 --> 0:05:31.359
<v Speaker 4>this one is going to take off?

0:05:31.440 --> 0:05:31.640
<v Speaker 6>Right?

0:05:31.920 --> 0:05:35.159
<v Speaker 4>Can something like this work in New York City? Robotaxis?

0:05:35.360 --> 0:05:37.800
<v Speaker 5>Well, Weimo is trying to get up permit here, So

0:05:38.279 --> 0:05:41.120
<v Speaker 5>in my mind, you know Uber wants to fill in

0:05:41.200 --> 0:05:43.960
<v Speaker 5>the gaps where they don't have a partnership with Wemo.

0:05:44.120 --> 0:05:46.560
<v Speaker 5>So right now, Uber has a partnership with Vemo only

0:05:46.600 --> 0:05:49.440
<v Speaker 5>in two cities, Austin and Atlanta, not in San Francisco,

0:05:49.560 --> 0:05:52.880
<v Speaker 5>Phoenix and other cities where Vemo operates in. So this

0:05:53.000 --> 0:05:56.120
<v Speaker 5>allows them to add more heavy vehicles than cities where

0:05:56.160 --> 0:05:58.120
<v Speaker 5>Vemo doesn't want to partner with Uber.

0:05:58.600 --> 0:06:00.440
<v Speaker 2>Right, would you get in a heavy bit in a way?

0:06:00.560 --> 0:06:03.520
<v Speaker 5>I have? Yes? I love the experience, really yes.

0:06:04.080 --> 0:06:06.680
<v Speaker 2>So you get in the back, there's no budding in

0:06:06.720 --> 0:06:08.320
<v Speaker 2>the front and the car just goes.

0:06:08.720 --> 0:06:11.320
<v Speaker 5>Yeah, I mean, and the car is reliable in the

0:06:11.360 --> 0:06:14.000
<v Speaker 5>city is where they all pray vingel now has one

0:06:14.080 --> 0:06:18.320
<v Speaker 5>hundred million miles driven mild So how much validation do

0:06:18.360 --> 0:06:18.680
<v Speaker 5>you need?

0:06:19.040 --> 0:06:21.400
<v Speaker 2>You're right, all right, you sold me. I'll give it

0:06:21.440 --> 0:06:24.000
<v Speaker 2>a shot. I mean, I don't know. Maybe not in Manhattan, No.

0:06:24.160 --> 0:06:25.200
<v Speaker 4>I saw I'm in San Francisco.

0:06:25.320 --> 0:06:27.440
<v Speaker 3>I thought about it, but he didn't do it.

0:06:29.080 --> 0:06:31.520
<v Speaker 2>But right, Mendy, thank you so much. Always always are

0:06:31.560 --> 0:06:36.360
<v Speaker 2>great talks, Mendeep seeing senior tech analysts, you know, driverless

0:06:36.360 --> 0:06:37.480
<v Speaker 2>card dude who knew that.

0:06:39.120 --> 0:06:42.839
<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us Live

0:06:42.920 --> 0:06:45.960
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:06:46.000 --> 0:06:49.320
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

0:06:49.360 --> 0:06:52.480
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:06:53.000 --> 0:06:57.320
<v Speaker 4>Donlease Matteo alongside Paul Sweeney. United Airlines right they narrow

0:06:57.400 --> 0:06:59.880
<v Speaker 4>it narrowed its profit range for the first for the

0:07:00.240 --> 0:07:02.279
<v Speaker 4>of the year, but they do expect travel demand to

0:07:02.320 --> 0:07:06.040
<v Speaker 4>continue to rise. Now. Earlier this morning, CEO Scott Kirby

0:07:06.080 --> 0:07:08.640
<v Speaker 4>he sat down with Bloomberg's Lisa Brahmins and they talked

0:07:08.640 --> 0:07:11.360
<v Speaker 4>about United's earnings and also their outlook for the rest

0:07:11.400 --> 0:07:12.280
<v Speaker 4>of twenty twenty five.

0:07:12.680 --> 0:07:15.280
<v Speaker 7>This year, a lot of uncertainty in the first half

0:07:15.320 --> 0:07:18.640
<v Speaker 7>of the year at macro uncertainty and that led to

0:07:18.800 --> 0:07:22.240
<v Speaker 7>an impact on bookings and demand at United across the

0:07:22.280 --> 0:07:24.960
<v Speaker 7>whole industry. But it felt like there was a turning

0:07:25.000 --> 0:07:29.360
<v Speaker 7>point at the end of June where the tax bill

0:07:29.440 --> 0:07:31.800
<v Speaker 7>passed and the situation in the Middle East was calmer

0:07:32.280 --> 0:07:36.080
<v Speaker 7>and tariffs, while not certain, yet narrowing the range, and

0:07:36.120 --> 0:07:40.480
<v Speaker 7>it really felt like people felt enough confidence or lower

0:07:40.560 --> 0:07:42.680
<v Speaker 7>level of uncertainty that they kind of came off the

0:07:42.720 --> 0:07:44.080
<v Speaker 7>sidelines and were unfrozen.

0:07:44.560 --> 0:07:47.680
<v Speaker 4>All right, that was United CEO Scott Kirby. Let's bring

0:07:47.680 --> 0:07:50.720
<v Speaker 4>in the expert on all this, George Ferguson's Bloomber Intelligence

0:07:50.720 --> 0:07:54.920
<v Speaker 4>senior Aerospace, Defense and airlines analysts. George, thanks for joining us,

0:07:55.200 --> 0:07:58.760
<v Speaker 4>Scott Kirby. He seemed pretty confident, did he?

0:07:58.760 --> 0:08:01.240
<v Speaker 3>He does? But I guess he always sounds confident, right.

0:08:01.280 --> 0:08:05.040
<v Speaker 3>I think he's counting on some capacity cuts here in

0:08:05.080 --> 0:08:08.120
<v Speaker 3>the second half, and he talked about some of the

0:08:08.200 --> 0:08:11.840
<v Speaker 3>uncertainty going away, So I think it's a it'll get

0:08:11.880 --> 0:08:15.000
<v Speaker 3>better story. But yeah, too, c for him and for

0:08:15.080 --> 0:08:16.320
<v Speaker 3>Delta didn't look that great.

0:08:17.760 --> 0:08:19.679
<v Speaker 2>George, where's business travel today?

0:08:22.040 --> 0:08:24.320
<v Speaker 3>I'd like to tell you what the airlines try to

0:08:24.400 --> 0:08:27.120
<v Speaker 3>hide that, but you know, everything we can parse out

0:08:27.120 --> 0:08:31.520
<v Speaker 3>of sort of Delta and United earnings makes it sound

0:08:31.640 --> 0:08:36.640
<v Speaker 3>like it's lagging the leisure rebound and maybe back to

0:08:37.160 --> 0:08:41.360
<v Speaker 3>twenty nineteen levels, But that would again sort of still

0:08:41.400 --> 0:08:43.439
<v Speaker 3>be lagging. And so the sense I get is that

0:08:43.559 --> 0:08:47.439
<v Speaker 3>it hasn't come back as strongly as leisure, and these

0:08:47.480 --> 0:08:51.080
<v Speaker 3>airlines are more pointing to high end leisure as the

0:08:51.160 --> 0:08:53.040
<v Speaker 3>driver of their profitability.

0:08:53.600 --> 0:08:55.520
<v Speaker 4>George, I have to point out Newark Airport because I'm

0:08:55.520 --> 0:08:58.439
<v Speaker 4>a frequent visitor. There are a lot of issues there

0:08:58.559 --> 0:09:04.000
<v Speaker 4>right construction new there were outages, delays. When they asked,

0:09:04.000 --> 0:09:05.880
<v Speaker 4>you know, Scott Kirby about it, he said he was

0:09:05.960 --> 0:09:07.800
<v Speaker 4>kind of you know, optimistic about it, but he also

0:09:07.840 --> 0:09:10.640
<v Speaker 4>pointed out JFK would love to get in there. Has

0:09:10.679 --> 0:09:12.920
<v Speaker 4>this been kind of a sticking point for United.

0:09:14.679 --> 0:09:17.080
<v Speaker 3>Newark for sure, right because Newark they've got a strong

0:09:17.160 --> 0:09:21.720
<v Speaker 3>concentration of flights out of there. You know, he started

0:09:21.720 --> 0:09:24.000
<v Speaker 3>the call too today. You know, I get the sign

0:09:24.040 --> 0:09:26.000
<v Speaker 3>on for the first couple of minutes of it before

0:09:26.120 --> 0:09:29.360
<v Speaker 3>joining you, and you know, he was sort of alluding what

0:09:29.520 --> 0:09:34.160
<v Speaker 3>was going on at Newark Airport, and so you know,

0:09:34.400 --> 0:09:37.640
<v Speaker 3>I think it's I think we're starting to put behind

0:09:37.720 --> 0:09:41.640
<v Speaker 3>us the FAA problems. But Newark is always a challenging airport.

0:09:41.679 --> 0:09:44.680
<v Speaker 3>It has a lot of activity. You know, he said,

0:09:44.720 --> 0:09:48.839
<v Speaker 3>the FAA and the constituents there have gotten real about

0:09:48.840 --> 0:09:51.200
<v Speaker 3>the amount of throughput they could put around Newark. That

0:09:51.280 --> 0:09:54.480
<v Speaker 3>would be good because essentially Newark suffers from a whole

0:09:54.559 --> 0:09:56.760
<v Speaker 3>lot of throughput that's trying to get through that airport.

0:09:57.160 --> 0:09:58.559
<v Speaker 3>And then you get in the middle of summer and

0:09:58.600 --> 0:10:01.440
<v Speaker 3>you just have these weather events storms which we've been

0:10:01.480 --> 0:10:04.000
<v Speaker 3>having I think every day now in New Jersey, which

0:10:04.480 --> 0:10:09.679
<v Speaker 3>sort of royal the whole deal. So he sounded optimistic

0:10:09.760 --> 0:10:12.240
<v Speaker 3>that they've got a lot of the fix in place

0:10:12.280 --> 0:10:12.880
<v Speaker 3>for the airport.

0:10:13.360 --> 0:10:16.839
<v Speaker 2>George Ware, are we on air traffic controllers? I mean, now,

0:10:16.880 --> 0:10:19.839
<v Speaker 2>hard can this be? To staff this whole system up here?

0:10:19.880 --> 0:10:22.640
<v Speaker 2>I just don't get it. What's the status?

0:10:23.640 --> 0:10:25.560
<v Speaker 3>Yeah? So, I mean it just takes a long time

0:10:25.600 --> 0:10:27.840
<v Speaker 3>to train in air traffic control, longer than I would

0:10:27.880 --> 0:10:30.760
<v Speaker 3>have expected. I mean, the last numbers I've heard were

0:10:30.800 --> 0:10:33.360
<v Speaker 3>sort of over over a year. I think I want

0:10:33.400 --> 0:10:34.439
<v Speaker 3>to say it was like a year and a half,

0:10:34.520 --> 0:10:36.080
<v Speaker 3>but I have to go back and check my numbers

0:10:36.080 --> 0:10:40.240
<v Speaker 3>exactly on that one. You know, during the pandemic, you know,

0:10:40.280 --> 0:10:43.880
<v Speaker 3>we had people that probably not too jazzed about entering

0:10:43.920 --> 0:10:47.080
<v Speaker 3>that business because it was one of those where you

0:10:47.080 --> 0:10:49.160
<v Speaker 3>couldn't work from home. I think that worked from home

0:10:50.240 --> 0:10:53.680
<v Speaker 3>world is fading a bit now, But back again, during

0:10:53.679 --> 0:10:56.560
<v Speaker 3>the pandemic, it didn't seem that exciting. And I think

0:10:56.559 --> 0:11:01.040
<v Speaker 3>it has the problem that every other industry America, especially

0:11:01.120 --> 0:11:03.840
<v Speaker 3>the older industries, have, and that is there's a bunch

0:11:03.880 --> 0:11:08.160
<v Speaker 3>of baby boomers inside it. They're approaching retirement and actively

0:11:08.200 --> 0:11:11.720
<v Speaker 3>retiring at this point. And the backfill, again, it's not

0:11:12.360 --> 0:11:15.440
<v Speaker 3>the most exciting industry, I guess to go into. The

0:11:15.480 --> 0:11:18.440
<v Speaker 3>backfill has been harder. Recruitment has been harder, and when

0:11:18.440 --> 0:11:20.560
<v Speaker 3>you get behind them, recruitment and training takes a certain

0:11:20.559 --> 0:11:23.280
<v Speaker 3>amount of time. It takes a while to fill. And

0:11:23.360 --> 0:11:28.360
<v Speaker 3>so we're still in that attempt to refill phase again.

0:11:28.400 --> 0:11:31.120
<v Speaker 3>I think it's getting better as the economy maybe as

0:11:31.120 --> 0:11:33.880
<v Speaker 3>some of the labor market is not as white hot

0:11:33.920 --> 0:11:36.000
<v Speaker 3>as it was coming out of the pandemic, but we're

0:11:36.040 --> 0:11:37.520
<v Speaker 3>still behind the curve a bit, all right.

0:11:37.559 --> 0:11:39.760
<v Speaker 4>So we heard from United, We've also heard from Delta.

0:11:39.880 --> 0:11:42.719
<v Speaker 4>You know, all the numbers, But for me, what does

0:11:42.720 --> 0:11:45.679
<v Speaker 4>it mean for airline fares? Am I gonna have to

0:11:45.720 --> 0:11:47.000
<v Speaker 4>pay more for a ticket coming up?

0:11:48.320 --> 0:11:51.640
<v Speaker 3>You know? I think that there's going to be a

0:11:51.679 --> 0:11:55.280
<v Speaker 3>stabilization affairs here. But when we look at the second half,

0:11:55.559 --> 0:12:00.640
<v Speaker 3>we see capacity growth coming down. We still see capacity

0:12:00.800 --> 0:12:03.959
<v Speaker 3>growth though, and I think that we've seen it sort

0:12:04.000 --> 0:12:07.319
<v Speaker 3>of around GDP, and we kind of think that around

0:12:07.480 --> 0:12:12.160
<v Speaker 3>GDP levels of capacity growth doesn't firmfares and it doesn't

0:12:12.240 --> 0:12:15.920
<v Speaker 3>cut fares, and so I think you're you've seen some

0:12:16.160 --> 0:12:19.959
<v Speaker 3>cuts recently. I think you'll see this level of fair

0:12:20.080 --> 0:12:22.720
<v Speaker 3>going through the back half of the year and less

0:12:22.760 --> 0:12:26.920
<v Speaker 3>airlines cut more capacity, which would help them firmfares a

0:12:26.960 --> 0:12:30.120
<v Speaker 3>bit more. But again, we see growth that's right around

0:12:30.360 --> 0:12:32.720
<v Speaker 3>GDP growth, and so it doesn't look to me like

0:12:33.520 --> 0:12:36.160
<v Speaker 3>a scenario where you're going to see strong growth in

0:12:36.280 --> 0:12:37.400
<v Speaker 3>fares for the airlines.

0:12:37.800 --> 0:12:40.720
<v Speaker 2>George can't let you go without talking about Boeing because

0:12:40.720 --> 0:12:44.640
<v Speaker 2>for me, it's just kind of my quintessential great American company,

0:12:44.679 --> 0:12:49.640
<v Speaker 2>great engineering company, great manufacturing company, Seattle, Washington, won great

0:12:49.640 --> 0:12:53.040
<v Speaker 2>parts of the of the United States where they with

0:12:53.120 --> 0:12:56.320
<v Speaker 2>their seven thirty seven deliverables, because you've told us time

0:12:56.320 --> 0:12:58.599
<v Speaker 2>and time again over the years that that's really a

0:12:58.640 --> 0:12:59.840
<v Speaker 2>key metric for this company.

0:13:00.400 --> 0:13:02.720
<v Speaker 3>Yeah. So I think one of the great other American

0:13:02.760 --> 0:13:05.400
<v Speaker 3>companies gave us a little bit of insight this morning,

0:13:05.400 --> 0:13:09.000
<v Speaker 3>and that was GE. Right, and GE supplies the engines

0:13:09.040 --> 0:13:12.000
<v Speaker 3>to Boeing, and GE kind of guided down a bit

0:13:12.080 --> 0:13:15.000
<v Speaker 3>on margins for the back half of the year. Here,

0:13:15.040 --> 0:13:19.320
<v Speaker 3>I mean guided down like they're nice. Their commercial businesses

0:13:19.320 --> 0:13:22.080
<v Speaker 3>are like operating margins in the high twenties, right, which

0:13:22.080 --> 0:13:24.360
<v Speaker 3>is really super and they guided down to sort of

0:13:24.400 --> 0:13:28.120
<v Speaker 3>mid twenties. And that's a function of getting new engine

0:13:28.120 --> 0:13:32.560
<v Speaker 3>deliveries into Boeing engines for the triple seven engines for

0:13:32.640 --> 0:13:36.439
<v Speaker 3>seven thirty seven, Boeing has done a better job of delivering.

0:13:36.480 --> 0:13:39.400
<v Speaker 3>That's all about how they're going to win. And from

0:13:39.400 --> 0:13:41.760
<v Speaker 3>what I heard from Ge today, that's going to persist

0:13:42.000 --> 0:13:44.520
<v Speaker 3>through the back half of the of the year, which

0:13:44.559 --> 0:13:47.880
<v Speaker 3>is I think a strong positive for Boeing. Again, a

0:13:47.880 --> 0:13:50.079
<v Speaker 3>little bit of an EBB for Ge, but a strong

0:13:50.160 --> 0:13:51.000
<v Speaker 3>positive for Boeing.

0:13:51.360 --> 0:13:53.840
<v Speaker 2>George, thanks so much, appreciate it as always. George Ferguson,

0:13:53.880 --> 0:13:56.719
<v Speaker 2>Senior Aerospace, Defense and Airlines analysts for Bloomberg Intelligence or

0:13:56.720 --> 0:13:58.480
<v Speaker 2>at least a big question for you, and this is

0:13:58.480 --> 0:14:00.360
<v Speaker 2>going to tell me a lot about how who you

0:14:00.400 --> 0:14:03.400
<v Speaker 2>are as a personal boy isle or window seat on

0:14:03.400 --> 0:14:03.880
<v Speaker 2>the plane.

0:14:04.000 --> 0:14:07.840
<v Speaker 4>Oh i'le me too, yes, right, no, because I know,

0:14:07.920 --> 0:14:09.160
<v Speaker 4>but then if people have to get up and go

0:14:09.200 --> 0:14:10.840
<v Speaker 4>to the bathroom back and forth, that's kind of a pain.

0:14:10.880 --> 0:14:13.480
<v Speaker 2>But yeah, it depends. Like if I'm on a short flight,

0:14:13.600 --> 0:14:16.480
<v Speaker 2>I'll go window because I like the flying into New

0:14:16.559 --> 0:14:18.840
<v Speaker 2>York is always cool because fifty percent chance you're going

0:14:18.920 --> 0:14:19.960
<v Speaker 2>to get the view of the city and all that

0:14:20.040 --> 0:14:23.400
<v Speaker 2>kind of stuff. Okay, but it depends where I'm flying.

0:14:23.440 --> 0:14:26.680
<v Speaker 2>I'm flying somewhere cool. Maybe I'll try the windness set,

0:14:26.720 --> 0:14:29.520
<v Speaker 2>but buying large. I'm an aisle person like that. You

0:14:29.840 --> 0:14:31.440
<v Speaker 2>need to get up and you know, take care of

0:14:31.480 --> 0:14:32.720
<v Speaker 2>business you could do.

0:14:34.960 --> 0:14:38.680
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:14:38.760 --> 0:14:42.160
<v Speaker 1>weekdays at ten am Eastern on Applecarplay and Android Auto

0:14:42.240 --> 0:14:45.320
<v Speaker 1>with the Bloomberg Business app. Listen on demand wherever you

0:14:45.360 --> 0:14:48.360
<v Speaker 1>get your podcasts, or watch us live on YouTube.

0:14:48.960 --> 0:14:53.480
<v Speaker 4>This is Bloomberg Intelligence. I'm Lis Smith's Hayo alongside Paul Sweeney. PEPSI.

0:14:53.560 --> 0:14:55.760
<v Speaker 4>Their shares get a nice boot this morning. They're about

0:14:55.800 --> 0:14:59.280
<v Speaker 4>six percent international customers, a big part of their nice

0:14:59.560 --> 0:15:02.880
<v Speaker 4>earnings that just came out here with all the details,

0:15:02.960 --> 0:15:07.960
<v Speaker 4>KENNI say Bloomberg Intelligence senior Consumer Products analysts, Kenneth, thanks

0:15:08.040 --> 0:15:11.040
<v Speaker 4>for joining us. Positive results. This is pretty good for

0:15:11.080 --> 0:15:12.760
<v Speaker 4>them because it's the time when people are a little

0:15:12.760 --> 0:15:15.600
<v Speaker 4>bit more health conscience. Maybe you know, there's some negativity

0:15:15.600 --> 0:15:18.080
<v Speaker 4>around soda processed food, so this is pretty good news

0:15:18.080 --> 0:15:18.360
<v Speaker 4>for them.

0:15:19.680 --> 0:15:24.880
<v Speaker 6>Yeah, hih, Lisa, Yeah, I would ascribed today's rally in PepsiCo, though,

0:15:25.040 --> 0:15:27.480
<v Speaker 6>where do a relief rally. You know, sentiment has been

0:15:27.480 --> 0:15:30.800
<v Speaker 6>pretty low on Pepsi since our last report in the

0:15:30.800 --> 0:15:34.200
<v Speaker 6>first quarter, they lowered their guidance. Wasn't really strong report.

0:15:34.520 --> 0:15:38.040
<v Speaker 6>This one, I think was a report of stabilization. Organic

0:15:38.040 --> 0:15:42.560
<v Speaker 6>growth was about up two percent in the quarter. Wasn't great,

0:15:43.200 --> 0:15:46.320
<v Speaker 6>you know, but it was above the one percent expectation.

0:15:47.760 --> 0:15:51.320
<v Speaker 6>Operating margins widen analysts love to see that, and I

0:15:51.680 --> 0:15:53.560
<v Speaker 6>guess the last piece of good news is they gave

0:15:53.640 --> 0:15:56.280
<v Speaker 6>a good sense of good innovation that's coming in the

0:15:56.320 --> 0:16:00.600
<v Speaker 6>fourth quarter and first quarter next year in the area

0:16:00.680 --> 0:16:04.040
<v Speaker 6>of protein drinks and as we know, everybody on GLP

0:16:04.120 --> 0:16:07.480
<v Speaker 6>one drugs these days are looking for protein supplements and

0:16:07.520 --> 0:16:10.040
<v Speaker 6>that really is an on trend innovation. I think people

0:16:10.080 --> 0:16:12.160
<v Speaker 6>are getting excited about.

0:16:11.880 --> 0:16:14.760
<v Speaker 2>The can A lot of folks, including myself, have gone

0:16:14.880 --> 0:16:20.280
<v Speaker 2>to private label goods when shopping in the supermarket, trying

0:16:20.280 --> 0:16:22.880
<v Speaker 2>to you know, fight this inflation thing out there. Does

0:16:22.960 --> 0:16:29.400
<v Speaker 2>Pepsi with their brands, are they seeing that as a headwind, you.

0:16:29.360 --> 0:16:32.320
<v Speaker 6>Know, Paul not really not in their big freeedola a franchise.

0:16:32.480 --> 0:16:34.440
<v Speaker 6>This is a you know, the eight hundred pound guerrilla

0:16:34.760 --> 0:16:38.600
<v Speaker 6>in a snack aisle. It continues to gain share, believe

0:16:38.600 --> 0:16:42.840
<v Speaker 6>it or not, at least on volumes. I think some

0:16:42.880 --> 0:16:45.040
<v Speaker 6>of the problem with free delay foods I should say

0:16:45.200 --> 0:16:47.720
<v Speaker 6>they're overall food they combined quicker with free to lay

0:16:47.840 --> 0:16:52.120
<v Speaker 6>last quarter is that I think consumers are a little

0:16:52.160 --> 0:16:55.480
<v Speaker 6>more price weary to your point, but so I think

0:16:55.520 --> 0:16:58.440
<v Speaker 6>they've held the line a little bit with with things

0:16:58.520 --> 0:17:02.480
<v Speaker 6>like you know, bundle old package sizes and things like that.

0:17:03.040 --> 0:17:06.479
<v Speaker 6>But you know, the company says it's really turning its

0:17:06.480 --> 0:17:10.560
<v Speaker 6>attention more to productivity and costs to get that business going.

0:17:10.920 --> 0:17:15.080
<v Speaker 6>In the second quarter, comparable profits were around thirteen percent

0:17:15.119 --> 0:17:18.960
<v Speaker 6>in that business is not great showing. So fortunately for them,

0:17:19.000 --> 0:17:23.720
<v Speaker 6>though in this quarter, the international area and Pepsi beverages

0:17:24.480 --> 0:17:26.880
<v Speaker 6>did pretty well and more than I'll set that weakness.

0:17:27.400 --> 0:17:27.560
<v Speaker 5>Now.

0:17:27.560 --> 0:17:30.959
<v Speaker 4>You were talking before about GLP one, So yes, people

0:17:31.359 --> 0:17:33.439
<v Speaker 4>going for the more protein like how you said, but

0:17:33.680 --> 0:17:37.080
<v Speaker 4>also wanting to eat smaller portions, and that's something that

0:17:37.240 --> 0:17:41.200
<v Speaker 4>Pepsi is changing with its snacks, right, making the packaging smaller.

0:17:41.240 --> 0:17:44.560
<v Speaker 6>Is that correct, That's right, It's a trend. It's been

0:17:44.560 --> 0:17:47.240
<v Speaker 6>going for a while, and I think they were pleasantly

0:17:47.280 --> 0:17:51.320
<v Speaker 6>surprised as their competitors, Coca Cola and Carragure. When they

0:17:51.400 --> 0:17:54.200
<v Speaker 6>rolled out the mini cans years ago, there's let about

0:17:54.240 --> 0:17:58.320
<v Speaker 6>cry that you know, sugary drinks were adding too many calories,

0:17:58.400 --> 0:18:01.920
<v Speaker 6>so they came out with us smaller versions and kind

0:18:01.920 --> 0:18:04.879
<v Speaker 6>of like a portion control kind of thing. What they

0:18:05.040 --> 0:18:08.760
<v Speaker 6>probably underestimated was how much that contributed to price mixed

0:18:08.760 --> 0:18:12.919
<v Speaker 6>because obviously the unit prices are higher with those smaller cans,

0:18:13.200 --> 0:18:16.000
<v Speaker 6>and they've extended that same kind of concept to a

0:18:16.000 --> 0:18:19.120
<v Speaker 6>lot of their you know, snacks as well, whether it's

0:18:19.119 --> 0:18:21.320
<v Speaker 6>a Cheetos or feudal A and so on. To your point,

0:18:21.520 --> 0:18:23.680
<v Speaker 6>and a lot of the food package food items as well.

0:18:24.280 --> 0:18:27.440
<v Speaker 6>Smaller is also more convenient, so it also plays into

0:18:28.080 --> 0:18:31.119
<v Speaker 6>consumer trends for portability as much as it is for

0:18:31.200 --> 0:18:32.000
<v Speaker 6>calorie counts.

0:18:32.720 --> 0:18:36.639
<v Speaker 2>I like the smaller cans of soda. That's perfect for me.

0:18:36.720 --> 0:18:39.679
<v Speaker 2>The twelve ounces was too much. These things are just

0:18:39.920 --> 0:18:43.280
<v Speaker 2>perfect for me, So kudos to all those folks. So

0:18:43.920 --> 0:18:46.440
<v Speaker 2>what I like about a lot of the names that

0:18:46.520 --> 0:18:51.120
<v Speaker 2>Ken Shake covers is their big, nice, juicy dividend payers.

0:18:51.480 --> 0:18:54.000
<v Speaker 2>I'm looking at Pepsi just about a three almost a

0:18:54.040 --> 0:18:58.400
<v Speaker 2>four percent dividend yield here Ken, how do your companies,

0:18:58.440 --> 0:18:59.880
<v Speaker 2>like the Pepsis of the world, how did they think

0:19:00.000 --> 0:19:01.280
<v Speaker 2>about their dividend policy.

0:19:02.800 --> 0:19:04.800
<v Speaker 6>Well, they are very much committed to it. They know

0:19:04.880 --> 0:19:08.919
<v Speaker 6>that their shareholder base is very income oriented and so

0:19:10.359 --> 0:19:13.560
<v Speaker 6>and you know, it serves the company well to have

0:19:13.600 --> 0:19:16.919
<v Speaker 6>a policy like that. Buy and Lawrence is the dips

0:19:16.920 --> 0:19:19.359
<v Speaker 6>and you know, consumer spending goes up and down, you know,

0:19:19.440 --> 0:19:23.320
<v Speaker 6>depending on the whims of you know, economics. These are

0:19:23.359 --> 0:19:28.840
<v Speaker 6>businesses that are typically recession proof, cycle proof, and so

0:19:28.880 --> 0:19:33.080
<v Speaker 6>they take these steady cash flows and they do a

0:19:33.160 --> 0:19:38.080
<v Speaker 6>nice balancing act of reinvesting with innovation. They're always looking

0:19:38.119 --> 0:19:40.800
<v Speaker 6>for productivity improvements that bore fruit this quarter.

0:19:41.640 --> 0:19:41.760
<v Speaker 4>Uh.

0:19:42.160 --> 0:19:45.960
<v Speaker 6>And they take care of shareholders first two dividend and

0:19:46.000 --> 0:19:49.480
<v Speaker 6>then on a more selective basis, share buybacks. So they

0:19:49.480 --> 0:19:52.000
<v Speaker 6>have a lot of levers to pull to reward shareholders

0:19:52.040 --> 0:19:53.919
<v Speaker 6>with an income stream that predictable.

0:19:54.119 --> 0:19:56.919
<v Speaker 2>Yeah, I mean, I'm looking at the comp function for

0:19:57.119 --> 0:19:59.320
<v Speaker 2>Pepsi in the last five years. Compound and any return

0:19:59.359 --> 0:20:01.680
<v Speaker 2>about six perc for the stock. But then you throw

0:20:01.720 --> 0:20:04.000
<v Speaker 2>in that four percent dividend, Neil, that's a ten percent return.

0:20:04.040 --> 0:20:06.199
<v Speaker 2>It's not a bad way to make a living. So

0:20:06.240 --> 0:20:07.800
<v Speaker 2>that's how I think a lot of people look at

0:20:07.800 --> 0:20:11.920
<v Speaker 2>those Staples stocks out there. Kenscha covers them all. He's

0:20:11.920 --> 0:20:15.280
<v Speaker 2>a senior Consumer Product Sannels for Bloomberg Intelligence. He's down

0:20:15.320 --> 0:20:18.120
<v Speaker 2>there in our Princeton office, although I'm guessing he's probably

0:20:18.359 --> 0:20:20.720
<v Speaker 2>working from home because that is a thing now for

0:20:21.280 --> 0:20:22.000
<v Speaker 2>a lot of folks.

0:20:22.440 --> 0:20:27.119
<v Speaker 1>This is the Bloomberg Intelligence podcast, available on Apple, Spotify,

0:20:27.320 --> 0:20:30.760
<v Speaker 1>and anywhere else you get your podcasts. Listen live each

0:20:30.800 --> 0:20:34.520
<v Speaker 1>weekday ten am to noon Eastern on Bloomberg dot com,

0:20:34.680 --> 0:20:38.200
<v Speaker 1>the iHeartRadio app, tune In, and the Bloomberg Business app.

0:20:38.640 --> 0:20:41.520
<v Speaker 1>You can also watch us live every weekday on YouTube

0:20:41.960 --> 0:20:44.200
<v Speaker 1>and always on the Bloomberg terminal.