Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you
Speaker 1: along with my co host Lisa brahma Witz. Each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money, whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com. Earlier this morning, we heard some
Speaker 1: really interesting discussion uh with FED Chairman j Pale to
Speaker 1: Peterson Institute talking about the impact of the coronavirus on
Speaker 1: the economy, and Chairman Pal warns of a broad virus
Speaker 1: danger and he certainly batted down any expectations of negative
Speaker 1: rates out there, but certainly a somber longer term view
Speaker 1: from the chairman to get a sense of kind of
Speaker 1: what some of the details are there that we should
Speaker 1: be paying attention to. We welcome Neil Dada ahead of
Speaker 1: US Economics at Renaissance Macro Research. So Neil, thanks so
Speaker 1: much for joining us. What was the key takeaway or
Speaker 1: key takeaways for you from what we heard from Chairman
Speaker 1: Pal this morning. Well, I think the most important takeaway
Speaker 1: is that he's leaning into fiscal authorities quite hard. U.
Speaker 1: He sounded pretty somber and um, you know, downbeat about
Speaker 1: the outlook. In my view, I think he kind of
Speaker 1: needs to do that. It's almost by design. If he
Speaker 1: sounds upbeat, that takes the pressure off on the heat
Speaker 1: off the ciscal authorities. If he sounds more negative, UM,
Speaker 1: I think he keeps the pressure on them. So UM.
Speaker 1: So to me, that, well, that's what was important. I
Speaker 1: also thought it was quite interesting they talked about how
Speaker 1: liquidity crises now can evolve into solvency problems later. Um. Again,
Speaker 1: that sort of speaks to this idea that the less
Speaker 1: they do now, the more pain there can be later.
Speaker 1: So that kind of speaks to the sort of second
Speaker 1: and third order effects from the initial shock um that
Speaker 1: I think a lot of people are worried about right now.
Speaker 1: So UM, I thought it was a pretty um you know.
Speaker 1: I mean, like like I said, I think I think
Speaker 1: he's negative. I think it's by design. Um. I think
Speaker 1: I think it's important for fiscal um you know, for
Speaker 1: our politicians to kind of um not declare victory too soon.
Speaker 1: And in my view that means really two things. And
Speaker 1: the most immediate term, UM, it means we need some
Speaker 1: kind of a stay in local aid package. UM, you know,
Speaker 1: from the federal government, you need to kind of backstop
Speaker 1: the revenue shortfalls that states are seeing. And UM, I
Speaker 1: think number two in the summer, when things presumably will
Speaker 1: feel a little bit better than they do right now. UM,
Speaker 1: we've kind of set up a cliff type scenario with
Speaker 1: with respect to fiscal policy, because we're going to see
Speaker 1: a robust unemployment insurance program evaporate for many millions of people.
Speaker 1: And these are individuals in many cases that UM work
Speaker 1: in industries like leaving, hospitality, retail that will be slow
Speaker 1: to come back. UM. And they also have very high
Speaker 1: propensities to consume. They usually spend what they get. So UM,
Speaker 1: those are the two things I think on the fiscal
Speaker 1: side that I'm kind of keeping an eye on right now.
Speaker 1: And I think Powell's right to kind of say that, UM,
Speaker 1: you know, while their costs to doing this, UM, the
Speaker 1: benefits probably away the cost at this point. Neil, I
Speaker 1: love speaking with you because when I sometimes feel gloomy,
Speaker 1: you often bring an optimistic view to the table, and
Speaker 1: I'm trying to find the optimistic view right now, especially
Speaker 1: after fed Share Powells testimony. I know that this is
Speaker 1: by design, but some of the statistics themselves all throughout
Speaker 1: one among people who are working in February, almost of
Speaker 1: those in households making less than forty tho dollars a
Speaker 1: year had lost a job in March. Meanwhile, Stan druck
Speaker 1: and Miller, the billionaire who has been very successful, said
Speaker 1: that the risk reward calculation for equities right now is
Speaker 1: the worst he's seen in his career. What do you
Speaker 1: have to say about that? So? I think, Um, I
Speaker 1: don't buy into this idea that the markets have priced
Speaker 1: in some kind of of you know, glory V shaped
Speaker 1: style of recovery and it's off to the races. Um.
Speaker 1: I think that's sort of a red herring that people
Speaker 1: are talking about. It's like everyone's looking for a V
Speaker 1: shaped recovery except for me. You know, I don't. I
Speaker 1: don't buy that at all. I mean, I think the
Speaker 1: markets in the economy are more or less telling you
Speaker 1: the same thing. We've done a reasonably good job of
Speaker 1: clipping off the left tail rist scenario. I don't think
Speaker 1: in L shape recovery is likely to happen on the
Speaker 1: other end of this. At the same time, we've opened
Speaker 1: things up a little, things have loosened a bit. Um.
Speaker 1: The process is going slowly and gradually, and we've had
Speaker 1: our initial bounce off belows and we're kind of treading water.
Speaker 1: So I think the stock market and the economy are
Speaker 1: more or less giving you the same message you asked
Speaker 1: for something optimistic. There's always been somewhere Lisa, and um
Speaker 1: and and and I'll tell you that. You know, it's
Speaker 1: pretty obvious to me that the economy bottomed sometime in
Speaker 1: the middle of April, meaning the level of activity isn't
Speaker 1: getting any worse. If you look at specific sectors, loively, housing,
Speaker 1: there's some evidence that things are reviving a little bit
Speaker 1: more rapidly than originally anticipated. As an example, mortgage purchase
Speaker 1: applications are up now four weeks in a row. This
Speaker 1: preceded the sort of expiration of some of these formal
Speaker 1: shels formal formal shelter in place orders, right, So, um,
Speaker 1: the housing market recovery started even before these orders went,
Speaker 1: you know, expired, and it's still recovering. It's up four
Speaker 1: weeks in a row. Um, we've recouped about two thirds
Speaker 1: of the loss since mid March. So um, that's that's
Speaker 1: a surprise. Um, and it's you know, I mean the
Speaker 1: fact that homebuying demand is picked up. I think it's
Speaker 1: a it's a good thing, it's an interesting sign. So
Speaker 1: it's something we're keeping an eye on. Yeah, Neil Data,
Speaker 1: thank you so much for being with us as always. Uh,
Speaker 1: it's always wonderful to get your perspective, Neil Data, head
Speaker 1: of US economics at Renaissance Macro Research. And I will
Speaker 1: tell you in the housing market, Paul, I wonder how
Speaker 1: bifurcated it is with now on urban centers getting the
Speaker 1: bulk of the purchasing right now. We hear so much
Speaker 1: about this in Denise PELAGRENI was talking about this how
Speaker 1: people are looking to get out of the city right now,
Speaker 1: perhaps because they've been sheltering in place in a studio
Speaker 1: or concerned about the density factor, but that seems to
Speaker 1: be something persistent. I wonder if it's going to be
Speaker 1: your diehard city personally, you're not considering leaving the city. Well,
Speaker 1: I'm I'm born and raised here and I've lived outside
Speaker 1: of the city, but you know, for for the time being,
Speaker 1: I'm here, and it will be interesting to see how
Speaker 1: the city transforms, especially if it gets cheaper for individuals
Speaker 1: to live here. How that affects things especially, I'm not
Speaker 1: going to get into it. Vanguard is known as the
Speaker 1: firm that really pioneered the index fund, that really has
Speaker 1: led the charge into passive investing. So it came as
Speaker 1: a surprise to some people in February when it announced
Speaker 1: a partnership with Harbor Vest UH Strategic Partnership to provide
Speaker 1: qualified investors with access to private equity, which is decidedly
Speaker 1: not indexible in the same kind of way as public equities.
Speaker 1: The question is, then the world got turned on its head.
Speaker 1: What is the opportunity now in private equity joining us now?
Speaker 1: I'm so glad to say fran Can i Ree, principle
Speaker 1: and global head of Private Investment at Vanguard frand thank
Speaker 1: you so much for being with us. I would love
Speaker 1: to start just first with how strong or weak demand
Speaker 1: has been for private equity at a time when some
Speaker 1: of the smaller businesses that these firms invest in are
Speaker 1: getting incredibly challenged by the pandemic and related shutdowns. Oh yes,
Speaker 1: thank you. And the supply coming in and the client
Speaker 1: interests coming in continues, despite as you mentioned, the health
Speaker 1: crisis and the market volatility. UM. I think a lot
Speaker 1: of investors see the case for private equity UM. The
Speaker 1: case also has extended in full and bear markets. So
Speaker 1: private equity tends to be a replacement to public equity
Speaker 1: or a compliment. And we've seen in other bear market
Speaker 1: environments where private equity has held its own. So Frank
Speaker 1: gives a sense of kind of the thinking behind at Vanguard. Again,
Speaker 1: as Lisa was saying earlier, you guys are the big
Speaker 1: giant player and indexing, and what's the thinking behind getting
Speaker 1: into the private equity business. Yeah, thanks, Um. I think
Speaker 1: most people may now mel us as indexing, but when
Speaker 1: we started Vanguard, Jack Bogel started Vanguard, we started as
Speaker 1: an actively managed shop and our first offerings were active
Speaker 1: uh in nature. And so while we get very well
Speaker 1: known for our indexing, I'm very proud of our indexing franchise.
Speaker 1: We're actually one of the largest active investors on the
Speaker 1: public equity side. We're also by far one of the
Speaker 1: largest active managers on the fixed income side, both taxable
Speaker 1: fixed income and tax exempts. So for us, we've always
Speaker 1: been a very large, vibrant, active shop, and private equity
Speaker 1: just extends that from the public markets. For the private
Speaker 1: markets fran This was the rage heading into this crisis,
Speaker 1: or right before it, where a vast amount of money,
Speaker 1: record sums were flooding into private equity firms public private
Speaker 1: debt funds, the idea being that public markets were still
Speaker 1: flush with cash, that really the private markets were the
Speaker 1: ones that still held opportunity. I'm wondering, though, liquidity and
Speaker 1: solvency are different, and there are people who are saying
Speaker 1: that private equity hasn't sold off to the same degree
Speaker 1: that public markets have, but it's simply a function of
Speaker 1: there not trading as much. Would you agree with that?
Speaker 1: Do you think that private equity has seen the same
Speaker 1: scope of declines, we just may not be able to
Speaker 1: see them in the same way. Yeah, that's probably correct.
Speaker 1: There's three maybe main components. One, you have appraisal based
Speaker 1: valuation versus with the public markets are priced instant caneatives
Speaker 1: for liquidity at that second, so it's the price that
Speaker 1: will clear supply and demand. And whereas private equity is
Speaker 1: a much longer duration investment, so the investors and the
Speaker 1: investments themselves are much longer duration investments and they don't trade,
Speaker 1: so a very small amount trades relative to its float,
Speaker 1: which is very different from the public equity market. So, Frank,
Speaker 1: give us a sense of kind of as you look
Speaker 1: at the market today, it must be really difficult to
Speaker 1: get a sense of where true value is. How are
Speaker 1: you and in your team kind of trying to work
Speaker 1: through that challenge. But the great thing for us at Vanguard,
Speaker 1: we launched on March five, and so for us, it's
Speaker 1: for us it's a new uh. So we actually have
Speaker 1: no money in the ground, So we actually see this
Speaker 1: as very opportunistic for Vanguard investors because we're not We
Speaker 1: were not buying in November, December, January. We would have
Speaker 1: if we were in the market, but we are entering
Speaker 1: actually at a pretty good time because the valuations have reset.
Speaker 1: So where are you seeing the potential opportunities here? So
Speaker 1: we very much like our roots on the public equity
Speaker 1: side and public fixed income side, are offering is going
Speaker 1: to be very broad based, very global. Um will likely
Speaker 1: have thirty to forty gps inside this offering, with seven
Speaker 1: to eight hundred different holding companies, it'll globally diversified. I
Speaker 1: don't want to interrupt you, Fran, but this sounds a
Speaker 1: lot like an index fund of private equity is that
Speaker 1: what it's aiming to be? Did we just lose frand
Speaker 1: did he just hang off on that question He was saying,
Speaker 1: I don't think so. I think we just lost him.
Speaker 1: But that's sort of the question that some people have
Speaker 1: is that are we going to end up getting some
Speaker 1: sort of indexing factor among private equity funds and could
Speaker 1: Vanguard's entrance into it be that. I mean, that's not
Speaker 1: what he said. We didn't get his response on that.
Speaker 1: We will have to have him back to discuss it,
Speaker 1: because it is a really interesting point. In other words,
Speaker 1: how much mainstreaming are you gonna end up seeing in
Speaker 1: the private equity industry? Paul, Yeah, And you know some people,
Speaker 1: you know, they see Vanguard and the likes of the Vanguards,
Speaker 1: you know, get into private equity that say top of
Speaker 1: the market when you know, as you were mentioning earlierly. So,
Speaker 1: there's so much capital flowing into the private equity space
Speaker 1: in the in the period before the pandemic, and there's
Speaker 1: not that many places to find good deals, and we
Speaker 1: saw this cash kind of piling up on the sidelines
Speaker 1: and the question is is there too much cast chasing
Speaker 1: too few deals? Uh? Pushing the prices up and returns down.
Speaker 1: I think the days of getting I R are those
Speaker 1: are certainly gone. And the questions can you get double
Speaker 1: digit consistent returns in the private equity market? If anything, though,
Speaker 1: Paul I will say that this downturn gives certain private
Speaker 1: equity firms certainly raising funds now a better chance of
Speaker 1: getting that I are going forward just given some of
Speaker 1: the valuations. Yes, and I think we're seeing a lot
Speaker 1: of money flow into a stress credit funds and uh,
Speaker 1: you know, you really if you can do your credit work, Uh,
Speaker 1: you know, certainly some returns there. So we thank fran
Speaker 1: Fran Canary, principle and global head of Private Investments at Vanguard,
Speaker 1: joining us here to talk about the private equity business
Speaker 1: and the opportunities in a pandemic world. This is Bloomberg.
Speaker 1: The people are starting to debate how this coronavirus and
Speaker 1: the will change economic will change consumer behavior? Is it
Speaker 1: changing consumer behavior and to what degree and across which
Speaker 1: activities you know, people are you know, as it relates
Speaker 1: to purchasing goods and services, people are doing more and
Speaker 1: more of it online and then when they do, in
Speaker 1: fact venture out to the stores, are they using more
Speaker 1: or less cash, deborit cards, credit cards, all that type
Speaker 1: of things. Fascinating to see how this pandemic will impact
Speaker 1: consumer behavior going forward as we think about payments and
Speaker 1: how we actually buy stuff when we're out in the stores. Uh.
Speaker 1: We're really fortunate to have Lynda Kirkpatrick, President for the
Speaker 1: U s issuers at MasterCard UH joining us. So, Lynda,
Speaker 1: give us a sense of what you're seeing in terms
Speaker 1: of the credit and debit card activity on your network.
Speaker 1: How is consumer behavior changing? Thanks? Called, Well, we've seen
Speaker 1: an increase in contactless payments in particular over the past
Speaker 1: couple of months. And you know, the payments industry has
Speaker 1: been investing in contact with capabilities for a while. So Linda,
Speaker 1: sorry to interrupt, but you know, to find what is
Speaker 1: contactless payments, because I find that it's much less prevalent
Speaker 1: in the US than it is, saying Europe. Yeah, that's right.
Speaker 1: Calls contactless is where you have technology that's embedded into
Speaker 1: a typical credit or debit cards that allows a consumer
Speaker 1: to tap their card at a terminal rather than inserting
Speaker 1: it or swiping it and avoiding contact with the terminal altogether.
Speaker 1: So it's using technology that prevents that contact with the
Speaker 1: with the register and it's just the safe and secure
Speaker 1: is every other product on the marketing fact that it
Speaker 1: has the safest UH technology embedded into into the card.
Speaker 1: UH and it's really a fast and easy way for
Speaker 1: consumers to go about their day and their purchases UH
Speaker 1: in general. So in with those with those payments, we've
Speaker 1: seen them in crease over the past few months. UH
Speaker 1: and and we believe this is a reflection of the
Speaker 1: current environment. We wanted to really under better understand how
Speaker 1: these consumer behaviors were changing and how we can support
Speaker 1: consumers and merchants as we moved through uh COVID nineteens.
Speaker 1: So we actually conducted a survey seventeen thousand people nineteen
Speaker 1: countries around the globe and UH of those we've surveyed,
Speaker 1: nearly of consumers say that they're now using some form
Speaker 1: of contactless payments and they cite safety, health and security
Speaker 1: reasons as as key drivers of that. And you know,
Speaker 1: Mastercard's own data shows that our contactless transactions grew twice
Speaker 1: as fast globally and three times as fast in the
Speaker 1: US as non contactless transactions in grocery and drug stores
Speaker 1: in particular. UH. So we are seeing arise in contactless
Speaker 1: both here in the US as well as markets outside
Speaker 1: the US. Even in our in our first quarter contactless
Speaker 1: transactions group forty per cent. I'm wondering, Linda, how easy
Speaker 1: it is to determine the shifts in the market right now,
Speaker 1: given how many people are staying at home and aren't
Speaker 1: spending as much, And if you could just speak to
Speaker 1: the not spending as much aspect a little bit as well,
Speaker 1: that might give people a sense of just how much
Speaker 1: spending has contracted. Yeah, you know what we're seeing with
Speaker 1: respect to consumer spending is it's really being focused in
Speaker 1: the food and pharmacy areas. So people are still absolutely spending.
Speaker 1: If you look at our transaction data and our purchase
Speaker 1: volume data, we're seeing, uh, we're seeing spend and we're
Speaker 1: seeing growth as of the end of the first quarter
Speaker 1: and into the second, but we're seeing it very concentrated
Speaker 1: in category that are everyday items and necessity items, and
Speaker 1: certainly digital and e commerce transactions have grown exponentially as well,
Speaker 1: So we've really seen a shift from uh, certain categories
Speaker 1: to other categories. But we are seeing sustained periods of
Speaker 1: spend and growth, and again, contactless Uh, ways to pay
Speaker 1: are are really on the rise because it you know,
Speaker 1: it's a product that lends itself to an environment where uh,
Speaker 1: you know, the CDC and other health officials are encouraging
Speaker 1: consumers not to come in contact with with cashiers and terminals.
Speaker 1: It's it's really the rough product at the right time, Linda,
Speaker 1: I'm wondering how difficult it is to get some of
Speaker 1: the stores that you partner with to invest in contact
Speaker 1: lists equipment now given their cash struggles. Yes, so the
Speaker 1: good news is that most merchants in the US have
Speaker 1: invested in contact with capability already. The upgraded the terminals
Speaker 1: to accept ship several years ago, and at this point
Speaker 1: we have six of our volume at MasterCard, actually close
Speaker 1: to sixty happening at terminals that have contactless capabilities. So
Speaker 1: acceptance by and large is is there. Uh. And we
Speaker 1: actually had great commitments from are issuing financial institutions to
Speaker 1: issue those contactless cards, and many of them now are
Speaker 1: already in market. Uh. So we're now seeing the benefit
Speaker 1: of that investment on the merchant side and the bank
Speaker 1: side as consumers are using these products more readily. You know,
Speaker 1: we wouldn't have anticipated when we started this journey UH
Speaker 1: several years ago towards you know, chip and contactless that uh,
Speaker 1: that we would have a pandemic that would make it
Speaker 1: ever more relevant. But but certainly now we have the
Speaker 1: health benefits in additions to safety and security benefits that
Speaker 1: contactless spring. Linda Kirkpatrick, thank you so much for being
Speaker 1: with US. President of US issue or as at MasterCard
Speaker 1: based in New York, Well shares of grub Hub yesterday
Speaker 1: searched as much as thirty nine percent after reports that
Speaker 1: Uber was planning to buy the food delivery company grub Hub.
Speaker 1: The question is a will it get through and be
Speaker 1: What is the goal in the combination of both of
Speaker 1: these companies joining US now as man Deep Singh, senior
Speaker 1: tech industry analyst at Bloomberg Intelligence, So what would Uber
Speaker 1: be looking to do with an acquisition of grub Hub. Sure,
Speaker 1: so one of the things that they are targeting is
Speaker 1: you know, positive even profitability. Obviously they set the goal
Speaker 1: for for Q twenty. We don't think that's going to
Speaker 1: happen even by the way, a whole lot of second,
Speaker 1: I'm not letting you get away with that. Basically, they're
Speaker 1: hoping to actually turn a profit at some point in
Speaker 1: life while they were trying to. But I think they
Speaker 1: were hit really badly with this COVID situation. Uh, Sadara
Speaker 1: say his businesses recession proves, but it seems, uh, you know,
Speaker 1: the volumes are done about fifty to sixt in core
Speaker 1: ride sharing, and now it's a matter of can this
Speaker 1: be a growth company? And investors are rethinking the whole
Speaker 1: notion of you know, Uber having a long addressable market
Speaker 1: where it can keep growing you know, every year. That
Speaker 1: is out of the window simply because white sharing at
Speaker 1: its core is declining, like I said, in volume, and
Speaker 1: we don't know when it will come back. Yes, the
Speaker 1: social distancing will be in effect for the foreseeable future,
Speaker 1: and even if things open up, the volumes are not
Speaker 1: going to come back right away. So we are talking
Speaker 1: about desoleration of pronounced deceleration in top line. And I
Speaker 1: think this is just an attempt to boost in organic growth.
Speaker 1: So grub hub kind of gives them one point five
Speaker 1: billion dollars in revenue, It helps them consolidate market share
Speaker 1: and really lower cash burn. That's key because they were
Speaker 1: losing fifty cents on every dollar of revenue in Uber red.
Speaker 1: So this kind of at least helps them lure that
Speaker 1: cash burn, which I think is extremely important given you know,
Speaker 1: the concern around liquidity for both Uber and Left so
Speaker 1: many deposition you know, acquisition, potential acquisition of growth hub.
Speaker 1: Kind of a tacit admission that the core right sharing
Speaker 1: business will not return to the growth rates it was
Speaker 1: before the pandemic, that maybe consumer behavior will be permanently altered,
Speaker 1: and one of the areas that may be altered. Is
Speaker 1: this the whole concept of right sharing. I wouldn't call
Speaker 1: it permanently altered, but I think for the foreseeable future,
Speaker 1: right sharing isn't coming back to the historical levels we
Speaker 1: have seen. And the fact that Uber is doubling down
Speaker 1: on food delivery, which is a lower growth margin business
Speaker 1: where they're losing money, just goes to show how desperate
Speaker 1: they are to at least push that top line. Because
Speaker 1: the last thing you want as Uber, you know, a
Speaker 1: company that has got scale and network effects, is to
Speaker 1: have you know, decline in top line growth. And that
Speaker 1: is very much of a possibility if this doesn't happen,
Speaker 1: because the core business is, like I said, declining at
Speaker 1: least for the next two quarters. There's a question Mandy
Speaker 1: it's a larger question about whether the sharing economy that
Speaker 1: was touted by so many of these tech startups and
Speaker 1: growth companies is dead in an era post pandemic. When
Speaker 1: you talk to individuals and when you look at the
Speaker 1: actual traffic at Uber and Left and how it's starting
Speaker 1: to recover in places that might be exiting the lockdown.
Speaker 1: There aren't many where Uber and Left have presents, But
Speaker 1: just in terms of the path forward, what are you
Speaker 1: hearing on that front? Well, so look at Airbnb and
Speaker 1: you know pretty much everybody, uh you know on the
Speaker 1: food delivery side is also part of the economy, and
Speaker 1: I think they do serve a purpose at the end
Speaker 1: of the day. They're all part of going digital and
Speaker 1: you know, helping improve utilization. The problem is just the
Speaker 1: cash burn. These business models are just not sustainable, and
Speaker 1: I think what covid situation has done is really brought
Speaker 1: the whole aspect you know of these companies just burning
Speaker 1: through cash quarter after quarter, not even trying to generate
Speaker 1: a profit. And really now the question is who can
Speaker 1: hold on to the cash for long enough? And we
Speaker 1: think Lift, for example, is really in a precarious situation
Speaker 1: where they're burning about two million dollars of cash every
Speaker 1: month and they have you know, about two point five
Speaker 1: billion dollars in liquidity, so it just takes them up
Speaker 1: to a year if the situation doesn't change. And I
Speaker 1: think liquidity is really the main focus right now for
Speaker 1: investors who can survive this period, which is at least
Speaker 1: going to be you know, I believe sticks to a
Speaker 1: twelve months if not, you know what, you know what
Speaker 1: this feels like to me? It feels like people are
Speaker 1: going to be paying a lot more to get the
Speaker 1: food delivered. I think so, yeah, exactly, And and it
Speaker 1: kind of goes to the point, uh, may man deep
Speaker 1: as we compare Uber to Lift, which investors are are
Speaker 1: wont to do? You know, lift that the Lift story
Speaker 1: was were simplified, were core ride sharing? Uh? To the
Speaker 1: extent that that business maybe permanently altered or maybe not
Speaker 1: permanently but certainly significant offered over a longer period of time.
Speaker 1: What's the feeling about the Lift story now? Is it
Speaker 1: still the clear story or to still the one that
Speaker 1: needs to diversify? Yeah, I think the diversification aspect is
Speaker 1: clearly not being diversified is clearly hurting them right now.
Speaker 1: And I will compare you know, Lift to somebody like Amazon.
Speaker 1: You know, both Uber and Lift have been uh cutting costs.
Speaker 1: They have been laying off employees. There is Zone is
Speaker 1: hiring hundred house and employees. Both of them are doing
Speaker 1: last mild delivery. So and and granted, uh, you know,
Speaker 1: Lift is a more one sided business model where they're
Speaker 1: just doing right sharing. But why can't they adapt? I'm
Speaker 1: just kind of really baffled here that they weren't able to,
Speaker 1: you know, offer grocery delivery quick enough to offset that
Speaker 1: they decline in right volume. Why did they have to
Speaker 1: just go in the towel and start laying off people.
Speaker 1: And and I think their business model there kind of
Speaker 1: premise all along was personal mobility and they haven't really fulcated.
Speaker 1: This is just you know, a one dimensional company just
Speaker 1: doing white sharing where they're they're supposed to have a
Speaker 1: lot of data where they can anticipate the demand and adapt.
Speaker 1: You know, they should have been able to do grocery
Speaker 1: delivery too, delivery much more quickly than than they have.
Speaker 1: And and that to me is surprising. Here Men Deep Seeing,
Speaker 1: thanks so much for joining us. We appreciate you bringing
Speaker 1: us up to date on Uber Grubhub, Lift and all
Speaker 1: that ride as sharing. Uh, it's going to be interesting
Speaker 1: to see how this shakes out. Man Deep seeing senior
Speaker 1: tech industry analys for Bloomberg Intelligence, and it's interesting. Lisa.
Speaker 1: You know, I kind of was always joking with friends.
Speaker 1: I just said, you know, Uber and Lift, the whole
Speaker 1: ride sharing thing was one of the greatest inventions of
Speaker 1: all time, never thinking that it would have to deal
Speaker 1: with something like a pandemic and how that might you know,
Speaker 1: really really alter the way people do some of these
Speaker 1: sharing activities like rides and or Airbnb. Yeah. I'm hesitant
Speaker 1: to make sweeping characterizations or extrapolations from this moment because
Speaker 1: the world changes when there is some sort of vaccine
Speaker 1: and people feel comfortable going out and about that's you know,
Speaker 1: the big caveat here. Yeah, exactly, So we'll see. But
Speaker 1: the you know, uh, Uber definitely dug doubling down on
Speaker 1: that diversification to food delivery business to Uber Eats, with
Speaker 1: potentially an acquisition of competitor grow Up. So will follow
Speaker 1: that story as it develops going forward, along with Lee
Speaker 1: so Bramo Wits. I'm Paul Sweeney and this is Bloomberg.
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