Speaker 1: From the heart of where innovation, money and power Colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Check in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up. In the next hour, the
Speaker 1: Fed unleashes its most aggressive policy in decades to combat
Speaker 1: soaring inflation. Will talk with Liz Young of Sophi about
Speaker 1: what it means for the economy, consumers and tech plus
Speaker 1: substantial demand for travel that is the message from airbnbco
Speaker 1: Brian Chesky after a much better than expected earnings report.
Speaker 1: They'll join me live to talk about how tourism is
Speaker 1: rebounding and that provocative tweet about big changes to Airbnb
Speaker 1: coming and one third of list market cap wipe out
Speaker 1: in a single session. Uber releasing its results early to
Speaker 1: prevent investor dragging them down to still Uber shares taking
Speaker 1: a smaller lugdown even after beating estimates. We're gonna speak
Speaker 1: with Lift president John Zimmer about the market reaction and
Speaker 1: what's next. All of that in a moment, but first
Speaker 1: I want to get a look at the markets and
Speaker 1: a big day for the US economy. The Federal Reserve
Speaker 1: has voted unanimously to raise a benchmark interest rate by
Speaker 1: half a percentage point, stock soaring, bonds rising during FED
Speaker 1: share j Pal's press conference. Bloomberg's Ed Ludlow is here
Speaker 1: with the reaction. I take it away. Yeah, the SMP
Speaker 1: five hundred, the main gauge of US equities rising by
Speaker 1: three percent. It's biggest jump since May really accelerating those
Speaker 1: gains throughout that press conference, as we discussed, and that's
Speaker 1: that one by more than three percent. We saw yields
Speaker 1: pull back, especially the benchmark ten year treasury yield, off
Speaker 1: five pound four basis points to two point nine four percent,
Speaker 1: and it was interesting to see bitcoin also get caught
Speaker 1: up in this kind of risk on sentiment. We saw
Speaker 1: in markets back above thirty nine thousand, pushing towards forty
Speaker 1: dollars per token, caught up as eguties are rising. Now
Speaker 1: come means by Bloombog terminal producer Marguerite points out to
Speaker 1: me that this is the biggest jump in interest rates
Speaker 1: since two thousand. But here's the thing, the focus is
Speaker 1: very much on inflation. The increase the f o m
Speaker 1: c's target federal funds rate takes us to a range
Speaker 1: of zero point five to one. You remember we got
Speaker 1: that quarter percentage point hike in March, but for much
Speaker 1: of the last two years, rates have been near zero
Speaker 1: because the FED was trying to prop up the U
Speaker 1: S economy cushion U S economy from the immediate impacts
Speaker 1: of the COVID nineteen pandemic globally, but the gap between
Speaker 1: rates and where we see inflation, which is at its
Speaker 1: highest level since the eighties, is the most on record,
Speaker 1: the spread between those two measures that we track in
Speaker 1: the US economy and FED power was saying that he
Speaker 1: envisages fifty basis point hikes. At the next couple of meetings,
Speaker 1: he got asked, well, could we see a seventy five
Speaker 1: basis point hike. He said that that was not currently
Speaker 1: being considered by the f O m C. Not the
Speaker 1: only story of the day. M Of course, Lift and
Speaker 1: Uber two very different stories, but similar market reaction. Lift
Speaker 1: off by thirty biggest drop on record, a huge chunk
Speaker 1: of its market cap lost after he gave a pretty
Speaker 1: weak outlook, and there are concerns that it's gonna have
Speaker 1: to spend heavy on driver incentives, which is going to
Speaker 1: weigh on profit. Uber actually showed some strength interesting ebit
Speaker 1: DAR forecast, but again the stock suffering in conjunction with
Speaker 1: its industry peer lift. Big questions now about how these
Speaker 1: two companies and bride Sharing stand on their own two
Speaker 1: feet in this post pandemic world. Then all right, add
Speaker 1: thank you lots to digest today. The Federal Reserve, as
Speaker 1: i'd saying, giving a much needed boost to tech stocks
Speaker 1: by ruling out a more aggressive rate hype path and
Speaker 1: reassuring the US economy will stay strong. As you mentioned,
Speaker 1: NASDAC nearly three biggest one day jump in a week.
Speaker 1: Liz Young, head of investment Strategy, it's so far joined
Speaker 1: us now, So look, lot's going on here. What do
Speaker 1: you think the ripple effects of this are really going
Speaker 1: to be on the macro environment over the next few
Speaker 1: months and the next couple of years. Well, the reality
Speaker 1: of it is that this is the first of probably
Speaker 1: a few larger hikes that we're going to see. It
Speaker 1: was important to get this first big fifty basis point
Speaker 1: hike behind us, because I think the anticipation was really
Speaker 1: killing us as far as investor sentiment goes. But we're
Speaker 1: probably still going to see another fifty in June. We
Speaker 1: may see again another fifty in July. The ripple effects
Speaker 1: of those together should hopefully damp in demand to a
Speaker 1: point that some of this supply demand stuff becomes more
Speaker 1: imbalanced and we see concurrently a rollover in inflation. The
Speaker 1: issue here, and I heard you guys just talking about
Speaker 1: the spread between the tenure Treasury UH and CPI and
Speaker 1: the spread between CPI and where the Fed Funds rate is.
Speaker 1: It's not that we're trying to get the Fed funds
Speaker 1: rate and the CPI rate to meet anytime soon. It's
Speaker 1: that as the Fed funds rate moves up, we want
Speaker 1: CPI to move down, and we want to see that
Speaker 1: move down, hope fully with a quick pace, because that's
Speaker 1: what's biting into the consumer. But the issue that we're
Speaker 1: probably going to face through summer is that we're sitting
Speaker 1: at an eight and a half percent c p I number.
Speaker 1: Even if this is the peak, it's not as if
Speaker 1: it's going to fall from eight and a half percent
Speaker 1: down to three percent overnight, So there's going to be
Speaker 1: a gradual reduction. We're just hopeful that as we raise rates,
Speaker 1: hopefully for fifty basis points, and we go at it
Speaker 1: with a heavy enough hammer, that CPI comes back a
Speaker 1: little faster than the Fed funds rate has to go up.
Speaker 1: So look, tech equities are among many stocks that have
Speaker 1: taken a giant hit this year. What does this mean
Speaker 1: for tech stocks in particular? So tech stocks, if we
Speaker 1: just use the nasdack to represent tech stocks, the Nasdaq
Speaker 1: is in bear market territory. Maybe after today it's narrowly
Speaker 1: out of bear market territory, but it probably should have been.
Speaker 1: And given where evaluations were before we started to really
Speaker 1: worry about Fed rate hikes and monetary policy tightening, some
Speaker 1: of that needed to come out of the system. Some
Speaker 1: of that bloat needed to come out of the system.
Speaker 1: So the correction that tech stocks have seen to this
Speaker 1: point I think makes sense given the inflated valuations that
Speaker 1: we're at. Also, when you look though at some of
Speaker 1: those tech stocks, they're still at pretty high valuation. So
Speaker 1: I wouldn't sit here and say that they're not going
Speaker 1: to go down further and that there isn't more risk
Speaker 1: in the system. But long term, if we look back
Speaker 1: on this time period, let's say five years from now,
Speaker 1: we're probably gonna look at it and say, you know what,
Speaker 1: some of those names were really good bargains at those levels.
Speaker 1: So this isn't okay. Time to be looking at tech
Speaker 1: as a longer term holding, and longer term here I'm
Speaker 1: talking about two years, three years, five years, looking at
Speaker 1: it as a long term holding, and looking for the
Speaker 1: companies that are high quality, that are still offering you
Speaker 1: growth prospects, and that aren't over levered or aren't trading
Speaker 1: at unreasonable valuations given where we are in the cycle.
Speaker 1: So I think it's okay, just come towing back in. Okay,
Speaker 1: how do you look at a company like Lift though
Speaker 1: losing of its value, Ubers earnings, We're a different story,
Speaker 1: but we're also seeing them take a slight leg down today.
Speaker 1: Investors are looking at you know, both of these companies
Speaker 1: as a gauge of the health of the consumer, right well,
Speaker 1: and I think there's a lot of different ways to
Speaker 1: look at the gauge of the health of the consumer.
Speaker 1: I think what we're seeing is that, because as I mentioned,
Speaker 1: a lot of that bloat came out of the system.
Speaker 1: Now you're seeing companies actually react in the stock market
Speaker 1: based on fundamentals. So we've gotten not as much of
Speaker 1: a tail wind from low rates, and you see earnings
Speaker 1: come out and companies are reacting to that. Generally speaking,
Speaker 1: the market overreacts in the short term. I also happened
Speaker 1: to think that this big rally we saw after the
Speaker 1: FED meeting today was a slight overreaction and we probably
Speaker 1: end up giving some of that back. So it's possible
Speaker 1: that we just need the dusk to settle on some
Speaker 1: of these companies that have drawn down quite a bit
Speaker 1: more after earnings reports. But frankly, I want to see
Speaker 1: the market react to earnings. I want to see the
Speaker 1: market actually paying attention to fundamentals and wanting to get
Speaker 1: what it paid is for and holding companies more accountable
Speaker 1: from a fundamental perspective instead of just relying on the
Speaker 1: macro backdrop to drive prices. On the other hand, I'm
Speaker 1: about to talk to Airbnb CEO Brian Chesky. Airbnb seeing
Speaker 1: substantial demand through the rest of the year. They say,
Speaker 1: you know, are you at all concerned that some of
Speaker 1: the demand companies are seeing is pent up demand coming
Speaker 1: out of the pandemic and that we're going to see
Speaker 1: another reordering as we move into next year. Well, depending
Speaker 1: on the sector that we're talking about, I think the
Speaker 1: travel sector is still seeing some of that pent up
Speaker 1: demand that people had been waiting to unleash once they could.
Speaker 1: The problem that the travel sector is going to face
Speaker 1: in this inflationary environment is that prices are going up.
Speaker 1: Flights are more expensive, hotels are more expensive. All of
Speaker 1: the experiences that we were hoping to have are more
Speaker 1: expensive than they were a year ago. So I think
Speaker 1: people are going to start to make different decisions on
Speaker 1: that front. As far as pent up demand, as like
Speaker 1: if we're looking at goods companies, looking at consumers actually
Speaker 1: buying things in stores or things online, I think a
Speaker 1: lot of that pent up demand has already been unleashed,
Speaker 1: and now we're in a place where we can see
Speaker 1: steady demand. But I don't know that we're going to
Speaker 1: see again that huge surgeon demand that we saw when
Speaker 1: things started to open back up for the first time.
Speaker 1: All right, Liz Young sopha ahead of Investment Strategy. Great
Speaker 1: to have you back here on the show. Thank you everyone,
Speaker 1: it seems wants to get away. Travel experts expect this
Speaker 1: summer to be one of the best the industry has
Speaker 1: seen after two years of pandemic lockdown. If Airbnb's earnings
Speaker 1: or any indication it will be a busy summer indeed,
Speaker 1: with CEO Brian Chesky seeing quote higher than historical demand,
Speaker 1: joining us now to talk about that more. Airbnb CEO
Speaker 1: and co founder Brian Chesky himself Grime. Great to have
Speaker 1: you back on the show as always. I know some
Speaker 1: of the trends you're seeing surpassed even your internal expectations.
Speaker 1: What surprised you most about the demand you're seeing? Well,
Speaker 1: I think what surprised me maybe the most, was that
Speaker 1: I was expecting last year to be the biggest traveler
Speaker 1: rebound that we had probably ever seen in a century.
Speaker 1: You've never seen so much pent up demand, and I
Speaker 1: think that that surprised me is we're seeing potentially even
Speaker 1: more pent up demand this year, and maybe that's not surprising.
Speaker 1: I think people weren't quite comfortable crossing borders, and yet
Speaker 1: the delta strained, and I think you're gonna see this
Speaker 1: summer travel season unlike we've ever seen before. And the
Speaker 1: thing about travel is there are some things when they're
Speaker 1: taken away from you, you kind of don't want to
Speaker 1: do them again. I don't think that's travel. I think
Speaker 1: the longer people can't travel, the more they want to travel.
Speaker 1: The morning bushes they get, so you use the words
Speaker 1: pent up demand there. And I'm curious how you think
Speaker 1: this summer might compare to next summer. For example, are
Speaker 1: you expecting the growth rate to slow down after people
Speaker 1: get this out of their system a little bit? Um No,
Speaker 1: I don't think so. I mean, number one, Asia probably
Speaker 1: won't recover right away. It's going to take some time.
Speaker 1: And you know that's where the large percent of the
Speaker 1: world population lives. So I think that next year you're
Speaker 1: going to see a huge amount of growth coming from Asia.
Speaker 1: It's gonna be a little slower this year. We have
Speaker 1: a lot of pent up demand for Europe and North America.
Speaker 1: The thing Emily that would just say is this, there
Speaker 1: are new use cases that are here to stay. People
Speaker 1: traveling to rural areas, people staying longer, people staying at
Speaker 1: me for a month or longer. But then our bread
Speaker 1: and butter historically has been cross border and urban and
Speaker 1: that is now back at or above two thou levels.
Speaker 1: So we're seeing a combination of the old trends coming
Speaker 1: back plus new trends sustaining. That's going to continue, and
Speaker 1: then eventually you're gonna have other geographies like Asia comes
Speaker 1: So I'm pretty bullish the next couple years. How strong
Speaker 1: is the consumer in your opinion, because obviously, with inflation,
Speaker 1: the cost of flights are going up, the cost of
Speaker 1: travel more broadly is going up, And I wonder if
Speaker 1: you think is there a point where inflation catches up
Speaker 1: with the consumer and overwhelmed that pent up demand. I
Speaker 1: think that it could affect travel more broadly, but I
Speaker 1: think it's very important for me to distinguish our business.
Speaker 1: You know, during the pandemic, we recovered faster than any
Speaker 1: travel company. That's clear. I don't think that's a controversial statement.
Speaker 1: And why is that. It's because we have nearly every
Speaker 1: type of space and nearly every community at nearly every
Speaker 1: price point. So when people feel like they can't fly
Speaker 1: they can't afford to fly, they can still get in
Speaker 1: a car and book an air nearby. And I do
Speaker 1: think a lot of people still want to go to
Speaker 1: the house. Airbing b's are typically still cheaper than a hotel,
Speaker 1: and so we're pretty resilient no matter how changing travel
Speaker 1: the man occurs. Lift meantime is getting pummeled today investors
Speaker 1: not excited about their outlook. Obviously a different company, but
Speaker 1: another sort of measure of consumer sentiment, and I wonder
Speaker 1: how you read that, you know, given that people need
Speaker 1: this kind of transportation to get from place to place airbing,
Speaker 1: b or not. I think that every company is different,
Speaker 1: and so I think that, Um, I think that the
Speaker 1: phenomenon of how people we're moving within cities is pretty
Speaker 1: distinct from the phenomenon of people traveling. And yes, people
Speaker 1: do need uh you know, transportation within markets. But the
Speaker 1: thing I would just know is about half our business
Speaker 1: are for stays outside of cities, right, so we have
Speaker 1: a lot of vacation rentals rural areas where ridesharing would
Speaker 1: not be very prolific. Well, on that note, you are
Speaker 1: saying huge demand for homes, and I wonder how that's
Speaker 1: translating into demand for urban travel. When do you think
Speaker 1: tourism in cities will fully rebound. Well, it's already fully
Speaker 1: I mean it's already above at this very moment with Airbnb.
Speaker 1: I can't say it's above for everyone. I don't know
Speaker 1: if hotels are back to twenteen levels, but we are,
Speaker 1: so I think it's already back. I think the summer
Speaker 1: it will be back. But Emily, here's the difference. Before
Speaker 1: the pandemic really our business was dominated by urban areas
Speaker 1: and the way people travel. They would go to Vegas
Speaker 1: or Los Angeles, or Rome or Paris. Now they're consideration
Speaker 1: set involves hundreds thousand places all over the world. They're
Speaker 1: open to national parks, They're going to rural area to
Speaker 1: go into small towns, so there's just a lot wider
Speaker 1: options now. Asking about the Apack region, the Apack region
Speaker 1: still struggling with COVID, what steps are you taking their
Speaker 1: to use your financial resources widely in that region where
Speaker 1: there isn't much demand. Do you see things improving there?
Speaker 1: But they are gradually improving. But money can't fix the problem.
Speaker 1: People just need to get comfortable traveling and you need
Speaker 1: to start crossing borders again. That is inevitable. People will
Speaker 1: eventually cross borders and travel in Asia more than they
Speaker 1: ever have before. But until they're comfortable, that's not something
Speaker 1: we can fix with money. The best thing we can
Speaker 1: do is wait for that market to be ready. It
Speaker 1: will certainly start coming back this year. I think you're
Speaker 1: gonna see a much bigger rebound for Asia probably next year.
Speaker 1: But again that those questions are kind of beyond me.
Speaker 1: This is really more a matter of where the recovery
Speaker 1: is for the pandemic in those countries. Okay, So let's
Speaker 1: talk about something that's not beyond you, and that is
Speaker 1: your work from Anywhere policy. You've announced that Airbnb employees
Speaker 1: can work from anywhere, and I'm curious how you think
Speaker 1: that will impact recruiting and impact hiring. Well, I can.
Speaker 1: I'll give you one stat So we announced last thursday,
Speaker 1: um it was April that you know, employees of Airbnb
Speaker 1: can now work, live and work anywhere in the world.
Speaker 1: If you move within the country you work, We're not
Speaker 1: going to reduce your pay. A lot of companies do
Speaker 1: location based pay. We don't do that. Within the country.
Speaker 1: You can go to a hundred and seventy different countries,
Speaker 1: live for nine days at a time. Since that announcement,
Speaker 1: more than a hundred thousand visits have come to our
Speaker 1: Jobs and Careers page. A hundred thousand. So I think
Speaker 1: that gives you a sense. What it tells me is
Speaker 1: that flexibility is the future. After compensation, Flexibly will be
Speaker 1: the most important benefit employers can offer. The best people
Speaker 1: aren't just in Silken Valley. They're not just in New York.
Speaker 1: The best people are now everywhere in any company that
Speaker 1: limits their talent pool to a commuting radius around their
Speaker 1: office will be at a disadvantage. You justin now an
Speaker 1: anti party crackdown, tightening up restrictions around Memorial Day and
Speaker 1: July fourth. You know, still given despite the moves that
Speaker 1: AIRBNBA has been making, we've seen people evade the rules.
Speaker 1: We saw what happened in Pittsburgh and is shooting at
Speaker 1: an Airbnb that's sadly uh, you know, killed two teenagers. Um,
Speaker 1: what more steps do you think Airbnb could take in
Speaker 1: this arena to make sure that people are always safe
Speaker 1: when they're staying at an Airbnb. Yeah, well number one, Emily,
Speaker 1: you just said it. We want to make sure that
Speaker 1: people always feel safe when they're an Airbnb. And the
Speaker 1: name of the game is we can always do more,
Speaker 1: and we're always trying to do more than we've done before.
Speaker 1: So what we've done is we background check everyone United States,
Speaker 1: every guest and host. We have a risky reservation system
Speaker 1: where where we put reservations on high alert during certain holidays.
Speaker 1: So this Memorial Day and this July we're going to
Speaker 1: be very much on high alert about parties. We've banned
Speaker 1: party houses, meaning you can't get an Airbnb for more
Speaker 1: than sixteen people in a house that's deemed a party.
Speaker 1: And so we're doing a lot of things. We're gonna
Speaker 1: continue to get more and more aggressive. Um. The good
Speaker 1: news is the incident rate has steadily been going down
Speaker 1: over time. The bad news is one incident is always
Speaker 1: one too many, so we have to continue to work
Speaker 1: really hard. So you tweeted that you will be announcing
Speaker 1: the biggest change to Airbnb in a decade next week.
Speaker 1: We're all on the edge of our seats. What more
Speaker 1: can you tell us? Yeah, you want me to say
Speaker 1: it right now, I'll just I'll just yeah, I'll just
Speaker 1: say this. Number One, I'm really excited because we have
Speaker 1: the biggest updates to our product in ten years. We've
Speaker 1: been thinking about this for a very long period of time.
Speaker 1: I can't say a lot, but I'll just give a
Speaker 1: couple of clues. Number One, there will be a whole
Speaker 1: new way to search on Airbnb, and this new way
Speaker 1: to search, it's going to be a new way to
Speaker 1: find really interesting homes. And then the second thing is
Speaker 1: we're gonna have a big step change to our service
Speaker 1: level and the kind of customer service we offer. You'll
Speaker 1: see a number of updates next week. I'm really excited
Speaker 1: about it. It's May eleven, nine A M. E. Stern
Speaker 1: Right on our homepage. There will be a small video,
Speaker 1: a short video, and you can get all the updates.
Speaker 1: Then we will be watching. I got to ask you
Speaker 1: about crypto payments. I know that was a top suggestion
Speaker 1: from your users. What progress have you made on that?
Speaker 1: We've We've We've been steadily making progress, um in so
Speaker 1: far that we've certainly researched it. We've looked at a
Speaker 1: number of ways that crypto could be used. Obviously, it's
Speaker 1: a popular request for people to all pay with crypto
Speaker 1: or be receiving money with crypto. But that's all about
Speaker 1: all I can say right now. So look, you know,
Speaker 1: I know you've also been tweeting about web three and
Speaker 1: you know, curious about what it does and does not mean.
Speaker 1: How do you see, you know, web three or crypto
Speaker 1: opening up new possibilities for innovation or are some of
Speaker 1: these technologies potentially overhyped? Well? I think both are very possible, right.
Speaker 1: I mean, I was not around during the dot com days.
Speaker 1: I was in design school at the time, but um,
Speaker 1: most of the companies during the dot Com era aren't around.
Speaker 1: That being said, almost all the ideas from dot Com
Speaker 1: that didn't work now work in some later incarnation, So
Speaker 1: I think that's the technology is really exciting. I think
Speaker 1: the idea of empowering people over the world is really
Speaker 1: exciting as well. But I also do think that, like
Speaker 1: any new emerging technology, the vast majority companies will probably
Speaker 1: not be around the future, but the ones that will
Speaker 1: be around could be really really large. Look at the
Speaker 1: dot com bubble, Amazon emerged from that. It was a
Speaker 1: huge company. So I do think there will be really
Speaker 1: large companies emerging. But just like you know, there's a
Speaker 1: lot of speculation. All right, Well, looking forward to next week.
Speaker 1: Brian open to speak with you again then May eleven.
Speaker 1: Brian Chesky, CEO of air VnB. As always, thank you
Speaker 1: for taking the time today. Coming up, why father? That
Speaker 1: is a question being asked inside Twitter right now ahead
Speaker 1: of an impending sale that Elon Musk. More on what
Speaker 1: the company is doing to motivate staffers next, This is Bloomberg.
Speaker 1: A few other stories were continuing to watch Twitter doing
Speaker 1: its best to quell concerns employees ahead of the Elon
Speaker 1: Musk pending acquisition. At an internal meeting, Twitter's VP of
Speaker 1: product tried to appeal to worker sense of community, saying
Speaker 1: they have a responsibility to each other. This according to
Speaker 1: people familiar with the matter. Twitter, which employs more than people,
Speaker 1: warned about a possible staff exodus and a regulatory filing
Speaker 1: this week. Musk has suggested cutting costs, including layoffs, as
Speaker 1: part of his plan to grow Twitter. The Securities and
Speaker 1: Exchange Commission is investigating Deity's chaotic debut in New York.
Speaker 1: That is, when the ridehailing giant raised four point four
Speaker 1: billion dollars days before revelations of China's probe into data
Speaker 1: security tank The stock before today DEDE had fallen since
Speaker 1: last summer's I P O, and the White House is
Speaker 1: boosting support for quantum computing is trying to pours billions
Speaker 1: into the next generation technology. President Biden signing a couple
Speaker 1: of tech focused directives Wednesday. One would require the country's
Speaker 1: most vulnerable I T systems to adopt new standards against
Speaker 1: the threat of code cracking from quantum computers. Welcome back
Speaker 1: to bloomer technology. I'm emily changing in San Francisco. Let's
Speaker 1: get back to earnings with lift shares. Tumbling after providing
Speaker 1: a disappointing second quarter outlook, even as revenue in the
Speaker 1: first quarter beat estimates. The right sharing company planning to
Speaker 1: spend more to attract drivers on the road ahead the
Speaker 1: stock following as much as its steepest ever drop in
Speaker 1: a single session. I want to bring in LIFT president
Speaker 1: and co found or John Zimmer for his take on
Speaker 1: all of this. So, John, clearly investors are spooked here.
Speaker 1: What is your response to their response? Okay, it matters
Speaker 1: to us the response. We don't like it. Um, we
Speaker 1: take it seriously. Uh, and we believe we're doing the
Speaker 1: right thing for the long term shareholder value. Uh. You know, first,
Speaker 1: reflecting on Q one, Q one was a good quarter.
Speaker 1: It was a new COVID high for rides. We had
Speaker 1: improvements on both the driver and rider's side. And and
Speaker 1: obviously with the market reacted to was us saying in
Speaker 1: Q two, coming out of Q one, where we have
Speaker 1: the largest spike in COVID cases with Almer Khan, we
Speaker 1: want to make some additional investments in the market where
Speaker 1: we see a lot of upside opportunity for return on
Speaker 1: those investments. Um, and I think you know what the
Speaker 1: market wants to hear is more guidance on what they're
Speaker 1: gonna get for that, and so we'll certainly do that
Speaker 1: in the quarters to come. Uh. And it's on us
Speaker 1: to to prove it as we put up numbers in
Speaker 1: in twe Q two, three and four. Dan, i'ves of
Speaker 1: wed Bush. We're for to your spending guidance as in
Speaker 1: nineteen eighties rock Star like disaster. You know, part of
Speaker 1: what you're spending on is driver incentives. You know what
Speaker 1: about concerns that lists this could lead to a race
Speaker 1: to the bottom, a subsidy war with Uber. Yeah, well,
Speaker 1: I think I think that prior statement is extreme and
Speaker 1: not not really tied to what we're doing here. Uh.
Speaker 1: And and I'm not concerned about a subsidy battle there.
Speaker 1: There are some fundamental investments were making. The one that
Speaker 1: we talked about and they got the most attention is
Speaker 1: on the driver's side. You had a lot of inorganic
Speaker 1: things happening when you have spike in COVID, whether that's
Speaker 1: a quick reduction in demand, a quick increase in demand, uh,
Speaker 1: and the need to add a drivers quickly. We are
Speaker 1: seeing drivers come back organically. In fact, you every year
Speaker 1: we had sev new driver activations. But based on data
Speaker 1: we're seeing now, there's a lot more demand on the horizon,
Speaker 1: and we want to prepare for that in the most
Speaker 1: responsible way. To have low E T A s UH
Speaker 1: and investing in drivers and investing in our marketplace technology
Speaker 1: to us, is a prudent way of doing that. You've
Speaker 1: said the cost of incentives will be passed down in
Speaker 1: part to customers. Do you have any concerns about alienating writers. Um? Well,
Speaker 1: we we always think about the price. I mean, that's
Speaker 1: actually a big part of this investment is to make
Speaker 1: sure we have the best E T A s uh
Speaker 1: and the best prices in the marketplace. Um. And so
Speaker 1: I think we're tying a few separate things. When you
Speaker 1: have dynamic pricing and prices go up, uh, those go
Speaker 1: down uh and are paid for by the writer. Um.
Speaker 1: But we're making a few investments here, that being only
Speaker 1: one of them. So investors are also wondering if they've
Speaker 1: overestimated the opportunity in ride sharing our higher prices here
Speaker 1: to stay. Is ride sharing a utility for the masses
Speaker 1: or a luxury good? And how much growth is there
Speaker 1: really to be had in the rider base? Yeah, I
Speaker 1: mean we're reporting on QUE one again Q one, we
Speaker 1: had growth year over year. Uh, you had four point
Speaker 1: three million more active riders than in a year ago.
Speaker 1: And so UH we're we're seeing that growth. I think
Speaker 1: what's not being given credit anymore is the fact that
Speaker 1: we're coming out of a pandemic uh and and we
Speaker 1: need to in our business. Demand turns on a dime
Speaker 1: and supply takes a few additional months or quarters uh
Speaker 1: to catch up, and we want to get ahead of that.
Speaker 1: But do you see right sharing as as a utility
Speaker 1: for the masses or with higher prices? Is this something
Speaker 1: that a smaller group of people, only a smaller group
Speaker 1: of people can afford. Know, a growing number of people,
Speaker 1: as I just said, with the four million new active writers,
Speaker 1: are going to be turning into it. We just had
Speaker 1: two years where people were asked to wear masks and
Speaker 1: not be around each other. We're coming out of that. UM.
Speaker 1: We we have continually seen historically and then now coming
Speaker 1: out of the pandemic, more and more people turn to
Speaker 1: this use case. We're gonna be bringing back shared rides,
Speaker 1: which has been missing for for the pandemic, which is
Speaker 1: a lower price product. UM we bring in other lower
Speaker 1: price products with weight and save. So I'm not concerned.
Speaker 1: And in fact, the message we're saying is that we
Speaker 1: see the demand coming back and therefore we want to
Speaker 1: invest in supply. Now, Uber says they're not going to
Speaker 1: be spending significantly to maintain or increase supply. You know,
Speaker 1: they're talking about tweaking their algorithms to make things more
Speaker 1: transparent for drivers. For example. Is this something that lift
Speaker 1: would consider other incentives to pull those levers to get
Speaker 1: drivers to come over. Yeah, this is not pure incentive.
Speaker 1: So we're we're investing across the board in the experience
Speaker 1: for drivers. Uh, and so a lot of that is
Speaker 1: in our marketplace technology, whether that's maps that improve the
Speaker 1: experience and allow drivers to to earn more and have
Speaker 1: higher utilization, whether that's our pricing algorithm to fine tune
Speaker 1: specific things that happen at say an airport when multiple
Speaker 1: planes on load at the same time, and all those
Speaker 1: improvements payoff as as rides continue to rebound, and we
Speaker 1: we feel strongly that these are the right investments to
Speaker 1: drive the most growth in both the short and long term.
Speaker 1: How much overlap do you see in drivers versus you know,
Speaker 1: there's Uber drivers that you're competing with for for for
Speaker 1: people and for food. But are you also competing with
Speaker 1: instat cart and grub hub and door diash and Amazon
Speaker 1: and you know Domino's Pizza. They need drivers too. Sure
Speaker 1: with within the category of drivers, there's the highest earnings historically,
Speaker 1: on average have been found within the rides here segments. Also,
Speaker 1: we typically require uh newer vehicles UH and and background
Speaker 1: checks and driving record checks are always required on our platform.
Speaker 1: That is not something on UH in these other industries
Speaker 1: that you name. That is always the case. UH. And
Speaker 1: so there are segments of the population that want to
Speaker 1: earn more uh and that have access to two newer
Speaker 1: vehicles and are willing to go those background checks. Now,
Speaker 1: I want to move to another story, huge shore that
Speaker 1: we're watching. I know you're watching the lead draft opinion
Speaker 1: from the Supreme Court that signals that Roe versus. Wade
Speaker 1: could be overturned and soon. LIFT has already come out
Speaker 1: in support of women's reproductive rights. Uh. You said you're
Speaker 1: going to defend drivers facing legal action in states like
Speaker 1: Texas and Oklahoma, where we've seen anti abortion laws make progress.
Speaker 1: What's your reaction to this draft opinion and what more
Speaker 1: is LIFT prepared to do. It's very concerning. As you said,
Speaker 1: we've been very clear on our viewpoint on women's right
Speaker 1: to choose their and have their reproductive uh, you know,
Speaker 1: health access. UM. And we've made a donation to Play
Speaker 1: in Parenthood, a significant donation to support their work on that. Uh.
Speaker 1: We were the first to speak out on the laws
Speaker 1: in Texas and then more recently in Oklahoma speaking out
Speaker 1: as important as are the actions we take. And so
Speaker 1: we're working to to make sure women who are coming
Speaker 1: to a different state have access to transportation to make
Speaker 1: that traumatic experience uh a bit less stressful. Uh. And
Speaker 1: and will continue to speak out when we think the
Speaker 1: rights of our our community are at odds with with
Speaker 1: what's happening in the world. If this issue is turned
Speaker 1: over to the states, potentially half of states could enact
Speaker 1: laws like this and some of those laws would be
Speaker 1: triggered immediately. Is LIFT prepared to defend drivers on a
Speaker 1: national level? Yeah, I mean the specific laws that we
Speaker 1: reacted to in in Texas and Oklahoma. In addition to
Speaker 1: to disagreeing with the overall viewpoint and and believing that
Speaker 1: women should have the right to choose, uh, there were
Speaker 1: laws that said that a driver without them even knowing
Speaker 1: where they're taking. Someone could be found criminally liable for
Speaker 1: taking someone to an appointment that they had no idea
Speaker 1: where they were going. That that is wrong on many levels,
Speaker 1: and that is something we will continue to defend. Our
Speaker 1: drivers from two have any concerns about alienating riders and
Speaker 1: drivers by taking this stand, I mean, obviously, you know
Speaker 1: you are running a business. Why speak out on this.
Speaker 1: It's important for UH companies and individuals to speak out
Speaker 1: when when they disagree with something. We've We've shown that
Speaker 1: throughout our history. We're not afraid to speak up. We
Speaker 1: think ultimately doing the right thing for society and speaking
Speaker 1: to that UH can also be beneficial for the business.
Speaker 1: But we care deeply about our impact UH and our
Speaker 1: ability to impact the world around us. All right, John Zimmer,
Speaker 1: Lift President and co founder, thank you for stopping by.
Speaker 1: I want to stick with Lift and Uber. Now take
Speaker 1: a culture look at the stock moves obviously that big
Speaker 1: move from Lift and talk to us about the size
Speaker 1: and scope of these moves. Obviously we heard John Zimmer's
Speaker 1: response there. He said he doesn't like it, but he disagrees. Yeah,
Speaker 1: and you know, investors clearly concerned right dropping the stock
Speaker 1: is significant, biggest drop on record. As you said, the
Speaker 1: other way looking at it is you know, it's more
Speaker 1: than three and a half billion dollars of market cap
Speaker 1: loss in a single session. Coming me, it's my Bloomberg terminel.
Speaker 1: Look at this chart. This is the way I've been
Speaker 1: thinking about this throughout the day that these two stocks,
Speaker 1: in particular since their I p o s, both of
Speaker 1: which took place in two thousand nineteen, of course, have
Speaker 1: not performed well. Right. You see that as we emerged
Speaker 1: through the the initial phase of the pandemic and things improved,
Speaker 1: we saw a rebound, but actually as part of the
Speaker 1: kind of conversation around economic reopening one through the present day,
Speaker 1: these stocks have seen declines and even Uber down as
Speaker 1: much as sent one point on Wednesday, ended up dropping
Speaker 1: by the most in five weeks. There are a lot
Speaker 1: of questions here about whether these two companies can stand
Speaker 1: on their own two ft. There were two quick charts
Speaker 1: I wanted to show you. The first lift. There are
Speaker 1: some bright spots. One of them is revenue per rider,
Speaker 1: pretty high, around forty nine dollars in revenue per rider,
Speaker 1: right now, way above where we were in two thousand nineteen.
Speaker 1: But if they're going to spend on incentives growing the
Speaker 1: top line through raising prices, that's not really satisfying for investors.
Speaker 1: Although a lot of Wall Street and this said this
Speaker 1: was overdone because by investing in the drivers, and you
Speaker 1: just heard it from John Timmer, that is a bullish
Speaker 1: sign that lifts sees demand coming in the future. And
Speaker 1: then finally on Uber, you know, they didn't farewell on
Speaker 1: the ext markets Wednesday, but lots of people pointing to
Speaker 1: their different business model. Right orange part of the chart
Speaker 1: is mobility rides, but delivery increasingly important. They have a
Speaker 1: diversified business. And you heard Dorak Kostrasha here and I
Speaker 1: hope you asked him about this at some point. Well
Speaker 1: what are they doing to win over drivers? They're saying,
Speaker 1: come to our platform, don't just drive people, you can
Speaker 1: also do delivery. You have the choice and maximize the
Speaker 1: money that you can earn. It's a really interesting differentiation.
Speaker 1: All right, Buddla. Thanks. Coming up, they're all NASDAC plays
Speaker 1: in crypto markets and how that could grow with more
Speaker 1: regulatory clarity. Talk about that coming up next time now
Speaker 1: for our Crypto report. And even with falling equities and
Speaker 1: delayed i p O, some companies are still looking to
Speaker 1: make their stock market debuts, according to NASDACS Ceodina Freedman.
Speaker 1: But what insights does the NASTAC have and what role
Speaker 1: will it play in crypto markets? Freeman spoke with bloom Brigs,
Speaker 1: Kaylee Lines and Guy Johnson earlier today. Take a listen.
Speaker 1: NASAC today is actually a scale technology company that serves
Speaker 1: the broader capital markets and the broader financial system. So
Speaker 1: we in fact have a big role to play in
Speaker 1: facility and helping crypto markets as well as you know,
Speaker 1: banks and brokers managed new digital assets. So we provide
Speaker 1: our technology to a hundred and thirty other markets around
Speaker 1: the world, including UM. Actually, I think we're up to
Speaker 1: potentially tend crypto markets now that are leveraging our technology
Speaker 1: for trading, for surveillance, and for other means that they
Speaker 1: have to make sure that they can grow and expand
Speaker 1: their business. We also have a very scaled anti financial
Speaker 1: crime technology solution where we are We've created a new
Speaker 1: module specific to digital markets to make it so that
Speaker 1: banks can UM evaluate a mL risk as well as
Speaker 1: fraud risk in their digital wallets as well as in
Speaker 1: their their more traditional accounts, so we have and we
Speaker 1: also one third thing is we have a crypto index
Speaker 1: that we've launched outside the United States. Index products we
Speaker 1: launched outside the United States, so we have a role
Speaker 1: to play there. But as a as a market operator,
Speaker 1: I think that we were still trying to understand the
Speaker 1: regulatory landscape as well as you know, the overall maturing
Speaker 1: of it for the institutional use of crypto before we
Speaker 1: make bigger decisions a market operator. NASA dack CEO aDNA
Speaker 1: Freedman there, and it seems California's governor has heard aDNA
Speaker 1: Freedman's calls for more regulation. Governor Gavin Newsome just signed
Speaker 1: an executive order to spur blotching innovation, making California the
Speaker 1: first state in the US to start creating a regulatory
Speaker 1: framework for Web three companies. Set in a statement, too
Speaker 1: often government lags behind technological advancement, so we're getting ahead
Speaker 1: of the curve on this, laying the foundation to allow
Speaker 1: for consumers and business to thrive. I want to get
Speaker 1: back now to the biggest story of the day, and
Speaker 1: that is the Fed's rate hike, the biggest since two
Speaker 1: thousand and the FED signaling more to come. All to
Speaker 1: Tampa inflation. I'm joined now by Mark Goldberg, a partner
Speaker 1: at Index Ventures, to give us some thoughts from the
Speaker 1: VC world, and he's also got some insights on fintech.
Speaker 1: Mark Goldberg of Index, you so much for joining, Thank
Speaker 1: you for having only It's a pleasure to be here.
Speaker 1: So look, big macro economic changes of foot What is
Speaker 1: your advice to founders right now in this moment? My
Speaker 1: advice is to build. I mean we're coming off a
Speaker 1: year that was the most exciting, exuberant year in not
Speaker 1: just fintech but in the tech venture capital market in
Speaker 1: a decade, and where money was was you know, available
Speaker 1: in spades, and now we're at a time where the
Speaker 1: market has changed, and what we're telling our companies is
Speaker 1: a focus on building, not fundraising. So how do you
Speaker 1: build without funding? Well, the nice thing is because so
Speaker 1: many of these great companies raised huge balance sheets last year. Um,
Speaker 1: they have the luxury of not having to go back
Speaker 1: to market and so the distraction of you know, constantly
Speaker 1: funding every six months twelve months has gone away. How
Speaker 1: is this impacting VC sentiment? I mean, I know the
Speaker 1: private market valuations are going down. Can we expect that
Speaker 1: to continue? The way it's impacting sentiment is the sentiment
Speaker 1: is about as negatives. If you seen you know, if
Speaker 1: you saw Bill Girls tweet and just the broader sentiment
Speaker 1: in south Park today it's negative. I think that's oversteered.
Speaker 1: I think what we're seeing as an opportunity and if
Speaker 1: you look at indext other VC funds, the best investments
Speaker 1: are made at times of um you know, on the
Speaker 1: other side of a cycle. And that's the opportunity we
Speaker 1: have in front of it. So how is that impacting
Speaker 1: your strategy at Index? Well, we're focused on what we
Speaker 1: always focus on, which is can we find the best
Speaker 1: founders and can we get behind generational companies. I think
Speaker 1: if that north star holds true today through cycles, we're
Speaker 1: gonna be just fine. You're predicting a tsunami of fintech
Speaker 1: m and a this year where specifically, I think what
Speaker 1: we're going to see is a massive wave of consolidation. Again,
Speaker 1: last year was the party. This year is the hangover.
Speaker 1: We saw a lot of excitement, and what's gonna happen
Speaker 1: now is that consolidation. The exciting thing though, is the
Speaker 1: number of consolidators in the fintech space. You and I
Speaker 1: had had this conversation five years ago, we would have
Speaker 1: thought about fintech as a vertical. What it's done is
Speaker 1: it has become totally horizontal. The acquires are not just
Speaker 1: Bank of America JP Morgan, Goldman Sack. Now, it could
Speaker 1: be Apple, it could be Google, it could be Striped.
Speaker 1: So the number of acquires has grown significantly. It's going
Speaker 1: to be a really exciting year. Well, we see crypto
Speaker 1: joining forces with traditional finances. That going to be part
Speaker 1: of the M and A. I think it might be.
Speaker 1: I think, you know, the crypto yng to the web
Speaker 1: to yang is absolutely possibility, and I think we'll start
Speaker 1: to see those combinations in this year. You've made a
Speaker 1: number of predictions before the start of this year. You said,
Speaker 1: fintech in the metaverse, gen Z on the rise, gen
Speaker 1: Z Traders on the rise, Stripe buying, open Sea, they
Speaker 1: are rolling out some more crypto features. You know, which
Speaker 1: of these things do you think is still going to happen? Well,
Speaker 1: I think we still have seven months of the year,
Speaker 1: so I'm gonna wait on on a value in of
Speaker 1: my prediction still then, But I think one of the
Speaker 1: more exciting trends from last year is this fusion of
Speaker 1: fintech and culture. And you know, we talked about the
Speaker 1: you know, meme socks of last year in robin Hood,
Speaker 1: and I think what we're starting to see is that
Speaker 1: fusion of uh fintech entering the pop culture mainstream. The
Speaker 1: way that cash app has a clothing store. Who would
Speaker 1: have thought that a bank would be people would be
Speaker 1: wearing the clothes from a bank. I think that is
Speaker 1: one of the durable trends that's going to propel us
Speaker 1: in the next few years. Robin Hood is way down
Speaker 1: from last year, and the gen Z traders are on
Speaker 1: robin Hood, so what's going on there? You know? I
Speaker 1: think robin Hood's genius was the ability to democratize access
Speaker 1: to the stock market. And if you step back from
Speaker 1: robin Hood, that has been one of our biggest themes
Speaker 1: at Index, which is how do you think about serving
Speaker 1: the eighty million underserved Americans. Actually, one of my most
Speaker 1: recent investments is called Nova Credit h They actually are
Speaker 1: able to offer immigrants without credit score an ability to
Speaker 1: get a mortgage or a car loan. And we think
Speaker 1: expanding access is really one of the big themes we're
Speaker 1: gonna be working on this year. Now, you are investors
Speaker 1: in a company or were investors in a company called
Speaker 1: Fast this you know one click checkout area which just
Speaker 1: recently disappeared completely, just went under, said they ran out
Speaker 1: of money. What happened there? Well, our investment in Fast
Speaker 1: was around this concept, like you said, of one click out,
Speaker 1: one check clickout, And what I think you saw with
Speaker 1: anyone who's been through an Amazon checkout experience or Shopify
Speaker 1: is there's an opportunity for streamline checkout. That was our
Speaker 1: thesis behind Fast. Obviously it didn't work out. That's venture
Speaker 1: capital m but we're still really excited about thesis and
Speaker 1: getting behind grave founders. Now, let's talk a little bit
Speaker 1: about spacks. Some are saying that SPACs are a four
Speaker 1: letter word, and you know, there are many good four
Speaker 1: letter words, but there are a few not good for
Speaker 1: letter words. What do you think about that? You know,
Speaker 1: I think spots was an interesting innovation. But as with
Speaker 1: the broader market, um, you know, we're gonna see what's
Speaker 1: durable and what was more of a you know, maybe
Speaker 1: something that that didn't last as long. So where are
Speaker 1: you placing your bets within fintech? Yeah and beyond for me?
Speaker 1: Right now, what we're focused on is finding opportunities in
Speaker 1: the fintech space consumer finance. I think there's this tremendous
Speaker 1: generational shift. You mean, people that want to do banking
Speaker 1: from their phone a lot, driven by the pandemic, versus
Speaker 1: doing it at a branch, so that you know, today
Speaker 1: less than ten percent of consumers use a digitally native bank.
Speaker 1: That's going to change in the future. The secondary is
Speaker 1: gonna be payments. So I think those are the opportunities
Speaker 1: were most excited about today. Now, you were an investment
Speaker 1: banker during the Tesla I p O. What was it
Speaker 1: like to work with Elon Musk back then? That was
Speaker 1: of what do you think of him taking over Twitter?
Speaker 1: Back then? It was quite the formative experience for a
Speaker 1: twenty three year old straight out of college to get
Speaker 1: thrown into that. I mean he was the same iconic
Speaker 1: class to figure he was then as he is now.
Speaker 1: I think he had a few fewer zeros on his
Speaker 1: balance sheet at that point, but the same attitude. Do
Speaker 1: you like the idea of him only Twitter where we're
Speaker 1: looking at some of your tweets right now, so you're
Speaker 1: on there. What I'm excited about is Twitter as a
Speaker 1: private company, what they can do if they optimize for
Speaker 1: the long run as opposed to quarterly earnings. So we'll see.
Speaker 1: There's so much uncertainty in the direction that he'll take
Speaker 1: the company. But I like the idea of being private
Speaker 1: and seeing what they can build from there. I think
Speaker 1: they should open source the algorithm. Is that going to
Speaker 1: change things? You know? I can't speak to that, but
Speaker 1: I think it is going to be exciting what they
Speaker 1: can focus on if they don't have the same short
Speaker 1: term horizon. What about employees who want to leave a
Speaker 1: lot of people there right now? They don't know if
Speaker 1: they we have literally have a story called why Bother?
Speaker 1: That's what employees are thinking. We're going to have to see.
Speaker 1: You know, there's obviously been a lot of negative sentiment,
Speaker 1: but you know, if they can make the right long
Speaker 1: term bets, it's going to be an exciting platform for
Speaker 1: years to come. All Right, Mark, Goldberg Index Ventures, thanks
Speaker 1: so much for joining us. Thank you coming into the studio.
Speaker 1: I appreciate it. Thank you. That does it for this
Speaker 1: edition of Bloomberg Technology. We'll be back tomorrow. I'm talking
Speaker 1: to Uber CEO Dara Kasra Shay. He'll be joining us
Speaker 1: live thirty a m. Eastern time. Tune in for that
Speaker 1: you don't want to miss it. We've also got an
Speaker 1: action packed show Lisa Sue of a m D, and
Speaker 1: much more coming up tomorrow. This is Bloomberg