WEBVTT - Lululemon Sprints Ahead on Innovation 0:00:01.280 --> 0:00:05.640 This is Bloomberg business Week Inside from the reporters and 0:00:05.840 --> 0:00:09.400 editors who bring you America's most trusted business magazine, plus 0:00:09.480 --> 0:00:13.640 global business finance and tech news. The Bloomberg Business Week 0:00:13.680 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebec from Bloomberg Radio. 0:00:19.560 --> 0:00:22.400 I'm Jessaminton, deputy team leader for the Acts team, and 0:00:22.480 --> 0:00:25.479 up here again with a Doug Prisoner of Bloomberg News. 0:00:25.560 --> 0:00:28.400 So I'm looking forward to looking more under the hood, Doug. 0:00:28.440 --> 0:00:31.880 When we're talking about Lulu Lemon, which did category well, 0:00:31.920 --> 0:00:35.599 how would you categorize this company? I mean, is it up. Yes, 0:00:35.720 --> 0:00:38.599 it's definitely upper end ath leisure. And so it did 0:00:38.600 --> 0:00:41.320 report earnings yesterday that came in a lot better than expected. 0:00:41.400 --> 0:00:42.919 So it does kind of make you wonder what does 0:00:42.920 --> 0:00:45.400 that say about the trajectory of the economy right when 0:00:45.560 --> 0:00:49.080 people potentially are still spending upwards of over one hundred 0:00:49.080 --> 0:00:51.960 dollars also of this athletic wear. Let's take a closer look. 0:00:51.960 --> 0:00:55.320 We have Bloomberg Intelligence Senior analyst Poonham Goyle. She's in 0:00:55.400 --> 0:00:57.960 Las Vegas, and Zachary Waring is with us. He's an 0:00:58.080 --> 0:01:02.840 analyst at a cf ARE, a research joining from Williamsburg 0:01:03.120 --> 0:01:06.760 Virginia Puno. Let me start with you unpacked the numbers 0:01:06.760 --> 0:01:08.880 that we had yesterday after the bell from Lulu, how 0:01:08.920 --> 0:01:13.800 would you characterize them? Overall? Very very strong, especially on topline. 0:01:13.840 --> 0:01:15.800 You know, their sales came in ahead of their own 0:01:15.920 --> 0:01:20.319 estimate and concentsus growing thirty percent growth, margins word down 0:01:20.520 --> 0:01:24.040 but still pretty encouraging. And the inventory is high. Yes, 0:01:24.080 --> 0:01:26.760 fifteen percent the year over a year, but still you 0:01:26.800 --> 0:01:29.000 know they're bringing that number to Really I think it 0:01:29.160 --> 0:01:31.520 was key here was the guidance. The guidance came in 0:01:31.800 --> 0:01:35.840 well ahead of expectation fifteen percent growth for the year 0:01:35.880 --> 0:01:39.120 and eighteen percent for the first quarter, versus conscensus in 0:01:39.160 --> 0:01:41.840 the low to mid teens. So I think you know, 0:01:41.880 --> 0:01:44.680 the key takeaway here is that Lulemon did well in 0:01:44.760 --> 0:01:47.119 before its quarter, but it's just not the four its quarter. 0:01:47.200 --> 0:01:50.400 They're expected to continue to do well in the coming year, 0:01:50.720 --> 0:01:54.840 where the math economic environment is a little bit uncertain, right, 0:01:54.920 --> 0:01:58.080 you don't know and where consumers will pull back, but 0:01:58.160 --> 0:02:01.440 it doesn't seem like they'll be on athletes or anytime soon. Zach. 0:02:01.520 --> 0:02:03.880 I want to bring you into this conversation because as 0:02:03.880 --> 0:02:06.520 far as looking ahead and its outlook, what are you 0:02:06.600 --> 0:02:09.239 seeing there and where are the promising signs and where 0:02:09.320 --> 0:02:11.640 there's still some weakness as far as when it comes 0:02:11.639 --> 0:02:15.960 to this as leisure maker. Yeah, thanks for having me, Jess. 0:02:16.080 --> 0:02:19.320 So you know, we really like Lulu Women, you know, 0:02:19.360 --> 0:02:23.200 we think it's a great company, really strong brand. We 0:02:23.320 --> 0:02:26.240 do have an issue with inventory still, it's still a 0:02:26.240 --> 0:02:28.880 little bit elevated. So over the past three years, you know, 0:02:28.919 --> 0:02:32.400 inventories up forty one percent annually, which is much higher 0:02:32.440 --> 0:02:35.200 than the sales up twenty seven percent over the same period. 0:02:36.440 --> 0:02:38.399 So we'd like to see that down below one point 0:02:38.440 --> 0:02:42.720 three billion by the end of the year. If they 0:02:42.720 --> 0:02:44.280 can get it down to one point three billion by 0:02:44.280 --> 0:02:46.120 the end of the year, we say that's pretty much 0:02:46.160 --> 0:02:48.359 in line with where it should be. So, Zach, does 0:02:48.360 --> 0:02:54.040 that necessarily mean cost cutting? No, so we yeah, I 0:02:54.080 --> 0:02:57.000 think it. They'll have to have some promotional activity to 0:02:57.000 --> 0:02:58.560 get ready of it. I think part of it will 0:02:58.600 --> 0:03:01.240 be they'll order left. They're doing that now that they 0:03:01.240 --> 0:03:03.240 did that in the last quarter, they ordered you know, 0:03:03.320 --> 0:03:05.520 less than they normally do before the holidays, and then 0:03:06.560 --> 0:03:08.720 you know, ordering less for spring, you know, because they 0:03:08.760 --> 0:03:11.400 have a large they say almost fifty percent of their 0:03:11.400 --> 0:03:14.840 inventory is core inventory that they can sell year around, 0:03:16.320 --> 0:03:18.720 so you know they've got a little bit of work 0:03:18.720 --> 0:03:21.400 to do on inventory Outside of that, though, obviously the 0:03:21.440 --> 0:03:25.720 brand and revenue growth is unmatched in apparel retail, so 0:03:26.680 --> 0:03:29.079 we do like shares. It's just it's tough to get 0:03:29.120 --> 0:03:32.560 really bullish with inventory levels aside and put I wanted 0:03:32.560 --> 0:03:35.480 to bring you back in because looking at Lulu Limon 0:03:35.560 --> 0:03:38.240 stock this year up thirteen percent, but when you draw 0:03:38.280 --> 0:03:40.440 it out over the past, you're kind of hasn't gone 0:03:40.440 --> 0:03:42.440 too far. But I mean, who do you consider to 0:03:42.520 --> 0:03:46.360 be more of a competitor when it comes to Lulu Limon, 0:03:46.680 --> 0:03:49.120 And I mean, how were some of its competitors holding 0:03:49.160 --> 0:03:52.680 up compared to how it has sure, So you know 0:03:52.800 --> 0:03:56.320 one competitor that come into mind is Nike, right. Nike 0:03:56.480 --> 0:04:00.200 clearly is also making a big push in two I 0:04:00.240 --> 0:04:03.200 think more stylish, right, because they both fell active where 0:04:03.240 --> 0:04:06.120 But where lu women kind of wind is on the 0:04:06.200 --> 0:04:09.160 styles and the comfort and the fits. So we've seen 0:04:09.280 --> 0:04:12.800 Nike make a bigger push especially with women. Luleman does 0:04:12.840 --> 0:04:15.000 have a men's business that is planning to double, but 0:04:15.400 --> 0:04:18.520 it's on the woman's side where it really resonates really well, 0:04:18.520 --> 0:04:20.960 and Nike has been pushing up its women's businesses all 0:04:21.160 --> 0:04:25.120 so I think both equally focused on driving sales about leisure, 0:04:25.480 --> 0:04:28.040 with Nike making a big push on woman and Lu 0:04:28.160 --> 0:04:31.640 women making a big push on men. So zach to 0:04:31.680 --> 0:04:34.040 what extent is their risk and the companies like Lulu 0:04:34.080 --> 0:04:35.919 getting it wrong when they look at the outlook that 0:04:35.960 --> 0:04:40.080 the macro could turn south so quickly and impact all 0:04:40.200 --> 0:04:43.400 categories of retail that the market may not fully appreciate 0:04:43.440 --> 0:04:47.240 at this point. Yeah. So you know, looking at some 0:04:47.279 --> 0:04:50.359 of the other apparel retailers in their fourth quarter and 0:04:50.360 --> 0:04:53.159 their guidance for twenty twenty three, that comes in a 0:04:53.200 --> 0:04:56.360 lot lower, but that's to be expected. So Lulu has 0:04:56.400 --> 0:04:59.120 been growing, you know, at twenty five plus percent now 0:05:00.080 --> 0:05:02.680 the last three years, like I mentioned earlier, So that 0:05:02.839 --> 0:05:05.160 would you say, that's a pretty mature market though for them, 0:05:05.160 --> 0:05:07.280 I meant of that growth rate sustained over time, at 0:05:07.279 --> 0:05:10.360 some point you hit a wall. Yeah, Well, so they're 0:05:10.440 --> 0:05:13.520 they're expanding into China. So they had thirty percent revenue 0:05:13.520 --> 0:05:15.880 growth in China this quarter, fifty percent on a three 0:05:15.960 --> 0:05:19.480 year annual basis. So China growth is strong, and that's 0:05:19.560 --> 0:05:21.200 kind of where they're looking to get a lot of 0:05:21.200 --> 0:05:26.400 their high growth internationally, but China specific. Management talked about 0:05:26.400 --> 0:05:28.440 that on the call a lot, you know, and we 0:05:28.440 --> 0:05:32.159 think that's possible. It's obviously got its risk in China 0:05:32.200 --> 0:05:35.039 obviously with the government and how they handled that, you know, 0:05:35.200 --> 0:05:38.560 us businesses, but you know, we think it's it's doable 0:05:38.600 --> 0:05:41.360 for them. You know, they guided for fifteen fifteen percent 0:05:41.360 --> 0:05:44.440 revenue growth in twenty twenty three, which was in line 0:05:44.440 --> 0:05:47.880 with what we expected. You know, we think maybe not 0:05:47.960 --> 0:05:50.640 quite twenty five percent annually for the next few years. 0:05:50.640 --> 0:05:54.520 The fifteen percent sounds pretty much in line. Hey, Puonam, 0:05:54.520 --> 0:05:56.880 I want to get your thoughts as far as when 0:05:56.920 --> 0:05:58.840 we were just talking about this, Doug and I, as 0:05:58.880 --> 0:06:01.440 far as the tell this could mean for the economy 0:06:01.720 --> 0:06:05.760 when you see Lululemen's performance versus when you're thinking about say, 0:06:05.880 --> 0:06:08.200 completely different retailers. Right when you're looking at so the 0:06:08.279 --> 0:06:12.160 Walmarts of the world me sees targets. What does Lulemen's 0:06:12.160 --> 0:06:14.080 performance say it's for us, what it can means for 0:06:14.120 --> 0:06:18.640 the trajectory of the economy. I think it comes back 0:06:18.680 --> 0:06:21.120 to the product. Product is king when you have the 0:06:21.240 --> 0:06:24.000 right products you will sell it when you resonate with 0:06:24.040 --> 0:06:26.560 your customer, or the customer will keep coming back to you. 0:06:27.040 --> 0:06:29.479 Those are the brands that are winning today in retail, 0:06:29.800 --> 0:06:34.479 and lu Lemon is clearly making inroads with its customers. Also, 0:06:34.520 --> 0:06:36.760 you know, it's still a small company when you compare 0:06:36.760 --> 0:06:39.400 it to someone like Nike. L Lemon is expected to 0:06:39.400 --> 0:06:42.400 grow to twelve billion dollars by twenty twenty six and 0:06:42.480 --> 0:06:45.760 top line Nike almost four times outside. Right, So when 0:06:45.760 --> 0:06:48.360 you talk about runway, is there a runway for lule 0:06:48.440 --> 0:06:53.120 Lemon to expand? Absolutely, and real runway is internationally as 0:06:53.120 --> 0:06:56.200 you just heard about China and also digitally, I think 0:06:56.200 --> 0:06:57.960 I think you know, those are two big opportunities for 0:06:58.160 --> 0:07:01.720 lu Lemen to keep plowing through and being really outside strowth. Zach, 0:07:01.800 --> 0:07:04.960 we were talking earlier about inventory levels being slightly bloated, 0:07:04.960 --> 0:07:06.839 the need to kind of cut prices to move that 0:07:06.960 --> 0:07:11.520 product out in terms of cost cuts on the manufacturing side, 0:07:11.880 --> 0:07:14.040 Is this something that the company needs to address to you. 0:07:14.280 --> 0:07:17.280 I don't know to what extent they're exposed to manufacturing China. 0:07:17.320 --> 0:07:20.040 Maybe they're more diversified, maybe they're in Vietnam right now, 0:07:20.120 --> 0:07:22.640 or even India. Is this something that you think has 0:07:22.680 --> 0:07:25.760 to be top of mind for company management, getting a 0:07:25.840 --> 0:07:31.320 more diversified supply chain in place. Yeah, so Lululum it's 0:07:31.320 --> 0:07:35.960 got a pretty diversified you know, logistics system in place. 0:07:37.000 --> 0:07:40.680 You know, we think that you know, they're out of Canada. 0:07:40.720 --> 0:07:44.160 Obviously they've got manufacturing all over the place, but they're 0:07:44.240 --> 0:07:47.080 high end, so they're not so they're not too worried 0:07:47.120 --> 0:07:52.360 about that part of the business. You know, managements talked 0:07:52.360 --> 0:07:55.480 a little bit about not they don't have a lot 0:07:55.520 --> 0:07:58.520 of promotional activity, so they're they're probably going to just 0:07:58.720 --> 0:08:02.080 order less as my guests the next few quarters until 0:08:02.200 --> 0:08:05.200 that inventory comes down. But you know, management, the CEO 0:08:05.280 --> 0:08:07.320 talked about it in this quarter that it you know, 0:08:07.480 --> 0:08:10.640 inventory wasn't an issue, so he doesn't see it as 0:08:10.640 --> 0:08:12.720 an issue, even though you know, we think it's probably 0:08:12.720 --> 0:08:15.920 still a little bloated. You know, they do grow into 0:08:15.960 --> 0:08:20.320 their inventory usually, but it's still even for Lululemon, Elevated 0:08:20.760 --> 0:08:23.800 and pun. We only have about a minute left, but 0:08:23.840 --> 0:08:25.960 I want to get your thoughts going back to what 0:08:26.000 --> 0:08:27.760 I was saying, it's for the trajectory of the economy. 0:08:27.800 --> 0:08:31.480 I mean, can we have a potential recession when consumers 0:08:31.480 --> 0:08:36.360 are still spending on discretionary items like Lulu Limon No. 0:08:36.520 --> 0:08:38.800 I think if we actually go into a meaning fullback 0:08:38.840 --> 0:08:43.359 in consumer expending, the discretionary sector will too be impacted. 0:08:43.720 --> 0:08:46.439 Prior recessions have showed us that there will be a 0:08:46.520 --> 0:08:50.120 material pullback. The question is when does that full fullback 0:08:50.200 --> 0:08:53.080 come and what's really going to drive it? Its currently 0:08:53.200 --> 0:08:56.240 inflation and a falling savings rate, you know, a slight 0:08:56.320 --> 0:08:59.880 pick up, an unemployment, debt levels rising. It has a 0:09:00.080 --> 0:09:02.840 done it. So are we going to enter into a 0:09:02.880 --> 0:09:07.439 deep recession? Then? In that case, I would expect discussionary 0:09:07.559 --> 0:09:10.920 fund to pull back even across app nature. Hey, Zach, 0:09:11.000 --> 0:09:13.960 very quickly, as stocks trading around three sixty two and change. 0:09:14.000 --> 0:09:16.680 Do you have a price target here? I did, so 0:09:16.800 --> 0:09:19.079 my price targets for twenty five. That's a twelve month 0:09:19.120 --> 0:09:22.760 price starry. Wow, So there's some upside, I'd say. So 0:09:22.880 --> 0:09:25.920 we have it as a whole currently okay, and it's 0:09:25.960 --> 0:09:28.839 strictly from an inventory standpoint, We're a little bit worried 0:09:28.840 --> 0:09:31.440 about maybe the margin compression in the next few quarters. 0:09:31.600 --> 0:09:33.600 Good talking to you, Zach. Thanks for joining us. Zach 0:09:33.679 --> 0:09:37.440 Waring there as an analyst at cfr A Research from Williamsburg, 0:09:37.520 --> 0:09:42.840 Virginia and Punham Goyle, Bloomberg Intelligence, Senior Analyst for Retail. 0:09:43.480 --> 0:09:46.720 Joining from Las Vegas. You're listening to the Bloomberg Business 0:09:46.760 --> 0:09:50.400 Week podcast. Catch us live week afternoons from three to 0:09:50.440 --> 0:09:54.240 six Eastern Listen on Bloomberg dot com, the Ion Radio app, 0:09:54.320 --> 0:09:58.040 and the Bloomberg Business App, or watch us live on YouTube. 0:09:58.640 --> 0:10:02.840 Itchen a ride, whether it's Lift or one of its competitors, 0:10:02.880 --> 0:10:05.400 Let's take a closer look now at what is happening 0:10:05.520 --> 0:10:10.800 with ride sharing company. Our guest now is David Rischer. 0:10:10.840 --> 0:10:14.560 He is the CEO of Lift and he is new 0:10:14.600 --> 0:10:16.920 to the job from what I understand. David, pleasure to 0:10:16.920 --> 0:10:19.720 have you on the program. Thanks so much for joining us. Oh, 0:10:19.760 --> 0:10:21.920 thank you, Doug. It's really great to be here. So 0:10:22.040 --> 0:10:24.080 the challenge is that you're facing right now is a 0:10:24.160 --> 0:10:27.240 ride sharing company when you're dealing with a rival like 0:10:27.400 --> 0:10:31.000 Uber that has such a large footprint. First, give me 0:10:31.040 --> 0:10:32.920 your view of the macro. How do you see things 0:10:33.000 --> 0:10:38.559 right now? Look, the macro is we're number two. And 0:10:38.640 --> 0:10:41.720 here's what's interesting is even being number two is still 0:10:41.720 --> 0:10:44.600 a big deal, by which I mean, you know, hundreds 0:10:44.600 --> 0:10:47.920 of millions of people, you know, hundreds of thousands of drivers, 0:10:48.320 --> 0:10:51.800 billions of dollars earned over the last you know, fifteen years. 0:10:51.800 --> 0:10:54.439 So it's a big category. This is a trillion dollars 0:10:54.480 --> 0:10:57.240 plus category. But we're number two, and so we need 0:10:57.280 --> 0:10:59.640 to fight pretty hard, and we need to remind customers 0:11:00.000 --> 0:11:01.880 we're going to pick you up on time, that we're 0:11:01.880 --> 0:11:03.720 going to charge you a price that's you know, in 0:11:03.800 --> 0:11:05.600 line with what you would get with the other guys. 0:11:05.760 --> 0:11:07.000 Are we're going to drop you off on time, and 0:11:07.040 --> 0:11:08.800 really kind of focus on those basics to try to 0:11:08.800 --> 0:11:12.280 turbo charge our business again. And I know you're officially 0:11:12.640 --> 0:11:16.679 taking over the chief executive role on April seventeenth, and 0:11:16.679 --> 0:11:19.680 you hinted yesterday's to some of our colleague leagues on 0:11:19.800 --> 0:11:24.760 Bloomberg TV that the sale potential sale for Lift you're saying, 0:11:24.920 --> 0:11:26.920 was potentially off the table. So I want to know 0:11:27.120 --> 0:11:29.800 what is the path moving forward? What is your outlook 0:11:29.840 --> 0:11:32.959 here as far as how to turn things around. Yeah, 0:11:33.160 --> 0:11:35.360 I mean to be clear, it wasn't so much that 0:11:35.400 --> 0:11:38.000 it's off the table. It's simply not our focus. You know, 0:11:38.240 --> 0:11:40.760 people buyers come all the time, and they know kick 0:11:40.840 --> 0:11:43.680 the tires and so forth. But from our perspective, the 0:11:43.720 --> 0:11:46.360 best thing we can do right now to maximize value 0:11:46.400 --> 0:11:49.760 for our shareholders is really build a great, great business. 0:11:50.080 --> 0:11:52.240 And it really does start with those basics. And if 0:11:52.280 --> 0:11:55.400 you compare our strategy to Ubers for a second, you 0:11:55.440 --> 0:11:58.760 know they've sort of gone this diversification route. You know, 0:11:58.840 --> 0:12:01.040 it sort of made some sense within the pandemic when 0:12:01.120 --> 0:12:04.160 rod share was so far down, but with rodshare coming 0:12:04.200 --> 0:12:07.200 back so strong, and it really is coming back strong. 0:12:07.240 --> 0:12:09.800 And I'm not making an earnings projector any crazy thing 0:12:09.800 --> 0:12:11.839 like that, but simply to say that, like people are 0:12:12.000 --> 0:12:16.160 getting back out and and kind of together again. So 0:12:16.240 --> 0:12:18.439 with that happening, you know, you want to ask yourself 0:12:18.480 --> 0:12:20.240 a question, do you want to be focused on that 0:12:20.400 --> 0:12:23.040 opportunity or not? And we think being focused is great. 0:12:23.080 --> 0:12:26.120 We don't want, you know, tun a sandwich deliverers, you know, 0:12:26.160 --> 0:12:28.199 also picking people up. We think that might be an 0:12:28.240 --> 0:12:31.200 interesting business model or at least an arranged marriage that 0:12:31.240 --> 0:12:33.400 worked for all for a while, but it's not going 0:12:33.440 --> 0:12:35.440 to be how we go. So you've got a strong 0:12:35.480 --> 0:12:38.000 background in technology. We're at Amazon for a while, you 0:12:38.000 --> 0:12:40.880 were also at Microsoft. Do you understand well the architecture 0:12:40.880 --> 0:12:45.080 of some of these platforms, these technology systems. Is there 0:12:45.120 --> 0:12:49.200 a way that Lift innovates its way out of this 0:12:49.320 --> 0:12:52.200 situation right now to try to capture more market share. 0:12:52.240 --> 0:12:54.400 And let me just throw one thing out, is it 0:12:54.440 --> 0:12:59.679 time to rethink dynamic pricing? Just as one point. I mean, 0:12:59.679 --> 0:13:02.160 that's a super interesting question. I won't go into the 0:13:02.160 --> 0:13:05.079 details on that, but for sure, there is an enormous 0:13:05.120 --> 0:13:07.920 amount of innovation left. And I think this is it's 0:13:07.920 --> 0:13:10.240 such an important point, and it gets forgotten because we 0:13:10.280 --> 0:13:12.520 think that somehow we're on the tail end of this. 0:13:12.760 --> 0:13:15.520 We're at the beginning of the ride share journey, and 0:13:16.120 --> 0:13:18.360 there are so many ideas here that our teams are 0:13:18.400 --> 0:13:21.480 coming up with on ways to really differentiate. I'll say, 0:13:21.520 --> 0:13:23.880 if you talk to drivers, I mean, aside from saying 0:13:23.960 --> 0:13:26.520 they love the control over their earnings and love the 0:13:26.559 --> 0:13:30.280 control over their time, they'll also say they really like 0:13:30.440 --> 0:13:33.559 lifts platform as a driving platform. The mapping is easy. 0:13:33.600 --> 0:13:35.920 It tells you where to pick or passengers up, where 0:13:35.920 --> 0:13:38.000 to drop them off outside the street, and so on 0:13:38.000 --> 0:13:40.520 and so on. These are kind of under the surface things, 0:13:40.559 --> 0:13:43.679 but there's a lot of innovation left in the market, 0:13:43.720 --> 0:13:45.559 for sure. So one of the things we've been talking 0:13:45.559 --> 0:13:47.320 a lot about and I'm sure it's fun of mine 0:13:47.400 --> 0:13:50.640 for you, the role of artificial intelligence and everything that 0:13:50.640 --> 0:13:53.600 we're doing these days. Is there a way to give 0:13:54.040 --> 0:13:58.319 the consumer right now in a ride sharing space greater 0:13:58.480 --> 0:14:01.640 preductability in terms of hooking up with a ride so 0:14:01.679 --> 0:14:04.600 that maybe wait times are reduced. Are you thinking about 0:14:04.800 --> 0:14:08.640 ways to use the latest technology to service the customer, 0:14:08.679 --> 0:14:11.679 to service your client in a way that can maybe 0:14:11.840 --> 0:14:15.040 enhance the experience, Yeah, but also less in the way 0:14:15.080 --> 0:14:19.520 time as one example. Absolutely absolutely, And I'm really glad 0:14:19.520 --> 0:14:21.960 you brought it up, because, Yeah, I mean, imagine a 0:14:22.000 --> 0:14:24.440 world where you tell us a little bit about you know, 0:14:24.480 --> 0:14:26.440 the trip you're going to take, maybe that involves going 0:14:26.480 --> 0:14:29.360 to the airport and when you're going to come back, 0:14:29.600 --> 0:14:32.040 and we sort of arrange everything around that. Right We 0:14:32.120 --> 0:14:33.800 pick you up when we know you need to be 0:14:33.840 --> 0:14:36.080 picked up, and we don't, you know, threaten to leave 0:14:36.120 --> 0:14:38.240 as soon as we're you know, arrived at the door, 0:14:38.560 --> 0:14:40.000 you know, we drop you off with the airport, and 0:14:40.000 --> 0:14:41.760 then of course we know on the other side you're 0:14:41.800 --> 0:14:43.760 going to need a ride too, and you're gonna need 0:14:43.760 --> 0:14:45.040 to ride to the hotel, and then you're going to 0:14:45.120 --> 0:14:46.960 do that whole thing in reverse, you know, maybe in 0:14:47.000 --> 0:14:50.160 a couple of days. So and that's basic, but even there, 0:14:50.240 --> 0:14:52.280 that just shows you how rides your service is going 0:14:52.320 --> 0:14:55.200 to really make themselves a lot easier and frankly more 0:14:55.280 --> 0:14:56.960 kind of compelling over time, and that'll be a big 0:14:57.000 --> 0:15:00.560 focus of ours. And David, you did bring up Uber earlier, 0:15:00.600 --> 0:15:02.480 and so I was curious as far as because with 0:15:02.560 --> 0:15:04.560 Uber and they have Uber Eats, it's typically more of 0:15:04.600 --> 0:15:07.800 a high margin business. You haven't when it comes to 0:15:07.840 --> 0:15:11.160 live expanded into those types of segments. I'm curious if 0:15:11.200 --> 0:15:14.360 that's something you're thinking about, and if so, what those 0:15:14.360 --> 0:15:18.200 plans could potentially be. Yeah, I mean again, our focus 0:15:18.280 --> 0:15:20.280 right now really will be on the right stare basics, 0:15:20.320 --> 0:15:22.360 because we think there's so much to do there. But 0:15:22.400 --> 0:15:24.920 it's interesting. You have to be, you know, cautious when 0:15:24.960 --> 0:15:27.360 you think about, like every the grass always looks green 0:15:27.440 --> 0:15:29.800 on the other side, and so you think, you know, 0:15:29.880 --> 0:15:32.360 maybe the food deliveries a higher margin business, but then 0:15:32.680 --> 0:15:35.040 you feel the onion back a little bit and you 0:15:35.040 --> 0:15:38.480 start to see you know, Instagram, you know, photos of 0:15:38.680 --> 0:15:42.160 you know, seventy two dollars deliveries for you know, a 0:15:42.200 --> 0:15:45.760 couple of slices and you think, gosh, someone's not really 0:15:45.800 --> 0:15:48.560 working super well there, particularly when the drivers are not 0:15:48.640 --> 0:15:51.720 saying I love the experience of the food delivery. I 0:15:51.800 --> 0:15:55.040 double park, I get a ticket, you know, maybe I 0:15:55.080 --> 0:15:56.600 get a tip, but I don't really get very much 0:15:56.600 --> 0:15:59.480 in base pay so compared to Ritter Even so, I 0:15:59.480 --> 0:16:01.720 don't know. I think a lot of this is much 0:16:01.760 --> 0:16:04.280 more to be determined than it looks like right now. 0:16:04.320 --> 0:16:05.920 And I think when we look back in five years, 0:16:05.960 --> 0:16:08.480 we'll think, gosh, you know, what an interesting early stage 0:16:08.480 --> 0:16:10.360 that those companies were in. And now look at how 0:16:10.600 --> 0:16:13.080 how much more, just how much better they've they've gotten 0:16:13.080 --> 0:16:16.200 because they've really focused on us as passengers and drivers. David, 0:16:16.240 --> 0:16:17.880 we're talking to you from here in New York City 0:16:17.960 --> 0:16:20.880 where the yellow cab drivers when Uber showed up into 0:16:20.920 --> 0:16:24.360 this marketplace, we're really struggling, and I'm wondering whether or 0:16:24.400 --> 0:16:28.960 not a similar strategy may be adopted by your company. 0:16:28.960 --> 0:16:31.160 When you talk about trying to grab more market share, 0:16:31.200 --> 0:16:35.840 do you purposely undercut a competitor to try to capture 0:16:35.920 --> 0:16:39.400 more market Is that part of a strategy too. I 0:16:39.400 --> 0:16:41.360 don't think that's a very good strategy to be honest, 0:16:41.440 --> 0:16:43.680 because that sounds like a race to the bottom, and 0:16:43.720 --> 0:16:46.280 that means somebody gets squeezed and that ends up being 0:16:46.280 --> 0:16:48.280 the drivers, and that's not where you end up with 0:16:48.360 --> 0:16:51.080 a healthy market. I think it's better to think a 0:16:51.120 --> 0:16:53.960 bit as you know, if you have two or three 0:16:54.000 --> 0:16:56.760 players in a market, you kind of want them all 0:16:57.000 --> 0:16:59.960 sort of fighting them out on kind of best behavior, 0:17:00.320 --> 0:17:03.400 you know. And I say that because you know, you 0:17:03.480 --> 0:17:06.040 really want as a consumer and as a driver, you 0:17:06.119 --> 0:17:09.040 want some choice, and you don't want a knife fight 0:17:09.119 --> 0:17:10.960 that ends up with one guy in the end having 0:17:10.960 --> 0:17:13.879 a monopoly. I think that's very, very dangerous. You know, 0:17:13.880 --> 0:17:15.720 we've sort of seen what that kind of looked like 0:17:15.760 --> 0:17:18.199 back in the old days with taxis, where maybe that 0:17:18.359 --> 0:17:20.800 wasn't the service the people really loved. And I don't 0:17:20.840 --> 0:17:22.760 think anyone really wants to go back to sort of 0:17:22.760 --> 0:17:25.479 a one party system. David, Are we going to continue 0:17:25.520 --> 0:17:29.960 to see higher prices on the lift app? I hope 0:17:29.960 --> 0:17:35.200 not concern there as far as how to grapple with them. 0:17:35.240 --> 0:17:37.200 I mean, look there, you know, of course our costs, 0:17:37.480 --> 0:17:39.439 you know, go up, you know, just like everybody else's. 0:17:39.480 --> 0:17:41.280 But at the same time, we're very aware of the 0:17:41.320 --> 0:17:44.080 macro environment, and the macro environment is really trying to 0:17:44.119 --> 0:17:47.080 push the other way. In other words, of consumers are saying, gosh, 0:17:47.119 --> 0:17:48.720 we don't have a lot of extra money right now. 0:17:48.760 --> 0:17:50.720 You know, you were talking about this a little bit before, 0:17:51.080 --> 0:17:53.359 and and it's a real question, you know, how flush 0:17:53.400 --> 0:17:56.760 your consumers feeling versus how you know, sort of more 0:17:56.800 --> 0:17:59.760 constrained are there economically. So we're trying to set ourselves 0:17:59.800 --> 0:18:02.560 up that we can offer a great value and not 0:18:03.359 --> 0:18:05.480 to the extent we can not pass those sorts of 0:18:05.520 --> 0:18:08.280 cost increases along to customers. David, very quickly here, I 0:18:08.320 --> 0:18:11.040 just need you to weigh in on autonomous driving in 0:18:11.080 --> 0:18:14.080 about thirty seconds. Too much hype here or or do 0:18:14.080 --> 0:18:18.919 you believe it's the future? Too much hype now? But 0:18:19.040 --> 0:18:22.520 it's definitely the future. It's not happening tomorrow. It's a 0:18:22.640 --> 0:18:25.600 very complicated problem. And even optimists from two or three 0:18:25.680 --> 0:18:27.720 years ago are now being you know, having their own 0:18:27.760 --> 0:18:31.760 expectations reset about what's possible in the near term. But man, 0:18:31.840 --> 0:18:34.439 I mean I have ten years from now. Imagine you 0:18:34.480 --> 0:18:38.439 know it's a karaoke experience. Yeah, I mean, there's so 0:18:38.520 --> 0:18:40.560 much money you can have where person in the front 0:18:40.560 --> 0:18:42.359 seat and not to be driving, can be showing you 0:18:42.400 --> 0:18:45.719 around town. Boy, I wonder if I'll live that long. David, 0:18:45.760 --> 0:18:50.159 Thank you so much. Yeah so, David Rich, CEO, the 0:18:50.240 --> 0:18:53.920 new CEO for Lift, joining us here on Bloomberg Business Week. 0:18:55.000 --> 0:18:58.600 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:58.640 --> 0:19:02.680 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:19:02.840 --> 0:19:06.119 the Bloomberg Business App, and YouTube. You can also listen 0:19:06.240 --> 0:19:09.399 live on Amazon Alexa from our flagship New York station, 0:19:09.680 --> 0:19:14.240 Just say Alexa play Bloomberg eleven thirty. We are back 0:19:14.240 --> 0:19:16.359 here on a Bloomberg BusinessWeek. You know, I think we 0:19:16.480 --> 0:19:19.040 talk a lot these days about taking care of the planet, 0:19:19.160 --> 0:19:21.960 the environment. What does that look like when it comes 0:19:22.000 --> 0:19:25.560 to building products. Well, Treks is a company, a leading 0:19:25.600 --> 0:19:30.399 producer of outdoor decking and railing that has a sustainable model, 0:19:30.480 --> 0:19:34.000 and the company's CEO, Brian Fairbanks, joins us now ian 0:19:34.040 --> 0:19:36.960 the Bloomberg Interactive Broker Studio in New York. Thank you 0:19:37.000 --> 0:19:40.040 so much for being with us. Give me a history 0:19:40.040 --> 0:19:43.440 of this company. How did it come into being? It's 0:19:43.480 --> 0:19:47.000 really unique about Treks is our sustainability journey started over 0:19:47.119 --> 0:19:50.919 thirty years ago when our founders looked for ways to 0:19:51.080 --> 0:19:54.160 use At that time, it was excess bread bags and 0:19:54.840 --> 0:19:58.680 waste wood and understand how could that material be used 0:19:58.760 --> 0:20:02.360 in a way that could generate value for the company, 0:20:02.600 --> 0:20:05.160 And they landed on a product that ended up being 0:20:05.160 --> 0:20:09.399 our first generation deckboard. And to this day we still 0:20:09.480 --> 0:20:12.600 use many of those same principles. We mix the polyethylene, 0:20:12.600 --> 0:20:15.840 plastic and wood together with a number of other additives 0:20:16.480 --> 0:20:19.200 to turn out a world class deckboard. And you've been 0:20:19.280 --> 0:20:22.360 at the company for close to do decades now, right, 0:20:22.480 --> 0:20:25.479 started back in two thousand and four. I've seen a 0:20:25.480 --> 0:20:28.440