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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Uber,

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Speaker 1: the scandal ridden driving a ride sharing service, is uh

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Speaker 1: evidently reportedly the subject of two additional, formerly undisclosed investigations,

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Speaker 1: and here to talk about why this company has been

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Speaker 1: uniquely targeted by regulators and lawmakers. I want to bring

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Speaker 1: in Max Chafkin, who writes for Bloomberg Business Week and

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Speaker 1: joins us UH, to talk a little bit about this. So, Max,

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Speaker 1: you know, what is it about Uber that has made

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Speaker 1: it subject to so many investigations? Right? So, as you said,

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Speaker 1: we we've learned. My colleague Eric Newcomer reported earlier this

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Speaker 1: morning that first of all, there is an additional criminal

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Speaker 1: probe that's looking into Uber's alleged theft of trade secrets

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Speaker 1: from Google, and another one looking at price fixing. I

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Speaker 1: think the answer to the question I asked of of

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Speaker 1: sort of what was going on and and this is

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Speaker 1: in the piece, but the company had kind of a

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Speaker 1: culture of I guess you might say rule bending, uh

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Speaker 1: and and and some might call it legal innovation. And

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Speaker 1: I think that's that's a term that some people inside

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Speaker 1: of you Uber had used might call it cheating, right, yeah,

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Speaker 1: And that's and that's something I think we've seen before

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Speaker 1: in the financial services industry, where these financial services innovations

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Speaker 1: sometimes uh, you know, push into areas of you know,

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Speaker 1: breaking ethical rules or even criminality. Well, Max, I wont

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Speaker 1: if you get to tell us about the executive ranks

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Speaker 1: of Uber. Who's there to actually fix the company and

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Speaker 1: then justify its multibillion all the valuation so so uh

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Speaker 1: recently Travis Kalenik Uh this this the former CEO, a

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Speaker 1: guy who sort of most closely associated with the founding

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Speaker 1: of Uber. Step down. There's a new CEO, the former

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Speaker 1: Expedia CEO, Dera Coastra Shah. He hope hope on getting

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Speaker 1: that one right, um, but on the pronunciation. But he's

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Speaker 1: been basically doing a an apology tour and and sort

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Speaker 1: of going around from to to offer, from office to

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Speaker 1: office to office, trying to sort of turn the page

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Speaker 1: and say, this is not going to be a company

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Speaker 1: that sort of by default bends the rules. And we're

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Speaker 1: learning that he is looking into some of these sort

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Speaker 1: of you might call them counterintelligence programs. It appears that

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Speaker 1: Uber had kind of almost its own personal, sort of

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Speaker 1: private spy service that was run by the former General Council,

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Speaker 1: the former Chief Security officer. Right. So, just to get

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Speaker 1: a little bit more specific about what the allegations are,

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Speaker 1: we talked about their program called Hell that that's what

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Speaker 1: they named, that basically tracked other competing ridesharing services where

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Speaker 1: they were to allow Uber drivers to go compete with

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Speaker 1: them more directly. They also kind of cloaked themselves sometimes

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Speaker 1: Uber drivers and would arrive instead of some of the

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Speaker 1: other competing rides sharing services. These are among uh, some

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Speaker 1: of the services that they provided that are being targeted

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Speaker 1: by regulators. Yeah, I mean when you when you take

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Speaker 1: a step back, you brought up Hell there. There was

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Speaker 1: also a program, similar program in Australia that was designed

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Speaker 1: to it seems like spy on maybe you might say

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Speaker 1: UH an Asian uh a taxi service UM. Basically in

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Speaker 1: all sorts of ways, it appears that that engineers inside

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Speaker 1: of Uber kind of broke with norms as far as

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Speaker 1: privacy and and uh sort of uh, you know, data

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Speaker 1: securities concerns. So so for instance, they were routinely uh

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Speaker 1: calling cabs from from Lift, a competitor, and and basically

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Speaker 1: trying to hire those drivers. They were routinely scraping data

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Speaker 1: from other services, and and this this thing called gray Ball,

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Speaker 1: which is a subject of another investigation. They were sort

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Speaker 1: of routinely trying to identify police and law enforcement officers

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Speaker 1: and try to make it more difficult for those people

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Speaker 1: to use the app, basically giving law enforcement um fake

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Speaker 1: data allegedly. So it's a whole bunch of it's a

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Speaker 1: whole swirl of things. You start to add it up,

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Speaker 1: and and obviously it looks like a culture of uh

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Speaker 1: that that's problematics at least, you know, Max said, it

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Speaker 1: makes me maybe considered that you know, with a hefty valuation, Uh,

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Speaker 1: may be considered that How is that it justified when

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Speaker 1: you have competitors that may offer exactly the same kind

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Speaker 1: of service without these legal problems? I mean, what competitive

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Speaker 1: advantage do they have that they got a list of

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Speaker 1: clients and everyone has the app, but everyone's got the

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Speaker 1: other app. And they're the same clients. Yeah, And I

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Speaker 1: mean this this gets to a pretty significant issue for Uber,

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Speaker 1: which is, right now, they are trying to raise money,

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Speaker 1: raise a big boatload of money from soft Bank, including

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Speaker 1: some of this money is going to buy out existing

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Speaker 1: shareholders in an auction, and we don't know exactly what

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Speaker 1: the valuation is going to be. Is it going to

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Speaker 1: be you know, closer to to Uber sort of on

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Speaker 1: paper valuation around seventy billion, or is it going to

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Speaker 1: be more like fifty build billion or something like that.

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Speaker 1: And and and the fact is that I think I

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Speaker 1: think investors might might be asking questions about sort of

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Speaker 1: how brittle is Uber's business, how how how secure? Why

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Speaker 1: not invest in lift or why not invest in any

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Speaker 1: of the other rides sharing services? Because the thing is,

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Speaker 1: it's supposed to be asset light, right, So you don't

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Speaker 1: put all your capital into the automobiles. You let the

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Speaker 1: drivers assume a lot of the risk. And you want

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Speaker 1: a valuation of a tech company, Well, there are a

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Speaker 1: lot of other people that can figure that out, now, right.

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Speaker 1: I mean if you the thing is, if you believe

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Speaker 1: in the business, and you believe that that these companies

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Speaker 1: create value, you still acknowledge the Uber is much bigger

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Speaker 1: than any of these other companies. It has a bigger network,

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Speaker 1: it's it's a better known brand. Although Lift is competitive

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Speaker 1: in certain cities, Uber is kind of the biggest, UH

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Speaker 1: of these apps in most of the most of the

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Speaker 1: cities where rides sharing companies play. At what point, though, Max,

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Speaker 1: does this start to snowball where you have regulators targeting

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Speaker 1: the business both because of some potential infractions as well

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Speaker 1: as mounting opposition from taxi services that have been long standing. Well,

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Speaker 1: it is starting to snowball. I mean what we saw

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Speaker 1: in London where where regulators in London who had kind

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Speaker 1: of given Uber the okay, sort of we're reading this

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Speaker 1: news that was happening in the US about this program

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Speaker 1: gray Ball, which I mentioned earlier, and said hey, wait

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Speaker 1: a minute, we're not okay with this, and they basically

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Speaker 1: announced that they were taking Uber's license away. And now

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Speaker 1: they've sort of reopened negotiations. They're trying to negotiate a

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Speaker 1: new deal with Uber. Uh. There's there there rumblings that

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Speaker 1: the same thing could happen in Brazil. And I think

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Speaker 1: it's important to remember and and Uber was very good

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Speaker 1: at sort of playing local politics, like going from city

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Speaker 1: to city figuring out how to get their service legal

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Speaker 1: or basically pushing and forcing regulators hands to make it legal.

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Speaker 1: But each of these cities have very specific local issues,

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Speaker 1: and it's not like it's a done deal to any

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Speaker 1: any mayor anywhere around the world. If if, if he

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Speaker 1: or she decides it's popular to go after Uber can

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Speaker 1: do that, and there's not much Uber can do, and

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Speaker 1: it's it could potentially, especially if criminal inquiries lawsuits continue,

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Speaker 1: amount this won't go away. It's not like Uber is

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Speaker 1: legal everywhere and it's gonna be legal everywhere forever. Just quickly,

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Speaker 1: because I know this is slightly off topic, but you

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Speaker 1: also have been writing a lot about Facebook and legal issues.

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Speaker 1: Have you noticed that the technology industry now faces the

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Speaker 1: legal same legal issues that maybe the non tech world

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Speaker 1: had faced, you know, decades earlier. Yeah. Absolutely, And I

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Speaker 1: think there is an interesting sort of Facebook connection here.

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Speaker 1: The the Uber chief security officer, Joe Sullivan, was at Facebook,

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Speaker 1: and you wonder how common are these kind of internal

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Speaker 1: spy agencies. I mean, Uber had a lot of consumer data,

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Speaker 1: but it is not the only company in Silicon Valley

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Speaker 1: with of data that's ultra competitive that has been pushing

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Speaker 1: in all sorts of ways, and I think we have

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Speaker 1: to look at this and ask, you know, how common

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Speaker 1: were these practices, you know, industry wide, And I don't

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Speaker 1: think we know the answer yet. All right, well, we're

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Speaker 1: gonna look to you for the answer. I think you

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Speaker 1: got almost you know, at least a couple next stories

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Speaker 1: out of that one. Thanks very much for joining us.

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Speaker 1: Max Chafkin is a columnist for a Bloomberg Business Week.

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Speaker 1: A writer for a Bloomberg giving us some details about

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Speaker 1: what's going on with Uber and those additional criminal investigations. Well,

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Speaker 1: there is a one hundred and eight year old company

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Speaker 1: that a lot of people in America have never heard of.

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Speaker 1: It is now called Mo Mochi ice Cream, and the

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Speaker 1: chief executive officer joins us now, Craig Burger. Thank you

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Speaker 1: so much for joining us. You became CEO about two

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Speaker 1: months ago and had previously been uh, the CFO of

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Speaker 1: the company. What excited you about the opportunity of leading

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Speaker 1: this particular company. Yeah, I think the fact that we're

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Speaker 1: innovation in the snacking category is everything I needed to

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Speaker 1: hear and see. So the company has done a phenomenal

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Speaker 1: job taking a very old item like mochi ice cream,

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Speaker 1: and have really targeted the millennial consumer to bring it

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Speaker 1: to the masses. So we're really changing the snacking world

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Speaker 1: one mochi ball at a time. All right, So can

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Speaker 1: you tell us what exactly is a moochi? Many people

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Speaker 1: may know it as a Japanese dessert. You're calling it

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Speaker 1: a snack the form fact. I'm sorry I have to

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Speaker 1: use this on my son tonight. I'm changing the world

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Speaker 1: one mochi ball at a time. You know, when they

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Speaker 1: start giving me flack about anything gone so well, they're

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Speaker 1: going to give you a cooler of it later on,

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Speaker 1: of course. And I want to just tell people how

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Speaker 1: it's made and and a little bit of the history

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Speaker 1: of the company, because if you're from Los Angeles at all,

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Speaker 1: you're very familiar with the heritage of this company. Yeah,

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Speaker 1: let me start. So, the company is a hundred and

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Speaker 1: eight years old, uh. And it was a confectionery to

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Speaker 1: start so, dealing in primarily Japanese bakery items. And the

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Speaker 1: founders invented basically mochi ice cream, which is a premium

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Speaker 1: ice cream surrounded by sweet rice stough uh. And that

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Speaker 1: brand was under the Mikawaya name and it had primarily

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Speaker 1: traditional Japanese flavors, So people who tried the product loved it,

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Speaker 1: but the awareness was very small. So then in two

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Speaker 1: thousand sixteen, Century Park Capital private equity out of Los

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Speaker 1: Angeles purchased the company, and they had this vision of

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Speaker 1: taking a very ethnic snack and really taking it to

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Speaker 1: the masses by creating a brand new brand, the Mimo

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Speaker 1: Mochi ice Cream brand, and coming out with more traditional

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Speaker 1: flavors that we know, like strawberry chocolate, cookies and cream,

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Speaker 1: and really targeting the millennial consumer something that had never

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Speaker 1: happened before. You mean, rather than red bean paste or

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Speaker 1: green tea mochi. Uh, they want to get more American.

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Speaker 1: I'm wondering, where is the market for mochi ice cream.

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Speaker 1: Is it simply in the big cities or is there

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Speaker 1: greater acceptance of more quote unquote ethnic foods in other

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Speaker 1: places outside of the city's okay, great question. Let me

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Speaker 1: start out with the market itself. So Mochi ice cream

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Speaker 1: falls under the frozen novelty category, which is about a

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Speaker 1: three billion dollar category, and that category has been flatted

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Speaker 1: down slightly over the last couple of years. Mochi ice

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Speaker 1: cream is part of that category. Mochi ice cream is

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Speaker 1: the category within there that it has the most growth

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Speaker 1: over the last year or two, primarily driven by Mymo

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Speaker 1: Mochi ice Cream. It's definitely a coastal brand. We started

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Speaker 1: out in l A and really in the last seven

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Speaker 1: months have blown up My Mo Mochi ice Cream nationwide.

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Speaker 1: But in l A, San Francisco, Seattle, and now New York,

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Speaker 1: we're really blowing it up. Craig, what's the biggest challenge

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Speaker 1: for you to expand awareness of this brand? I mean,

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Speaker 1: what have you been most surprised at with respect to

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Speaker 1: the difficulty. Well, it's pretty interesting because most people you

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Speaker 1: talk to have never heard of Mochi ice cream. So

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Speaker 1: the first thing you try and do is have them

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Speaker 1: try it. So you know, We've hired a marketing team,

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Speaker 1: We've got a strategy in place to really increase the

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Speaker 1: trial and awareness of the product, and part of that

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Speaker 1: is being done through what we call the Mochi Bar concept.

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Speaker 1: And we're really we're the first ice cream company to

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Speaker 1: break away from the ice cream freezer in the retailers

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Speaker 1: and go into the perimeter of the food stores with

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Speaker 1: a self serve Mochi bar, and that's a paid sampling

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Speaker 1: event because consumers are paying anywhere from a dollar fifty

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Speaker 1: two dollars for Amachi ball and trying it on the spot.

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Speaker 1: And it's usually the normal reaction. The first time they

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Speaker 1: bite into it, it's wow, that's kind of weird, and

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Speaker 1: then the second bite is, oh my god, I love

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Speaker 1: this stuff. So it's uh, it's a great thing to see,

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Speaker 1: you know, it's something that is really uh, taking the

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Speaker 1: stores by surprise and building overnight. Was it a conscious

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Speaker 1: effort to turn it into a snack as opposed to

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Speaker 1: a dessert and therefore the smaller form factor. Yes, so

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Speaker 1: we see it as a snack. You know, millennials snack

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Speaker 1: at least four times a day. Uh, this is a

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Speaker 1: perfect product. And ten calories per hundred and ten calories.

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Speaker 1: It's handheld, it's portable, it's grabbing go. It fits their lifestyle.

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Speaker 1: You know, we have fifteen or so flavors. What does

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Speaker 1: it cost? Uh? You know, it comes by the ball.

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Speaker 1: If you buy an e Moachi bar would be anywhere

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Speaker 1: from all fifty to two dollars a ball in a

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Speaker 1: six pack. The retail is about five or dollar a ball.

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Speaker 1: I love how targeted millennials are. They like snacks, not

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Speaker 1: desserts because deserts are too fattening, and they like it

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Speaker 1: small and they like it quick. Who right there, you go, Well,

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Speaker 1: you've definitely defined the market, and I think you're gonna

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Speaker 1: start eating some of these moments. I must say that

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Speaker 1: we gotta leave it there. Thanks very much, Craig Burger.

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Speaker 1: He is the chief executive of Momochi ice Cream. NAFTA

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Speaker 1: North American Free Trade Agreement five hundred and twenty five

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Speaker 1: billion dollars. That's a total amount of trade between the

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Speaker 1: United States and Mexico. Mexico is the number three trading

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Speaker 1: partner of the US, right after Canada, also a signatory

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Speaker 1: to NAFTA. Here to tell us about the renegotiation of NAFTA.

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Speaker 1: There's our own White House correspondent. We've got Jennifer Jacobs

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Speaker 1: joining us from Washington, d C. Jennifer, maybe just outline

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Speaker 1: exactly what is scheduled to happen today, who's going to

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Speaker 1: be there and what do they really aim to accomplish. Uh. First,

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Speaker 1: it's Jennifer Epstein of on our White House team. Just

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Speaker 1: wanted to make sure that's clear to that people aren't confused.

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Speaker 1: Uh if they know our voices. Um so Uh. Prime

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Speaker 1: Minister Trudeau is coming to the White House a little

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Speaker 1: bit later today to meet with President Trump. It's their

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Speaker 1: fourth meeting since President Trump took office at the beginning

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Speaker 1: of the year. Um. And and this is the same

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Speaker 1: time that there are a whole bunch of uh you

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Speaker 1: know that that that we're in this fourth round of

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Speaker 1: trade negotiation talks. Uh, and that's happening here in d

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Speaker 1: C as well. Uh. You know, we're just anticipating in

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Speaker 1: the US to continue to take a pretty hard line

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Speaker 1: on some things that they that that they're kind of

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Speaker 1: that the U. S officials kind of expect Mexico and

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Speaker 1: Canada to be relucked into, including substantially raising the requirement

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Speaker 1: of the requirements for rules of origin for vehicles. Um,

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Speaker 1: you know what share has to be uh of the

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Speaker 1: of the vehicle has to be built built in the

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Speaker 1: United States. Jennifer and the rest of NAFTA. Jennifer, I'm

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Speaker 1: struck by President Trump versus Congress, versus his diplomats. Is

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Speaker 1: President Trump carrying the weight of a unified group of

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Speaker 1: politicians and policymakers as he renegotiates NAFTA or is he

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Speaker 1: increasingly isolated in some of his demands? You know, I

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Speaker 1: think this is a situation where in order that it's

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Speaker 1: increasingly isolated, I think it's been isolated all along. That

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Speaker 1: that while there are certainly a big populist tervor uh

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Speaker 1: to pull out of NAFTA, or that NAFTA the bad

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Speaker 1: deal and it must be renegotiated, that there are so

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Speaker 1: many Uh, there's so many US lawmakers who are who

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Speaker 1: really would not do not actually support going all the

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Speaker 1: way and getting out of NAFTA. You know, for this president,

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Speaker 1: seems like threats are not just threats, but are It

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Speaker 1: depends on what it is, of course, you know, if

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Speaker 1: we're talking about nukes, who knows. But uh, you know,

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Speaker 1: threats on something like this are threats that he seems

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Speaker 1: poised to follow through on, just the way he has

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Speaker 1: initiated the process of pulling out of the Paris Climate Agreement. Uh,

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Speaker 1: just as you know we are anticipating some kind of

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Speaker 1: reversal from the um Iran deal. Uh. These are things

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Speaker 1: where this president is willing to negotiate, was willing to

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Speaker 1: threaten uh in hopes of negotiating. Well, but what ends

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Speaker 1: up happening is that he just ends up pulling out

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Speaker 1: all altogether and just given up on these things, Jennifer Epstein. Uh.

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Speaker 1: And I also I apologize because of course I know you,

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Speaker 1: and I just want to mention also that people can

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Speaker 1: follow you on Twitter or your twit Twitter handle is

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Speaker 1: at gen x j E N E P s. And

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Speaker 1: as someone who is certainly covering historic presidency uh and

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Speaker 1: has a background in history with your degree from a Princeton,

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Speaker 1: can you just sort of step back for a moment

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Speaker 1: and tell us what do you what kind of reactions

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Speaker 1: or what conversations do you have with other people, uh,

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Speaker 1: and their reaction to this effort to renegotiate NAFTA, What

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Speaker 1: did they tell you? How did they react? Well? Thanks, Pim,

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Speaker 1: and don't don't worry about it. It's fine. It happens

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Speaker 1: all the time in both ways with us. We get

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Speaker 1: each other's emails all the time. UM. So I think

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Speaker 1: that that in the context of this, this is pretty unusual.

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Speaker 1: You know, this is the president who seems to be,

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Speaker 1: you know, at once attempting to fulfill some of its

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Speaker 1: campaign problemises, which is something that presidents trying to do

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Speaker 1: and oftentimes you know, get stopped up on either because

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Speaker 1: once they get into office they realize, you know, just

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Speaker 1: how untendable something is, or they just can't get the

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Speaker 1: support from Congress something like this. The President seems to

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Speaker 1: be ignoring all of that and just trying to move

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Speaker 1: ahead in his own way without uh and necessarily getting

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Speaker 1: anybody else on board. Uh. And that just this kind

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Speaker 1: of uh, you know, indicative of his style and his

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Speaker 1: desire to be a bull in the china shop. You know,

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Speaker 1: I'm struck by the fact that the US Chamber of

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Speaker 1: Commerce Chief executive Officer Thomas Donohue was speaking in Mexico

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Speaker 1: City yesterday and said that he would fight quote like

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Speaker 1: hell to defend NAFTA if Trump tries to pull out.

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Speaker 1: I'm wondering what could be the fallout if President Trump

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Speaker 1: decides to single handedly pull out. Well, you know, it

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Speaker 1: would obviously, uh, you know, turn the ire of a

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Speaker 1: whole lot of members of Chamber of Commerce, of the

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Speaker 1: Chamber of Commerce, which is you know, the hugest uh

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Speaker 1: business lobby in the country. That all that that you

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Speaker 1: would send only have a president who's still despite having

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Speaker 1: dissolved his various councils uh seems to you know, rely

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Speaker 1: on that kind of support and the and the support

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Speaker 1: of the establishment mainline Republicans dwindling as they may be.

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Speaker 1: That if if they can't even rely on him to

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Speaker 1: kind of support their business interests, uh, you know, why

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Speaker 1: should they be supporting him at all? For Epstein, thank

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Speaker 1: you so much for joining us. Jennifer Epstein covers the

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Speaker 1: White House for us here at Bloomberg News and NAFTA.

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Speaker 1: Talks are going on today in Washington between President Trump

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Speaker 1: and the head of Canada. Thanks for listening to the

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Speaker 1: Bloomberg P and L podcast. You can subscribe and listen

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Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform

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Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.

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Speaker 1: I'm on Twitter at Lisa abramowits one before the podcast.

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Speaker 1: You can always catch us worldwide on Bloomberg Radio.