Uber to Limit Surge Pricing: Bloomberg West (07/08)

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July 8 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Transportation for America's James Corless, Technalysis President Bob O’Donnell, YP's Darren Clark, Electronic Frontier Foundation International Director Danny O’Brien and Yahoo Chairman Maynard Webb. (Source: Bloomberg)

Live from pier three in san francisco, this is "bloomberg west." we cover innovation, technology and the future of business.

Let's check some of your top tech headlines.

Uber has reached an agreement to cap there's during emergencies and natural disasters.

The company has agreed to limit pricing during abnormal disruptions of the market and will implement similar policies across the u.s.. they had been charging as much as eight times its base rate during storms in your last winter.

Samsung is warning cells of a smart phones and tablets have slowed dramatically.

Thousand is says it's facing stiffer competition in china, the world's largest smart phone market.

The drop in sales has cut the samsung operating profit for.the quarter but 24% from last year google is having difficulty implementing an eu court privacy resumed a must allow individuals the right to be forgotten.

After processing some requests to have content hidden from search results, some news outlets have complained other things have disappeared.

Google has restored some links to affected news articles.

It's a car server showdown in the big apple.

Uber rich in agreement agreeing to cap prices during emergencies and natural disasters, one day after the company said it was slashing prices by 20% in new york, making it cheaper than a city taxi.

Lift announced today it is launching in new york city, which is its biggest market.

Can lift really compete in manhattan?

Joining me is matt miller in new york and james corliss in washington.

What is your take on all of these moves recently by uber, and lift joining the competition in new york today?

You're seeing an explosion of these mobility providers that are providing transportation services.

The iconic yellow cab, we always wonder if that's going to actually put the cab out of business.

Really this is suggesting a bigger disruptive shift in transportation.

It's actually much bigger market force, not just new york city but actually around the country and around the globe.

People are looking for easier, more convenient ways to get from point a to point b. young people are less interested in actually owning a car and more interested in living in urban lifestyle in cities.

New york is such a unique market, it has been -- cap said been so available for so long.

What do new yorkers want?

Do you guys like uber and are you interested in lift?

It's a little bit more of an expensive experience than taxis.

They have come down for their pricing on their lower-priced products.

I think new yorkers would love the taxi situation itself to get better.

It is so awful a situation for the drivers, it's an awful situation for the passengers.

The cars are a outdated and uncomfortable.

The bureaucracy and the regulation, big government mixed with a small group of owners of these ultra expensive medallions have really made the taxi experience a bad one.

There has to be an alternative.

Uber is a great one at the top in and lift is a great one at the lower in but they are different areas on the spectrum, as far as income is concerned.

I do have so many bad memories of trying to catch a cab in new york in the rain or whenever they were changing over the times and nobody knew who was picking someone up.

But you can use them at a cheaper price point.

You can also use halo, which is a tlc lead service to help you hail a yellow cap.

If you are more comfortable experience, it you can use the typical uber, which is the black car experience or size up and get the suv experience.

For regular taxi users, anybody can get a cab with his or her phone.

The question is, which cost level do you want to go to?

Lift is focusing really on brooklyn and queens in their introduction.

The website says brooklyn is the city where they are located.

They are trying to serve the more underserved communities, the outer boroughs.

Or trying to hit the lower-cost experience, and uber focuses on big, expensive manhattan island.

They have dropped theirs in san francisco, l.a., and boston.

Buber is losing money on some of these transactions.

What is the strategy?

Have done a lot of expansion very quickly.

They have been capitalized in a major way.

They are having lots of regulatory difficulties, as everybody is in this space.

They have reduced their commissions on some of the rides.

I think it's a pretty big bet on a future way to provide urban mobility and suburban mobility across the country.

They are clearly making a calculation.

They will take a loss, they will take less revenue because they think it market is only going to get edgar and bigger and in places far beyond -- going to get bigger and bigger and in places far beyond new york.

They have raised over $1.5 billion in order to do that, where as lyft has only raised $250 million.

I read into sting article that compared uber to amazon and the pricing strategy -- i read an interesting article.

I don't think that is the long-term strategy for uber.

They are making this move repeatedly to try to make sure they get a bigger slice of the pie away from taxicabs.

It's still going to be a higher-priced product.

For that you get convenience and a more comfortable ride.

The interesting story today is the deal uber made with the new york attorney general, eric snyderman.

They are agreeing to cap their prices at times of natural disasters, only when the city is in a state of emergency.

When no other yellow cabs are on the street.

No caps off or wants to risk it for the low price.

The genius of uber was that when demand was high and supply was low, the pricing helped equalize those things.

What the new york attorney general has brilliantly done is take that genius solution out of it, so next time there is a natural disaster or emergency, they cannot do the surge pricing that brought them out in droves in the first lace.

Such a huge defeat.

Sp clear that uber struck the deal because they were in fact violating new art state law.

They may not have had a choice.

-- violating new york state law.

Uber has been ruthless with its pricing strategy.

Could you see a broader transportation pricing were created as a result of their tactics?

Certainly you could see that, but the services that are out of compliance with regulation and eight law, let's just be very clear, transportation regulation state law has not been updated for probably 75 years.

We are sort of operating in the 1950's. it matters if it is providing transportation as a utility or simply how we finance the system.

The laws are a patchwork quilt that needs to be updated.

Colorado just passed a law to provide more legislative oversight.

I understand there are a lot of problems there.

They are operating in miami apparently illegally.

The laws need to be updated.

That is the other problem.

If they are, will uber actually be stopped?

What is the reality?

In miami they are still operating when they are not even legal under the current miami laws and regulations.

They have been brazen in their pricing in their ability to come in and operate even when they are not supposed to.

This is an experience that is much better for the consumer than the alternative.

It is much better for the driver than the alternative.

Just because we have these archaic, 1950's laws on the book doesn't mean that we should try and stick with them.

Let's evolve a little bit.

Matt miller on transportation . thank you both.

That story is not going away.

Samsung says it is facing slumping smartphone demand in europe and asia.

Does it mean rivals are gaining ground?

That and more when we return.

? this is " bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and -- amazon blocked reorders for some textbooks earlier this year after dispute over the share of income.

They sent a letter proposing to give them all equal revenue.

Sam sun out with its earnings preview and second-quarter operating profit dropped to a two-year low, down 24% year over year.

It's a third consecutive quarter of declining profits.

Samsung is lining the disappointing sales on slumping demand in europe and asia and the mystic competition from china putting pressure on the market share.

I spoke with bob o'donnell and former vice president at idc.

I started by asking him while the earnings were worse than expected, what stands out?

It's the numbers on the low wind.

We have all known that high-end smart phones have been challenged for a while.

It's a pretty saturated market.

The growth has been expected to be in the lower end.

To all of a sudden have them say now we are getting hit on the low end, that's a big red flag for me.

That means there are challenges for samsung but i think it reflects challenges for the smartphone arc it overall.

Is most of the pressure coming from china?

Has been this discussion of the next billion smartphone user.

Where is the next billion?

Maybe there is not another billion, maybe it's more like 400,000 or something like that, a smaller number.

That means we are heading toward it be, just as we saw in the pc market.

They talked about tablets, i think that within a few years, are going to be in an era when it's going to be difficult to make any money on hardware except for the biggest guys.

Even ipad sales are slowing down.

That's exactly right.

Iphone sales are slowing down.

I think apple will have a tough quarter again until iphone6 comes out.

What about that and the larger screen size?

Do you think this will be a new boon to the apple bottom line?

I think it will be a nice fit for apple.

There is clearly pent up demand for larger size iphone.

We have seen everyone else moved to these larger phones.

Once you have used some of these bigger phones, they are kind of nice to have.

By the way, there's a direct impact on tablets.

If i've got a big phone, why do i need a small tablet?

I don't so it is all a bunch of factors coming together so i think you'll see iphone6 does very well for apple which will hurt samsung on the high end.

There's continuing competition on others on the lower end and that means for samsung to move forward, they will have to depend on other businesses.

That got semiconductors which is part of it but i would argue they will have to do something radically different, moving software and services, do something like by netflix or something crazy that gives them an opportunity in the services space because i think they will need that long-term.

So where so radical is not wearables are a smart watch?

We will see them do wearables and as part of the incremental growth in hardware but that will not change the world.

The price point these things are selling at, there's not a huge amount of profit potential there either.

How does the smartphone market evolve?

If it is plateauing, what happens three years out from now?

I think we have a couple of years of growth.

Instead of the numbers that people have thrown out around $2 billion per year, we could end up peaking at 1.4 billion.

After that, it becomes a refresh cycle.

How frequently do i refresh my phone?

That is lengthening because of i have a bigger phone -- then why do i need a tablet?

And i will not refresh this as frequently.

We have hit these devices and these are pretty good.

Until i break it, i am good.

What do you think about the market for wearables?

Another report thinks the wearable market will decline.

I was on the lower and.

I joke that in 2014 we will see more announcements for wearables than actual wearable shipments.

We have not figured out what they are really good for him what people use them for.

Are we going to get people to use them for longer than four weeks?

People use them for a month and then they give up.

That was bob o'donnell.

Wrapping your gym membership is one reason that could prompt a phone call from your doctor.

We will explain how health providers are using big dated to keep you healthy, next on "bloomberg west." ? welcome back to "bloomberg west." could you be getting a call from your doctor over your unhealthy shopping habits?

Hospitals are now turning to big data to try to keep you healthy using consumer spending information from public records, store loyalty programs and credit card purchases in the hope it will paint a more complete picture to health care providers and prevent people from getting sick.

We have more from new york.

You've got a piece out in "does this week" about this.

How are hospitals getting this information?

They are buying up from data brokers, the same company selling information to retailers for years.

Those retailers used to market new products like knowing whether a customer is pregnant or whether you should send them coupons for baby products.

What these companies do is they buy hundreds of bits of information on every u.s. consumer, things they glean from your voter registration or property tax records, they have details in every credit card transaction you make and every item you purchase with the store loyalty card.

They compile this information and they sell it to retailers.

Now they are getting into the business of hospitals in selling this to health care companies and doctors.

Is this ethical?

Could this lead to discrimination?

Under obama care, doctors and hospitals are no longer able to deny coverage to someone because of their medical condition.

But whether the word is this is creepy is one thing and a lot of readers have written in and people i talked to have said what i do between me and cvs or mcdonald's is between the two of us.

It's not between me and my doctor.

There are certain things i tell my doctor in certain things i don't. a lot of people do not seem to like the idea of having a third party, this doctor and hospital, now looking in on things they don't think are related to their medical care.

How exactly will this work?

Is it as specific as your dr.

Picking up the phone and saying you had ice cream on friday?

One example that was given to me by the carolina health care system which is one of the largest hospital chains in the country that's in the early stages of using this.

They are hoping to collect all this information on their patience and then put it into a complex algorithm that will flag certain high-risk patients.

A patient with asthma -- if they know you have not been filling your asthma medication prescriptions because they are buying your prescription records, if they know you are whining cigarettes at the drugstore and i know you live in an airy with a high pollen count, you'll be flagged to them as someone is likely to show up at the er with an asthma attack or with obesity.

If they know you have diabetes and they can see your eyeing a lot of sugar at cvs with your care members card and they know you no longer have a gym membership, you will be flagged as someone who is likely to have complications with diabetes and they can call you and say you have been flagged as a high-risk patient.

Maybe you should come in and talk to a counselor.

Is there a program we can connect you with?

Maybe get a reduced rate on the gym membership, how can we help you?

We are just in the early stages right now the doctor won't necessarily have the details and won't necessarily know that you bought junk food at cvs but he will know that something is going on and you're not eating a healthy diet or working out regularly and he can intervene from their.

Interesting, i guess my diet starts now.

Thank you so much.

How can tech ceos turn a crisis into an opportunity?

The apple chairman gives us the answer when "bloomberg west" returns.

? let's look at where stocks are trading, down for the second day -- all the major averages down but the nasdaq down the most, technology stocks leading the way.

You are watching "bloomberg west." box just raise an additional $150 million of funding to buy time and flexibility for its ipo.

The company has delayed plans to go public as the bumpy stock market is made conditions not so favorable.

The decision was made by the ceo aron leavy but was it the right decision in what could be a crisis for this company?

Joining us is the yahoo!

Chairman maynard webb for our office hours segment.

I know you are close with aaron and you are an advisor to him.

Was this the right decision?

That's a question for aaron.

I don't know all the facts about it.

I'm a huge aaron fannin he will figure out the right thing to do.

From the outside, was that a mistake to file when they filed?

Timing is always interesting.

I would not say it's a mistake.

If you raise money in the spring of 2008 and it looked brilliant and if you are waiting to get your business a little further along and you did not raise money, you look like an idiot.

The market timing is not something you ever tried to get her they right.

You try to build a business for the long haul and that's what he is trying to do.

When boxer of build there is talk about how much they are spending on marketing and if that's sustainable, is there a bigger picture problem that he needs to be thinking about?

I'm sure he's thinking about how to grow a great company.

What does he need to do to get the talent and the products into customers hands in a way they love it?

That will solve all else.

When it comes to a time of crisis, what should a ceo do?

I've several pieces of advice having lived through a few of them myself.

The first thing his problems don't get better with age.

It's important to know that you have a problem and assess how big it is.

Put your best resources -- act quickly and be suspected that what you know and do not know.

Often times, people get in trouble as they think it will go away in a day and it becomes a storm and it becomes taking a lot of energy.

I have being a fan of picking up something as a drop of blood or a time of love flowing out of an artery.

If it's a ton of blood, you have to put your best people on a 24-7 and build a whole work stream around what to communicate.

I would be careful to communicate only what i know.

The world wants to know more than you know.

Often, people get in trouble getting ahead of that medication.

How important is communication?

When a company goes through hard times, maybe you don't hear anything from the top.

The first interesting for people is it's not fun to talk about problems.

The first instinct may be to hide and hope it goes away.

Or fix it without saying anything.

It's always better to tell the truth and run into the fire and the honest about where you are and when you will fix things.

When i was at ebay and we had a product or a tech issue, we would tell people when it would get fixed and then we would make sure we lived up to that.

Then they were ok.

People want a checkpoint at where you are and when will you know.

They might want to know everything right now but you don't know it.

What about reaching outside the company for advice?

John donohue was talking about the paypal situation.

He said i called tim cook and he had experience dealing with carl icahn and he called some members of the paypal mafia.

How often does that happen?

It happens a lot.

If you are at the top of the company come you can get advice for the people that work for you and advice from your board.

Most ceos are heat seekers for the best advice possible.

You have to balance that with what you can talk about.

Something like carl icahn is a great example because it was very public it was no secret.

We had a situation earlier this year on one of the boards i'm on and i reached out to meg whitman who gave me on believably great advice which was helpful.

Give me an example of a time -- an example you can share details on when you are in a crisis and you handled it either the right way or the wrong way.

I have done both.

One of the times at ebay that we were rolling out a new feature because we we knew better and it would change everybody, it forced everybody to it whether they wanted to go to it or not.

It created an unbelievable amount of damage.

We had to roll it back.

We had to apologize and we stood firm for two or three days well everybody got more angry and started selling their ebay memorabilia and everything else.

I would say that's one we did not do well.

Another one was 9/11 when the trade towers went down, people were selling rubble on ebay within 30 minutes after the crash.

We decided that was not ok.

We turned that around and in four days, built an unbelievable sight to help the governor raise a ton of money for charity.

You mentioned apologizing.

I wonder when company should apologize and when they should not apologize.

Facebook recently had been getting flack for the study they did where they tried to manipulate users emotions but either showing them more negative posts or positive posts and facebook has not apologize.

Sheryl sandberg apologize for the way it was communicated.

However, some of the people behind the study said that was not a good apology.

I cannot speak for facebook but i can tell you my mother sits on my shoulder every day.

I was always taught that being a southern boy, it's good to apologize and move on and admit what you have done if you have done something incorrect.

Try to put context on it and get to the next place.

Ok, yahoo!

Chairman maynard webb, great to have your address in our office hours segment.

Thank you for stopping by.

Google is being accused of censorship after following a european court order.

We explained why next on "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available this is "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire.

Google has started removing webpages from search results in europe following a right to be forgotten ruling by the european court of justice.

The ruling allows europeans to ask search engines to remove links about them but google has come under fire from organizations like the bbc that say the search engines implementation is censoring legitimate journalism.

I'm joined by the electronic frontier foundation founder.

This is such a complicated story.

You start off thinking it will be so easy in this is clearly what the court of justice thought.

There are facts and pages on google's search index that perhaps you could move because they are inaccurate or outdated and this is what european data protection law is about.

A credit company for example but this is public information, the information that is being removed from the index in the original case was published in the newspaper.

The newspaper keeps that online but google is not allowed to mention that it's out there.

Are they supposed to be removing links to these results or the actual results?

The way that google has decided to implement this which fits in with what the ecj was implying is if you search for someone's name on its own, they remove that link.

If you search for me in the third search is that i set fire to a shed when i was seven and i want that gone, that does not happen.

If you search my name + shed, maybe it will come up.

It's a very specific kind of removal.

Is this google's interpretation of the ruling or is it the ruling itself?

The ruling itself goes through a lot of this and you can kind of tell they are trying not to be very technically specific.

You kind of have to be because you are saying make it though away but don't make it completely go away.

You got organizations like the bbc and the guardian saying those are legitimate articles.

Then google is putting them back.

The other part of it is that many people feel google is kind of interpreting this deliberately to mess it up so that they are removing these things so people will turn against it so the law will change.

I don't entirely think that's the case.

I think it's that google is trying to feel its way around.

The original case was about a newspaper article.

They are trying to see what would happen.

The thing that worries me is its find that the bbc and the guardian can kick up noise but what if an individual website has its content removed?

Are they going to be able to successfully campaigned to put that back in?

Google has worked with governments in the past like china to remove content.

They have said this page does not contain all the results.

Are they could do something like that in europe?

That was one of the good things that they always did when content was being removed.

They had this tradition of putting a message at the bottom saying that some of these things have been removed.

What they have done this case is they still have that little message but they're putting that little message on every search that looks like a name in europe.

Unless it's famous.

If you look for james bond, it does not say that message.

If you look for my name, not yours, it actually has a message that says maybe something is gone or maybe it hasn't. i might not have burned down the shed but it puts that on every listing.

If you go to google.com which is the u.s. search engine, it is the same.

But google.uk is censored.

That is a concession that these companies have made in the past.

A country requires them to do this and they move it but only in that country's website.

Could this have implications for u.s. citizens?

Good eye as a u.s. citizen say i don't want some of the stuff out there so i should get a removed in europe?

That is a good question.

Data protection law definitely is interpreted in europe as applying to everyone.

I think that would be really interesting to try out.

What impact will this have on google's global operations?

Could this happen in other parts of the world?

My problem as someone who considers the civil liberties implications of this is that this sets a precedent that other countries will try to take advantage of.

A lot of the most draconian information services like google could use this opportunity as a wedge to try to force more censorship of big centralized sites.

There are companies like reputation.com that can help you manage your reputation online.

Can you imagine a world in which we all had control over what exactly when online about us or how it was organized and presented?

Who is actually going to have that power?

One thing the court said is there are exceptions for people who are public figures.

I think the rich and affluent people, public or not, will be the people who have the ability to make information and hide information and regular people will not necessarily have that opportunity.

We will continue to watch how google interprets and implements this ruling abroad.

For now, danny o'brien, thank you for joining us.

Coming up, remember the yellow pages?

Companies like google and yelp that made the telephone book something of a relic . the yellow pages are still around.

? welcome back to "bloomberg west." the iconic yellow pages that has been operating for over 100 years has on through its own digital transformation.

It's now known as yp, it has 70 million monthly users of the popular mobile app.

How is yp staying relevant among intense competition from other search engines?

Joining me to discuss this is aaron clark.

Every time the book ends up on my doorstep, seriously they still make this?

People still use the book.

We keep track of where the book is getting used and how it's getting used and you would be surprised that lots of places in the country it is very popular and especially that's what they're used to.

The digital site, yp, is a complement to and you have been actively recruiting local businesses to get online and get listed.

Tell me about that process.

On the digital side, we're about getting businesses online make sure they have a website that works for mobile and the web and make sure they're listed everywhere they need to be listed and we do it good job of driving them leads.

On the consumer side of the business, we have an app and experiences that reach 70 million unique visitors every month.

Yelp has 132 million, how do you keep up with the competition?

How do you keep up?

Many people dismiss the core find experience, having a fast and easy and comprehensive view of the businesses you might be looking for.

In addition, we are pushing new features that help people choose the best is must that's a thing called my book which started out as a bookmarking feature.

Now we are revolving that into a publishing platform so you can leverage your social graphic and people around you can find out what the best is this is are in your area.

You have some art ships with yelp and google?

Absolutely, we compete on the consumer side than on the media side, we are eyeing and selling traffic and inventory.

What do you make of the continued threat of google to take on both of you?

When i type a restaurant into the search engine, the person that comes up our google results in google reviews.

I think it's a great company but i think local is a deep and specific problem.

You have to focus on it and get into the nuances of what the businesses are doing to build the right stuff area how do you deal with widely varying demographics and a younger generation of consumers?

On the print side, we let the consumers choose how they use that and whether -- have you thought about not printing it?

There's places where we don't print it.

We do a lot of targeting where we deliver the book to make sure we will get maximum usage.

It's called smart delivery and we make sure we are sending up who are most likely to use them.

We are proactive on the green side of things where people can opt out so we art about doing the right thing.

What about reaching other consumers?

It's about mobile.

We have been in the app store from day one.

We are ranked pretty high on google play.

For local and that category.

We are pushing harder the mobile front.

We think we've got an interesting piece, advantage because we have so many merchant relationships in so many fees on the street would think that helps us from a content respective understanding the community.

You also have a lot of yahoo!

Alums?

I'm one of them.

We have a larger engineering team than anyone would imagine.

We have 600 engineers and alumni from yahoo!

And other places.

We've got a lot of tech capability and we run a big data pipeline and are a big open source shop.

We do our best to keep up with the big boys in the valley.

Good to hear what you are working on.

It is time for the bwest byte where we focus on one number that tells a lot.

Jon erlichman joins us from washington.

100 million.

The company but barcodes on marijuana.

They have tracked more than 100 million grams of marijuana over the last five years.

The first recreational, legal pot store in the city of seattle.

When you are trying to regulate a business like this, you need a lot of information, including where it is coming from.

It's part of the regulation, they will require to use rowers in the state of washington.

There is quite some action going on behind you.

Who are these people?

Set the scene for us there.

Is a mix of people.

Or than anything, it is curious people.

It's like people standing in line when a new apple product is released.

A lot of people are already legally purchasing marijuana -- medicinal marijuana.

This is the evolution of that process.

These are people who obviously are buying it that way.

I think they want to see what the fuss is all about.

This particular store owner comes equipped with 10 pounds of pot, so he is ready.

Tomorrow you're going to the opposite end of the spectrum in sun valley.

Thank you for watching this edition of "bloomberg west." ?

This text has been automatically generated. It may not be 100% accurate.

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