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Markets, Trade Negotiations, & Uber · Bloomberg Intelligence

0:02
Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you.
0:05
Speaker 1: Along with my co host Lisa Brahmas. Each day we
0:07
Speaker 1: bring you the most noteworthy and useful interviews for you
0:10
Speaker 1: and your money, whether at the grocery store or the
0:12
Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
0:16
Speaker 1: or wherever you listen to podcasts, as well as at
0:18
Speaker 1: Bloomberg dot com. There was a minute there when a
0:21
Speaker 1: reflation trade was taking hold and people were expecting a
0:24
Speaker 1: steepening of the yield curve an increase in future inflation expectations.
0:30
Speaker 1: What happened because we are seeing right now the ninth
0:32
Speaker 1: straight day of yield curve flattening. Drewmatics, chief market strategist
0:36
Speaker 1: for MetLife Investment Management, joining us right now, Um from Whippany,
0:39
Speaker 1: New Jersey. Drew, thank you so much for being here.
0:41
Speaker 1: I want to start with the flattening yield curve and
0:44
Speaker 1: get your sense of how important it is to keep
0:46
Speaker 1: track of nine straight days, the longest stretch since November
0:49
Speaker 1: two thousand, fifteen of yield curve flattening in the US. Well,
0:53
Speaker 1: I don't think it's a coincidence. When you know the
0:56
Speaker 1: good days or days and the curve steepening, and you
0:58
Speaker 1: can see that US markets, and you can see people's
1:02
Speaker 1: optimism begin to rise and people begin to think, hey,
1:05
Speaker 1: we're heading towards a more normal environment. Um. And then
1:08
Speaker 1: you have the days of flattening, where you know, you
1:10
Speaker 1: can have updates in the market despite that, UM, but
1:13
Speaker 1: people become a little more concerned about what the future
1:16
Speaker 1: might hold UM. And of course you can you can
1:18
Speaker 1: argue the causations working one way or the other. But
1:22
Speaker 1: I think broadly speaking, what we want to see is
1:24
Speaker 1: a steepening Yol curve. I think what the FED wants
1:26
Speaker 1: to see is a steepening Yol curve. What they want
1:29
Speaker 1: is a curve that's steep enough that if they want to,
1:31
Speaker 1: they could actually hike rates again. Not that that's on
1:34
Speaker 1: their mindset for something near term, but longer term, they'd
1:37
Speaker 1: like to see things normalized enough where they could push
1:39
Speaker 1: rates higher. Again. Do you think the we even have
1:42
Speaker 1: any green shoots of that as it relates to the
1:45
Speaker 1: underlying economy. Uh? Well, I think if you're the FED
1:49
Speaker 1: and you've been blaming kind of uncertainty on on kind
1:53
Speaker 1: of why you were cutting to begin with, uh, you know,
1:56
Speaker 1: we have seen some movement on trade, We're seeing some
1:59
Speaker 1: movement in your or UM. Lots of areas of uncertainty
2:02
Speaker 1: are becoming UM, we're beginning to see pathways towards less uncertainty,
2:08
Speaker 1: so a conclusion being reached UM or moving towards that conclusion.
2:13
Speaker 1: The problem we have now is that there's so many
2:15
Speaker 1: different things, and there's so many potential outcomes from trade
2:19
Speaker 1: and from politics and from the European story, that because
2:26
Speaker 1: there's so such complexity there, you can't figure out how
2:29
Speaker 1: to price everything, and so people then default to I'm
2:32
Speaker 1: going to be risk on or I'm going to be
2:33
Speaker 1: risk off, because they really can't put a value on
2:37
Speaker 1: all the things that are going on right now. That said,
2:39
Speaker 1: you've seen a steady decline or at least remaining stable
2:43
Speaker 1: of five year five year of break even rate. It's,
2:45
Speaker 1: in other word, as another gauge of future inflation. You're
2:48
Speaker 1: not seeing a concept of reflation taking hold in broader
2:53
Speaker 1: derivative and bond markets. And I'm just wondering whether that
2:56
Speaker 1: signals that they've fed really ought to cut rates again. Well,
3:01
Speaker 1: I you know, I don't think so. I think you know,
3:03
Speaker 1: first of all, you know, the headline of or current
3:06
Speaker 1: inflation that the FED follows, it's actually very close to
3:09
Speaker 1: their target. So even when they were cutting rates and
3:12
Speaker 1: saying inflation is not high enough, they were actually very
3:14
Speaker 1: close to their target. I think any other federal reserve
3:17
Speaker 1: that hadn't been through the financial crisis would have been
3:19
Speaker 1: saying we're close enough and we're happy with that. UM.
3:23
Speaker 1: So there's this fixation on pushing inflation, you know, significantly
3:28
Speaker 1: higher or higher to the target and above, as opposed
3:31
Speaker 1: to just being nearer the target UH. And I think
3:34
Speaker 1: that could end up backfiring on the Fed UH simply
3:38
Speaker 1: because you know, really, if you're going to focus on
3:40
Speaker 1: that last twenty basis points are so of kind of
3:43
Speaker 1: inflation that you want to achieve, you might lose sight
3:46
Speaker 1: of the fact that, you know, the rest of the
3:47
Speaker 1: economy seems to be doing well, and if there is
3:50
Speaker 1: an inflation surprise, it's going to put you well above
3:52
Speaker 1: a target that you're happy with. UM. So you know,
3:55
Speaker 1: maybe a grind higher is better when you're approaching your
3:58
Speaker 1: target than a than our sharp move higher. So Drew,
4:01
Speaker 1: given the strong performance we've had across many asset classes
4:04
Speaker 1: here in and even comparing it from the lows of
4:08
Speaker 1: the fourth quarter of last year. As you look at
4:10
Speaker 1: the where do you see the most opportunity? Uh? You
4:16
Speaker 1: know the problem is with evaluations where they are you
4:19
Speaker 1: know that there aren't a great number. You know, there
4:21
Speaker 1: there isn't a lot of opportunities. So I would I
4:23
Speaker 1: kind of take it and and and put it in
4:25
Speaker 1: this way. UM. You know, if you're going to be
4:28
Speaker 1: investing in the current environment, you want to be aware
4:30
Speaker 1: of the risk that you're taking, and you want to
4:32
Speaker 1: know how those risks could evolve. UH. And I think
4:36
Speaker 1: you know, often times, you know, people think they're taking
4:38
Speaker 1: one kind of risk and and they find out that,
4:40
Speaker 1: in fact, they were taking a different kind of risk. Um.
4:43
Speaker 1: And and so I think you know, as we're looking ahead,
4:48
Speaker 1: you know, our view is that you know, the next
4:50
Speaker 1: year looks good. The year after though one, UH is
4:54
Speaker 1: are likely timing for a recession. UM. So you know,
4:58
Speaker 1: when we're thinking about things, were thinking about, you know,
5:01
Speaker 1: when's the NEXTRA session coming, and how do you prepare
5:03
Speaker 1: for that? Um? And you know, I think a lot
5:06
Speaker 1: of people and there are a lot of forecasts out
5:08
Speaker 1: there now where people have very high probabilities of recession. UH.
5:11
Speaker 1: You know, banks are saying that there's a high probility
5:13
Speaker 1: of recession, but then you look at their forecasts and
5:16
Speaker 1: there's and there's no recession within their forecast. Um, And
5:19
Speaker 1: I think that's something people have to be on the
5:21
Speaker 1: watch out for. So just quickly here, Drew, recession, how
5:24
Speaker 1: do you trade that? Now? Well, you begin to make
5:27
Speaker 1: sure that you're comfortable with all the exposure you have, um,
5:30
Speaker 1: and that you know you're you you know, in the
5:34
Speaker 1: near term at least you know there's still some opportunities,
5:37
Speaker 1: but you don't necessarily want to you know, um, you
5:40
Speaker 1: might want to date those opportunities instead of marrying them. So, Drew,
5:44
Speaker 1: interesting one call. I mean, it's interesting right here. Did
5:48
Speaker 1: that suggests to you that maybe the FED doesn't have
5:51
Speaker 1: as much MS they think that they do, Uh, you know, yes.
5:55
Speaker 1: So you know, I think if we're thinking about where
5:58
Speaker 1: the FED is going to head from this point, they're
6:00
Speaker 1: not going to be hiking rates next That's not our view.
6:02
Speaker 1: Our view is that the next move will be lower.
6:05
Speaker 1: But at the same point, we don't think they're gonna
6:07
Speaker 1: be moving at all next year. Truemattus, thanks so much
6:09
Speaker 1: for joining us. We appreciate your commentary. Drew as the
6:12
Speaker 1: chief market strategist for MetLife Investment Manages, joining us on
6:15
Speaker 1: the phone. China is agreeing to take a harder stance
6:33
Speaker 1: on intellectual property theft as part of the ongoing trade war.
6:37
Speaker 1: Is hard to know exactly how to frame this though,
6:40
Speaker 1: given that there are not that many more details. But
6:43
Speaker 1: luckily we have Henrietta Trees joining us now to help
6:46
Speaker 1: us do that, director of Economic Policy Research at Beta
6:48
Speaker 1: Partners joining us from New Orleans. Um, Henrietta, what don't
6:52
Speaker 1: you make of the IP theft news that was coming
6:55
Speaker 1: out overnight? How seriously should markets be taking this? I
7:00
Speaker 1: think it's at first glance good news. What we've seen
7:02
Speaker 1: from President she in the past is when they are
7:06
Speaker 1: making concessions or doing things that the Americans have been
7:10
Speaker 1: asking of Beijing, they tend to announce it separately or
7:14
Speaker 1: um in advance of any kind of deal being reached
7:17
Speaker 1: that they can present as though they've just independently decided
7:21
Speaker 1: to make this movie. We saw that on the Financial
7:23
Speaker 1: Markets Access opening up. Um. They've done this I P
7:26
Speaker 1: theft type of extractions several times in the last few years.
7:31
Speaker 1: So on the one hand, it bodes well for Hey,
7:33
Speaker 1: maybe there's something that could be announced in the coming
7:36
Speaker 1: days in terms of the Phase one deal, and they're
7:38
Speaker 1: trying to get out in front of that and appear
7:39
Speaker 1: more autonomous than doing it of their own volition. But
7:42
Speaker 1: at the same time, there's not very many details. Um
7:45
Speaker 1: One of the things that concerns me is that this
7:47
Speaker 1: is happening apps in a Phase one deal being announced
7:49
Speaker 1: or even uh deadline or set meeting for Vice Premier
7:54
Speaker 1: Lucha and USTR Life Heiser to even meet um let alone,
7:58
Speaker 1: Presidents Trump and President she meeting to ink a deal.
8:01
Speaker 1: So a lot of this is happening outside of any
8:05
Speaker 1: comprehensive details on Phase one, and of course enforcement remains
8:08
Speaker 1: the number one issue for me. So Henrietta, can you
8:11
Speaker 1: just give us a reset kind of where we are
8:14
Speaker 1: or really where the Chinese are in terms of they're
8:17
Speaker 1: thinking about how incentive are they to get a Phase
8:21
Speaker 1: one deal. I think right now the goal is to
8:25
Speaker 1: avert List four B tariffs, which is about a hundred
8:28
Speaker 1: and sixty billion dollars of consumer facing goods set for
8:31
Speaker 1: the summer fifteenth, And what I'd encourage investors to do
8:33
Speaker 1: is sort of separate out the ability of the United
8:36
Speaker 1: States and China to come to an agreement that staves
8:39
Speaker 1: off at the summer fifteenth escalation from necessarily reaching a
8:43
Speaker 1: Phase one deal. Um in my view, we are already delayed.
8:47
Speaker 1: We've already moved the goldmost. We're entering into week seven
8:51
Speaker 1: of the Phase one trade deal being announced, which was
8:53
Speaker 1: set to be a three to five week you know,
8:56
Speaker 1: wrapping up final negotiations period. So we've already delayed since
8:59
Speaker 1: stance rely, and based on what we've seen from the
9:02
Speaker 1: administration of the last two years, they're pretty comfortable pushing
9:05
Speaker 1: out deadlines um, so December fifteenth moving to let's say January, February,
9:10
Speaker 1: March fifteenth, or even being suspended altogether, as was the
9:13
Speaker 1: case with the escalation on Lists one, two, and three
9:17
Speaker 1: rising in their tariff rights from I think it is
9:21
Speaker 1: distinctly possible and doesn't necessarily have to be a Phase
9:23
Speaker 1: one deal. The problem is the longer this takes to work,
9:27
Speaker 1: the more other components are happening in the ether, like
9:30
Speaker 1: the Hong Kong protests or the impeachment proceedings in the
9:34
Speaker 1: United States. The lack of a U s m c
9:36
Speaker 1: A vote time continues to pick by and Phase one
9:39
Speaker 1: deals are not being reached into vacuum. So I'm hopeful
9:42
Speaker 1: that we won't see the tariffs, but that doesn't mean
9:44
Speaker 1: we have to see a phase one deal. So Phase
9:46
Speaker 1: one was supposedly soybeans AGG purchases the easy stuff that
9:50
Speaker 1: has run into roadblocks. We're hearing with questions about enforcement
9:53
Speaker 1: and just how much as far as a number figure goes.
9:56
Speaker 1: China's agreeing to buy intellectual property theft was suppos to
10:00
Speaker 1: be phased two, according to my understanding, because I thought
10:02
Speaker 1: that this was one of the harrier things. So can
10:04
Speaker 1: you try to square the idea that we're running into
10:06
Speaker 1: issues with soybean purchases, which was supposed to be the
10:09
Speaker 1: easy stuff, and we seemed to be getting something an
10:11
Speaker 1: IP theft, which was the tough stuff. That's such a
10:14
Speaker 1: good way to phrase it, if I'm not mistaken. The
10:17
Speaker 1: September of the most recent orders were three month lows
10:20
Speaker 1: on soybeans as China's getting just out today, right, So
10:24
Speaker 1: really interesting development. And you I think that's a great
10:26
Speaker 1: point that you make. Um when it comes to AGG purchases,
10:30
Speaker 1: I think we should maybe think about the diversification that
10:34
Speaker 1: we've seen from China, So the most prominent I think
10:37
Speaker 1: would be in terms of protein sources. Having them signed
10:40
Speaker 1: that poultry deal a week or two back. That was
10:43
Speaker 1: a really tremendous development that I think constitutes systemic reform,
10:48
Speaker 1: Like the administration has been trying to seek out in
10:51
Speaker 1: as you suggest, I P theft or any kind of
10:54
Speaker 1: major significant uptaking agriculture purchases. So we're seeing it on
10:58
Speaker 1: some areas but not on others. Are importing pork to
11:02
Speaker 1: at least some extent, and then the the poultry component
11:04
Speaker 1: could be a billion dollar industry once they get those
11:08
Speaker 1: trade lines reopen. The soy piece is an unfortunate decline,
11:12
Speaker 1: but if you are dealing with what less pork in China,
11:18
Speaker 1: they need less soy to feed them, So I guess
11:20
Speaker 1: it does track the I p ST component, though, just
11:23
Speaker 1: like with everything else is you really need technical details
11:26
Speaker 1: and we have none of those. So Persident Trump alluded
11:29
Speaker 1: to I P theft in some way, shape or form
11:31
Speaker 1: being included in a Phase one deal, and if this
11:35
Speaker 1: is the extent of it, then it's not nearly enough
11:37
Speaker 1: to constitute systemic reform. And I think, and just to
11:41
Speaker 1: sort of sound like a broken record, it comes down
11:44
Speaker 1: to enforcement. If China is agreeing to make changes and
11:47
Speaker 1: they're hoping that the United States will back up, back
11:50
Speaker 1: off on further tariffs or take off whole baskets the tariffs,
11:53
Speaker 1: which is what I think a lot of investors are
11:55
Speaker 1: hoping for and the Chinese absolutely want. UM. This is
11:58
Speaker 1: a way to incentivize the United States to get more
12:02
Speaker 1: comfortable with easing the enforcement components and taking tarifs off
12:05
Speaker 1: before they reach any kind of final agreement you know,
12:08
Speaker 1: on phase two or phase three or what have you.
12:10
Speaker 1: UM And unfortunately, just don't see US t R Lifehiser
12:12
Speaker 1: agreeing to take off tremendous amounts of tariffs. One of
12:16
Speaker 1: the things that I try to advise our clients about
12:18
Speaker 1: all the time is to say, look, before tariffs come
12:21
Speaker 1: off on entire product lines and huge you know list
12:24
Speaker 1: for a baskets are lifted entirely, recognize that the usc
12:29
Speaker 1: R has a comprehensive one, two and six month enforcement
12:33
Speaker 1: strategy that he has already laid out for us that
12:35
Speaker 1: I think will more likely results in the initial step
12:38
Speaker 1: being to reduce tariff rates, not to reduce the overall
12:41
Speaker 1: basket of goods that are our tariffs. So for instance,
12:43
Speaker 1: the list for a tariffs, which are a hundred and
12:46
Speaker 1: twelve billion dollars worth of goods. Instead of taking all
12:50
Speaker 1: that add and twelve billion dollars off, you drop the
12:52
Speaker 1: rate from fift to ten percent and then maybe six
12:54
Speaker 1: months later reassess and and that's how lifehiser will allow
12:58
Speaker 1: for enforcement of ever trying to commit to on I
13:01
Speaker 1: p or ADD purchases for that matter. So Henrietta just
13:04
Speaker 1: about thirty seconds. What happened to the feeling maybe six
13:07
Speaker 1: months ago that the Chinese We're just gonna wait and
13:10
Speaker 1: take their bets with whoever's in the White House. Then
13:14
Speaker 1: my understanding is that the US Hawks in China really
13:16
Speaker 1: got spooked by the Administration's decision to dramatically escalate cariffs
13:21
Speaker 1: in mid August. The White House has been walking that
13:24
Speaker 1: back ever since, as we've seen um, but that was
13:28
Speaker 1: the big game changer in that the administration and specifically
13:31
Speaker 1: President Trump acted way outside the bounds of what US
13:34
Speaker 1: Hawks and China expected, and they might be better off
13:38
Speaker 1: reaching a Phase one deal now and hitting the pause button,
13:42
Speaker 1: which I think is really what a Phase one deal is,
13:44
Speaker 1: just an opportunity to hit pause through the elections. So
13:46
Speaker 1: hopefully we get to that. Henrietta Trades, thank you so
13:49
Speaker 1: much for joining us. Some really smart commentary there on
13:52
Speaker 1: the ongoing U S. China trade negotiations. Henrietta is the
13:56
Speaker 1: director of Economic Policy Research for Veta Partners. During us
14:00
Speaker 1: on the phone from New Orleans with some you know,
14:02
Speaker 1: some really interesting commentary as it relates to the tariffs,
14:05
Speaker 1: and that's one we got to really focus on the Crofts.
14:08
Speaker 1: I thought what she said was really telling the idea
14:11
Speaker 1: that China's that we can expect China to announce concessions
14:16
Speaker 1: that they make ahead of any deal that gets reached,
14:19
Speaker 1: so that it seems like it's coming from their own volition. Well,
14:38
Speaker 1: another risk on day today in the markets, some optimism
14:43
Speaker 1: about China trade and what a year it's been in
14:44
Speaker 1: the smp fient year to date. A lot of folks
14:47
Speaker 1: are starting to look forward to seem about how they
14:51
Speaker 1: should position our portfolio. We can get some good color
14:54
Speaker 1: from our next guest, Clark Kendall, President CEO of Kendall Capital,
14:56
Speaker 1: joining us on the phone. Clark, thanks much for joining us.
15:00
Speaker 1: You know a lot of folks dealt with the pain
15:02
Speaker 1: and experience the pain of the fourth quarter last year,
15:05
Speaker 1: but then we're more than rewarded by the upside here
15:08
Speaker 1: in SMP up about year to date. What are your
15:13
Speaker 1: thoughts for the remainder of the year and heading Yeah,
15:16
Speaker 1: so far this has been a great year. Um, we
15:19
Speaker 1: are the investment managers for the middle class millionaire in
15:22
Speaker 1: the in the Washington, d C. Area. I think, you know,
15:26
Speaker 1: we've got to try to get away from just predicting
15:28
Speaker 1: the market but looking for opportunities within the market. Okay,
15:33
Speaker 1: so where do you see opportunities? Well, as I always say,
15:36
Speaker 1: it's sometimes it's easiest to know where not to invest.
15:39
Speaker 1: I think the ten year Treasury at one point nine
15:42
Speaker 1: is not attractive to me. The I p o s basically,
15:46
Speaker 1: the I p o s have come to market this
15:47
Speaker 1: year have come to market because they're starving for cash
15:51
Speaker 1: on the opposite side of the coin. And on top
15:54
Speaker 1: of that, the nifty fifty, the top fifty stocks of
15:57
Speaker 1: the SMP, are at huge value shoes, So I think
16:00
Speaker 1: the other four fifty stocks create great opportunities in today's market.
16:04
Speaker 1: Are there certain sectors, Clark that you think maybe have
16:07
Speaker 1: been left behind? Some people were suggesting maybe some international stocks.
16:10
Speaker 1: Maybe even maybe I'm going to the risk curve for
16:13
Speaker 1: emerging markets. What are your thoughts on where there might
16:16
Speaker 1: be some value. I think there's some great value. I
16:19
Speaker 1: like to look at things of price to cash flow.
16:22
Speaker 1: I think the fact that Schwab's buying t D and
16:24
Speaker 1: merrit Trade is a great example of a company looking
16:28
Speaker 1: in that foreign and fifty looking for cash flow. The
16:30
Speaker 1: fact that Walgreens is looking to go private, Why are
16:33
Speaker 1: they looking to go private because the cash flow is
16:35
Speaker 1: so strong. So I think there's some great companies out
16:38
Speaker 1: there in that four hundred and fifty where the cash
16:40
Speaker 1: flow is quite strong. So going into a lot of
16:43
Speaker 1: people are expecting a bit of a resurgeons in economic prospects,
16:47
Speaker 1: at least in the first half of the year, and
16:49
Speaker 1: then for that to sour in the second half. That
16:51
Speaker 1: seems to be the consensus. What are you advising your
16:54
Speaker 1: clients do heading into next year? Well, I think kind
16:58
Speaker 1: of predicting how fast the GDP will grow, where interest
17:01
Speaker 1: rates will go the short term, that's very hard to predict.
17:04
Speaker 1: Jeremy Pal basically pointed out we're in a good spot.
17:08
Speaker 1: We have low inflation, we have low interest rates, we
17:10
Speaker 1: have low GDP, we have all low unemployment, and I
17:13
Speaker 1: think we take advantage of that. We look at things
17:16
Speaker 1: like Norwegian Cruise Lines a great example of a company
17:19
Speaker 1: having strong cash flow with low unemployment people. It's a
17:23
Speaker 1: relatively cheap, cheap vacation. Things like United Rental. I mean,
17:28
Speaker 1: we're the economy is still growing and you know they
17:31
Speaker 1: have a great profit margin, great cash flows. So I
17:34
Speaker 1: think there's continues to be great opportunities in our economy.
17:38
Speaker 1: So Clark one of the areas that has really been
17:40
Speaker 1: the driver both on the downside. Do you think about
17:42
Speaker 1: the fourth quarter last year than the upside? Uh? This
17:44
Speaker 1: year has been technology and particularly some of the Fang stocks.
17:48
Speaker 1: Is that a group that is attractive to you or
17:51
Speaker 1: do you think it's just just too rich? I think
17:54
Speaker 1: I think we need to be very cautious with the
17:56
Speaker 1: Fang stocks and all the stocks in the nifty fifty.
17:59
Speaker 1: Well remember at the turn of the century. Um everyone
18:02
Speaker 1: at the turn of the century head Cisco and Dell
18:06
Speaker 1: qual Calm in their portfolios. Qual Calm has you know,
18:09
Speaker 1: revenue and earnings are up seventeen times at the stock
18:13
Speaker 1: prices two thirds the value was nineteen years ago. So
18:16
Speaker 1: I think we need to be cautious and That's why
18:18
Speaker 1: I'm saying go back to the fundamentals. Price to cash
18:21
Speaker 1: fell everyone's index thing. But I think there's great opportunities
18:26
Speaker 1: for the portfolio managers that pay attention to valuations. Clark Kendall,
18:29
Speaker 1: thank you so much for being with us. Clark Kendall,
18:31
Speaker 1: President and Chief executive Officer of Kendall Capital, joining us
18:35
Speaker 1: from Maryland. Well, it looks like Uber has run into
18:53
Speaker 1: another roadblock in London, losing their license over rider safety concerns.
18:58
Speaker 1: The stock is off about one point three percent today,
19:02
Speaker 1: off about from its I p O. We should say
19:04
Speaker 1: they have appealed that, so it's not a completely final
19:07
Speaker 1: thing yet. Absolutely, let's get the latest. Nate Langston, European
19:10
Speaker 1: technology editor for Bloomberg News, joining us from our London
19:14
Speaker 1: radio studios. So Nate, give us the latest on what's
19:18
Speaker 1: going on with Uber and the city of London. Yeah, well,
19:22
Speaker 1: a couple of It's just it's probably worth stepping back,
19:24
Speaker 1: just very briefly, because a couple of years ago, when
19:26
Speaker 1: Uber's previous full license M was refused a renewal, it
19:31
Speaker 1: immediately had to appeal and was allowed to continue operating
19:36
Speaker 1: for several months while that appeal took place, and to
19:39
Speaker 1: just over two years on from that, the same thing
19:42
Speaker 1: has happened again. It was applying for a new license
19:46
Speaker 1: and it was refused, and now Uber is appealing that
19:50
Speaker 1: license and is able to carry on operating at least
19:53
Speaker 1: while the appeals process goes through, so cars aren't being
19:58
Speaker 1: pulled off the road. Drivers can will accept new rides. Um,
20:02
Speaker 1: But obviously it's a huge blow in in one of
20:05
Speaker 1: the biggest markets that Uber has outside of the US.
20:08
Speaker 1: How do we view this? Is this a political issue
20:11
Speaker 1: with some of the other cab drivers in the city
20:14
Speaker 1: of London winning a political battle here versus a legitimate
20:18
Speaker 1: complaint that regulators have against Uber. There is a legitimate
20:22
Speaker 1: reason for complaint here. They did TfL who's our our
20:26
Speaker 1: transit authority? Here did find evidence of many journeys fourteen
20:31
Speaker 1: thousand journeys at least being being made by drivers who
20:36
Speaker 1: either didn't have a license or even had had their
20:39
Speaker 1: license revoked in the past. And I think that that
20:42
Speaker 1: speaks for itself as to the political angle. Um, if
20:45
Speaker 1: you ask any black cab driver here in London whether
20:48
Speaker 1: they like Uber, you'll get a pretty unanimous response that
20:51
Speaker 1: they do not. And Siddik Khan, who's the Mayor of London,
20:56
Speaker 1: is on the Labor party side of the political spectrum
21:00
Speaker 1: here and he's come out in support for what TfL
21:04
Speaker 1: has done as well. And there's a very big union
21:06
Speaker 1: support on the labor side for for the black cab industry.
21:10
Speaker 1: So it's it is easy to think that there's a
21:12
Speaker 1: there's an element of political motivation here, but fundamentally, the
21:16
Speaker 1: decision is for the regulator, which is a political and
21:21
Speaker 1: that's the that's the body that's made this decision and
21:24
Speaker 1: had the final say. So, Nate, give us a sense
21:26
Speaker 1: of how the good people of London view their black
21:29
Speaker 1: taxi cab fleet. I mean, when I'm in London, I
21:32
Speaker 1: just think it's a joy to use. It's a great,
21:35
Speaker 1: great service, it's a great experience and I can trust
21:37
Speaker 1: it with what we have had to deal with here
21:39
Speaker 1: in New York. Um, So, is there a public support
21:43
Speaker 1: for the black cabs or people just saying, hey, we
21:45
Speaker 1: want the cheapest ride, the easiest ride, the most convenient ride.
21:48
Speaker 1: I mean for anyone coming in from out of town.
21:51
Speaker 1: I imagine there's a there's a lot of fun in
21:53
Speaker 1: getting a black cab, and certainly you know, they're good
21:55
Speaker 1: vehicles and and they're very convenient, but for for most
21:59
Speaker 1: people who who live here, it's basically it comes down
22:02
Speaker 1: to cost and who's going to be fastest. And because
22:05
Speaker 1: Uber is so pervasive across the capital. You know, there's
22:07
Speaker 1: forty five thousand drivers just in London alone, it's it's
22:12
Speaker 1: easy to just to become very, very fond of Uber.
22:14
Speaker 1: And personally, I I use Uber many many more times
22:17
Speaker 1: than I do a black cap for for personal and
22:20
Speaker 1: for work. So the I don't think the cab industry
22:23
Speaker 1: has any reason to be any more worried than it
22:25
Speaker 1: was before. But I also don't think they're they're going
22:29
Speaker 1: to lose any business to people coming in from overseas
22:32
Speaker 1: who who just liked the novelty maybe of taking a
22:35
Speaker 1: black cap. How crucial is London to Uber's europe strategy
22:39
Speaker 1: at this point, Well, it's one of the biggest markets.
22:42
Speaker 1: Um it's I think it's one of the fifth most
22:44
Speaker 1: of the fifth most lucrative city for Uber in total.
22:48
Speaker 1: Um So it's very very important. But it's but it's
22:51
Speaker 1: not the only one. You know, Uber is active in
22:53
Speaker 1: many cities across the continent, and I think that losing
22:56
Speaker 1: London will send a very challenging message to other cities.
22:59
Speaker 1: But I think it's going to necessarily be a black
23:02
Speaker 1: hole for the whole European arm of the company. So now,
23:06
Speaker 1: what's the next um step? Four? I guess Uber here
23:10
Speaker 1: they're appealing it, do they have a hearing? And what's
23:12
Speaker 1: kind of the timing here? Well, if the timing follows
23:15
Speaker 1: a similar step to what we saw in twenties seventeen
23:19
Speaker 1: when this when this happened last time, they Uber filed
23:23
Speaker 1: the appeal that year in September and hearing took place
23:27
Speaker 1: in June the following year. So there's a several month
23:30
Speaker 1: window for that appeal to even hit the first the
23:33
Speaker 1: first magistrates court. So I would, I would certainly, we
23:36
Speaker 1: haven't any information to suggest that that that would be
23:39
Speaker 1: any different this time. If Uber were to lose that
23:42
Speaker 1: appeal um in in several months time, potentially it could
23:46
Speaker 1: still take this all the way up to the Supreme
23:49
Speaker 1: Court here, and that's a process that's you know, it
23:52
Speaker 1: could be measured in years rather than months. And throughout
23:54
Speaker 1: this process, Uber has the legal right to continue operating,
23:59
Speaker 1: so I sir, and we don't see any reason for
24:02
Speaker 1: for drivers to be to be overly concerned in the
24:05
Speaker 1: near term, and certainly not before next year. Nate Lanston,
24:09
Speaker 1: thank you so much for being with us. Nate Lanson
24:12
Speaker 1: UH covers all things technology related. Bloomberg European Bureau. Thanks
24:17
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Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever
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Speaker 1: pt Sweeney. I'm Lisa A. Bram Woyds. I'm on Twitter
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