Latest / Bloomberg Intelligence / Trump Says 80% China Tariff ‘Seems Right,’ Ahead of Talks

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Trump Says 80% China Tariff ‘Seems Right,’ Ahead of Talks · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news, and Android auto with
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  Speaker 1: the Bloomberg Business App. Listen on demand wherever you get
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  Speaker 1: your podcasts, or watch us live on YouTube.
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  Speaker 2: A trade team heading over to Switzerland today for trade
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  Speaker 2: talks with China, and President Trump out today with a
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  Speaker 2: tweet saying eighty percent China tariff. Quote seems right ahead
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  Speaker 2: of the talks, so we'll see how that plays out.
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  Speaker 2: Seawan Donna joins us. He is senior economics writer for
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  Speaker 2: Bloomberg News. He's based down in Washington, DC. Seems right.
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  Speaker 3: I don't know.
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  Speaker 2: I'm not sure where that number came from here, Sean,
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  Speaker 2: what are expectations going into some of these trade discussions
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  Speaker 2: with the Chinese in Switzerland.
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  Speaker 4: Look, the administration from President Trump on down has made
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  Speaker 4: very clear they want to do some de escalation this
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  Speaker 4: weekend and that they want to bring parish down from
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  Speaker 4: the one hundred and forty five percent plus level that
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  Speaker 4: they're at. We had heard in recent days below sixty
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  Speaker 4: percent was something that they're targeting. The President's out with
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  Speaker 4: eighty percent. But look, the thing to keep in mind
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  Speaker 4: here is even if we get what would be a
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  Speaker 4: dramatic the escalation dramatic reduction from one hundred and forty
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  Speaker 4: five percent to eighty percent or sixty percent. Those levels
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  Speaker 4: are still incredibly high, and they're still going to be
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  Speaker 4: prohibitive for a lot of trade. And you know, the
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  Speaker 4: folks a Bloomberg Economics have been running the numbers and
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  Speaker 4: you still get plenty of damage to the US economy
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  Speaker 4: to trade to the Chinese economy. Those are not good numbers.
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  Speaker 4: I mean this it speaks to how far we've come
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  Speaker 4: in the last month. You know, it was literally a
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  Speaker 4: month ago today that these reciprocal tariffs went into place
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  Speaker 4: from President Trump and then he had a bit of
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  Speaker 4: a U turn put on a ninety day puz. But
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  Speaker 4: the window on what is being discussed is just has
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  Speaker 4: shifted remarkably over that time.
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  Speaker 5: And that's what we forget kind of yesterday too, like
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  Speaker 5: even though there was a deal with the UK, like
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  Speaker 5: those ten percent tariffs are still in effect, They're still there.
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  Speaker 5: What was so interesting though, is that he also said
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  Speaker 5: that it's up to Besson't why, like, what do we
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  Speaker 5: make of that? And is that a good or a
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  Speaker 5: bad thing as far as markets are concerned.
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  Speaker 4: Well, look, I mean, Besson's the guy for now. Right,
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  Speaker 4: I mean, he's leading the delegation there, and President Trumps
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  Speaker 4: has moved around. I mean a few weeks ago, it
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  Speaker 4: was Howard Latnik who was the guy right and on
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  Speaker 4: China and other things. It looks like the Secretary of
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  Speaker 4: Commerce is now dealing with other countries and there's a
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  Speaker 4: lot of negotiations going on there. Scott Besson is the
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  Speaker 4: man of the moment this weekend. He's being joined by
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  Speaker 4: Jamison Greer, who really is the trade wonk in the mission.
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  Speaker 4: He's the US trade representative of course. So look, you know,
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  Speaker 4: one of the things we learned in the first Trump
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  Speaker 4: administration is President Trump has lots of emissaries, and he
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  Speaker 4: often shifts emissaries over time. So let's see what Scott
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  Speaker 4: Bessen comes back with, Let's see what President Trump makes
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  Speaker 4: of it, and let's see where the talks go from here.
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  Speaker 2: What's the current thinking Sean about when will consumers feel this?
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  Speaker 2: Gene Soroka, who runs a port of la was in
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  Speaker 2: our studio last week and he said bookings for this week,
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  Speaker 2: sailings from China into his port are down thirty to
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  Speaker 2: thirty five percent for this week.
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  Speaker 3: When's that going to reach consumers?
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  Speaker 4: Look it's it's going to reach consumers and soon. I mean,
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  Speaker 4: I think you know, we had new trade numbers out
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  Speaker 4: of China today and exports from China to the US
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  Speaker 4: are down by twenty one percent, and we're down by
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  Speaker 4: twenty one percent in April, and they're only going to
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  Speaker 4: get that. You know, they're only going to continue downward
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  Speaker 4: from from here, even if we get some kind of
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  Speaker 4: de escalation at the weekend. So the one thing that
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  Speaker 4: is is kind of pushing back against the impact for
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  Speaker 4: consumers is that companies have built up a lot of inventories.
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  Speaker 4: So you talk to companies and they'll say, we've got
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  Speaker 4: three maybe six months worth of inventory there, and that
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  Speaker 4: might get us through. So we're going to see empty shelves,
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  Speaker 4: but not all the shelves are likely to be empty
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  Speaker 4: this summer.
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  Speaker 5: And then it becomes a question of when do we
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  Speaker 5: see those jobs be cut? So if you don't have
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  Speaker 5: the volume coming in, do those dock workers get scrapped?
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  Speaker 5: And that was a question posed to President Trump yesterday
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  Speaker 5: and he's like, well, good, because a long term it's
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  Speaker 5: going to be good for America. But what's that trickle
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  Speaker 5: down looking like?
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  Speaker 4: Yeah, and we're already seeing job cuts, and you know,
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  Speaker 4: we're also seeing hiring slow down, and I think that's
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  Speaker 4: That's the other thing to remember is a lot of
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  Speaker 4: the uncertainty around trade isn't necessarily about cutting jobs or
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  Speaker 4: closing factories in the short term. It's about not expanding factories.
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  Speaker 4: It's about not growing, it's about not hiring more people,
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  Speaker 4: and that, of course is what's really toxic for the expoment.
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  Speaker 5: All right, Sean, we gotta leave it there. Thanks lash
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  Speaker 5: onon Don and joining us. He heads up all trade
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  Speaker 5: and economic coverage for Bloomberg.
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• 5:21
  Speaker 3: AI.
• 5:21
  Speaker 2: Well, you remember when the time was we talked about
• 5:23
  Speaker 2: AI NonStop, and then we switched the narrative to terrors.
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  Speaker 3: I kind of want to go back to AI. That
• 5:29
  Speaker 3: seems like a lot more fun.
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  Speaker 2: But it's affecting all the industries we know that, including
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  Speaker 2: financial services industry. One of our next guests is really
• 5:37
  Speaker 2: involved in that. Josh Panthony, CEO CO founder of boosted
• 5:40
  Speaker 2: dot AI Joints, is here in our Bloomberg and Arrective
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  Speaker 2: Brokers studio based in Chicago, so I mean in Toronto
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  Speaker 2: for our Canadian friends. Welcome, Josh, appreciate it.
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  Speaker 3: Talk to us about boost to AI. What do you
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  Speaker 3: guys do?
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  Speaker 6: So we make it easy for professional investment managers to
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  Speaker 6: build these little sort of AI workers the kind of
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  Speaker 6: automate different parts of the process. So you might give
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  Speaker 6: it some task related to maybe doing a competitive analysis
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  Speaker 6: or tracking what's happening with tariffs, and then have the
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  Speaker 6: worker kind of automatically scan through the world and inform
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  Speaker 6: you about really important.
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  Speaker 7: Information that could have impacts on your process.
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  Speaker 5: So what's the ROI for something like that? Like, if
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  Speaker 5: I'm a portfolio manager, what does it look like? What
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  Speaker 5: has my job get better or worse?
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  Speaker 6: Yeah, well we mix your job much better. Point we
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  Speaker 6: kind of think of it in three different ways. We
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  Speaker 6: can help automate drudgery. So if you're someone has to
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  Speaker 6: do something like write a deep due diligence document, or
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  Speaker 6: if you do a report or a swat analysis, or
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  Speaker 6: you know, write like a ninety page investment thesis. These
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  Speaker 6: are all examples of task that system could help you
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  Speaker 6: do just a lot faster. The second way we think
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  Speaker 6: about it sort of monitoring the world. If you have
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  Speaker 6: a portfolio and you wanted to sort of scan through
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  Speaker 6: everything happening in particular sector, maybe look forever you like
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  Speaker 6: eight K, ten K scan to corporate events. This doesn't
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  Speaker 6: can form you real time. And then the last category
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  Speaker 6: I think of is sort of like superpowers. A good
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  Speaker 6: example of that is when the video head there Blackwell
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  Speaker 6: chipped away. He historically analyze that by looking at sell
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  Speaker 6: side research talking to our groups. You'd still do that,
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  Speaker 6: but you could use our system to look through like
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  Speaker 6: three thousand companies, learnings calls, summer as across all of them,
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  Speaker 6: what are the major macro effects of this, and how
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  Speaker 6: many are still bullish and working with the video versus
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  Speaker 6: other providers, And that kind of analysis just wasn't really
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  Speaker 6: possible at scale until our technology came around.
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  Speaker 2: As a former cell side research channels, would my job
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  Speaker 2: be at risk here? People still need me?
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  Speaker 7: Yeah? I think the jobs just going to change.
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  Speaker 3: Okay.
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  Speaker 7: I think there's kind of two elements of that work, right.
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  Speaker 6: There's the element of producing text, analyzing text, producing numerical analysis.
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  Speaker 6: We think AI is going to more or less automate
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  Speaker 6: ninety to ninety five percent of that. But there's another
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  Speaker 6: deep part of your job where you were going out
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  Speaker 6: and actually talking to humans. You were running conferences, you
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  Speaker 6: were talking to management, you were talking to experts. Humans
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  Speaker 6: are always going to have a massive competitive advantage, and
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  Speaker 6: we think that the job almost gets more humanized. You
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  Speaker 6: spend more of your life talking to other people, get information,
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  Speaker 6: learning what matters, and.
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  Speaker 7: Taking to the polls. Well, the machine keeps track of
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  Speaker 7: all the information in the world.
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  Speaker 5: So one of the criticism is that you know, by
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  Speaker 5: going through all those earnings reports or whatever salesye reports,
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  Speaker 5: you learn stuff, and that if you have AI do it,
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  Speaker 5: you take away that learning tool.
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  Speaker 7: How do you combat that?
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  Speaker 6: Yeah, absolutely, there's still going to be some earnings calls
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  Speaker 6: you're going to cover, but there's probably hundreds of earnings
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  Speaker 6: calls maybe up the supply chain, down the supply chain,
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  Speaker 6: relatedt competitors, related names that you don't cover, that have
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  Speaker 6: really big impacts on your stocks you're probably not looking
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  Speaker 6: at today. By adding in something like this, the sort
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  Speaker 6: of set of information you can use as part of
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  Speaker 6: your analysis just increases a lot more.
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  Speaker 2: What did you make of the news that's maybe came
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  Speaker 2: to a little bit of a head in this past
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  Speaker 2: week about AI as a threat to Google Search?
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  Speaker 3: Yeah, what did you make of that?
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  Speaker 4: So?
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  Speaker 6: Number one, it absolutely is, But I think at the
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  Speaker 6: high level there's kind of two interesting things with AI.
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  Speaker 6: Number One, we think we're still very early innings. There's
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  Speaker 6: a lot of room to expand we don't think the
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  Speaker 6: markets priced that in. But number two, there is huge
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  Speaker 6: disruption that's coming.
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  Speaker 7: You know.
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  Speaker 6: In particular, we think the cost of producing software is
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  Speaker 6: going to reduce like ninety nine percent of the next
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  Speaker 6: year or two. And so there's a lot of traditional
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  Speaker 6: companies that had very strong tech motes where those motes
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  Speaker 6: are going to basically evaporate overnight, and we don't think
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  Speaker 6: that's been priced in yet.
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  Speaker 5: How are you looking to expand your business? How do
• 9:21
  Speaker 5: you keep growing? I'm sure there's a lot of competition.
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  Speaker 6: Yeah, you know, long story short, we're just under a
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  Speaker 6: thousand users right now. There's a ton more out there,
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  Speaker 6: you know, So we're growing really heavily quarter over quarter,
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  Speaker 6: but it's still.
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  Speaker 7: Maybe one percent of the market.
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  Speaker 6: And really my mission right now is to capture as
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  Speaker 6: much as a can over the next year or two.
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  Speaker 2: So what's the feedback from you go into you know,
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  Speaker 2: a hedge fund or something.
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  Speaker 3: Are they receptive to it?
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  Speaker 2: Do they feel like the quality may not be there,
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  Speaker 2: they're unsure about it?
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  Speaker 3: What's the reception?
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  Speaker 7: Yeah?
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  Speaker 6: Oftentimes when we engage, we like to start with sort
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  Speaker 6: of asking, what's the task you lease like doing. Tell me,
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  Speaker 6: you know you work eighty hours a week, ninety hours
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  Speaker 6: a week, what are the ten hours that you just
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  Speaker 6: absolutely do not want to do? And really a lot
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  Speaker 6: of that journey is walking them through how to automate
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  Speaker 6: that ten hours, that twenty hours, giving them that time back,
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  Speaker 6: and then we kind of build on top of that.
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  Speaker 5: How hard is it to find a team, like I'm
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  Speaker 5: assuming that competition is huge right now, what's that like, like.
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  Speaker 7: The technology team to actually build it?
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  Speaker 3: Yeah?
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  Speaker 7: Yeah, yeah, probably very hard.
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  Speaker 6: I'm really lucky. I've been in the space since about
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  Speaker 6: two thousand and nine. Built my first company at first
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  Speaker 6: AI company back in twenty ten that eventually got sold
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  Speaker 6: to Microsoft.
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  Speaker 3: Working before like any of us knew what a I was.
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  Speaker 7: Yeah, no, back then it was a bad word.
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  Speaker 6: I had trouble raising money in two thousand and nine
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  Speaker 6: because no one thought AI was going to be a
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  Speaker 6: real thing.
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  Speaker 7: Just crazy to think about.
• 10:48
  Speaker 3: Uh huh, what's like raising money today? A little bit easier?
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  Speaker 6: No, I mean this company, I've raised about sixty five
• 10:56
  Speaker 6: million dollars in that range. You know, jump back in
• 10:59
  Speaker 6: time Maluba raised maybe thirteen million, So very different fundraising environment.
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  Speaker 3: Do you go to different tools?
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  Speaker 5: So I how do you keep refining your tools to
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  Speaker 5: broaden and make it even more useful? And also the
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  Speaker 5: accuracy level?
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  Speaker 3: How do you track that?
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  Speaker 6: Yeah, so kind of two different questions there. I'll start
• 11:18
  Speaker 6: with maybe taking track of technology, So we start by
• 11:22
  Speaker 6: having a very deep empathy of understanding what are the
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  Speaker 6: kinds of workflows our users want us to automate, what
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  Speaker 6: are the kinds of things that actually matter, and then
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  Speaker 6: constantly tracking what a success look like for those kind
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  Speaker 6: of workflows and where we have success with that.
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  Speaker 7: And I'm sorry was reminding the second question.
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  Speaker 5: Uh, the second question was it was really brilliant changing
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  Speaker 5: the tool accuracy?
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  Speaker 3: Oh an accuracy?
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  Speaker 6: Yes, this is actually really really vital in the inside
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  Speaker 6: of finance. So the biggest problem is, like, you're not
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  Speaker 6: going to make one hundred million dollars trade if you
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  Speaker 6: don't absolutely trust the information that's coming out.
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  Speaker 7: Of the system.
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  Speaker 6: So we really think about that in two ways. Number One,
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  Speaker 6: we have to have the most accurate system in the space.
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  Speaker 6: Number two, we have to have the most auditible system
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  Speaker 6: in the space. When the system actually makes a recommendation
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  Speaker 6: to it's not enough to just give.
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  Speaker 7: You an answer.
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  Speaker 6: It has to give you a very detail explanation of
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  Speaker 6: where it came to, that conclusion from where it came from.
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  Speaker 7: And that's something we excel at.
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  Speaker 3: Josh, thanks so much, coming in the studio. Josh Pentony.
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  Speaker 2: He's a CEO and co founder of boosted AI company
• 12:20
  Speaker 2: based in Toronto. Have an operation here in New York City,
• 12:24
  Speaker 2: showing once again how we're very friendly US and Canada.
• 12:27
  Speaker 3: We like, we love these guys.
• 12:28
  Speaker 5: I mean, yeah, I know, so I don't know if
• 12:30
  Speaker 5: that feeling is going to stay, but sure, no, it's
• 12:33
  Speaker 5: all good.
• 12:33
  Speaker 3: It's all good. We're all friends.
• 12:36
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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• 12:46
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• 12:50
  Speaker 3: All right, let's go down to Washington, DC. You got
• 12:52
  Speaker 3: a lot going on there.
• 12:53
  Speaker 2: Henrietta trez joined your season managing partner, director of Economic
• 12:57
  Speaker 2: Policy at Vada Partners.
• 12:58
  Speaker 3: She's actually lives in Louisiana. How cool is that? I
• 13:01
  Speaker 3: think New Orleans.
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  Speaker 2: That's awesome, Hey, Henriette, I mean from your perspective and
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  Speaker 2: you talk to your sources in Washington. Should we expect
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  Speaker 2: anything coming out of Switzerland this weekend as it relates
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  Speaker 2: to US China and trade.
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  Speaker 8: Yeah, it's a good question.
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  Speaker 9: Obviously, the President out kicked his coverage here with the
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  Speaker 9: one hundred and forty five percent tariffs on China. The
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  Speaker 9: problem is eighty percent, which he's talking about now on
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  Speaker 9: truth social is still prohibitively high and doesn't really move
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  Speaker 9: the needle for small businesses or anybody importing from China
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  Speaker 9: or overseas right now. So the expectation I had going
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  Speaker 9: into this before the President started tweeting this morning was
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  Speaker 9: effectively that Secretary Bessett is trying to establish himself with
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  Speaker 9: the Vice Premier of China at these meetings in Switzerland
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  Speaker 9: this weekend. Historically, what we know from China and what
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  Speaker 9: we've gotten from MOFCOM in the last couple of days
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  Speaker 9: is that they are extraordinarily cautious and not at all
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  Speaker 9: optimistic about whether Secretary Bessett is able to speak for
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  Speaker 9: the president, whether the United States is serious about actually
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  Speaker 9: reducing terrifs.
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  Speaker 8: And so the President is trying to give the Secretary.
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  Speaker 9: Vesset effectively the permission structure that China needs to enter
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  Speaker 9: into the conversation any kind of meaningful way.
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  Speaker 8: So my sorry, Yeah, So did he.
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  Speaker 5: Do it by saying eighty percent looks good and it's
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  Speaker 5: all up to Scott?
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  Speaker 3: And was he able to accomplish that?
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  Speaker 9: I think that from a directional standpoint, it's pretty clear
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  Speaker 9: now that Secretary Besson does have this authority to go
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  Speaker 9: to eighty percent. Whether he has the ability to go
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  Speaker 9: further than that, I think is not something that China
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  Speaker 9: can necessarily accept because obviously the President, through this tweet,
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  Speaker 9: is the one who actually set the terms of what's
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  Speaker 9: going to happen, not Secretary Beston.
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  Speaker 8: So it does undermine the Secretary a little bit.
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  Speaker 9: And I think what we should hope at best case
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  Speaker 9: scenario is some sort of joint statement, which we don't
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  Speaker 9: often get. Usually, the US will put out a statement
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  Speaker 9: and China will put out another statement, sometimes hours or even
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  Speaker 9: days afterwards, and they're very short, they're very curt and they.
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  Speaker 8: Effectively say we met.
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  Speaker 9: And that's sort of the best that we can hope
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  Speaker 9: for going into this before the President tweeted about it.
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  Speaker 9: I think that what we'll see now is the business
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  Speaker 9: community to come out and say, hey, eighty percent is
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  Speaker 9: still too high. We need this to come much much lower,
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  Speaker 9: if not all the way off, which the President does
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  Speaker 9: not seem inclined to do.
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  Speaker 2: This trade policy the President Trump is deploying, How is
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  Speaker 2: that good politics?
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  Speaker 8: I think the.
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  Speaker 9: Supporters of President Trump really like the tariffs. They like
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  Speaker 9: this sort of sticking it to the man mentality. And
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  Speaker 9: so even though you're seeing the polling drop pretty materially,
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  Speaker 9: even with Republican voters, his core base. I think the
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  Speaker 9: last time I saw numbers was like forty three forty
• 15:39
  Speaker 9: seven percent of the Republican conference is very supportive of
• 15:43
  Speaker 9: the President's tariffs and his strategy, and they're willing to
• 15:46
  Speaker 9: give him this opportunity to wait and see.
• 15:48
  Speaker 8: But on Capitol Hill you have absolute panic.
• 15:50
  Speaker 9: It's sort of like ducks sitting on top of the
• 15:52
  Speaker 9: water and then furiously paddling underneath the Republican Party trying
• 15:56
  Speaker 9: to write this tax bill as running into the reality
• 15:58
  Speaker 9: that tariffs do not raise two trillion dollars if they do.
• 16:01
  Speaker 8: Not bring in revenue.
• 16:02
  Speaker 9: And of course, if you're stopped imports, you're not bringing
• 16:05
  Speaker 9: in tariff revenue.
• 16:06
  Speaker 8: So there's a lot of panic on Capitol Hill.
• 16:08
  Speaker 5: So clearly though, the narrative is trying to be shifted
• 16:12
  Speaker 5: to lower taxes. I guess as long as you're making
• 16:15
  Speaker 5: under five million dollars as a couple, and also deregulation
• 16:19
  Speaker 5: like that desperately seems to be the narrative that that
• 16:21
  Speaker 5: needs to be shifted for the administration. Is it happening,
• 16:24
  Speaker 5: like is that legit?
• 16:26
  Speaker 8: Well, that's interesting.
• 16:27
  Speaker 9: The one thing I touch on with this two and
• 16:28
  Speaker 9: a half million for individuals and five million for couples
• 16:32
  Speaker 9: filing jointly. This new tax policy for the president is
• 16:35
  Speaker 9: that you know, he's the ultimate salesman, right, and he
• 16:37
  Speaker 9: recognizes that this tax bill has a serious image problem.
• 16:41
  Speaker 9: And the image is one that the American public is
• 16:43
  Speaker 9: really primed to notice, which is cuts to medicaid. You know,
• 16:46
  Speaker 9: we have been talking about medicaid cuts for twenty years now,
• 16:50
  Speaker 9: since Obamacare. It's something we talk about on our web
• 16:52
  Speaker 9: Wednesday webcasts. I wish we could move on for it,
• 16:56
  Speaker 9: but the American public is so attuned to any cuts
• 16:59
  Speaker 9: to Medicaid that they sort of viscerally react negatively to
• 17:03
  Speaker 9: any tax bill that would include those data sets. So
• 17:06
  Speaker 9: in this circumstance, the President has realized that supporting taxes
• 17:10
  Speaker 9: on the wealthy is actually very popular, and this is
• 17:13
  Speaker 9: a great way to sort of reimagine the tax bill
• 17:17
  Speaker 9: and potentially get more support for the package from the
• 17:20
  Speaker 9: American public. But obviously the Republicans on Capitol Hill do
• 17:24
  Speaker 9: not like that idea.
• 17:25
  Speaker 2: All right, Henrietta, thank you so much for joining us.
• 17:27
  Speaker 2: Appreciate your time always. Henrietta Trez, Managing partner and director
• 17:30
  Speaker 2: of Economic Policy at Veda Partners.
• 17:33
  Speaker 3: Coming to us via New Orleans via that zoom thing.
• 17:36
  Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us
• 17:41
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• 17:45
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• 17:48
  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 17:52
  Speaker 5: Let's get to some of the earnings that came out
• 17:55
  Speaker 5: over the last twelve hours in terms of technology, and
• 17:58
  Speaker 5: one of them is a care round strike.
• 18:01
  Speaker 8: So the US is now probe being a role.
• 18:03
  Speaker 5: Of CrowdStrike fosses in a Karasoft deal. I don't really
• 18:06
  Speaker 5: know what that means.
• 18:07
  Speaker 3: So let's get to that.
• 18:08
  Speaker 5: But it wasn't good for crowdsource. A man deep Seeingloomberg
• 18:11
  Speaker 5: intelligence in your tech industry analyst joins us. Now, so
• 18:13
  Speaker 5: what's the latest with this thing?
• 18:15
  Speaker 10: Well, so I think this goes back a couple of months.
• 18:20
  Speaker 10: In fact, Karasoft is a reseller of software, so they
• 18:26
  Speaker 10: sell all kinds of software to government agencies and in
• 18:30
  Speaker 10: this case, the contract is like thirty two million dollars
• 18:35
  Speaker 10: that was the end customer's IRS. And it seems the
• 18:40
  Speaker 10: product was never deployed, so even though it was accounted
• 18:44
  Speaker 10: for in CrowdStrike.
• 18:46
  Speaker 7: Early, I think I remember this.
• 18:47
  Speaker 10: Yes, so it's getting probe. But to my mind, you know,
• 18:52
  Speaker 10: for a company like CrowdStrike with a four billion dollar
• 18:56
  Speaker 10: revenue run, right, you know they have exposure, but it's
• 19:01
  Speaker 10: like maybe mid to high single digits, so not a
• 19:04
  Speaker 10: whole lot of government exposure, and it is more of
• 19:09
  Speaker 10: a one off. I can't imagine, you know, that being
• 19:12
  Speaker 10: a problem with how they do their accounting. It is
• 19:15
  Speaker 10: more about how they source the contract through this reseller caarasoft,
• 19:20
  Speaker 10: and when did it show up in the income statement
• 19:24
  Speaker 10: as revenue. So nothing, to my best of my knowledge
• 19:28
  Speaker 10: is accounting related. It's more about the sourcing. And we've
• 19:31
  Speaker 10: seen that with other companies like Service Now in the past,
• 19:36
  Speaker 10: where you know, you have government agencies that award contracts
• 19:41
  Speaker 10: and these are lumpy like think of them as twelve
• 19:45
  Speaker 10: months in the making and then suddenly.
• 19:47
  Speaker 3: You get awarded a big contract.
• 19:49
  Speaker 10: But nothing really that affects overall companies' sort of sourcing
• 19:55
  Speaker 10: of contracts.
• 19:56
  Speaker 2: I think that's a competition in the car hailing business.
• 20:00
  Speaker 2: Look at the Lift of twenty one percent crowds.
• 20:04
  Speaker 3: I mean again, Lift, I pitch you.
• 20:06
  Speaker 2: Over the last ten rides I've done, I've probably taken
• 20:09
  Speaker 2: Lift seven times because they just had the better pricing
• 20:12
  Speaker 2: and materially better pricing. Yeah, so somebody's algorithms not working,
• 20:16
  Speaker 2: either ubers or lifts.
• 20:17
  Speaker 3: But I'm taking advantage. I'm arbitrage in that bad Boy.
• 20:20
  Speaker 3: What'd you learn from Lyft?
• 20:22
  Speaker 10: Well that pricing is these things to focus on. If
• 20:26
  Speaker 10: you have lower prices, that helps you get repeat customers.
• 20:30
  Speaker 10: And I think that you what you just said absolutely
• 20:34
  Speaker 10: make sense. And look when you compare a Lyft to
• 20:37
  Speaker 10: let's say door Dash or Uber. Lyft has got about
• 20:40
  Speaker 10: twenty four million monthly active users, door Dash has forty
• 20:44
  Speaker 10: two million, and ubers is much higher because they have
• 20:47
  Speaker 10: geographic diversification. But when I compare the overall rides, Lift
• 20:54
  Speaker 10: does less than a billion rides in a year. DoorDash
• 20:58
  Speaker 10: does three billion orders for with forty two million users,
• 21:02
  Speaker 10: So that just goes to show there is a lot
• 21:04
  Speaker 10: of room for Lift to increase frequency. And people are
• 21:08
  Speaker 10: price sensitive, so that's where.
• 21:10
  Speaker 3: The grouping at people that you can do different? Am
• 21:12
  Speaker 3: I like the person? Again? Me, it's just person because
• 21:15
  Speaker 3: I know it is in most cases the same car,
• 21:18
  Speaker 3: the same carver.
• 21:20
  Speaker 10: Yeah, and they have tiered you know the customers, so
• 21:23
  Speaker 10: if you want to go for a high end service,
• 21:25
  Speaker 10: they have vehicles available. So from that perspective, there is
• 21:28
  Speaker 10: not much differentiation between an Uber and a Lyft.
• 21:32
  Speaker 3: And the game in the system here very totally. And
• 21:34
  Speaker 3: you told everyone now prices for everything.
• 21:38
  Speaker 5: But what did Lift do to manage their couse to
• 21:41
  Speaker 5: help their margins is considering that their market share they
• 21:43
  Speaker 5: didn't grow.
• 21:45
  Speaker 10: I mean, look, in all fairness, the valuation was less
• 21:48
  Speaker 10: than one time sales, so you compare it to other marketplaces.
• 21:51
  Speaker 10: Broad Ash traids at five times ev DO sales. Suber
• 21:54
  Speaker 10: is more four x ev DO sales. So lift A
• 21:58
  Speaker 10: lot of the bad news was price in that this
• 22:00
  Speaker 10: company is losing share, they would never really be profitable,
• 22:04
  Speaker 10: and they just managed to execute much better operationally. You know,
• 22:09
  Speaker 10: they've been cutting costs on the operation side, sales and
• 22:12
  Speaker 10: marketing side, and they have limited their ambitions to those
• 22:16
  Speaker 10: twenty five million monthly active users. They're not going after
• 22:19
  Speaker 10: one hundred million what Uber has. They're saying, if I
• 22:22
  Speaker 10: keep getting repeat business from this twenty five million, that
• 22:26
  Speaker 10: will help me sustain mid to iteen's growth. I don't
• 22:29
  Speaker 10: have to go for user acquisition right now. And look,
• 22:33
  Speaker 10: they are making an acquisition in Europe now free now,
• 22:36
  Speaker 10: so they are looking to expand geographically. But it's really
• 22:40
  Speaker 10: finding your sweet spot and niches where Uber is not
• 22:44
  Speaker 10: that big, and that strategy is good enough because at
• 22:46
  Speaker 10: the end of the day, it's still a duopoly in
• 22:48
  Speaker 10: right sharing platinize.
• 22:50
  Speaker 2: When I was down at Duke a few weeks ago,
• 22:51
  Speaker 2: when I was a student.
• 22:52
  Speaker 3: There, parking was impossible, impossible.
• 22:56
  Speaker 2: Now it's not a problem because not as many kids
• 22:59
  Speaker 2: bring to cars because they because they just rely on Uber.
• 23:01
  Speaker 3: Yeah, so it's like you don't have to worry about Yeah.
• 23:04
  Speaker 3: So it's it's they were telling me it's not an
• 23:06
  Speaker 3: issue anymore. So how about that?
• 23:08
  Speaker 7: All right?
• 23:08
  Speaker 2: Man Deep Sing, Thank you so much. Appreciate that. Senior
• 23:10
  Speaker 2: tech analyst for Bloomberg Intelligence.
• 23:13
  Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
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