>> from pier 3 in san francisco, welcome to "bloomberg west" where we cover the global technology and media companies that are reshaping our world. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. let's get straight to the rundown. from luxury tech buses that have been surrounded by protesters, google is trying out a ferry service instead. lieutenant governor gavin newsom weighs in on whether the tech elite are ruining san francisco. the always colorful t-mobile c.e.o., john legere, was kicked

out of an at&t party and now he is trying to steal their customers. we'll hear from the man himself. general motors and audi might seem like unlikely partners for google, but the search giant has teamed up with several automakers to bring its android software to the connected dashboard. first to the lead. google is testing out a ferry service for its employees to bring them from san francisco to headquarters in mountain view. it will stop in red wood city and presumably pick up from there on buses to mountain view. a google spokesperson said we don't want to cause any inconvenience to san francisco residents and we're trying alternative ways to get googlers to work. some san francisco residents have been protesting the tech shuttles that routinely take employees from san francisco to headquarters in the valley. apple and facebook have the same buses that google does. the city of san francisco agreed with the technology companies

and the shuttle companies that they are going to have to pay to stop on city streets. i spoke with our editor at large, cory johnson and california lieutenant governor in gavin newsom about the subject. newsome was elected mayor of san francisco back in 2003. i asked him whether he sees a divide between the tech community here and everybody else? >> not everybody else, but i think it is deja vu all over again, 1997, 1998, 1999, 2000 -- >> only when things are good? >> things are good. the question is, is it situational, meeting short-term success, or is this sustainable, and there is every indication to suggest that this is going to be a longer term curve, and that could change the way of san francisco, good -- so there is a

lot of legitimate concern out there and a lot of friction, and it is certain manifested with these buses with some of those protests a few weeks ago. >> these employees do not take public transportation. they are on these cushy buses down to silicon valley, and also, real estate prices are now sky high. it is impossible to get an apartment around any of those bus stops let alone anywhere in san francisco. how big a problem is the real estate? >> it's a big problem. go back. all the headlines, all of the stress and gentrification, go back to your old articles in 1998 and 1999. it is precisely the same. we were talking about commercial rent control, and there were convictions, and we had emergency supplementals to take care of nonprofits because they were being priced out and they could no longer afford the rents. the question now is going back to that time, and that ended quickly, a boom and bust, and now we are sensing this will continue, so it does require a different kind of motivation, leadership, to get ahead of this. i thought it was a good thing, the mayor came together with the tech community, apple and

others, facebook and others, and they said, look, we agree. we have to address these shuttle buses. >> do you think it is good that they have to pay? >> it is a good thing, because it was important to send the message that they have to play by the same rules as everybody else. they were taking bus space and traditional muni public bus space, and these shuttles were there. if you or were there, we would get a $270 fine. so it seemed appropriate that $1 a day per stop, per use. the tech companies are also providing a service. folks from not in their cars. they are not driving and contributing to congestion and global warming. it is a win, i think, on both sides. >> i want to bring cory into this discussion because he was here during the last bubble. is it ok if it happened then and it is happening now, and are they doing enough? >> i was there during the gold rush too. i am really old. there are a lot of interesting city planning issues.

what happened in 1997, 1998 and 1999. these were urban companies. dot com companies, and they were not profitable businesses, and now we are talking about yahoo! and google and big profitable businesses that are ferrying city workers to suburban sites, and that is not what was going on before. there is this notion that people who want to live in the city are able to, and there are different kinds of companies affecting change in the city, so i think to gavin's point, this could be a much more permanent thing because they are successful, profitable business where the workers are choosing to live in the city and not in suburbia. >> right. >> that's if there is any big phenomena. silicon valley is moving north. these young folk want to be in a dense, urban environment and want all of the amenities, and they are willing to sacrifice a commute.

that is big vexing issue for these companies. they want to maintain these campuses, but increasingly, folks are saying, can't you open up a satellite office in san francisco? >> and we are seeing companies like twitter and salesforce make their headquarters in san francisco. they are taking up huge corporate office space, and that is not making people happy either. the day twitter went public, there was a huge protest in san francisco and people complained they were getting pushed out of the area and they are revitalizing the city, and in another one, they are being pushed out of the area. people can't afford to stay where they are living. >> it is an age-old story. gentrification. when you invest, prices tend to go up. people are competing for access to that newly improved area, so this is going to be again, a huge challenge for this mayor and the next five to 10 years if we see the kind of sustainability that cory and

others believe exists now in this very substantive move towards global local mobile social class, with real profits opposed to those companies that were built on really nothing except hype. >> we'll have more on this perceived tech divide next on "bloomberg west." ♪

>> welcome back to "bloomberg west." i am emily chang. tech companies are now at the center of recent protests over income inequality in san francisco. as we know, protesters have surrounded tech shuttle buses in the city and on the day of twitter's i.p.o., they surrounded twitter headquarters as well. twitter has been given big tax breaks to stay in the city. what responsibilities do companies like twitter have?

jack dorsey recently spoke out about it saying it is really disappointing. there is a social responsibility that all companies have and we can carry that torch. on the late edition of "bloomberg west," i spoke with cory johnson, gavin newsom, the lieutenant governor who was elected mayor of san francisco back in 2003. i asked him what does it mean "carry a torch"? what is twitter's responsibility? >> twitter in particular, because i was mayor at the time we started negotiation. they got a nice tax break that encouraged them to locate in the market area of san francisco. they fulfilled their commitment and our expectations have been exceeded because of their success and the area is beginning to truly change for the better. i think the responsibility, obviously comes from tremendous success. there is no one better, by the way in this city than the marc benioff founder of

salesforce.com. he gets this better than anyone. it is right to celebrate all the success of the companies and the tax benefits. >> is it fair to get all of those tax benefits? >> i think it was the right thing for the city to do at the time and i think it has paid great dividends. that said, guys like marc didn't necessarily seek it out. twitter got the benefit and others are getting the benefit but he gets it in this context. a lot of the tech people i talk to said we're creating jobs. what more do you want from us? guys like benioff understand we need to step up in a much bigger way and a more pronounced way. there are real conversations. trust me. some conversations with these leaders that have made fortunes and understand their responsibility to the community in a much deeper way than just creating a job. >> what about companies like facebook, apple, cory, google as well, that are not based in san francisco but make it easy for employees to live here and commute down there? >> i think one of the issues here and it touches on all sorts

of things and it is not just a san francisco issue. but this issue of income inequality in this country, the rich being so much richer than the poorest people, creates economic risk and you see it not just in people protesting in buses. when the growth part of our economy, when the spending of our economy is only happening by the richest people, and that could be so disrupted by a stock market crash or a slowdown in all of this tech growth, it could be the beginning or end of that stock market crash. it creates greater risk to the economy. one of the reasons we had a great depression after a stock market crash in 1929, we had a lot of income inequality until the big spending was not happening in the farms and with poor people but it happened with rich people taking their stock market gains and spending them. that is one of the risks with income inequality. we can see that visually in this bus story, but san francisco, that is one of the big differences from 1999 is this income inequality we have in

that city and so many others in the country. >> it is much more widespread. >> as a business owner, i have close to 1,000 employees. one thing i know as a business owner, businesses can't thrive in a world that is failing. at the end of the day, we are in this together. i think you just hit it on the head. if the stock market drops down and the fed changes their chief money policies that are moving the markets and put people in equities, all of a sudden the pace of this can change and we won't have the ability to come out of it in a really meaningful and sustainable way. i don't want to say it is code red, because that is typical political hyperbole, but we're getting to a point, and these are just symbolic flashpoints, these google ferries and the buses, etc. we're at a point where people are going to have to step up to the plate in a non-ideological way and address this issue. >> what do you think of the ferries? >> i love the ferries. it is an old idea. i remember talking to the founders of google literally a decade ago. they were talking about some form of ferries. this is a long time in a works.

this didn't just happen in response -- >> but the consequence of this is there is not good public transportation down there. i don't work for google. if i want to get down to silicon valley via public transport, that is very difficult. it would take forever. >> there are two complaints, as a former mayor. homelessness and how lousy the public transportation system is. >> number three, school. >> by the way, you're absolutely right. the challenge is we do provide an extraordinary world class public transportation within the city. we actually move every single day about the equivalent of the population of san francisco. it works well despite the fact that it can be better. that said, it doesn't go down to silicon valley. that's where it stops. we have a bay area rapid transit system. we had a big strike people may have heard, a few months back. it doesn't necessarily have that direction down into san jose. that is being worked on.

we got it to the airport. bart to san jose is now being worked on. that's why we have limited transportation. that is why these buses are necessary. why not take advantage of mother nature's -- >> maybe google can fund more public transport. >> they are funding for their employees the shuttles. they're getting people off the roads and out of cars and now providing an additional service with ferries, i think is a very healthy thing and before you know it, sergey will come out with a new way to bring people down. >> our editor at large, cory johnson and lieutenant governor gavin newsom. coming up, google has teamed up with carmakers focused on bringing android to your dashboard. we'll have more on that next. >> welcome back to "bloomberg west." ♪

i'm emily chang. self-driving cars are not a thing of the future. they are here. audi showed off a self-driving car at the consumer electronics show in las vegas.

it can not only drive itself, it can park itself. bloomberg's sam grobart took a spin. >> the car of the future isn't something that is coming. it is already here. cars are already beginning to take on more and more responsibilities that drivers used to do, and i'm here at the audi booth outside of ces to see what they are doing to combine all of these sensors and functions into new semi- driverless vehicles. audi is showing different technologies here in las vegas, including cars that can effectively drive themselves through highway traffic. >> so we're in traffic now and the car is monitoring the vehicles around it. it is monitoring the lane markings and the road boundaries and it is basically following traffic like a human driver would. >> you haven't been touching the steering wheel this whole time, have you, bjorn? >> no, the car is driving it. the driver can relax and do something else.

he doesn't have to watch the car doing its job. >> audi is showing cars that monitor your alertness and stop the car if you fall asleep and cars that can park themselves without you behind the wheel. >> did you just see that? >> he got out of the car, pulled out a smart phone. pushed a button. the car put itself in the parking spot, no dings, no dents, no scratches, no nothing. you have computer-controlled steering, acceleration and braking. you have sensors mounted all around the car so it knows when to turn, when to straighten up, when to speed up and when to slow down. >> so bjorn, when will a car that can drive itself through traffic be something that we see available to us? >> we're going to make this technology available in the next five years and as you have seen, the technology is ready. the thing that is keeping us is legislation in most parts of the world. >> automakers love to talk about the joy of driving. the fact of the matter is

probably more than half of the time there is not a lot of joy, parking cars, sitting in traffic. that is not something you want to actively be participating in. these technologies remove that basically from your responsibility. >> that was bloomberg "businessweek's" sam grobart. google's self-driving car may not be on the road yet but they are helping to push connected cars into the fast lane having just announced the open automotive alliance with g.m, honda, hyundai and audi. the goal in partnering with car makers is to get a customized version of android software into cars for infotainment and entertainment. for more, i sat down with mark mahaney, who covers google for r.b.c. capital. >> they already are your online utility and probably the one single thing that you could not live without on the internet. you think about all the information that you need, the number of times you use any of the entertainment applications they offer you. now they are trying to take that utility-esque feature of google and take it off of the computers and put it on your glasses and

put it in your car where you spend all of your time. you can't do searches where you have your desktop with you or your mobile phone with you, but you have your car with you. yes, now you can. it is integrated into part of the car. that is part of the information they are trying to build around maps. they may not be able to monetize usage of map but indirectly they do, because if you you're using google finding out how to get from point a to point b, you'll use them for other functions. >> i was talking to -- in so many words he said all of this stuff -- it doesn't matter because it is not apple. and, you know, apple i.o.s. does have some integration with cars at this point. what is your take on that when it comes to google vs. apple? and the car, which is an as yet unclaimed territory when i know you when comes to technology. >> the big missing rink in

wearable devices and integrated cars i think is voice recognition, and i think it is pretty clear that the company with the best voice recognition, voice context technology in the market is not apple. it is google. so i would take some exception to the comments. i think that is the link that people are missing. the google glass -- think about it in three years from now, the ability to interact with the device. it will be in your car via a very good voice command. by the way, it will be tailored to just your voice. not to anybody's voice. that's the secret sauce behind wearable devices and integrated cars. >> what are the means for samsung? this is a company that relies heavily on google's android operating system. this week it seems like they are focused on the connected home and not the connected car. is that a mistake? >> i don't know. this internet of things, this internet of people, we want to be connected with all the things that internet offers us. internet saves us time. i don't know why samsung wouldn't be part of this ecosystem. in that kind of environment where the internet connection matters more than anything else, the importance of the devices

kind of falls a little bit. still devices are going to become commoditized. >> when will we see the cars on the road? >> i saw a photo of you in one. >> that was a few years ago. >> my understanding is they have already done over 100,000 miles of driverless driving in two states, nevada and california. i don't know. it is very hard to know. it is one of those off things. it is one of those experiments that google does. i'm not sure they have thought through it. that is ok. if it becomes a utility, they will find a way to monetize it. >> my interview with mark mahaney of rbc capital. coming up, t-mobile's c.e.o. john legere sits down with us. this interview may be more shocking than ever. that's next.

>> welcome back, i'm emily chang. john legere got kicked out of the at&t party. t-mobile just announced it had the best quarter in eight years. they're going to cover early termination fees to get customers to switch from other carriers to t-mobile. they are showing subscriber growth as well. jon erlichman sat down with john legere earlier this week. >> what i did is i announced ahead of schedule q4 subscriber numbers. 1.64 5 million net adds, making the year 4.4 million postpaid.

869,000. the growth of t-mobile is growing. the revolution continues. number two, we have the fastest 4g lte network in the united states now. we have crowd source results. the cease and desist letter is going out to at&t to take those billboards down. those two things were important because now the answer to questions are why not switch? why would you not switch to t- mobile? the answer is termination fees. we are eliminating early termination fees and moving the industry to no contracts completely. what it can mean, a survey was done last week and families said they would consider t-mobile if they did not have a contract. they would move if they could get their termination fees paid. at about 78% will come, but it is a revolution.

>> there is no doubt, you have been adding a lot of customers. you mentioned at&t, i have to talk about them. last week, ahead of the ces they made their own announcement about the contract side. what are the differences between? >> unlike my normal behavior, this is for everyone. this is for verizon, sprint, at&t -- what they did is they came up with an offer -- >> you call that desperate. >> totally desperate. here's what i suggest today.

what i suggest is everybody consider our offer. if it doesn't work out, at&t will pay you to go over there. it is not competitive. ours is cash. >> you have done a lot of things over the last year, this is an important thing. you did the international roaming, which was a big move. some wonder how far you will go in terms of this potential price war. are we in a price war already? >> nobody knows how far i will go. that is pretty clear. we jumped 3.6 million customers. this is only considered a price war for the people in contracts.

my commitment is to profitable growth. i am reinforcing and pushing forward. >> people want to know that you're working on something right now. you have some successes leading. >> i will give you a standard answer right out of school. i am a ceo and i can't comment on that. almost all consolidation in the industry was done for somebody to acquire spectrum. all the people who like t-mobile right now, all they have a spectrum. they don't have a business. with t-mobile, i can tell you this movement and revolution will continue. whether we do it alone or we do it in a consolidation, we will be at the forefront of what happens. >> we talked a lot about at&t, we have to talk about some of

the headlines. party crashing, you were kicked out of and at&t party? >> i love macklemore. i want to see him play. i was surrounded by a sea of humanity that escorted me out. i am sure i would've done something different. >> it wasn't a stunt? >> i was prominently displayed in the new york post next to kim kardashian and eliot spitzer. i have arrived. i am ready. >> what about profitability? we see your aggressive moves. others in the industry are making aggressive moves because t-mobile is. what does that mean in terms of service? >> if you look -- one of the things i quietly did this year is to take money out of the cost structure.

i do not have a macklemore party. i did have a suite at the super bowl. they don't have the cost or to just -- compete. with these plans, i can very profitably grow. but as i can speak to. >> in terms of ultimately how many people you could bring aboard, with all the announcements today, any idea on how many new customers you think this could bring to t-mobile? >> put it this way, the original plan was hopefully to be slightly negative in the postpaid business in 2013. i raise it to 1.8 million. we've have seen accelerated growth. the momentum continues. at&t 2.2 to one, sprint 3.6 to

one. verizon, 1.3. so we are moving. >> jon erlichman with john leger. have you ever wanted to watch eight shows at the same time? maybe you'll need to at some point. dish is making that possible with a new dvr offering at ces. that is next coming up. ♪

>> dish network unveiled its latest addition to the hopper dvr line. you can record eight shows at a time. you can watch four simultaneously. apparently some people want to do that. it is integrated with sony play station.

jon erlichman spoke with dish network ceo joe clayton. >> what we are doing is using technology to better improve the experience for the consumer. i will give you an example. our new product allows you to record eight programs at one time. if you have a multiple tv household, i have five kids, there is never enough capacity. we have something called a wireless joey. in a lot of homes, you are limited as to where you can put your tv. this is a wireless. you plug it in and it will work anywhere. last but not least, we have something that will reduce clutter in the home. instead of having a separate box, you can hook it up to a sony playstation 3 or 4 or the new lg smart tv. we are making this easier for the consumer.

>> you embrace technology. you have used those words yourself many times before. broadcasters get frustrated with where their content is going. it has resulted in legal battles. is this the sort of thing you can settle as friends? >> you would think we are against advertising, we do half a billion dollars in advertising a year. what does the consumer want and how to we better use technology to target the consumer? we want to give the messages that are important. that is what we are trying to accomplish. >> are there any hard numbers you can share with us about them permitting new technology that is tangibly resulted in new customers? >> it is too new to have statistics. it is more efficient.

that is what the advertiser wants to spend his money as effectively as possible. that is a message we are trying to get across. >> you spend your days working on all sorts of partnerships, partnerships to allow technology to be used and deals with the content providers so that they can have their content available through dish. people are wondering when you have a new deal with disney. can you give us an update on that? >> discussions are ongoing. it is going to be over multiple years. it will take time. we will end up with something that is mutely beneficial for -- to mutually beneficial

mutually beneficial for the disney corporation and for dish network. >> there is the tv side and taking it wherever you go. there's the content question about the wireless drive. i just asked about t-mobile. it does dish network want to buy t-mobile? >> we look at all of our options. there are also multiple possibilities for us to get into the wireless space. we are trying to acquire spectrum which gives you the purview to get into the wireless space. spectrum is like oil or gas or water or gold. you cannot get enough of it. we are trying to achingly -- we are in the process of accumulating spectrum and we believe that will get us the foray into the wireless space. >> john legere gets a lot of headlines. what do you think about what he has been able to do for t- mobile? >> i think he is done a nice job of changing the consumer offer

in the wireless space. i give him a lot of kudos. >> last year, i ask you whether or not we would see some type of deal with directv and dish network. you'll probably been asked that question 3000 times. how long are people going to be interested in staying with video service for any reason. is there a benefit of companies coming together? what is the latest on that? >> obviously, there would be some synergy putting both companies together. quite honestly, you are in a saturated market. even with directv and dish network. that is our primary objective going forward. >> we spoke with the ceo of area oh.

what about as an offering for dish network, having your own aerial-type service? >> we are used to boxing with the broadcasters. it comes back to the technology. we follow all technological developments closely. if this can give us a lower cost that we can pass onto the consumer, it would be an option. there is a lot of water to go under the dam. -- to go over the dam. the courts still have to rule. it is still more speculation than anything at this particular point in time. >> what about a hulu type service? there were a lot of people who were interested in buying hulu? >> a service that doesn't have as many commercials in it? we would be interested in taking look at that as well. anything they can improve the experience for our customers and potential customers. >> joe clayton with jon

erlichman. ces may about the newest gadgets, are they really that different? jon erlichman got out some old gadgets to see how people will react. this interesting science experiment is next. ♪

>> welcome back to "bloomberg west." i am emily chang. ces attendees are there to see the newest gadgets. can they really tell the difference? you're going to love this experiment. jon erlichman hit the streets with some old stuff to see if people really could tell the difference. >> oh yes, the consumer electronics show. we are bombarded by tech that is exciting and new. or is it? we decided to show people old stuff and see if they knew the difference. this is a k 44 headphone.

this has dual stabilization band. >> they are very light. they are a little bulky. >> it is halfway between a pc. >> it is very lightweight. >> it feels kind of heavy. >> give up your smartphone for it? >> in theory, it will be an energy-efficient band across the top like a light sensor. >> using the light sensors and how it fits your face, they do seem like regular sunglasses. >> maybe some more light sensors? >> it is kind of random. this is a metronome. >> i'm used to seeing the one with the -- >> i love it.

>> do you guys use gps? >> it is on her phone. >> this was heavier. first impressions of this apple watch? >> i dig i would rather have the samsung virgin. >> this a be connected to my mobile device? >> check this thing out. >> the nano watch is that what that is? >> it is the nano, but it looks pretty cool? >> it is smart. >> jon erlichman, our senior west coast correspondent.

we will talk about getting on board with the microsoft tablet. ♪

>> welcome back, i am emily chang. more and more airlines are putting tablets in the cockpit. this means they don't have to carry those heavy flight bags filled with maps and documents and they can save fuel, two. delta went in another direction and chose the microsoft surface. we find out why. >> for 30 years, she has been lugging a 38 pound briefcase. inside are charts.

now, a tablet that weighs two pounds is about to lighten her load. >> i think the tablet is one of the biggest steps, it will make everybody's life easier. >> other airlines are using ipads, delta chose the microsoft surface. >> when you see this thing, it is sleek and has a gorgeous display. you can split the screen. it is lightweight. >> delta plans to roll out the surface to all of its pilots. it will save $13 million worth of fuel costs a year. >> now i do not have to have carry this all over the place. i just have my tablet. it doesn't obstruct my view. i have it right here. >> the surface is a piece of technology, there can always be

a risk. >> technology has been a huge safety improvement. but, there are times when this new technology creates safety issues. >> do you think you will be less safe when you make a switch to the tablet? >> no. there is not just one pilot here, there are two. on some routes there are four. if my tablet would fail, i have three more. >> at the end of the day, you know how to fly the plane manually. >> if all the technology went, we would just use our piloting skills and get this bird down safe. >> remember, you get all the latest headlines of the top of the hour on bloomberg radio and

at bloomberg.com/technology. that does it for this weekend's "best of west." ♪ . .

>> with the right ingredient -- >> we have sugar and butter. >> celebrity chefs have turned their kitchen chops into sizzling businesses. >> anybody can do this. >> luring us in with their tips of the trade -- >> it's a very easy recipe. >> and the high-stakes drama of the kitchen. >> i'm dying up here and you're killing me. >> tv shows, restaurants, and cookbooks. >> i feel like a burger or something. >> these larger-than-life personalities have made eating into a multi-billion dollar industry. we all know some of the best conversations happen over a meal, so we gathered at a classic new york city restaurant. let's meet the titans. first up, mario batali. short, vest, and orange crocs.