♪we're having a party happy birthday, grandma! ♪we'll be swinging ♪dancing and singing ♪baby come on over tonight emily: is uber charting its course to an ipo? why they might be getting a $1 billion line of credit. i'm emily chang and this is "bloomberg west." coming up, a sublet fight in san francisco. we talked to experts about what the trend means about a possible tech bubble. the senate works into the weekend debate the controversial bill that would rateeign inn in the fight.

what he plans on doing with the money. that is ahead on "bloomberg west." first, uber making the rounds on wall street. the company is seeking $1 billion credit line from a handful of banks. the company is in talks with six or seven banks. uber declined to comment. we reported uber was planning to raise $1.5 billion in a valuation. what does uber what with all this money? is an ipo in the new future? katey joins me now and from d.c., gabe joins us. you just invested. you other perfect guy to be talking to. this credit line is something

that facebook, twitter, alibaba had done before. how close are we to an uber idea? gabe: we don't know. i think it is difficult for companies like uber. facebook did this -- they went out and started to build close relationships with 6, 7, 8 investment banks -- banks in general. what is interesting about uber versus lyft is that they are getting into a lot of different spaces. they're delivering food in new york. they have mobile stores in washington, d.c. they are getting into the autonomous car business. i imagine that is pretty capital intensive. the reason why they invested in lyft is we see a very focused company. excellent team really believes in transportation and also a company that is really more about social entrepreneur ship and as rate values

which we think is -- and has great values which we think is sustainable for long-term and a valuation makes sense. emily: is this uber spending money on self driving cars and perhaps trying to buy into the business? they do this to form relationships with banks for the ipo which is difficult. it seems like they are trying to do that. katie: it is not because they are unfocused or they want to dabble. it is the idea of moving people through packages. even if uber has a great brand, i can get somebody to boot my packages move my packages around is not something i cannot get somebody to do. uber is becoming the platform

that everybody ends of using further deliveries which is pretty powerful. emily: gabe, regulation regulatory issues still poses problems for ube. in d.c., they are facing a class action lawsuit. lyft as well. there are increases in taxes where they are trying to get state regulations. where do you see this going? gabe: i ahvehave a few thoughts. taxis should spend more time on innovation versus litigation. there is a huge opportunity for them to compete and so far they have basically let it pass them by. however, in terms of uber controlling all the ground transportation, i don't think there is a winner takes all possibility or strategy. i don't think that is practical. i don't think cities want that.

so, it might be tempting to think you could push one button and get absolutely anything, but i think you will have these new bus services like bridge and you will have lyft and uber. lyft for instance, grew by 400% this year. it is forecasting $800 million in revenue next year. i think there is a huge opportunity to big people in the u.s. on the consumer ride market. i think i would rather let the car companies build cars. emily:katie: i was not saying there was only room for uber. i was saying that uber could be very clever by also controlling the backend and the self driving car technology so if it becomes monetized, uber has other ways

to make money that go far beyond just being a ride. emily: a lot of people think lyft whenever be able -- will never be able to can be on uber's level . gabe: i don't believe that and the metrics don't say that either. i was in san francisco last week and the lyft line product is phenomenal. there is a density of drivers and riders that they are bigger than uber that multiple people are getting in cars and sharing rides. i think that is the future. i think this idea that we have -- that we will own cars in the future is not the way things will be in urbanized areas and we are rapidly reorganizingeurbanizing. when you think about the car

business starting to decline i think there is a lot of opportunity for these up-and-coming services. emily: lyft has a lot to prove. gabe and katie, thank you both. now don't try this at home. a canadian teenager part of the hacker group that calls itself the lever squad has pleaded guilty to some they called squatting. it invoke making prank calls to police and tell them in things like holding a family hostage or there is a bomb or somebody was killed. the purpose is to get somebody to center a swat team to wherever you want. a teenager got a gamer swatted after a live stream on youtube and will be sentenced next month. some people have way too much time on their hands. next, and google's developer conference is coming to san francisco next week.

we will tell you what to watch for. we crunch numbers and found tech companies are part of a big sublease fight in san francisco. can we say bubble? that is next. ♪

emily: a story we are watching. tom wheeler calling the hands of time warner cable and charter that state regulators in unopposed to mergers.

there was a nail in the coffin for $45 billion merger between time warner and comcast. the number two u.s. cable company has feel that interest from several others. charter might offer more than 170 dollars a share in a possible bid for time warner cable. meantime, the french cable company has also shown interest. now to what bwest special report. square is putting part of it san francisco headquarters in a sublease market growing company subletting their offices in the city after planning for future expansion. we crunched the numbers and found the growing trend. take a look. there is a land grab in san francisco, but how much is too much? >> companies are being forced to leave five times more space than they currently need for the number and the employees they have to ensure they have grow. emily: space makes up the

largest amount of vacant space. san francisco leads the nation at 13.5% a year ago. i'm here at the headquarters and much of this building is not filled with employees. last year, company least a large plot. square has 60,000 square feet on the market. 10,000 square feet -- subletting a a new low. the landgrab is not slowing down. >> most of the commercial buildings will be delivered. the buildings that will be delivered in 2016 are tech companies. emily: companies can make big bucks by subletting. the bad news is they cannot do it themselves. >> there is a parallel in 2007

and then in 2010, there was no one to fund it. you could be looking at something where three years down the road where it expires, there might be not anywhere to lease. emily: i want to bringing our panel of real estate experts. matt with me here in san francisco and glenn with us from seattle. glenn, is it or isn't a sign of a bubble? glenn: i think they got ahead of themselves with very long leases. sometimes you have companies that took too much space and have to sublease. other times, you have companies that signed up for space and they need more. both of those factors are driving activity and it comes from the fact landlords were able to get long leases against the very unpredictable part of the economy. emily: matt, you have been pounding the pavement. have seen spaces on the market.

are you worried? matt: it is a healthy trend because it provides short-term opportunities for companies that should not be making 10 year lease commitments. emily: what if they cannot fill those leases? matt: that remains to be seen. it is extremely disruptive and expensive. a lot of companies are taking more space than athey need to accommodate future growth. right now, a lot of them are making money doing that. emily: glenn are these companies getting too ambitious or are these spaces in the near future they could fulfill? glenn: i don't think they have any choice. if they want to be in san francisco or the peninsula, you have to pay through the nose and for a long time. some of these companies feel like they don't really know if they will have 200 employees were 500 employees, but they are signing tenure deals.

that is a cost of being in the center of the innovation economy and some will pay it and some will leave. emily: matt, what kind of innovations are you singing? we have seen linked and get some headquarters here in san francisco. matt: it is mostly residential. san francisco was becoming where people want to live. if you drive out of san francisco, there is more traffic driving out right now. a company like linkedin is making their headquarters here but they will be vacating about 400,000 square feet. emily: schwab put another 300,000 square feet in the market. is this something that concerns you? what happens when rates go up? gleenn: the challenge is not just for the companies that are

leasing space over 5, 710 years. it is for the employees. a median price for homes is $1 million in silicon valley. we have a number of people looking to lease silicon valley having doubled over the past three years. one in four people are searching for a home from silicon valley and are looking outside of the city or outside of the peninsula because it is so unsustainably expensive. we have heard it from years that it is crazy here but i think people are starting to act on that. they are looking elsewhere in the northwest, colorado, texas, even boston. emily: is that what you are seeing? matt: absolutely. we have a lot of san francisco-based clients that are looking into salt lake city phoenix, seattle where there issue on customer support talent. emily: how does what is

happening in san francisco compared to what is happening to other parts of the country? glenn: thew whole country is getting more expensive but nowhere is it happening faster than silicon valley. when we talk to our commercial broker about what we are seeing in terms of commercial rent he said it is funny because almost every client we have is now looking at comparing the cost in silicon valley, san francisco to denver, austin, portland, seattle, boston. it seems like every business is realizing the fact you can have developers everywhere and contribute code from wherever they are and looking to lower their overall cost. the industry starts to focus not just on revenue growth but all profit. it is a significant factor. you look at the operating expenses and how much lower they would be somewhere else and employees would rather live there as well. it is an easy choice to open another office in boulder, colorado or austin, texas.

that is what is driving her own residential business. emily: quickly glenn, sublet space can be ina leading indicator that something will pop. bubble or no bubble? glenn: there is a bubble. that our prices that are too high on companies, prices that are too high on real estate. as interest rates go up, you are going to see a contraction. don't think it'll be the kind of freefall we saw in 2000 for the dot comess or in 2008 for homes. there is no way prices can keep going up at this rate. emily: there is a bubble according to glenn. thank you for joining us. you said what i wanted you to set. matt, thank you as well. we will continue to monitor this trend. google developers conference is next week. here are the top three things to watch.

android -- we are looking for any updates to the operating system and anything about how it is expanding its product. gaming in virtual reality -- google vr headset allows users to have a vr experience with a viewer from cardboard. specific sets of app could create experiences. third, news on the axis program like the project has already been delayed. the company says it will take at least summer to send in imitation for those who signed up -- invitation for those who signed up. at williams raising a pleading i'm not a money in a worldwide business. what is in the numbers? we will break that down. the future of the nsa could be changing this weekend. they are scheduling a rare weekend vote on legislation.

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emily: it is time for the daily byte. the number is 12345678 or 123,456,789 dollars. that is how much money twitter cofounder ed williams and his team have raised for their first fund. some celebratory suites tweets yesterday. is notit is not philanthropy. companies like the on me which may something that looks, feels, taste like beets but is made from plant protein.

digital light field computing company is there, too. leonardo dicaprio is an investor. apparently, he gels with the team for shared passion for the environment. another developing story -- the clock is clicking for nsa and the senate is feeling the pressure. this saturday, senators are voting on a bill that would and bold collection of your phone records. summer pushing a measure that would extend the program for a short time. it will expire in june so what could this mean for the intelligence community and the tech companies? peter cook joins me now with more and we also have harvey geithner. peter, i want to start with you. how divided is the senate on this issue? peter: it is absolutely divided. even at this hour dark closed-door meetings happening.

there are a lot of support for the house bill you mentioned that would end the book collection program -- bulk collection program. it is not clear it has the 60 votes needed to go forward. mitch mcconnell is a critical player. this is dividing republicans, democrats. it is a very complicated picture. i cannot tell you how exactly it will play out. emily: how would you like this to play out? >> we support the u.s. freedom act. we think it is time for the senate to and this unlawful and useless program. emily: do we really know how this will affect the security in the meantime until new legislation is put into business? harley: one the usa freedom act has six months to take effect. if it is passed, there is a six month waiting period. and second, the program we are

trying to stop is where the nsa is collecting the phone records of americans nationwide. that has been proven over and over again by experts with access to be useless for national security. it is not made a single concrete contribution to the terrorism investigation. it is invasive and not a helpful safeguard so why are we fighting so hard to protect it? emily: peter, is this too harsh a step? peter: in the minds of mitch mcconnell, for example, it will risk american security. he and other republicans have in making the case that this program, despite the criticism of the program, it is important and essential to keep americans safe. there is a huge debate in the congress right now about whether or not that is the case. he does not have confidence that handing this over to private

companies that the nsa will have the kind of real-time access you think they need in order to protect american security. that is the debate right now. the white house is backing this house bill and will like to see this in the hands of the private sector but there is no clear platatheway. >> mitch mcconnell is saying he is not confident in that doing away with it will keep america safe. there was a letter issued by the director of national intelligence and a separate letter by the nsa director that say they are essential given abilities that will remain even if usa freedom is put into place. emily: harley, still a lot of debate in this issue. peter cook, we are going to monitor this rare weekend vote. we did want to clarify a story would put on may 8. we cited a statistic that 67% of all patent litigation was a

nonpracticing entities and informally known as trolls. the source of the status was use in a pricewaterhousecoopers report. that does it for this edition of "bloomberg west." have a wonderful long weekend. that is it today from san francisco. ♪\

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♪ mark: on the show tonight, more focus from iowa. let us go to our men peter cook with all the latest political news. peter: the state department released the first batch of hillary clinton's personal e-mails when she was secretary of state but using a private e-mail server. it was related to the 2012 terrorist attack in libya that killed americans. she said she never use the server for classified materials but the fbi