♪ emily: i'm emily chang and this is "the best of bloomberg technology." we bring you our top interviews. facebook hit with a bombshell, "the new york times" reports the network cut deals with 150 companies to share more data. the first big suit is filed against facebook over cambridge analytica. apple versus qualcomm, both sides of the showdown weigh in after china supports a ban on

the sale of 6 iphone models. from production "hell" to hitting model three milestones, we look back on the year that was tesla. nine months after a scandal erupted over facebook's open borders overuse of information, those are under scrutiny again. "the new york times" reported that after facebook tightened rules to limit the information that could be linked to outside apps, it revealed that facebook cut special deals with companies. facebook gave spotify the ability to read and write. facebook helped apple hide signs that it was asking users for data. "the new york times" got access to enable article sharing. in all, 150 companies had access to more data than facebook disclosed, impacting users. this comes as it faces a fresh legal challenge over the

cambridge analytica scandal. to discuss the latest, we talked to rich greenfield who has a buy rating. facebook gave spotify and netflix the ability to read and write my personal messages? what does that mean? >> what facebook is trying to allow you to do is to use facebook in a way that is better integrated with those apps. you can send a show to a friend and you do not have to copy and paste. it is integrated. you need to have the permissions, if you delete a message, it would delete it in your chat history. emily: could spotify go in there

and read something i sent to a friend in 2013? >> that is unclear. what i want to know is, there is a big difference between allowing you to do that kind of messaging and being able to read all of your personal messages with people who are not using spotify and it is not clear where this falls. what matters is that facebook said post 2014, it wound down those deals to share data with third parties. they said that to congress. this is an example of how that was not quite true. emily: one of these was ongoing with yahoo! as recently as this summer. facebook has a post today. "to be clear, none of these features gave companies access

without people's permission nor did they finally our settlement with the ftc." facebook is saying that partners did not use this data inappropriately even though there is no way to verify that. do you think that all of this bad news is going to impact growth? >> i go back to what sarah said. you think about a consumer, you take a song and you want to share with a friend. copying a link and going into facebook and looking up your friend and pasting it in is cumbersome and not user-friendly. facebook has wanted to be the social layer that connects you and everyone that you are friends with across the internet. many of the things we are talking about, or that the new york times are talking about, tie back to wanting to be that social conductivity, share content with your friends.

this was to make your life better. it is easy in the maelstrom that facebook seems to be stuck in now that the company had evil intentions. from a consumer standpoint, this was done to make life easier and it is in part why the users liked using facebook and instagram. a made life easier than before those two applications existed. i think the reality is -- sarah: i do not think, yes, this is making it easier but the problem is not so much what they did but how they talked about it. they were telling people they had full control over their data, they were telling people that they could opt out of these things. that these deals were not going on. yet, we hear that they are. even if this is something consumers want, was facebook being clear about how it worked? i think there are several examples this year, not just the

story that they were not. , >> the article also says netflix was accessing personal messages and facebook said that was not true. just because you put words on paper does not mean every word was correct or that capabilities were being utilized. it takes two sides to utilize data inappropriately. there are two aspects to this and we are focusing on facebook and not the third parties that were trying to leverage this and were they leveraging it or was it that it was available, which, i agree was an issue. emily: let's talk more specifically about what facebook got out of this. some of the data they got back from these companies enabled them to power the people you may know feature and i have seen friends, it feels creepy, psychiatrists and patients being connected to each other when there is no reason facebook should have that information or

that those people would want to be connected publicly. talk to us about what facebook got out of this. >> facebook is collecting data from every avenue it can and even beyond the story, location data, there were users on media who posted a story about how they turned off location data and yet they were getting location-based ads. facebook said, that is one way to turn off your location. we can always get your location and there is no way to opt out and that does not sound like what they were explaining about how you have control over your data. they should be clear with people

about how this works because in confusion, there is fear. emily: facebook has been suffering, the market cap as it rose to the middle of this year and it started to decline significantly which, i know you happen more optimistic about the idea this will not impact growth significantly, that this bad news will not be bad for growth. as a user, these revelations bother me. i do not feel i have this information when i signed up. are you changing your opinion that this will hurt growth? >> you might want to look at the cookies tracking you on every device you use. i would argue you have hundreds of cookies tracking everything you do, everything you click on is being tracked by some site. the premise of internet

advertising is tracking you and everything you do, pictures you look at, everything you do is tracked and used to target. this is a broader issue that goes beyond facebook. emily: rich greenfield and sarah frier. coming up, it is apple versus qualcomm, in a battle around the world. we will hear from the attorneys representing both sides. if you like bloomberg news, check us out on the radio, listen on the app. this is "bloomberg." ♪

emily: a new development this week in the ongoing dispute between qualcomm and apple. thursday, qualcomm won another injunction on iphone sales in germany after a china court ruled in qualcomm's favor, banning sales of iphones. we caught up with don rosenberg tuesday who says that apple

needs to take this seriously. don: this case started in 2017. apple and its attorneys have been involved in every process going on. they were aware that a preliminary injunction was being sought and it was ordered. it is not and nor will it. this became effective immediately. it affects older iphones. it affects the iphone 6s through x and the only reason it does not apply to later devices is because when we brought the suit, it did not exist. emily: when do you expect this to take a bite out of sales? don: it should have been taking a bite and should be right now in china.

the order requires them to stop selling, and stop importing any devices between those model numbers i suggested. the new models will be coming soon. we are in the process of seeking an order covering new models as well. emily: there are developments in this global patent showdown every day. we spoke with steve mollenkopf in august. take a listen to what he had to say to where he hopes to get back to. >> there is no better opportunity for qualcomm than to work with apple. it makes sense the technology leader should be partnered with the product leader and those things tend to work out. the way we think is that you get the disputes figured out and you move on. i hope to be in that period according to the schedule we have laid out.

emily: this seems to have gotten uglier. is that possible? don: as steve has said, this will resolve one way or the other, either through the court and rulings such as this recent china ruling or through some kind of settlement process. that is the way these things terminate. it will end. do we want to do business with apple? absolutely. they are a significant player in the mobile communications market and if we were to get there through settlement or because one of these many milestones have occurred and that brings parties together, so be it. emily: there seems to be confusion on the pathway to resolution. are the companies in talks?

don: we are not talking about whether we are in talks. the companies hav engaged in the past and continue to on some level. there is apparent to everyone they can watch this that the companies are involved in extremely difficult litigation processes and were bound by certain confidentiality requirements, were bound by the things going on in court. the process of negotiation is something we are open to. emily: the sec has brought an antitrust case against qualcomm. qualcomm has said you are in settlement talks with the ftc. what are the chances these cases go to trial? don: there is a pretty good chance they go to trial. we are anxious to go to trial in san diego where we can prove that apple and its contract manufacturers, have breached their agreement. they have not paid us in close to two years for intellectual

property that they have been paying us for in some cases for 10 years. apple has told those manufacturers not to pay us and they are obeying. we would like that to get to trial and we would like to establish our right to have those royalties paid both for the past and going forward. the case with the ftc, we have been in settlement discussions. we hope to resolve that case. if we do not, that is scheduled to go to trial in january. we believe we have strong defenses. we believe the basis of the ftc case, like other cases, is unfounded, and we think we can prove that. emily: the general counsel there. a lawyer for apple contract manufacturers has a different

perspective. i spoke for a lawyer representing those manufacturers about the global patent showdown. >> it is an order that relates to software, does not have anything to do with the technology at issue in the lawsuits we have against qualcomm, where we are seeking about $9 billion in damages. from what apple has been saying, they have an easy software work. qualcomm has been engaging in distraction techniques meant to take attention away from the fact they are facing three big lawsuits in the united states that challenge their business model.

emily: qualcomm is not happy with apple's response, the general counsel telling us they are obligated to immediately cease sales and prove compliance in court. you are representing manufacturers. what happens if apple cannot sell its most popular devices on the chinese market? >> i do not think that is going to come close to happening. qualcomm is exaggerating. it is deceptive, their ceo is saying there is a settlement on the horizon which is false. this is something the sec looks into. that order is not going to affect contract manufacturers i represent. qualcomm is trying to take away from the fact that the united states government is taking them to trial, arguing and claiming that their business model, monopolistic practice and the

abuse of the law, must stop. that is what this is about. the patents they are claiming in china is not something they created, it is something they bought and has nothing to do with the legal hurdles they face in the united states. emily: what would it take for all sides to get serious about a settlement? ted: qualcomm would have to cease its illegal practices. qualcomm took an early lead in technology and it obtained a monopoly and they use that power to tax innovation, to add a double price, something no company could ever get away with when they sell chips to product manufacturers. qualcomm needs to stop that, it needs to compensate the contract manufacturers for the injury and harm.

this case has been talked about as apple versus qualcomm but it is more than that. it is my clients, the builders of the devices, the united states government, regulatory authorities around the world, china, europe have found this conduct to be illegal and have imposed fines. qualcomm needs to cease illegal activity and to treat competitors and consumers fairly. its behavior is injuring consumers around the world. emily: that was the lawyer representing the contract manufacturers that assemble apple products. uber's future may rest on its food delivery service and more. after new reports that russian hackers heavily targeted black users, the naacp is returning a donation to facebook and calling for people to log out of the social network. we will speak with the

president, derrick johnson. this is "bloomberg." ♪

emily: in november, uber released a limited set of financial information, a move the company makes each quarter. it offered a glimpse into his food delivery business for the first time. uber eats generated $2.1 billion in gross bookings, 17% of its $12.7 billion in gross bookings last quarter. the emergence of uber eats has been good news as the company prepares to go public. the ceo was asked about it at a conference earlier this year. >> lots of companies would kill for 41% growth. it is a large number and we have businesses like uber eats that are growing at 150%.

there are some businesses that are going to mature as a scale. as they are scaling, we demonstrate in markets that contribution margin is positive. we are in a battle with lyft. that is a challenge. emily: i caught up with the vice president of uber everything monday. jason: i joined the company four and a half years ago to help figure out what other businesses uber could get into. it is about how to use its urban logistics platform to launch new businesses and for people to connect with cities. we said there are a lot of things we can do and let's look at the things we can move. let's call it a vision for everything. food was a big part of it. it became about 95% of what we do on a regular basis. we were not expecting food would be as big as we thought.

at the beginning, we thought there were a number of businesses. we decided to focus on that. we do uber eats. emily: it is 17% of gross bookings, that means all food orders, not just what uber is taking. give us an idea of how fast the business is growing. jason: it is hard to say when we would get to half. it is so hard for me to speculate and the reason why is we just had our three-year anniversary. we launched the business in 2015. it is $2.1 billion. it is growing faster than what we thought. it is hard to say. our approach has been if we focus on the customer and restaurants and markets and what people want, it will end up being what it is and it is bigger than what we thought and it will continue to surprise us.

emily: it is profitable anywhere in the world? jason: we have a number of profitable markets. we are focused on growth. we wanted to make sure we could get the economics in shape and we did that. emily: will you get more specific than the ipo filing? jason: he has said we are going public next year. i'm going to leave it to him to talk about the specifics. emily: the ceo has expressed interest in delivering groceries. where does that stand? jason: part of that, and, we are staffing a team in toronto to address that opportunity.

we see grocery and prepared food on a bit of a collision course, if you will. if you go into a grocery store, you have got prepared food and a lot of the movement on the restaurant side of things since fast casual started picking up is people are trading that prepared food as a replacement to grocery. you are going to see those move together and we are making a bet. we are starting to look at it. emily: looking at delivering prepared food from grocery stores? jason: we do that today. more as a full-fledged grocery that is adjacent to the eats business. emily: the uber everything vice president. coming up, we speak with derrick johnson, naacp president, why the organization is asking congress to further investigate facebook's involvement in russian hacking. bloomberg technology, we are

live streaming on twitter. check us out and follow tictoc on twitter. this is "bloomberg." ♪

emily: welcome back to "the best of bloomberg technology." i'm emily chang. the naacp is one of the oldest civil rights organizations and is calling on users to boycott facebook for one week after a report shows russian hackers targeted black users leading up to the 2016 election. derrick johnson joined us from baltimore. why are you asking users to log out, not just to facebook but to instagram? derrick: they are part of the same company. we are concerned with the pace at which facebook has responded to the reality that a foreign nation sought to subvert

democracy by suppressing black votes. that is something that no u.s. corporation should tolerate, especially a company like facebook, where african americans are over indexed in terms of their usage. we should be protected and our corporation should make sure democracy is safe. emily: you have returned a monetary donation you received from facebook. you say as much in a tweet. how big was that and what was the response from facebook? derrick: we have been in communication with facebook. our goal was to make sure they hear our concerns. facebook sought to be supportive of the naacp. we felt our value system was a lie. any time a corporation refuses to support democracy by making sure citizens are protected, the nature of a company using racial hatred to divide this nation is something that should not be tolerated.

our mission fights against that so we could not accept any donation at this time. emily: was it sizable? derrick: i prefer not to get into numbers. it was a donation that we would have accepted but at this juncture, anytime you have this scenario, compounding it is it was targeted by a firm hired by facebook did began to do research. what would have happened if that would have been me or the naacp? we stand in solidarity with this company. emily: facebook says they have undertaken an audit by a key civil rights leader to work on these issues you are raising. they have expanded their voter suppression policies, added

resources when it comes to safety. sheryl sandberg says facebook is committed to working with leading civil rights organizations to address civil rights on our service. i am grateful for their guidance. we know we need to do more to listen and take action to respect rights. have you gotten to speak with sandberg or mark zuckerberg? derrick: i have spoken with sheryl a couple of times. i agree with her, facebook needs to do more. one of the things i raised was the audit, it cannot be an audit used in the media and individuals three levels down are responsible. it needs to have a level of importance to ensure that facebook changes its culture and maintain a positive relationship with the african-american

community. emily: what was sandberg's response? derrick: she was nice and heard what i had to say. for us, it is a matter of seeing next steps. are they going to take the recommendations in the audit and implement those and are they going to ensure that african-americans are not used in a proxy fight for political gain? emily: you are not the first person to complain about the black experience on facebook. we spoke to a former employee who raised concerns about the treatment of african-american employees at facebook and how the company treats black users. take a listen. >> they do not think of the black experience, which is a shame because black users are

over performing on the platform. it is a missed opportunity, missed financial opportunity, for facebook to not engage with those users. emily: what is interesting is that tech companies and even facebook may not realize the power of black users on their platform and yet russia does. what does that mean for the future of your advocacy and the naacp advocacy? derrick: it is important for facebook and the tech industry to appreciate and respect the consumerism of the black community and that is reflected in not doing more ads, it is reflected in their corporate hires, whether there is enough diversity in decision-making positions so that where a critical opportunity presents itself, they can seize upon those while at the same time, recognize there may be cultural sensitivities and avoid those. emily: talk to us about what you are calling for. derrick: we want to bring attention to the urgency of facebook taking action to ensure african-americans are not

targeted by foreign nations, that racial hate is not used on their platform, that they look at their diversity in terms of their decision-making and on the board. they have vendors, that they are not used towards african-american organizations or our community. emily: what do you want users to do? is a temporary boycott enough? derrick: what we're doing now is we asked our members and supporters to log off and not use facebook for a day or a week and our goal is to make sure facebook understands the nature of what has taken place. the fact that racial intolerance has grown is something that we are confronted with and some people are living in fear. that was festered on facebook

and the fact that platform was used to suppress votes needs to be addressed, the fact that facebook hired an outside firm and that firm begins to target african-american organizations, that needs to stop. facebook needs to own up to the fact that diversity is important and their leadership should reflect a diverse population, particularly a community that over indexes their products. emily: derrick johnson. out of the u.k., uber has lost a bid to overturn a court ruling that allows drivers to get a minimum wage and holiday pay. the court of appeals dismissed the challenge.

it is the third time uber has lost. they will take the case to the supreme court. coming up, after a wild year that included monetary milestones and erratic tweets, could elon musk be getting a last laugh? how doordash went to becoming one of the fastest-growing startups. we will speak to the ceo. this is "bloomberg." ♪

emily: the tesla headlines in 2018 kept coming so fast it has been hard to keep up. from the fallout of elon musk's funding secured tweet to short sellers circling the stock, media coverage was on anything but autopilot. we sat down with the bloomberg reporter who covers the company and a writer who wrote about the inner workings of tesla. you interviewed dozens of

current and former tesla employees and a certain amount of love-hate is expected. what surprised you most? >> how chaotic it became in the company over the last two years. we saw elon musk talking about the model three as some of the most difficult times of his life. what we did not understand was how difficult it was for everyone inside the company. people talked about it as being a year that was so challenging that many of them ended up leaving. one person said that everyone in the company ended up being in an abusive relationship with elon. it was a year that was transformative. they got through the process of making the model three.

you had such a huge exodus of talent. in part because the bloom was off the rose for a lot of old. -- a lot of people. emily: they talked about him in your piece being 95% genius and 5% mad. one of the anecdotes was this idea of rage firings, where he would say i have to fire someone today. i just do. charles: the biggest challenges inside the company was that mr. musk, he is passionate and if you happen to encounter him and you could not answer his question right away, and answer he was looking for, you might be fired. one executive told me she had forbade her employees from walking close to the desk that musk used because she was terrified that some random encounter might result in them being let go. it is a place where elon musk's personality impacts every aspect of the company. his quirks, his eccentricities,

his short temper has a huge impact on the company and it is a reflection of who he is. emily: we cannot ignore the fact that tesla hit some huge model three production milestones. i have this chart showing how many more cars have been produced every quarter. tell us about the successes. >> as charles reported, this was a year for everybody. you saw dozens of executives leave and yet they recorded this profit in the third quarter and everyone is waiting to see if they will do it again. emily: take a listen to this from "60 minutes." a roller coaster year, the sec issue seems to be resolved.

>> i do not respect the sec. >> you are abiding by the settlement? >> because i respect the justice system. emily: what is your reaction? dana: i was not surprised. this is someone who had to settle because of stock prices. the settlement says they have to appoint two directors. they are within that window. he is not abusing the settlement degree. he is not following the spirit in terms of his public statements but he is not out of compliance. emily: executive turnover, there has been a lot. do you think musk can continue to lead the company without turnover? charles: he is going to continue whether anyone wants him to or not. he is the largest shareholder. it would be the largest package in history. nobody can force out elon musk

and the board is not inclined to do so. it is a board that does what elon musk tells them. can they maintain this position in the marketplace? for consumers and investors and counterparties in this industry, trust is everything. we buy a car because we trust it is going to do what it is supposed up. suppliers hand over parts without asking for cash on delivery because they trust they are going to get paid. one of the challenges is that mr. musk has said he signed an agreement but he does not respect them. there is a question, at what point to people run out of trust, how much rope do they give an executive before they

start to say, we are worried and when that happens, once the trust is gone, it is hard for a company to hit full speed. emily: how much rope do you think current and potential employees will give him? charles: the line worker, there is a long list of people and they are seeing a record number of college graduates who want to work at tesla. at the executive ranks, that is where the challenge is. when i talked to executive level people, they did not want to work at tesla the way they wanted to at one time because they knew the environment was such a challenging one. tesla has been ahead of the curve in terms of their technology, on the cutting edge of the market. other car companies, companies that know how to manufacture at scale, are catching up.

for the next car, is tesla going to have the people in place to beat the other companies that know how to do this at scale? emily: uber self driving cars are hitting the road again. nine months after the death of a pedestrian in arizona, uber has received the all clear from the pennsylvania department of transportation to resume testing in pittsburgh. testing will resume with more limitations and safety measures, including improvements to braking and monitoring. they will also be deployed in san francisco and toronto to be driven in manual human mode. what has uber been doing since that accident?

>> reassessing on every level, looking at the safety of drivers, looking at what technology they use, what is on, what is off, what they maintain. they get this technology and they couple it with their self driving technology. it is a lot of work and changing prophecies and saying we are going to drive slower and do it on a smaller circuit. where they're going to be driving in pittsburgh is smaller. emily: one or two is not many. where else? eric: the sense i got is there is not a lot of room on this course. it is so small. in toronto and san francisco, they are manual which means a human being is driving but the car is taking this data which uber can use. getting them back in manual is one step towards getting them

back towards autonomous. emily: what is the importance with the ipo coming up? eric: it is a major cost center. hundreds of millions. that is a risk for them. we talked to the ceo and he said they are going to look at ways they can spin it out or different financial vehicles for the program. that is an open question, what they do with the autonomous program. what they want is an upside. whenever these vehicles are ready, we are in the business of autonomous vehicles. emily: how -- where is uber in terms of lyft? eric: lyft had more partnerships and started later. lyft is aggressively trying to catch up with the idea they can partner and as time passes, it becomes easier to catch

everybody else, that once was novel is easier for a company to play catch-up. emily: eric newcomer, thank you. google will invest more than $1 billion to expand its presence in new york city. the company will move into new buildings. the move could allow google to more than double its staff in new york, 7000 people. coming up, doordash. the company is growing faster than any competitors. we speak to the ceo, next. this is "bloomberg." ♪

emily: a year ago, doordash looked like another meal delivery app, facing competition and thin margins.

the company was struggling as it struggled to differentiate its product. things turned around. doordash started turning a profit minus overhead expenses. granted, that is a generous definition of the word profit but it was enough. there was a fresh round of investment totaling $500 million. tony xu joined us to talk about the turnaround. i'm going to double down on the fact that that is a generous definition of profit because salaries and rent are a part of everyday operation. how well is the business doing? tony: we have tripled sales in one year, we are north of a billion in net revenue. there are a handful of businesses that can say that and no one can say they are growing

that fast in the industry we serve, the restaurant delivery business. we are gaining share faster, we are growing faster, and we are on track to being the largest platform. emily: how do translate that into profit? tony: we have had a playbook on how to turn businesses from investment into growth into cash flow positive. it is only after that playbook was developed that we decided to raise the financing in march and in august. emily: we had the head of uber eats who also said business is growing faster than they expected. they are exploring grocery delivery. they have deep pockets too. how do you stand up to the competition?

tony: we have. emily: what are you doing to differentiate yourself? tony: a lot of the work that led to the results of 2018 happened before 2018. since day one, we have had a strategy of focusing on merchants by building more services like doordash drive which builds channels for merchants to deliver their own merchandise. we have 97 of the top 100 merchants signed up. we are also delivering other types of meals. we started with food, which is the hardest. our partnership with walmart started in april and has reached over 500 stores and we deliver the majority of walmart groceries. emily: where do you think business is going? do you think there will be a few players, some smaller players will go out of business. it does not seem like this many players will survive. tony: you are starting to see some of that. it is a vast market. 30 years ago, 5% to 10% of pizza sales were delivered. today, over half of pizzas are

delivered. outside of pizza, only 8% to 10% of food is delivered. you are seeing that both talent, capital, merchants, partnerships are accruing to a couple of national players. emily: where are we going to see you expand, use this money? tony: doordash started the year with 600 cities. we are in 3000. we are ahead of goal. that said, we have a lot of the u.s. left to serve. we serve the largest coverage today. there are still 25% to 30% of households we do not serve. we have to get to more cities. today, we deliver with partners like wing stop and walmart. there are many other businesses for them to survive the next decade.

there are other products we have to continue on our merchant first approach that will give customers more selection at higher quality and that is what keeps customers coming back. emily: tony xu there. that does it for this edition. we will bring you the latest every day of the week. tune in every day at 5:00 p.m. in new york. we are live streaming on bloomberg. this is "bloomberg." ♪

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>> coming up on "bloomberg best," the stories that shaped the week in business around the world. the fed takes centerstage with a dovish hike, maybe not as dovish as the markets hoped for. >> powell that >> it's really facts and circumstances, meeting by meeting and meeting. >> central banks of japan and england stand pat on policy. italy's budget concessions pass muster with europe. >> as the more moderate people have won this battle. >> softbank's i.p.o. sinks in its first day of trading. china celebrates 40 years of reform with a message of

re