♪ emily: i am emily chang in los angeles and this is "bloomberg technology." we have liftoff. lyft soaring in its debut after raising over $2 billion in an ipo. i sit down with the cofounders to talk about how they get costs down. plus, we hear from ben horowitz. he compares the rise to that of rocky balboa. and, lyft's public debut sheds light on how the ipo market is

changing. almost 5% of shares, but 50% of voting power, will that become the new normal? after months of anticipation, lyft has finally said into the public market. the second largest ride hailer soared in its debut, shares rocketing up as much as 21%, closing almost 9% above the opening price, giving lyft on $22.3 billion market cap. they rang the nasdaq opening bell from a new driver center in l.a., for going the traditional opening ceremony on the floor of the exchange. while the ipo is sending an encouraging signal to a number of companies lining up to go public, there are still questions about future success. last year, lyft lost almost half as much money as it made. i sat down and asked how they plan to bring those costs down.

take a listen. >> what we are going after is a $1 trillion market opportunity. americans spend $9,000 owning and operating their cars and using it only 5% of the time. this massive market shift is happening with car ownership and we are investing to take it vantage of that. our economics are improving and we are very confident. emily: in your risk factors, you say you may never be profitable. how do you convince investors that they should be betting and be optimistic here? >> every year, the economics and business improve. we are confident that the business will be profitable. there are risk factors, but we are making tremendous progress going after this once in a generation shift, a $1.2 trillion market could flip from

an ownership model to a service model and we are leading the way. emily: if you focus on one day, does that give uber an opportunity to clawback market share another day? >> we are not focused on our competition. we are focused on what we can control. we are thinking about how to serve our drivers and passengers, pushing down our operating cost and the operating cost of our drivers, and that has allowed us to go to nearly 40% market share. we don't focus on market share, we just execute. emily: is getting 50% market share in the u.s. more important than expanding internationally? >> our focus is always on taking care of our customers. we don't set market share goals. we focus on delivering the best transportation to our customer. we sit down and we make the trade-off.

can we go deeper on this market in the u.s. and deliver better transportation here, or is it time to go abroad? a little over a year ago, we launched canada and we will continue to consider international opportunities. it is a great call option. emily: what do you mean by a great call option? >> there are many future growth opportunities in this business. whether we are going deeper in north america or going internationally. we look at that as a call option and we may choose to do that someday. emily: let's talk about founder control. a lot of voting power, but you hold 5% of shares. there was a lot of backlash. what is your argument that that is the best way? >> we put a lot of thought into this with our board and investors and we wanted to set the company up to go after the

long-term and make the right investment. we think that is going to be necessary to deliver the largest shareholder returns over time. we designed it together. we still have majority control. we selected an independent chair of the board. we have an incredible board from a diverse set of backgrounds. we think collectively that is the right package. emily: there are concerns that this won't lead to the correct checks and balances you need on a public company. we've seen situations where founder led decisions were made that maybe weren't the best decisions. how do you respond to that? >> we've been balanced in how we put this together. we have an independent chair. we have a great set of shareholders. when we talked to investors, we

let them know that we care deeply about their views and our track record shows that. emily: you've been investing heavily in self driving technology. how much and how fast do you think self driving technology will bring your cost down? >> i think we are still years away from self driving. emily: how many years? >> i wish i knew myself. i think there's this conception that there will be a magical self driving vehicle someday, but the way we see it playing out is, the first generation of vehicles will only be able to do a subset of the rides. it will be critical that they are rolled out on a platform like ours where you can count on drivers to fulfill other requests. it may be a long time before it empty autonomous vehicle is allowed to do a pickup at an airport, drive at night, drive at certain speeds.

there's all sorts of restrictions. i think a network application will be the majority case for the years to come. emily: in the meantime, i know you are focused on changing trends, but in many cities where lyft and uber are big operators, you are seeing an increase in cars on the road. you are seeing more car ownership. what evidence have you seen that -- >> we've seen peak car ownership in the national numbers, people that are purchasing or deciding not to purchase -- if you look at millennials that are coming of age and waiting or not getting their license, i think there a pretty obvious trend. last year, over 300,000 customers got rid of a car. some families are going from two to one car.

emily: in your roadshow, you really talked about you don't do delivery, you don't do trucking. you are getting into new businesses. what is going to be the biggest source of new revenue in the future? will it be something we don't know about? >> we compete with car ownership. we want to provide you every possible option that you could be trading off. whether it is a bike or a scooter, shared ride, luxury ride, we want to provide you with any possible options. we would be competing with the car that is parked in your driveway as the primary goal. emily: speaking about the future of drivers, self driving technology is very important, but so much has been about

treating customers well, treating drivers well. doesn't that sort of undermine -- >> i don't think those jobs go away at all. the entire rideshare market in the u.s. is just 1% of miles traveled. if that goes to 10%, you would need either 10 times the number of drivers, obviously there's room for both increasing the number of work opportunities and adding. emily: where is lyft in five years? >> in five years, we want you to be subscribing to a package of miles. similar to the way you have a cell phone with a number of minutes, we want people to completely get rid of their car and jump into the world of transportation as a service and

subscribe to miles. so you don't have to think about each trip. emily: something like lyft time, a monthly thing, a yearly thing? >> it will still have to take shape, but i think people will be subscribing to miles. emily: our interview there with the lyft founders, logan green and john zimmer. meantime, apple has canceled its air power charger after more than a year of delays. the device was announced in 2017 alongside the iphone x and was slated to launch last year. apple's senior vice president said, after much effort, airpower will not achieve our high standards and we canceled the project. we apologize to those customers who were looking forward to this launch. we are committed to push the wireless experience forward. joining us to discuss, alistair barr in san francisco. isn't this pretty unprecedented? >> it is really unprecedented.

apple is the ultimate consumer hardware company and they really have all the best engineers. this is a real surprise. emily: when apple announced this, they said the modern technology wasn't quite ready for this idea, but apple new how to execute it. what went wrong? >> a lot of things went wrong. apple always comes out with these products a bit later than early movers, so there are some that do this type of thing, but apple wanted to make sure that when you put lots of devices on this, you can put it anywhere, and that was a real challenge for them. there was a couple other things with software. obviously the company has not managed to iron those out, which means i think that a lot of

other companies won't be able to either. emily: in our story today about this, he also mentioned several other products that had been delayed in the tim cook era. is this becoming a pattern? >> it certainly feels that way. tim cook is great at where his experience is, but there have been some problems. the home pod was delayed and the laptops have had problems with keyboards. the company makes a lot more products now and they are ambitious in what they are trying to do. i think the focus has broadened a little bit. obviously they make a lot more of these things and there are more customers and some of these customers are a lot more demanding than some of the core fans of the company.

emily: bloomberg's alistair barr, thank you for that update. we are going to follow that one. coming up, how lyft sets the stage for ipo's to come and make it founders an opportunity to consolidate even more control. if you like bloomberg news, check us out on the radio, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

♪ emily: continuing our discussion of lyft, although shares jumped, it is more important to note

that a relatively small number of shares available to trade tends to magnify the gains and declines. with more startups coming to the market, will we see a similar trajectory for the rest of ipo's in 2019? let's bring in olivia and barrett daniels. both in san francisco. olivia, there's a lot of math, a lot of economics that goes into how many shares, how many to get, so what do you make of the math and how this played out? >> the shares came in at $87 today. a nice healthy pop of about 21%. they ended up closing at about $78 a share. lower than what they came out at, but they didn't pop too much. so we think the company is very

happy with what happened today. we understand the bankers are as well. emily: and yet, this is a company that is losing almost half as much money as it is making. we heard john and logan talking about how they plan to bring cost down, but there's still a lot of uncertainty about whether they will be able to do that. why do you think investors are forgiving that? >> ipo's tend to get a pass when it comes to losses. but there is a difference. it is important to differentiate between the ipo and what happens after the ipo. a company needs to perform against their story going forward. there is a difference between having what it takes to be a successful ipo and having what it takes to be a successful public company. emily: snap is a perfect

example, a big pop but wasn't able to sustain that, and the market cap has dropped. talk to us about the founder control situation. we know the founders have a lot of voting power. that is becoming a trend at silicon valley companies. you see it at facebook and google. is it going to become the new normal? >> a lot of people have been talking about the fact that logan green and john zimmer owned less than 5% of shares, but got close to majority control of the country -- the company. the board agreed to that. it seems that retail investors didn't seem to mind. i think that shows us this trajectory can continue. emily: is that a trend among investors, that they are not concerned about the founders having so much control and that potentially backfiring?

>> i think it is a trend that we are seeing more of and it doesn't feel like the investment community is all that concerned. i would expect to see more of this as we go forward. emily: we will be looking at the ownership stakes of other companies. uber, pinterest, didn't lift ownership stakes. should we expect that information to be filled in? >> i think that would be something typical we would see. emily: olivia, how does this set the stage for all of these other companies that are about to come out of the gate? this must be good news for uber, which is also losing money and also a big ride hailer. >> this is great news for uber. they wanted lyft to do well because that allows them to value their u.s. business. uber has a u.s. business and a global business and many

different verticals, including delivering food and freight. they want to use what lyft's valuation today, about $22 billion, to say, this is what our u.s. business is valued at, plus more. emily: it is interesting. i was in a few uber's and lyfts today and always have a chat with the drivers. one of my drivers said for every lyft call, he probably gets 10 calls for uber and uber has so much more business in this particular area. we know that lyft claims 39% market share in the united states, but i wonder if uber is far bigger than lyft -- we know it has more market share, but it has all of those challenges going on a broad.

>> clearly it is a much bigger company. we should expect a lot more buzz and excitement. when it does come time for that ipo. as for how much bigger it is, i think it is hard to say, but i think a lot of that will come to light. emily: olivia, what are the uber bankers thinking now? >> i think they are pretty excited. lyft clearly had a successful ipo. uber thinks it is better, but there's something to be said that there is an appetite for money-losing tech companies right now. emily: we will see what tomorrow brings. olivia and barrett, thank you both. coming up, jpmorgan gives a pessimistic outlook for tesla in delivering model threes to

customers in europe and china. details next. this is bloomberg. ♪

♪ emily: some football executives will likely testify when tech heavyweights take their dispute to trial. apple ceo tim cook and his qualcomm counterpart are expected to take the witness stand in san diego next month. a list also includes dozens of other executives and engineers.

wework is getting resistance to lending in europe. bloomberg spoke with 17 creditors and brokers. they say they are reluctant to build up more exposure to a single company. we work is also the biggest private occupier of commercial real estate in london and new york. it has 45 million square feet of office space worldwide, but last year's losses approached $2 billion. deliveries could still be a problem for tesla according to a j.p. morgan analyst who cut his price target from $230 to $215 a share. he said first-quarter results are susceptible to model three deliveries in china. coming up, lyft backer and board member ben horowitz says uber is less of a competitor than it ever was with some strong words about lyft's biggest and bigger rival.

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♪ emily: this is "bloomberg technology." i'm emily chang in l.a. let's return to our top story, lyft getting to the public markets before its rival. uber has had more market share almost every step of the way, but today lyft got to run a victory lap. andreessen horowitz says the fact that they survived the fight with uber would have surprised almost anyone a few years ago. we caught up with horowitz today to talk about the ipo and its competition. >> it's like rocky balboa winning the heavyweight championship of the world. it's like that. all these founders in silicon

valley go, "nobody believes in us," but it's the truth, nobody, everybody had written them off. for them to come back -- when i stepped off the board i think we were at about 16% share in the u.s. and we are at about 39% today. it's amazing. it's really thrilling. emily: uber is a fierce competitor. in some cases, they resorted to illegal things. >> highly illegal tactics. emily: john and logan, i just spoke to them, they say they don't think about the competition, but come on -- how much do you think they think about in a situation like this? >> i think less now than we did. it's a huge thing. it is pervasive and everything. it wasn't just competition. uber first sold the original idea. it's not just competition for drivers, but for passengers. when lyft was raising money,

uber would call investors and threatened them, saying you would never do business in this town again if you invest in lyft. really, really aggressive competition. of course, there were some thoughts about it. but john and logan did a great job creating their own vision for the future of transportation, how you treat people, how you treat drivers. it establishes a great position for them in the market. emily: it is a pretty bold accusation that they would threaten? >> anybody who tries to invest, i will tell you that. then uber copied the business. lyft was ridesharing and uber was black car, and uber saw us

taking off, they adopted the ridesharing. that is stolen. emily: so uber has worked hard to rebuild their comp -- reputation. does that make it harder for you that uber is back on its feet? >> actually, i think not. here is why travis, for all his aggressiveness, was an amazingly competent com tough competitor. i think with the change, uber has lost a lot of talent and a lot of people. we hired a lot of them. you can see in the numbers we are getting stronger and stronger. the short bursts have got us from 16% to 22% shares. emily: do you think the new ceo of uber is not doing a good job?

>> i think it's hard to take over somebody else's company who has such a pronounced culture and specific way of doing things that you are trying to change. i think that is a hard task. emily: you have seen a lot of business models and invested in a lot of companies, started your own companies -- lyft is making $2.2 billion a year. they are losing almost half of that. how do you bring costs down and how quickly can they realistic bring the costs up -- down? >> i think they have gone down over the last year. the unit economics on the core business work very well. they are investing in up on a -- autonomous vehicles and scooters. they are well on the way to profitability. emily: what is the argument for investors, that this is may be $25 billion company, when it is

losing massive amounts of money? >> it's the future of transportation. you believe that in the future, things -- we will not all be stuck in traffic in our own cars. lyft is the best company in that market. transportation is an enormous market and enormous opportunity. at least in my view, et cetera opportunity to invest in the very best company in that market. emily: what does that future look like to you and how much is self driving technology part of it? >> a little bit remains to be seen, but i think it has been a real factor. but the network itself will be a factor. i think we will have drivers for much longer than people anticipate. there are things that humans are really good at like bad weather,

and weird places, and all these things that we -- is much harder to get a computer to do. it will be a big factor. it will take the economics to change the landscape. we think owning the network, this is a huge investment, as you pointed out, is a wonderful position to be in. it will lead us to the future. emily: john mentioned that they are always thinking about international, and if they do expand internationally, it will be in markets where there's only one real competitor. what might those markets be? >> i can't forecast the business because i'm just a board member, but we have a lot of knowledge about what the best markets are, where the prophets are, the business, and so forth. emily: are you comfortable not expanding internationally right now? >> one of the things we are doing -- we just rang the bell on a service center.

most people don't know lyft has a service center. in the u.s., we can really help drivers. we can help them get their cars serviced, we can help them succeed and make more money. that is much easier to do when you have a sharp, domestic focused like we do. we are really committed to that. we just hit a big new program with the city of los angeles around that. i think that if you are spread out internationally, you can't do that with the same intensity. emily: companies are waiting a lot longer to go public. lyft was one of them. this year we will see a flood of ipo's, potentially uber, airbnb, slack, pinterest. this is a new trend. these companies have been building for a long time and now they are coming out of the gate. >> i think all the companies you named are high-quality companies with excellent businesses, turn

-- tremendous unit economics, good management teams and so forth. i think it will be healthy for the ipo market. when high-quality services go public, it is great for the economy, the company, great for investors and the country. i have high hopes. i don't know about high expectations, but it is exciting. emily: do you think we will see snap where it had all this fanfare and 25 billion dollar valuation, and now it is almost unheard of? >> anything is always possible. that was a very company specific kind of event that occurred. i think snap went public much earlier in its maturity than these other companies. emily: is there as much value today for public market investors?

>> i think one of the tragedies of the last kind of 20 years of regulation has been, we have many fewer public companies. microsoft went public when it was worth $300 million. that can't happen today because of the way -- it is too dangerous to do that. on the other hand, these companies do have a lot of runway in front of them because they have enormous market opportunities. emily: does that mean there is more value for you? you just hired a partner to focus on late stage growth companies. where do you see the opportunities for the sort of next wave of hot tech? >> i think of a lot of the value has shifted from the public to

the private market. i think that is something we as a country need to figure out how to correct because it creates a wealth gap. when you are in the private market, you have to be at least an accredited investor, meaning you have to have at least $1 million to invest in these companies. it was done to protect individual investors, but i think it has taken away too much opportunity. i think that is true. it's great we have high-quality companies going public. it would be better if there are more of them. i'm hopeful that we can start to reform now that we know what's happening, we can reform regulation and make it both safe and create opportunities. emily: now that you have this sort of barbell strategy out of andreessen horowitz, where is the next hot tech thing? if it's not social networking or the sharing economy, what is it? >> i think social networks, sharing economy, mobile apps, i

think we are seeing now things like ai, cryptocurrency and blockchain, ar and vr, biotech, computational biology. those are the areas that we see great opportunities in for the next 10 years. emily: do you have any concerns about china? there is some controversy about working conditions for tech workers. do you have any concern about their impact on the u.s. for technology? >> i think china doing well and growing -- since the cultural revolution and kind of opening the markets and succeeding, it is one of the greatest things that has happened to the world, period. i think it has been great for the u.s. so far that china is successful and not just a billion farmers.

that is incredibly positive. countries don't compete in the way companies compete. if arizona is doing well, it doesn't hurt california. if china is doing well, it doesn't really hurt the united states. in fact, it makes overgrowth better. i am excited about it. china is very different, though. there is plenty of room for u.s. companies, even if china is successful. emily: some of my conversation with ben horowitz, general partner at andreessen horowitz. the parent company of bloomberg television is an investor in andreessen horowitz. facebook is considering placing restrictions on who can post live videos in the wake of a massive shooting in new zealand earlier this month that was filmed and disseminated in real time. the social media company came under sharp criticism for not taking the video down fast enough, and for letting it be

circulated across the internet and uploaded to other platforms like youtube and a blog post on instagram. co sheryl sandberg says the company must work to continually stay ahead. coming up, we speak to the cofounders of a credit card start up that hit more than a $1 billion valuation in just two years. it is launching its second product, a physical credit card for e-commerce companies. that's next. this is bloomberg. ♪

♪ emily: brex, a corporate card aimed at startups specifically help -- designed to help e-commerce businesses grow. they have helped online brands to better understand their needs. we caught up with brex cofounders.

reporter: e-commerce is a very large segment of the online economy. people are buying in retail every single day. we saw that there was this opportunity because they have a lot of trouble getting finance and to buy inventory, advertising, all that. we created this card that gives them 15 day free credit for that entire period. from our last company, we processed payments for e-commerce, so we had a lot of experience in the segment, and we chose to make this second vertical launch. reporter: since you had experience in that segment before, what sort of risk profile are you looking at? i would assume e-commerce companies are selling a lot of products, but you could also be targeting companies that might not be around forever. i'm sure there are things to focus on to make sure you are giving access to that money to the appropriate companies. >> absolutely the first thing is that brex is a charge card. they have to pay balances at the end of the month.

second thing is we actually have this advantage that we have real-time data about their businesses. when they onboard in brex, they link there e-commerce platforms so there is access to shopify or other sources that gives us real-time insight into how the business is doing versus a bank that only looks and periodically. reporter: what are some of the companies that are working with you guys? i remember when i spoke to you originally, it was a lot of current companies asking for this that happened to be in e-commerce. are there ? >> are from san francisco, we have gravity blankets, bev, those are names that have signed up in the last few weeks since the end of february. every day, we have new companies showing up. reporter: for those companies, why is there a priority to use

you guys versus whoever they were using before? what is your advantage? how are you monetizing that? >> the first thing is we can give them higher limits than they would get naturally. the bank is only looking for their financial history. we are looking at how they are currently doing. we can give much higher limits. the second thing is that they get 60 days in order to pay the bill. there are daily payments. whatever you buy today, you only pay 60 days from now. whatever you by tomorrow, you pay 61 days later. traditionally, you pay everything in one day of your statement. that gives them a lot of free cash flow to run their business. plus, our technology is much better. we have received matching technology to keep receipts easy to -- easier and invite users. >> at the same time, with things like loans that are pretty expensive, because of the way we do underwriting differently, we

provide a cheaper way of financing businesses. reporter: how are you monetizing that? >> we monetize through interchange, which is a fee we make when the company swipes the card. instead of charging interest, we monetize through that. reporter: got it. pedro, given your last company had done this before, what are some of the things you learned that you have taken into this into the risk profile part of it? >> i think understanding how e-commerce businesses work and what the concerns are was very helpful. in the previous company, we were doing the payment processing for them. we had to understand how the checkout process works and how their business functions. what are the things they have to buy on card and what are the biggest expenditures? when we came to brex, we decided to design the card specifically focusing on these companies that had to pay for inventory advertising shipping costs and all that. i think a lot of the insight on

how the companies operate came from a previous company by seeing those, and adapting all of that to the companies at brex. >> one of the biggest differentiators for brex is that we don't put them all in one bucket as a small business. they are all different. we try to deeply understand the business and build a product that is the best for them, to say, hey, this product works the same for everyone. emily: those are the brex cofounders with our own julie for heche. still ahead, searching -- pressure on the company ratcheting up. sitting down with us for an exclusive interview. this is bloomberg. ♪

♪ emily: huawei earnings surged 25% last year, even as the telecom faces a u.s. push to keep it out of next-generation

networks. tom mackenzie spoke exclusively to guo ping, one of the company's three rotating chairman, from shenzhen. >> i noticed the oversight board's report was issued last night. there are some things i would like to point out the first one is there isn't a single backdoor installed by any country in huawei's products. u.k. cyber security situation has not worsened since when he 17. i would like to say that huawei has the best cybersecurity record over the past 30 years, including recently when there were malicious cyberattacks, none of which had anything to do with huawei. we understand many global firms pay a lot of attention to cybersecurity and have raised the standards. they are looking for reliable results as well as reliable process. we work with other institutes and respect the results of the u.k.'s oversight board. we are voluntarily making the cybersecurity more trustworthy as well. we established a product and decided to invest $2 billion u.s. to make the process

trustworthy by providing the source code. reporter: it is a widely held views the now that australia and canada are facing retaliation from china for aligning with the u.s. when it comes to the case of huawei. do you think those retaliatory actions by beijing are beneficiary to your case or are they undermining huawei's case? >> i'm not the chinese government nor am i part of any other government, so i can't comment on their positions. we hope we can bring values to the countries that she was us and to our clients. our strategy is to help clients more successful in their businesses and help countries who choose us. that is our priority. reporter: the u.s.-china trade talks in beijing this week, do you think huawei is coming up in those discussions, and if president trump was to intervene on behalf of huawei, would you welcome that? >> i have also read this in various media and other sources, but i have no further knowledge

or information regarding this. reporter: it seems like a key and central part of this controversy around huawei comes down to trust. there's a question as to whether founders of the company, if they are members of the communist party and they signed and took the oath for the communist party of china, that they could turn around. can they really turn around to the government and leaders within the communist party and say, i am prepared to break my oath to the communist party, even if the government leaders are saying this is in the national security interest, this is in the interest of the country and the party to get access to your system's data or at least the possibility to spy on other nations? is that really a realistic proposal? >> from the perspective of the chinese government and huawei, it is rare and difficult to have a company like us who has the rare ability to compete globally. the government hopes that huawei

can generate more tax income and create more jobs for industry professionals. if you take inappropriate actions like the u.s. or australia, those actions compromise the chinese government plans to boost gdp and create jobs. we have over 90,000 employee shareholders. any bad actions from us would damage employee shareholders and go against management interest. huawei would never do that. we would never go against basic business principles. reporter: a strong set of earnings for 2018. earnings up about 25%. what are your projections for this year, and what are the biggest potential headwinds? is it the campaign by the u.s. against the company, or is it the china economic slowdown? >> when it comes to 2019, we are optimistic that we will hit double-digit growth, despite the uncertainties in the external environment, we are cautiously optimistic about growth in the 5g business. the future of the telecom business lies and opportunities that 5g and future generations of technologies can provide to

other industries. emily: guo ping of huawei. thank you so much for listening on this friday. have a wonderful weekend. we will see you back here on monday. this is bloomberg. ♪

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. ♪ >> hi, i'm roger teeter and believe me, i truly understand your back pain. in my 40's, i wrecked my back. on most days i could hardly get out of bed. i had to crawl into the shower to get hot water just to be able to stand up. until ireally worked was introduced to inversion.