♪ emily: i've emily chang in san francisco and this is "bloomberg technology." counting down to uber filing its ipo. what could be one of the 10 biggest listings of all time. shares of lyft have hit a new all-time low. snap is expected to lose users in the united states for the first time this year. willketer says instagram

pick them up. it's being called a triumph of modern astronomy. how 400 researchers contributed to the first-ever image of a lack whole. our top story -- of a black hole. uber is set to file for what could be the largest ride -- the largest ipo this year. about $10 billion, making one of the biggest public offerings ever in the united states. road to the public market has not been without speed bumps. uber'sake a look back at journey so far. 10 years ago, they launched uber elite black car service in san francisco. 10 years later, uber has a shortened name and has completed one billion rides. two years later, 5 billion. by 2014, and sales reached $495

million -- annual sales reached $495 million, making it one of the fastest growing startups ever. all that growth came with challenges. taxi drivers seriously protested expansion. reports of physical and sexual assault raised alarm bells about safety. 's toxic corporate culture was exposed. reports of sexual harassment led to the firing of over 20 top employees. they were accused of stealing secrets from a rival car service. ceo travisunder kalanick reached a breaking point and investors pushed out the once untouchable ceo. was broughtia ceo in to fix it. management,ew worked to rebuild trust.

it hasn't been an entirely smooth ride. uber's self-driving car pilot was involved in a fatal accident in arizona. today, drivers want better pay and benefits. continues towshahi push the bounds. uber eats generated a whopping $2.1 billion, 17% of uber's growth -- gross bookings in the third quarter of 2018. it is looking to launch flying taxis by 2020. as uber spends more to fuel global expansion, profitability remains a big concern. entering the public markets could give uber a rush of capital, but will lofty ambitions attract investors or cause them to hit the brakes? uber and stick with bring in gabe klein, former

commissioner for chicago and washington dc. gabe also an investor in uber's rival, lyft. i want to start on lyft, shares closing at $60 today. do you think the pessimism we ipo ising days after the warranted? no.: is the same company that was around 10 days ago and six years ago. we are seeing triple digit year-over-year growth. we are continuing to see a focus on urban consumer transportation. we are seeing an expansion into micro mobility with scooters and the purchase of bike share.

i am very bullish. i think you can't watch sort of day-to-day what is happening in the markets. emily: what about uber targeting a $120 billion valuation? , butinly bigger than lyft they are also losing a lot of money just like lyft. is that fair? gabe: last year, it was $76 billion, then $120 billion, now looking at $100 billion. i don't see what has changed materially from last year to this year aside from the shuttering of their autonomous vehicle which was really hemorrhaging cash, and of course the purchase of jump which is, i would say, a bright spot. i honestly don't quite understand the change in the valuation. i think you have to take into

account post mates and the host of other businesses that are in that space versus the duopoly of uber and lyft. 40, $50s uber eats a billion business? gabe: i don't think so. i think that is a commodities business. when you look at ride-hailing, it is complex in terms of the technology to create the marketplace the balance supply and demand. we do have a duopoly because it is so complex. i don't see that with uber eats. emily: lyft has been pushing, we ,re creating a greater future but there was a study done by the university of chicago that couldthat lyft and uber be responsible with putting more cars on the road in urban

centers and undermining public transportation. do you see a problem with that? gabe: i do. in places like manhattan, you have a tremendous amount of vehicles, up to 80,000 vehicles. if they are roving or dead-heading, as we say in the transportation space, that could have an effect on cities. getting multiple people into vehicles is very important. in boston, i think it was announced today, for logan airport, there's a push to charge more for individual trips and discount the taxation at the airport for multiple person trips. i think you will see that as you move to congestion pricing in cities, that there will be a real push toward non-single occupancy vehicle trips. emily: do consumers really want that? they have shared rides now and it certainly doesn't seem like it is the biggest portion of

their business. gabe: i don't think it is. i think that's going to change. i think that's where government regulation helps. i think pricing is hugely important. i think if you charge a modestly smaller amount for a multi-person trip, people are not going to do it. that was one of my complaints launched and uber multiperson lines. it is getting significantly cheaper. with the changes in taxation at airports and downtowns throughout the world, i think it will be much more tempting to share a ride. emily: what do you think is the biggest threat to their business given that getting from point a to point b, however you do it, is a commodity? gabe: i think that is an issue. some people say, the problem for over and lift now is that -- for uber and lyft is that autonomous

vehicles are a ways out. i think it is quite the opposite. i think you will see both uber prices toaise approach profitability and i think the real existential threat for them, ironically, was autonomous vehicles. neither of them are the leaders in those industries. once -- once waymo, cruze turn on those services. i think they are in a better competition with robo taxis, five to eight years out. emily: you have people betting on these cars thinking it will bring costs down. gabe: i am not one of those people. i believe you have to invest in them and think about whether people will continue to see these apps as sticky when they raise their prices by 20% to

30%. emily: gabe klein, cofounder of cityfi, thanks for stopping by. apple got a rare negative recommendation as hsbc lowered its rating on the stock to "reduce" from "hold." they said it could take some time for the digital services to get returns, and it did command the company for putting its money where its mouth is and raise the price target to $180 from $160. coming up, the chinese government maybe opening a door into cloud computing. we will discuss, next. if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s. come on sirius xm. this is bloomberg. ♪

take all forwinner the last two companies chasing a $10 billion department of defense cloud deal. amazon and microsoft of the last competitors standing. this, after the pentagon determined that the acquisition process for the contract wasn't tainted by alleged conflict of interest. the announcement for the winning bid is set for the middle of july. speaking of the cloud, in china, it is a tricky road for foreign operators. they are forced to license their company to domestic partners, store data on chinese soil. but u.s. and chinese regulators are looking at a compromise that could possibly do away with some

of those regulations. treasury secretary steven mnuchin told cnbc that both sides have looked at how to possibly enforce a trade deal. i want to bring in our bloomberg trade reporter. let's talk about what steven mnuchin said today. he told cnbc that the talks have been productive but that there are still issues. what are the issues? >> i think the issues are the same as those that we've been hearing about for some time, that is how in win does the u.s. remove tariffs in exchange for chinese concessions on structural reforms, big purchases of soybeans, natural gas, and so on, and secondly the enforcement piece. mnuchin said today that the enforcement piece was largely done, but we have got to get a little bit careful here. steve mnuchin has been out there beforehand saying that certain

elements of the deal were completed and it has proved to not be there quite yet. we have heard some skepticism on capitol hill, from chuck grassley, making exactly that point, that he wanted to hear this from bob lighthizer, not stephen mnuchin. he said the u.s. and china would open an enforcement office. >>that something we expected we have been trying to figure that out. lookingthizer has been at some structures. this is a key element of a trade deal. theynts to make sure that do live up to their commitments or else face some consequences for the tariffs. there have been some different mechanisms that have been talked about in terms of how that would work. chinese worry would be that

they were giving up some sovereignty. they would want some say in it. this structure sounds a lot like an embassy to me, is one thing that is being talked about. they have also talked about joint panels. aghthizer has talked about series of different meeting schedules where, every month, officials meet every quarter, twice a year ministers meet to review progress. we are still waiting for all of these details. sometimes when we hear raises more questions, like today, then what it answers. emily: meantime, chinese officials called a meeting with executives from amazon, apple, to talk about opening up the chinese market. how significant is this? >> very significant. it gets at the crux of previous

administration complaints about china, that it has closed off china and this potentially lucrative market in the digital sphere to outside competition, and that that has created these kind of behemoths like alibaba that has faced competition from the u.s.'s own behemoths like amazon. the cloud business is really kind of the plumbing for the 21st century economy, if you will. amazon web services, their cloud unit, microsoft, ibm can get in there and compete, that would be a huge opportunity for u.s. companies. it is a huge question again about the details. we will have to wait until we see these licenses get issued if they ever get issued, to understand the significance of anything that is negotiated. it is very clear, and i don't

, to keepone expected this thing in place called the great firewall of china. that the chinese are going to keep that in place and keep some data location requirements. the fact that the chinese are calling in the companies to talk about this is a sign that they are thinking seriously about that and that is important because it points to this deal, morenegotiation, being about substance than sometimes we've been led to believe. thanks so much for that update. coming up disney is prepping for its big push into video streaming, pouring roughly $2 billion a year into its new service. but will it pay off? bloomberg tech's livestreaming on twitter. check us out @technology.

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rumors,fter years of disney is expected to finally reveal the details of its new video streaming, disney plus, to investors on thursday. it is not their first attempt at a streaming service. the disney channel, which the company first introduced as a premium cable network similar to hbo. joining us from l.a., chris palmeri. the disney channel worked out well for them, correct? chris: it did, for decades.

originally, you had to subscribe to the disney channel. they were selling services so they had to give up some ad revenue when it put stuff on its own service. it took a while to catch on and the lesson really was that it offered a broad array of content, not just for the youngest kids, but content for older kids, teenagers. that's when things really took off, with those original shows. i think you will see a wide righty of programming right from the start with this new streaming service and big spending. emily: i know you and your team have been working hard to get any details on what this team will unveil. chris: it is amazing that they disclose the biggest acquisition , but when everyone wants to focus on is this service that hasn't even launched. when thist to know,

is launching, how much it will cost per month, they want to know whether there are targets for how many subscribers disney is anticipating. given their history, i doubt they would stick their neck out and offer that. they want a sense of how much the company is spending in how long those losses will continue. will be a lot of questions from analysts about the cost of all this. palmeri, thank you so much for stopping by. we will keep waiting for your new reporting on what's coming tomorrow. someone says 7 million electric cars will be on the road by 2025, adding that electrified transportation has reached an inflection point. >> we tried to do the old wayne gretzky thing, which is don't skate to where the puck is, skate to where the puck is going

to be. we try to skate right ahead of the puck. we work closely with these car companies, say, how many are you going to be deploying in the united states, where will you be deploying them, and then people -- and then we try to go in deployed there? -- go and deploy there. nissan is a partner of ours, so they tell us where they are going to sell cars and we have an incentive program with their drivers so when they buy an ev, they get a bucket of charging. >> it raises the question, who will be responsible for driving that, car companies, current oil companies who already have fuel stations, utilities? cathy: the driver overall is that it is a good technology. i've never met a person who has driven an electric car that doesn't love it.

it is the pace of innovation. that is number one. number two, we have environmental imperatives that have been around for a while, reducing all kinds of air pollution and reducing carbon pollution. i think the car companies see the nexus of those two things and they are pushing forward. the car companies have announced $300 billion they are putting toward electrification of their platforms. that is a significant amount of money. then what you see is the oil companies, i think the progressive oil companies saying, we need to diversify not just be the supplier of internal combustion engines. total, shell, bp investing in electrification infrastructure. of evgo.thy zoi there marketers say snap out of it. new research predicts that

snapchat could lose new users in the united states for the first time. snap says that model is flawed. later in the show, remember,'s -- member spacex's first falcon heavy launch that sent a tesla into space? another one is ready to launch. this is bloomberg. ♪

this is bloomberg technology. in the last week, we have talked a lot about snap. one industry analyst says snapchat's efforts to broaden his audience won't revive growth in the short term. they say snapchat will lose users and the u.s. for the first time this month. is our us to discuss analyst.

had they come to this conclusion? lacks they have a methodology for from snapchat. the comparisons are different. a marketer is looking at monthly active users. snapchat reports its daily active user base. in marketer is saying that based on their projections, growth will slow in the u.s. for the first time this year. they are also predicting that untilwill flat lined up 2023. a snapchat disputes this and points to their own data which shows the daily active users are not supposed to decline in the first quarter of 2019 but they do not get projections as far out as he marketer does. regardless, it shows that the recent changes mentioned before in terms of gaming, revamping the app, finally having a redesigned may not ask and overall audience pie in the near future. >> the biggest thing is the

delta between their biggest prediction and were they were now. they were predicting 6% growth this year now they are going to -3%. the fulleen looking at social media space and it is hard to see how any social media company is going to experience user growth at this time. they are fully penetrated. it is about how to monetize those users. you don't necessarily believe that the users could swing that much but you don't think users are going to grow? lacks i think it is going to be hard to see user growth. facebook and twitter have flatlined for the last couple of years. if you look at snap, they have fully penetrated the generation and they are struggling to capture millennials, gen xers and baby boomers. but i doee user growth see how they monetize the users. they are low in the ranking as

for how much revenue they are getting per user. statementleased a saying the methodology of you marketer's forecast is flawed. we do not anticipate a sequential decline. who do we believe? speaking, the trends do a line. we are seeing snapchat's own a data showing the user growth is barely growing. >> a marketer is saying that instagram is going to pick up. >> instagram has directly copied snapchat's most popular feature, stories. there was a big drop in usage for snapchat after that announcement.

there seems to be too much excitement to send when it comes to snapchat. the things they were talking about have yet to show proof that they have been successful. for example, the in game app features -- in at game features. snapchat isn't out of the woods yet. we are seeing that they are really focusing on drilling down on this core demographic trying to get those users monetize better but they seem to have given up on the older demographic. this,er pessimism about does that extend to instagram? at every have to look u.s. based social media and say this is a fully penetrated market. look atferent if you asia where there is not much penetration. in the u.s., you have all internet penetration,. phone penetration.

growth is going to be at the speed of population growth. we remain bullish on those areas. they are doing some interesting things about how to monetize those users that they do have. i just a see them being able to move up the chain into millennials and gen xers anytime soon. >> over the last week we have seen analysts upgrade their views including someone of rbc capital two days ago. he said he believes snap is evident flexion point. now if they truly have fixed their android problem, they are going to open up a broader range of users. you will see revenue growth accelerate. losses will come down in stock will go higher. emily: we're focused here on the u.s..

international users are android users. what do snaps picture look like in the international market and have they fixed their android problem? >> they have only recently announced that there is going to be a new revamped version. if they do get it correctly, they do have a huge global market opportunity. littleaces it may be a bit too late. i have already lost those users to competing platforms. in terms of analyst sentiment, it is fair to say that 2018 was rock bottom snapchat. everything that could have gone wrong did go wrong. now analysts are starting to track this maturity, this growing desire to make money. to be a profitable going -- growing company. to have a little bit less executive turnover. you think that snap will remain relevant in the conversation? we have heard about users who

have fallen off. president trump tweets on twitter every day and it is a huge part of the news cycle. it keeps twitter feeling revenant. -- relevant. good point about twitter because i think the trump effect on twitter is it brought into -- twitter into a lot of people's lives who are not using it. snapchat hasn't had that moment outside of the gender the generation. be something to that happens on snap and you will have to be on snap only to see it. that is a great upside case of it happens that don't know if orwell it will have -- if or when it will happen. emily: thank you both. meantime, amazon will start accepting cash at its convenience stores. there has been criticism that going cashless discriminates

customers.er income amazon has only 10 go stores in three cities but there could be as many as 3000. coming up, no longer just a something in a galaxy far far away. we will talk about how we captured an image of something so strong that nothing can escape it. we are talking about what coals. this is bloomberg. ♪

emily: spacex is readying another lunch on wednesday. this one will be for the first paying customer of the rocket. who is it? a satellite services provider from saudi arabia. let's get to dallas where our reporter is standing by. this is a big milestone. >> it is for spacex. this is the first time they are flying the falcon heavy with a paying customer and it is not just for the testing and pr. is bringing in money. it is an important addition to their product lineup because spacex can now say we have for customers that have a large payload. down the road, it opens them up for more government business. what happens next?

how many more customers could we see? limited universe of players with satellites this large. that is not a very large and growing business. it is steady and profitable. you would be counting on the dod which does a lot of classified spy satellites and other technology. interesting things about space force that the president is trying to get integrated and through congress is that you can see a lot more launches in theory if that takes off. that could potentially mean more hardware that goes into space. if spacex is working toward launching its first human into space, what is the timeline on that? >> that is going to be later this year. there are still some significant reviews that need to happen.

before nasa puts their astronauts on that. with thed be commercial crew program. the falcon heavy today is not a rated for humans. we will not see any nasa work on that. elon musk has said that in the a larger starship project is not meeting the deadline said he has set. we could potentially see them get falcon heavy rated for human passengers but that is still something pretty far off. emily: we know elon musk likes to make ambitious deadlines for himself. what are the other milestones you are going to be watching for? big one for spacex is when they fly people. this is a critically important contract with nasa.

he started the company because he wants to go to mars. the work they do now is for the space exploration in the future. i think that is what everybody at spacex is working toward now is to fly people safely and show that it is just the next thing on the list that they are going to cross off. >> thank you so much. speaking of deep space, it is being called a breakthrough for humanity and something that pushes the boundaries of science. i am talking about the first ever glimpse of a black hole in space. you are looking at a black hole at the center of a massive some 50 5 million light-years away from us. here on earth. up until this point, a blackhole was something we only saw in simulation. took eight telescopes

scattered around the world from hawaii to antarctica and beyond to make this possible. to tell us more, we have a caltech professor. >> the kind you only hear about in harry potter novels comic books. emily: here are some questions from my son. where did it come from? where do black holes come from? >> these are the best questions. this is exactly what we talk

about in astronomy. where do black holes come from and everyone has their own opinions. this is one of the observations that we think will help us figure this out. the only way to get a big blackhole is to put together a bunch of little things. this thing is billions of times heavier than the earth or than the sun which is thousands of times heavier than the earth. it is a lot of things have smashed together. one of the things we really don't know is do black holes make delicacies or do galaxies make black holes? for the heaviest ones, one of the opinions is that when these are flying around in the center of the galaxy, it is really crowded. occasional pull tracks on each other and eventually slows things down and they all fall down and land on the blackhole. part of the reason you see all of this glowing orange material around the picture of the blackhole is it is the friction of these gases rubbing together

as they fly at the speed of light and just rubbing together just like rubbing your hands makes them hot. if you have a bunch of gas together at the speed of light, it generates x-rays and gamma rays and radiation. that is why we can see it from so far. emily: here is another question from my son. why can't they just send a drone in there to take pictures? >> we will do that someday i hope. this is a picture taking radio unusual and not something we are used to. it is something like when you see in the movies, people use sonar or radar to figure out what is going on. kind ofdifferent radiation from light. it is just as good and in this ite, the people who observed use it because they are able to put telescopes on different sides of the earth. it is a little bit like something would look if it was

the size of the earth. why is it so hard? a blackhole is about as small of a thing is you can make as far as we know from physics. suns andok 5 billion smash them together until they completely collapsed, this is about the smallest thing you can make from that much mass. it is so far away. it is millions and millions of light-years away. we think it is something small like when you see an airplane in the sky, that is small. this thing is millions and millions of times further away than the moon. look at, it ise something like half a degree across in terms of angle. it is hundreds of times further with me earth than it takes to get from l.a. to new york. if you do the trick hundred times, that is how far the moon is. you have to do that trick hundreds of billions of times to

get as far away as this blackhole is. that's basically what i told him, for sure. is, what istion next? what's the next big discovery were working towards when it comes to black holes? >> i was wondering about this last night. when i was guessing with the image will look like. stephen hawking brought up this problem in 1974. he said we don't know what the border of a blackhole is going to look like. predictionslot of about radiation from the border of the blackhole. what happens when we think about black holes on a chalkboard, the laws of physics don't make sense.

there is a clash between quantum physics and einstein physics. we don't know how to put that together. do it,k finally when we we will find out that there is something new and exciting going on at the border of a blackhole. the next efforts will be adding more telescopes to make this image better. experiments which will look for gravitational waves. years,pefully in several we will have another space antenna to look for another kind of gravitational signal from supermassive black holes. you have the to the curiosity of children and adults everywhere. thank you so much for joining us. is looking, google for a new moneymaker. we will talk about where the company expects to find a fresh source of cash.

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for more than 15 years, google maps has been free of charge. it now, it could be a moneymaker. google has been slowly experimenting with ads. as google's search business slows, consumers might start to see more ads on maps. how would this work? what i'm sure a lot of people have started to see a few ads here and there. there are obvious once assert -- such as if you search for coffee shops, a list comes up.

a company could pay to be at the top of that list. the other way is for the pin that shows a coffee shop to be a different color. in this case purple and green will be ads in the map searches. there is a whole host of other ways that you can imagine them doing this. will consumers except this after it being ad free? >> i came to this story because as a consumer, i started seeing at the maps and i love using maps all the time. i always felt that it was sort of a great piece of infrastructure, a utility that i could use to get around. google spends billions of dollars building maps. mapping the entire world to a level of detail that is incredible. it is a definite transition from

something we were just using for driving directions to something we are using to find our way through the city. when i go traveling, i save a lot of pins about restaurants of things i want to see. point, they are at the point where we're going to use that if there are a few ads or not. they are really going to start turning on the screws here. emily: how much money could google make from this? >> that is a good question. they are making billions of dollars per quarter on search ads. when you think about mobile search, it is hard to see no more searches without ants crawling -- crawling out. as you said earlier, they have been going slowly on this. they don't want to spook people off. i don't want to push back against consumers and what they like area there is a lot of room

to grow here. emily: when do you think we will see at the greater volume? >> a will continue to go slowly. company iske this under tremendous pressure for investors to wrap up money. definitely expect this to continue. five years from now, we will look back and maps will look different. thank you for bringing us that story. at that does it for this addition of bloomberg technology. we are live streaming on twitter. at tictoc follow us on twitter. this is bloomberg. ♪

>> welcome to daybreak australia. we are counting down to asia's major market open. >> these are the top stories. a brexit extension of up to 12 months, however france says a link deposit should not be taken for granted area policymakers grappling with