i'm carol massar in for emily chank. this is bloomberg technology. today we're at reebok headquarters. we'll hear how innovation is

driving product design. we'll look at the future of professional sports and facebook rolling out a new user to protect user privacy. will it be at the expense of its ad sale? they bought the maker of the sneaker for near nearly $4 billion. adidas is looking for reebok to expand. one innovation, liquid technology hoping to make shoes faster and cheaper. >> the footwear industry seeing a jump-start in technology. nike's hyper adapt made self-lation shoes a reality. their future craft introduced 3-d printing with comfort. now their factory is making

ntricate lightweight designs using cotton and corn. bill mcginn is is head of reebok's future. >> it is a way to get away from molds like every shoe of the market does and draw the bottom of the shoe instead. this is like 3-d printing but faster. >> it is a way to keep up with younger consumers. >> the goal is to go from we're going to make a billion pair officer one shoe and hope everyone likes it. that was the old model. now we're moving to smaller batches. as you get tighter and tighter, you get closer and closer to custom. >> how is that a benefit to reebok? what are the benefits to new manufacturing? >> you can react much more quickly to consumers. >> reebok is not alone. adidas and rivals nike and

underarmour have moved into the 3-d printed sneaker game. factory k's liquid material uses computer software and robotics to draw shoes in three dimensions. >> we're faster than the old model now. each unit takes a few minutes to put together. >> they bought reebok in 2006 for $3.8 billion. in 2010 they signed a artnership with cross fit. they said they are commitsed to the future of reebok and moved its headquarters from the boston suburbs to downtown this year. >> the spirit of the company has changed dramatically. we were always a very established shoe brand.

i think the whole place is feeling like a start-up. >> it does feel like a start-up. breathing new life into its classic white leather sneaker. > and for more on reebok let's bring in barbara heathersburger. i want to talk about because you are known for footwear and so much more in terms of the fitness industry. what has been so front and center is the u.s.-china trade negotiations. how are you as a company and who sell around the world see those headlines? i think that is important to assess where manufacturing is happening for so many different companies. >> i think that is a very good question. that is on top of the mind for so many people. actually we're in a fortunate situation where part of the

adidas group and we have a very diversified strategy. >> you have been doing that for a while. diversifying your supply chain. >> this makes us less didn't on the portion that we are producing in china. >> ok. not so much of an issue. >> not so much of an issue. >> having said that, china is an important market. you sell around the world. i'm curious as you ino vate ew products. you have sewn dramatic growth. talk to me about that. > apparel plays an important role. a functional product. an innovative product. we launched last year in ugust. we talk to women despite the

fact there that there are a lot of bras outs there and they are either feeling pain while they work out or they are not comfortable at all. we reached out and came out with the first innovative bra that combines the second skin feeling with the support you need working out. >> you brought over a model. very thick, clear solution. it is a sheer thickening fluid. when you press it, it is fluid and elastic. >> how much of what you're doing in terms of apparel, it is not just about design. it is about that as well but more about technology, different fabrics. really exploring that to introduce new products. >> i'm in the industry now for 25 years. over the last 10 years, there has been a gigantic leap in

the innovations in apparel. a lort it is because of the manufacturing capabilities that we have today but also of the innovations that we're seeing on the fabric side and it is our job is to find out what the consumer really wants so everything starts with the consumer and then we need to bring it back and find new ways, address it by creating new fabrics, finding new suppliers or in the case of the bra go outside the industry to come back to find the solution. >> the does that mean you're working with a lot of chemical companies, companies creating material. when we all started working out, it was the same, similar stretchy fabric. what is the future of fitness apparel? >> it is going much more diversified. it is working with chemical companies but also working eally with the things to

create those fabrics in order to create the right come popetses and ingredients that solve the problem. it will be more in the 2350u6 about finding those fabrics that allow you to personalize your garment to your activity to your body. >> in terms of the apparel industry, there is a lot of competitors out there. you have grown that side of the business over the past four years by double digits. do you continue to see that growth? >> yes. luckily. there is a lot of competition and a lot of opportunities still out there. the fitness industry and the bigger trend will be there to stay and consumers are just not only looking for product that they can work out in, they are also looking for product that they can wear the other 10 hours of the day. while they are maybe out with their children playing in the playground or even commuting to work. >> we're living in those

clothes. we started talking about china. you had your first fashion show in shanghai and created is it a creation center. you either selling into china or europe or some other market, the u.s. market, are you designing specifically for that customer? >> we are looking very closely into the regional specific needs. it may be as simple as creating product and then making sure that we have asian or japanese sizing vrable available but also looking specifically for big markets like china into what are the product needs specifically for this market. that's why we opened our creation center there and are working with the shanghai center to make sure we are not duplicating things and also that we are max niesing innovations. >> cardi b to have as somebody you partnered with.

social influence or social media, how sporpt that in term of getting your message and brand out? >> it is part of our approach to storytelling. we want to make sure that the consumer not just buys a great product and loves it but also has an emotional connection. i have probably with millions of other products in the reebok history and this is important for us. this is what is the long lasting impact that you can make with the consume . cardi is helping us do that. >> thank you so much. >> pleasure to be with you here. >> we really appreciate it. coming up next, we'll discuss how legislation has impacted fantasy sports. we'll have the draftkings c.e.o. coming up. this is bloomberg. ♪

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>> welcome back to bloomberg technology. in boston, i'm carol massar. seven states have since joined nevada for offering legal sports betting, and daily sports fantasy platform draftkings is receiving the benefits. joining us now is ceo and cofounder of draftkings, jason robin. so nice to talk to you again. jason: nice to talk again as well. carol: can you believe it has een just one year? jason: i can't believe it. a lot has happened.

feels like more than a year. carol: what has happened? what have you learned since the legalization? jason: it has been exciting. what we learned, there is a lot that is similar but also a lot of differences from fantasy sports product and how customers respond. carol: is it tougher? jason: i was surprised at how many new customers came on. we thought it would be mostly overlap. about half of our customers in new jersey are brand-new to the platform. we certainly advertise, so i'm sure they knew about the fantasy sports product. carol: is it a different demographic? jason: a little younger, but otherwise quite a similar demographic. carol: so talk to us about the stickiness, about retention rates. you get somebody on your platform, and they keep coming back? jason: it is really seasonal, because it is driven by the sporting calendar. on the fantasy product, we retain almost 80% of customers year to year. it is hard to tell. after the super bowl there is a big drop off, and it picks up again for march madness. hard to tell what the troop retention rate is. carol: what did you see for

those big events? the super bowl and march madness? jason: the super bowl was by far the biggest day ever. it was huge. we had an unbelievable amount of participation. march madness was a little spread out. overall we had more activity for march madness than in the super bowl, but over the course of several games instead of one. carol: tell me about esports. i'm curious, a year in, what do you think of the potential? jason: esports is a product we had in fantasy for several years. it has a very avid following, and we have cool integrations where you can ask he watched the contests on draft kings. i think it has a lot of potential. it's something that unfortunately in new jersey is currently prohibited on the betting side, so we can't offer esports betting, but i am hopeful over time that will be possible,, because i think it would be a great betting product. carol: what is standing in the ay of nationwide adoption of

legalized betting, online betting? jason: i think it will just take time, a state legislative thing. they all have a different process. some have to go to the ballots. carol: what is holding them back? probably everyone would like the additional revenue. jason: i don't think a lot of are being held back. just government is a slow process, and even after they pass laws, and four states in the last two weeks, tennessee, iowa, indiana and colorado. they all have to still go through a process of issuing regulations and licenses. new jersey has been an outlier. west virginia and pennsylvania passed in q2 last year and are just getting operators online in the next quarter or two, so a year later when they finally get them. carol: so it takes a while. how far are we from all 50 states? being onboard? jason: i don't know about all 50. some states will choose not to for a very long time. i think we will get a very large percentage of the

country within 4-5 years, 30-plus states. carol: i'm curious about mobile. you launched the first mobile app in new jersey, and what additional opportunities do you see with mobile? jason: mobile is where almost all the volume is in new jersey. we have a little coming in from retail, atlantic city, but it is so convenient for people to use mobile devices, which you can use from anywhere in the state. it is not just us. in new jersey overall about 85% of revenue comes from mobile now, so it is really critical, and also how most of the black market operates today. carol: which is nice to know. [laughter] jason: it is what people want to go. carol: where people operate. i'm also curious about competition. fox getting into this. how do you see that. the more the merrier, or competition? jason: we always knew this would be competitive. carol: a big media name. jason: i think it is a great thing, and i will tell you why. it mainstreams it in a way we never could on our own, and i think it will cause other interesting partnership

opportunities to emerge. as we know, when one big company makes a move, others start moving faster. a lot of the media companies have been figuring out their strategy, and now you will see real partnerships. carol: could you anticipate more media names doing the same? jason: that is a gas. -- is a guess. i don't have any reason to believe other than every market i see, when one big competitor jumps, at least some others start moving. arol: at one point you tried to get together with fanduel, and that was blocked by regulars. you have a partnership with caesar's, and they took an equity stake and will get some of your gambling revenue. are you looking to do more with them, a bigger partnership at one point? jason: we have a lot of really exciting things we can do with caesar's. they have an amazing set of resort properties,, and there is a lot we can do over time with them as a partner. we are also partnering with a number of great casino operators, trying to partner with different media companies.

disney owns a stake in our company. that is interesting to us. we think that having multiple relationships is important, and caesar's is a really good one. carol: do you think ultimately you can stay solo, go it alone and have partnerships, or ultimately will you hook up with somebody else as there is more competition? jason: whatever makes sense is what we will do. right now, i feel that our best route is to stay solo. that can change over time. markets consolidate as time goes on. but right now, we have an amazing opportunity in front of us, growing like crazy. 60% growth in q1. carol: on revenue? jason: yes. we have a big opportunity in front of us, and right now we think our best bet is to stay alone. carol: jason, always good to check in with you. jason: thank you for having me. carol: bitcoin see -- draftkings ceo and founder jason robin joining us. facebook is looking to integrate more privacy into the platform, but they could face backlash from advertisers. that story is next. this is bloomberg.

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and l: i'm carol massar, this is "bloomberg technology" live from boston this week. facebook is close to rolling out a long-awaited privacy feature, but issued a warning to advertisers that improved privacy will have at least one key trade-off, weaker targeting. kurt wegner has the latest. tell us about this new privacy feature, clear history. what is it about? kurt: this is something that facebook announced over a year ago.

it allows users to basically take their browsing history from around the web and disconnected from their facebook profiles. right now, facebook knows where most people travel, what websites they are looking at, and uses that information to show them targeted ads. the company says when the feature rolls out, you will be able to disconnect those two data sets. kurt: how easy is it for users to actually use this new feature to protect their browsing data? kurt: that will be the question. since it hasn't rolled out yet, we don't know what it will look like. will it be really prominent? will people be easily able to disconnect this, or will facebook make it a lot more complicated? my guess is it will be buried somewhere. there are so many features on facebook right now. it will probably be one of the things you have to hunt and

find, and as a result i am not sure how many people will use that. but we don't know that until it officially rolls out, theoretically sometime soon. carol: when i read this story, i thought, what does this do to the mobile or search advertising financial model? could it potentially upend it and impact a lot of other companies? kurt: i guess you could imagine that if this does become a really popular feature and everyone suddenly says, whoa, we don't want facebook or others to be following us around the web, showing us ads, maybe this could put pressure on other advertising businesses to offer a similar service. again, i'd be pretty shocked. there is a lot of uproar around privacy stuff, and then a lot of people don't actually follow through and opt out of things. so unless that really happens, this is more a small change for facebook, but something they want to warn advertisers about. carol: how we heard anything yet from the advertising industry about the impact, or how they see this? kurt: well, because this was announced over a year ago, at

this point it is just kind of waiting and waiting for the finish line to get here. so there is not a lot being said right now, but at the time there was a lot of question marks. like, if people use this, it certainly could have an impact if you are a direct response advertiser and want to be retargeting everybody who comes to your website on facebook. this will impact you. but if people aren't using it, it really doesn't matter, and we won't know until it is rolled out. carol: another story i want to ask you about, of course about whatsapp, the chat app owned by facebook as well. a spyware hacking report. what do we know? what is the latest? there was a flurry of stories today. urt: whatsapp said there was a hack, a third-party organization that kind of offers spyware technology for government clients was able to get into whatsapp.

the third-party company says, we don't know who exactly was using the technology to do it, but whatsapp came out and admitted it happened. they encourage people to update their whatsapp app to make sure they have the latest software on their phone, which includes some sort of protection from the hack. we don't know how many people are impacted, but definitely a concern. carol: and the company involved, nso software, a company in israel, this is not the first time they have been on everybody's radar in terms of concerns? kurt: yeah. they do have a bit of a reputation for this kind of thing. like i said, they often have government clients. so anytime you have government sing the technology to surveilled people, and they say it is used more for crime-fighting and things like that, but you can imagine there's a fine line to walk there looking at someone' messagess for a potential criminal reason versus just

looking to be looking. so we heard from facebook, they want this to be wrapped up soon. carol: all right, we will leave it there. bloomberg's kurt wegner. we're going to take a break. coming up, we speak to the cochairmen of bain capital, stephen pagliuca. of bain capit stephen pagliuca.

♪ carol: welcome back to a special edition of bloomberg technology live from reebok's headquarters in boston. rising trade tensions between the u.s. and china have market watchers on edge. federal reserve bank of new york president john williams explained the downside of raising tariffs earlier on bloomberg tv. tariffs, it isf like a supply shock. one will boost inflation by a few tenths. it will effect demand but also it has negative effects on the

value chains and how the economic system works. carol: our next guest is the cochairman of one of the world's leading private investment firms, baincapital and co-owner of the legendary nba team, the celtics. stephen pagliuca joins us now. so nice to see you. i want to talk to you front and center, we have been obsessed by the u.s.-china trade talks, what seems to be may be posturing. how do you see it? stephen: we have had a trade imbalance for 25 or 30 years. initially, when you had emerging markets it was a good thing. people were brought out of poverty because of local trade, businesses have prospered but now they are not emerging anymore and it is really a time to rebalance so it is a more fair system. that is what is happening. carol: you have investments in china.

carl was onrious, earlier saying china is not our friend. how do you see the chinese market in terms of transparency and where they are positioning themselves? stephen: we have had a lot of success in the chinese markets, they crossed over to become a service economy. for many years it was driven by exports and manufacturing. now it is a services economy. we have not been that affected, and won't be that affect did by the trade issues. it is more of a global issue. if you think about it, 500 billion of goods comes into china from the u.s., 100 billion goes out, that is a big imbalance. obviously there should be rebalancing. i hope rebalancing, not retrenchment. there could be negative consequences for each side. what does it rebalancing mean, how do we need to rebalance for china? stephen: we need to rebalance of them taking more of our goods,

having similar things on patents, protection of software. carol: do you think we can get that? in terms of enforcement of that? stephen: they have come a long way and financial services can take control positions in china. they realize to be on a global stage they will have to have the same kind of rules as western economies. we have to negotiate and come to the middle. it is too important for both economies not to get that done. carol: these are two individuals, president trump and i who both like to win. will that be problematic in terms of getting a deal done? stephen: they are both strong leaders and deal breakers and will recognize it is bad for each country to be in this situation. i am hoping that cooler minds will prevail. they are good leaders. they are trying to get something good done for each country. they will come to the market. carol: on the market volatility,

do you attribute that to u.s.-china trade negotiations is there something fundamentally going on in our market economy? stephen: the good news is we are at record low unemployment area puts u.s. in a strong position and not much inflation. i think it is a strong negotiating position. the markets are probably as high as they have been. we have had an 11 year expansion. so there probably will be some kind of correction or settling. right now the business we are in, economies are doing well. carol: in terms of the companies under the bane empire, have they been impacted in terms of u.s.-china trade? stephen: all of the companies have looked at changing the supply chain if it has to happen, if the cost of goods are going up, most of corporate america has gotten out ahead of

this because it has been going on for a couple of years. as soon as this started to go on, our companies work with our folks to develop action plans. how do you make it work economically? carol: they haven't switched yet? stephen: they are prepared to switch. many of them are diversified. there are many other countries involved in the global supply chain. companies have the flexibility to shift their lines. the companies are quick and nimble in the u.s. so they will get through this. i would rather not have the trade war or tariffs and have it be settled but companies will be fine. carol: we have been captured by the uber ipo. there were a lot of stories about what did morgan stanley get wrong in terms of bringing the company to market? did morgan stanley overvalue the company? [speaking simultaneously] stephen: they came out at the low end of the range. i don't know if i would blame anything on morgan stanley. i think it was a well done offering, but we had this

volatility with trade, we had market that is volatile in general because it is at an all-time high so anything to do with trade or political tensions seems to affect the market in the short-term. remember when google went public, google took a beating and went way down. carol: facebook too. stephen: there will be some volatility in these tech offerings. they got added at a choppy time in the market. carol: i am curious about the private equity environment, how you see it. there is a lot of cash. what do you think of valuations right now in terms of the pe deals? stephen: valuations are high. i have a question on too much money chasing deals in the 1980's, 1990's, 2000's -- i thought they were all true, but baincapital has grown from $36 million under management in 1984 to $205 million today. and they are some of the highest returning funds we have had.

why? it's because private equity really is a great business model. it comes in and tries to transform businesses. so for the model has proven to global, help mergers and acquisitions, companies be efficient, the whole world has changed in terms of private equity and terms of the value being added by baincapital which was founded on the principle of taking consulting skills and bringing greatness. carol: what are the areas you are looking at that you are finding interesting? stephen: we view this as a needle in a haystack, proceed with caution in these frothy markets. we have a team of 1000 people looking at thousands of deals and we have kind of covered the waterfront. in the last 10 years we have become specialists in -- we have had a big technology practice so we have reorganized to have vertical markets which include technology, health care, consumer retail, industrial, and financial services. we work together as a team to

look at all those opportunities. with hundredsart of opportunities, thousands of opportunities per year. a real estateated last year and raised mortgage rates about $1 billion. did you raise that mark? stephen: it was a fantastic situation. harvard wanted to get out of the direct business. they had a fantastic group, only three miles away from us. dan cummings and the entire team came over. one day they were at harvard, the next day we had offers -- office space and we were at bain capital. it was seamless. they have focused on some great growth segments in real estate such as medical offices, college dorm facilities, biotech, so they have been successful and we are proud to have them be part of the baincapital family. carol: i have got to ask you about sports. everybody is going to yell at me. i'm curious, sorry you guys are done for the season.

what did you learn this season leading up to the playoffs? stephen: it is hard to have the last playoff game and not coming back because you think it will go forever. we had a great team, great coach and the ball didn't bounce our way this year. the credit goes to milwaukee for -- milwaukee, who i think could win the entire nba. he is an incredible player. the future is bright, we will have up to four first-round draft picks. they have a good young crew. great coach, great general manager. the future is bright for our team, but today the ball didn't bounce our way. carol: it is the way it goes sometimes. stephen: i watched the end of toronto-philadelphia and a long shot from way out as time expired was going -- i had visions back to my high school days of that happening to me, standing and watching the ball go in and your season is over. it's terrible. irving,ell me about mr.

will he be back with the team? stephen: we can't talk about that. carol: i am curious about sports betting. how do you think -- you have had an announcement. how will that change the landscape? stephen: it is really out there in europe, happening there are so we are behind in that. i think it needs regulation, the leagues have to be on top of everything to make sure it is true but it will create fan interest. carol: do the leagues have a piece of the action? stephen: they will participate by getting more interest in the games. it will bring people into watch those games, what basket is scored and what the scores are. anything that causes more eyeballs, it will really add more excitement. carol: thank you so much. good luck next season. stephen pagliuca joining us. coming up next after a quick

break, uber's struggle, raising new questions. arotech ipo's overhyped? we will talk more about that coming up. this is bloomberg. ♪

carol: welcome back to bloomberg technology. uber turned positive in tuesday's session but the stock is below its ipo price of $42. that is raising questions about the company's valuation as well as the handling of its ipo. someone who knows a lot about startup evaluation. they are no stranger to the ipo

tech landscape. they someone of their own investments hit the market, we are talking about pinterest. it is up 53%. we call that a good ipo. i want to talk to you about a lot of things. let's talk about uber. how do you see that? what happened? did they price it wrong? you understand this market, and you understand valuation. >> sort of. uber is very special. i ubered over here. carol: i use it like three or four times. >> it is a new verb. it is a rare thing in the consumer world. everybody has an opinion about the enormous value of that company. it is also a really special company in terms of the historic levels of burn and you could argue they didn't do enough job telling all of us what they were doing with that spend. there are questions on if they are investing in short-term gains or long-term.

we did not have a ton of information. carol: with a company that comes out of the gates, this is a company that has been around for 10 years, they have also got bankers who are advising them. do you blame the bankers are not helping not tell the story accurately? kent: if you step back in 10 years the company created the $65 billion of enterprise value, so it is unprecedented with a couple of exceptions. who knows what people project in terms of the long-term value. you could argue they didn't arm public investors with enough information to be certain that this multi-hundred billion dollar potential outcome was there. carol: do you think this is somehow impacting longer-term or maybe even for the rest of the year, the market? beyond me, different type of company. kent: this is more of an uber story. there are a host of companies, we talk about pinterest that went public recently.

carol: and it has done so well. kent: done incredibly well and they have predictable revenues and visible efficiency. people understand how those businesses are creating value. there is a pipeline of private companies we look at where we understand how those businesses are working and it will be easier to sell. carol: what about when you have a company that has been around for a decade but still not making money? is it problematic? kent: some people thought so. the question is, how are they investing that money and is it rational? are they getting a rational return? if you read the uber f1, it was not clear. my gut says i will uber to the airport for the rest of my life, this business will be around forever. if it is worth $350 billion or $50 billion it is hard to say. carol: tell me how you are investing your money. where you are finding investing opportunities? consumer. kent: i spend half my life looking for the next uber ipo,

bellyflops aside. that is a really, really hard thing to do. if you think of yourself as a consumer, how many things have come into your household in the last year or two. it is a handful. we call these earthquakes be a -- earthquakes, we spend our time looking for these but you don't know where the next one will happen. they happen fast and are rare. we listen in all of the obvious places, silicon valley, new york, boston, then we have to be prepared to pounce when we see them. a lot of what you have seen with incredibly fast rises in valuation of consumer facing companies is because investors have figured out that these special phenomenons don't happen all the time. they will pay all most any price. carol: where are you guys? toast is in the restaurant space, how is that going and where? kent: we look for generally radical market fit. toast is a restaurant software

company that entered the space with a bunch of legacy. this is a cloud-based terminal so it is like a thin tablet that comes in and is updated by the software engineers and has blown the competition away. that is an easy one. we saw the traction when that company was hitting the market and we jumped in. we try to think systematically about every -- every element of the consumer's life including the businesses they interact with. you go into restaurants, you go into dental offices, you go into hospitals and think about the technology that is consumer facing that might have an enterprise software model. carol: we just have about 45 seconds left. when we think about consumer space, what is something we are not discussing now but in five years will be ubiquitous? kent: hardware has gotten a bad name historically with investors. i think we are seeing incredible innovations with consumer hardware in robotics and we could see many new purpose built hardware devices that have ubiquitous adoption. that is one we are looking for

as a boston element. i invested in a company that had like the best watercooler. like steve jobs designed a watercooler. it is this incredible device that consumers crave -- rave about. that is consumer stuff i think will become part of our life. carol: thank you so much. really appreciate the time. coming up we will talk the future of mobility and competition from uber with the president of zip car. this is bloomberg. ♪

carol: before uber there was a zip car. the car sharing service launched in 2007 in boston. i caught up with the president and discussed operating in the city. >> we are based in the innovation district which is where the tech hub is. the vibrant community of companies, people has been a huge success for us. on top of that, for us, the most

important thing is people and talents. we are lucky because we have access to great technology companies in boston but also top universities. carol: boston has got to be a great test lab because you think a lot about urban planning and the urban environment. >> absolutely. it is one of those cities that is growing fast but also a good size where there is lots of testing. you see mobility companies being based in boston and doing tons of testing and it is emerging. so it is really exciting. carol: i have got to ask about the demographics of zip car today. it floored me when i went back to do research, 20 years this company has been around. i remember when it was introduced. tell me a little bit about what is your typical zip car user today. tell me about your top and bottom line growth and user retention. tracey: everyone thinks we are a millennial brand because it is so fun and innovative but we actually have members that range from 18 years old to 93.

but 40% of the member base are over 40. it's older. we are serving the people of the city. they are urban, smart, savvy and live and work in the city. that is our core base. we don't really comment on financials because we are part of the avis group, but our member topline growth is growing rapidly. as people feel comfortable shedding their car and using services like zip car, it has been a huge momentum. carol: it is great that you bring this up. we were talking in the newsroom about you guys are kind of a great test experiment or great experiment of the whole idea of the sharing economy. there has been a lot of ideas about teenagers not getting drivers permits or drivers license anymore. it is not just in the u.s. but a global phenomenon. what are you guys seeing as the experiment that, the idea of the sharing economy and people saying, i don't need to own a car? tracey: the company was found 19 years ago. at the time there was no such

thing as a sharing economy. there was no iphone. this is how long ago it was. when the company was founded the vision was really bold. it was the view that in the future consumers are going to want to pay for the trip and not the car. that was how the sharing economy was born. being pioneers in the car sharing space has been fortunate because we have had 19 years to innovate and experiment how usage is changing. as more and more services -- netflix, spotify, the movement towards paying for access and less ownership is going to take off. carol: what you have seen over 20 years and there are more options that play into the sharing economy, people say there will be a day when we will not own a car, do you see that happening based on the numbers and data? tracey: especially in cities. 70% of urbanites still own a car. but people will question, there is so much congestion, do i want

to drive but number two, the cost of ownership has outweighed the hassle. services like ours will help propel the reduction of personal ownership over time. carol: when someone becomes part of your community, what data do you see they either give up their car or give the plants to buy a car? tracey: we see people considering buying a car and after they join not only do they not buy a car but they use of the forms of public transportation, cycling and walking. overall, they become much more green in how they behave and -- and how they live in a city which has been huge for us. tracey: but you see them give up and say i will not own a car. tracey: they use our service every single day. we have a commuter program that is accessed for commuters monday through friday. they were like, i had to

purchase a car to get to work, but now i don't need to. carol: what about retention? you mentioned netflix. all of these services, some of them spend a lot on marketing and reaching out to consumers and holding on to their user base. give me an idea of that. has that become a bigger part of your financial pie? you guys spend more time and money on that effort? tracey: for any subsequent -- subscription business retention has got to be a metric. what we are focused on is great member experience. it comes down to getting a great service but also a good value. when we think of retention, we just anchor on how to week continued to improve that member experience? as we do that, retention will naturally come. carol: i want to ask about uber and lyft. who is your chief competition? tracey: our competition has always been ownership. 70% of urbanites own a car and if we can chip away at that, that is a huge opportunity for us. carol: that was tracey is then,

president of zip car. on wednesday we will be live from the boston chamber of congress speaking with these people. 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. ♪ >> the proceeding is a paid advertisement for super beats. dana: hi, i am dana loesch from "the dana show." over the years, you have seen me interview some pretty cool people. right? today is no different. i am speaking with dr. nathan bryan. he is one of the leading minds in nitric oxide research. one of the leading minds in the world. i recently went through a health breakthrough, is what you can call it, with my energy an