taylor: i am taylor riggs in san francisco. this is "bloomberg technology." coming up, demand down after tesla's third-quarter deliveries failed to match forecasts, analysts reevaluate the stock price. we have the latest. diversity and inclusion, former interim reddit ceo on corporate governance in the tech sector. new threads, instagram

introduces a mobile app designed to share content with friends, but it looks a lot like snapchat messaging. we have the details. first, our top story. it was bad news, good news for tesla after third-quarter delivery numbers. it delivered 97,000 cars. elon musk had hiked the idea of reaching 100,000. tesla shares sank. earlier, an rbc analyst looks ahead to earnings following the delivery numbers. >> we have them falling short of guidance. even if you look at the production levels, there was some record production levels, 96,000 some odd units -- they would need to be a significant increase in that. i think there is hope the shanghai factory will be able to

come online, but we remain skeptical. taylor: with more, i want to bring in gordon johnson, and let me start with you. we talked about the delivery numbers. i'm curious about that composition mix. what do you make of the different models and the price differential? >> the model 3 was 82% of deliveries. it is great for the model three, but it is a concern because the margins are lower than on the other models that are higher priced. those deliveries have been falling. taylor: gordon, is the biggest concern they are selling more of the cheaper cars, and that is pressuring margins? >> it is a concern, but the biggest concern is the street is expecting q3 revenue to grow. from 2018 to 2019, asp's are

and they sold more cars. doing the math, they only recognize 1/12 of the least revenue in the quarter they sell it. we think revenue will be down year-over-year. if revenue is down come it could turn into a busted growth story. taylor: how do they boost revenue growth? >> we don't think they do. what is very significant, if you look at european sales, norway, the netherlands, and spain, in the mix of model threes sold, it dropped significantly from q1 to q3, and other models increase d significantly. the problem with that is there is a $10,000 discount of one model versus the long-range

all-wheel drive, so you will get negative impact in this quarter as well. the street is at a $200 million loss. we are coming close to a $400 million loss. while elon musk has everyone focused on production, we think they need to focus on profit. that is a problem. taylor: you heard a lot about that average selling price. from what you hear on the street, is there a composition of the s and x they need to sell profitability that seems ever elusive? >> tesla has other levers to pad their balance sheet. they make a lot of money selling regulatory credits, but they could recognize more credit revenue or regulatory credits in europe. they have deferred revenue from full self-driving, and how they realize that revenue as they roll out features is something they can pull on going forward. taylor: gordon, you could argue this company has an expectations problem.

i want to pull up a quote from gene munster. i spoke with him yesterday. he said when a company talks about delivering 100,000, you are hoping for 102,000, not 97,000. this is a credibility hit, classic textbook example. is managing expectations this company's biggest problem? >> it is not the biggest problem, but it is funny this is the time people are calling for a credibility issue. they said they were going to be profitable every quarter. they have burned close to $1 billion. they talk about funding secured, selling hundreds of thousands of cars. the biggest problem is tesla is not making money, and it looks like it will be worse in q3. there are things, levers they can pull, but if you look at the $408 million loss in q2 and think about q3 and asp's are

down $3000, if you assume $200 million in revenues and full self-driving revenues and give them credit for no restructuring, you still come to a roughly $400 million loss, if you assume asp's are down $3000, which is fair from so i think it will be ugly this quarter. taylor: from the demand perspective, how is the u.s. market? is it mature? >> it is hard to say, because the growth of tesla has been viral. someone gets a car and let their friends drive it. a lot of families have more than one tesla. in california, i see more and more model threes. california is just one state, and there are plenty of states with a model three has yet to penetrate. electric vehicles do well in certain climates and states, but not a 50-state market yet. taylor: is demand in europe and china the next leg of growth? >> that is what people are

focusing on. if you take out the netherlands, where there is an incentive being cut, u.k. where there is back demand being filled, growth was down in q3. in china, tesla shanghai factory is looking to produce 150,000 model threes out of the gate. demand in china is 30,000 to 40,000 annually. there is a huge gap, tons of competition. they are not in the top 10. the entry price for the model three in china is $48,000, so there doesn't look like there is any respite near-term. we think they will have to find significant growth somewhere else. taylor: let me push back a little bit. the company said they are entering the fourth quarter with the backlog. does that not show a sign of demand? >> what tesla has been graded doing as they started marketing the model three as a $35,000 car, full self-driving, able to

drive coast-to-coast in the u.s., so they built up a big backlog over years, and now that they are unleashing that car into other markets, they are executing on that backlog they built over years. the backlog does not suggest demand. it suggests they are entering new markets. once you go through that backlog, you will have real, organic growth levels. u.s. q3 sales are down 20% year-over-year. ford was up 5%. gm was up 6%. fiat was flat. we are seeing the negativity of actual organic demand in q3. taylor: the biggest talking point that you want to get from earnings? >> we need to know if they will reaffirm full-year guidance. taylor: lively conversation.

thank you both for joining me. more news out of wework, company leaders told staffed up cuts are coming. wework's cost-cutting efforts would include layoffs. the new co-ceos stated the cuts will be handled as humanely as possible. we will cover this in detail later this hour. coming up, we look at why startups and investors are taking a fresh approach to diversity and ethics. this is bloomberg. ♪

taylor: health startups approach to diversity is increasingly in the spotlight. we work is the highest profile example. the company shelved its plans for an ipo. this was taken to calm investors. joining me to discuss the importance of diversity and ethics is ellen pao, the former interim ceo of reddit. she will speak at tech crunch disrupt, making the case that an ethical company means a better bottom line. thank you for joining me. i wanted to start with that corporate governance problem so much in the example of wework. how do you measure a boards corporate governance? is it that they need a female on board? what does good corporate governance look like to you? >> i think we have strayed. when i was in law school, we talked about the people you are

supposed to treat as your constituents, not just investors, but employees, the community, the public at large. we have moved from surveying the public and taking care of employees to focus on wealth generation. a lot of that comes from changes that started with google. when they started their corporate formation, the founders had a huge super vote for each share of stock they had that gave him control of a company. i don't know if it still goes on to this day, but they have had super voting control of all sorts of different issues, and that has come down to a lot of startups that have formed since. my understanding is wework had 20 votes per share for the founder and ceo, which made him the ultimate decider of many things.

when you have a board that can't really do that much because the founder has so much control, you wonder if that is going to be effective at all. taylor: are the companies doing a good enough job of making boards diverse enough early on? you can't just do it right before you go public. what is happening five years previously? >> there is a problem with the board level and executive level. this ongoing problem in tech where vc firms have few women and people of color, and a tiny fraction of women of color, especially from underrepresented groups, and a lot of times boards are formed by investors, senior partners and managing partners who sit on the board and make these decisions, and often they are very homogeneous, talking to people who look like him and who don't experience a

lot of the things that people from different groups experience. they don't have exposure. they live in a bubble. when you have a board that is very homogeneous, they often miss big things. if you look at companies and their problems, because they don't have other voices, perspectives, don't understand the people who are renting on airbnb might be from different groups and there might be some racism, if you have pictures, and how will we address that? they end up addressing it five years later when they start getting scale and have to rebuild their whole system. taylor: what does an ethical tech company look like to you? >> it starts from the beginning when you are hiring the first engineers, the first marketing people, when you are building your company. you have to think about, looking at all the right faces for my

-- right places for my team, only hiring from my friends, people who look like me, people from my fraternity, so finding people from different experiences, people coming from different backgrounds with different perspectives, it is important from the very early days. we have programs to encourage early-stage startups to look at and measure and hold themselves accountable for the diversity on their teams, and to make sure they are including those people from different groups in a way that everybody is having a good experience. taylor: what do the numbers show you about the bottom line of companies that have diversity and inclusion, versus those who do not? >> they have done a lot of work to show that companies with racial and gender diversity are 35% more likely to have better financial results, that is a huge percentage.

if i am running a company, i would rather have those odds be better by 35% than not, and i don't understand why companies are not reading the research and internalizing it in bringing together more diverse boards and management teams. taylor: you are part of that change. you are an investor yourself. when you look at the companies you are investing in indy vc pipeline, how involved are you in the day today to make sure that is included? >> for me, it starts at the investment level. i talked to founders about diversity, inclusion, and whether it is a priority come , especially if the team does not have much diversity to start in the founder team, and i only work with people who are interested. if they plan to go in the weight ay we have gone in the last five or six decades, great. there are plenty of people who

can help you. for me, it is less interesting. taylor: we take a look at a lot of the ipo's that have gone south this year. what is the pressure to be profitable, especially a start up, these days? >> with the recent ipos imploding, not being able to get out, or going down a significant amount, people are realizing the markets are not rewarding your customer base, they are actually looking for a long-term strategy and business model. and that is driving more investors to look earlier, like we can't just ride out the growth numbers. we need to look at the dollars and the cash flow and the actual profitability, and that is changing how -- i think -- i don't see the whole swath of investment, but from my perspective, people are getting more focused on revenue numbers

, what is your business plan for getting profitability, and how are you going to be a long-term business? taylor: a lot of other concerns have been about valuation, as you look at the landscape, is it overvalued to you? >> it has been overvalued for a long time. these companies are raising billions and billions of dollars. it is incredibly frothy. it has been on this pace of growing valuation for many years, so it doesn't feel like there was a sudden jump. it has been this ongoing climb, and now it has come to the point where it is a bubble going to burst. taylor: companies like softbank, big money coming in, have they structurally changed the environment, or can you still compete? >> that is a good question. i invest at the early stage, two founders, or five employees. i think everybody is trying to

expand what they cover. people at my level are trying to raise funds so they can invest in the next stage when they see which other early-stage startups are making huge gains, and i can double down and put more money in because i was not able to get that much ownership because the valuations are so high. now you see firms saying you should not work with individual investors, you should only work with firms because they are going earlier and earlier so they can have that birdseye view to what is working sooner and get into them with an advantage because they have the relationships. i think they are still changing. it is not clear. i hope there is still room for people like me, because the firms out there today are homogeneous, and if you don't allow new players to come in, it will stay that way.

taylor: we look forward to your panel tomorrow at techcrunch. that was ellen pao. coming up, amazon planning and $800 million data center in argentina. how they could be reaping big tax benefits from the expansion. that is next. this is bloomberg. ♪ taylor: amazon's cloud division

is expanding. the company plans to build a regional data center in a free trade zone in argentina. amazon is preparing to invest about $800 million in the project over 10 years and will reap considerable tax benefits. for more, i want to bring in the person who covers amazon forest. us. why argentina? >> well, this will be amazon's first data center in south america since its first one in brazil in 2011, so now this was

in argentina, the second economy in south america, so it is expanding its presence in latin america for the first time in several years. taylor: spencer, when i was in new york, amazon was looking at expanding their second headquarters, and they got a lot of pushback for tax breaks. is there any risk amazon gets backlash for the amount of tax breaks in argentina? >> i have not heard much on that. a lot of these are fairly standard for the trade zone down there, so that would be any business operating in this specific trade zone, getting these benefits that the argentine government put in place to try to grow more tech companies and entice more tech companies and other knowledge-based economy players in that area, so it seems like it is pretty standard. the big benefit is there are breaks on energy use taxes, and because data centers consume so much energy, that will be one thing, but most of the benefits

seem to be standard for any business going into those trade free sounds. zones. taylor: you talk about how companies want to be close to data centers because they can get the extra high speed that comes with being in the same country. what other tech companies outside of amazon could take advantage of this program and are poised to benefit? >> the cloud computing industry is $200 billion globally, growing close to 20% a year, so amazon is racing to big data -- build data centers around the globe, as well as microsoft and google, so you have this race to create capacity and create the best user experience. it's not just the customers physically based in that country that benefit, any global platform that is serving its customers through the cloud that has end users in those countries would also benefit, so a platform that serves south american customers through a data center in argentina would

have a better user experience than if those customers in south america had to access the services through data centers in europe or the u.s., like they do now. taylor: it sounds like this could be the first stop of many for amazon as they look to expand the global cloud center, right? >> yeah, there is a big investment in cloud computing. they have gotten them in the u.s. come a europe, asia, australia, south africa is on the map, so yes, they are absolutely trying to build capacity as more and more companies see the benefits of having on-site data servers and on-site staff to maintain and manage them to outsource that to someone else and gain all those efficiencies. this is just another indicator that amazon sees their business continue to grow.

taylor: thank you for joining me. coming up, in one corner, the king of social networks, in the other, the presidential hopeful. they are ready to go head-to-head. this is bloomberg. ♪ sometimes your small screen is your big screen.

and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. keep what you watch with you. download the xfinity stream app today and get ready for xfinity stream tv week. watch shows like south park and the walking dead october 7th through 13th. taylor: this is "bloomberg

technology." i am taylor riggs in san francisco. who was afraid of elizabeth warren? not mark zuckerberg. that is we learned earlier this week. >> i would bet that we will have a legal challenge and i would bet that we would win the legal challenge. basically, it -- and -- [stammering] does that basically suck for us? yeah, i don't want to have a major lawsuit against our own government.

taylor: joining me is bloomberg intelligence senior analyst. let's start broadly here. what are these regulatory hurdles having an impact, if any on facebook's bottom line? >> you look at usage, but what is definitely changing is the way facebook is able to take advantage of this demand and its long-term prospects in a way, and it's happening because of a few reasons. it does not have an impact on business strategy. product delays because of regulatory hurdles, and you have lower ad targeting potential and its impact on the future , compliance costs increasing because of regulatory requirements. if you look at long-term expectations, they are not getting the credit in terms of what they can actually achieve through diversification of revenues. the strategies they have at hand

and regulations are to sort of roll back some of that long-term. taylor: i want to start on the cost side of things. on the cost side compliance , costs could be millions, billions, you name it. do you have any sense of what the actual compliance costs are and how that could impact the next 12 months? >> it has already had an impact on facebook. if you look at margins, they have already declined. the expectation is that the cost will taper going into this year with the election cycle, we don't know if it will hold or not, but the cost structure of doing business in today's environment has changed, and that is not rolling back. what would be more interesting is if you actually look at expectations for growth for this company for the next years. 20% revenue growth is what the market is expecting, give or take, barring a recession. if you look at that growth and

align that with end market growth, you will notice they are only getting credit for what mobile advertising and things like that are doing. they just have to do slightly marginally grow their market to achieve those numbers. at the other end of the spectrum, they have massive potential. if they are able to navigate the regulatory hurdles and pick their battles and diversify into that, you have the upside on the consensus. that is the reflection, what you see in expectations in terms of of execution.y taylor: you talk about revenue growth, almost amazingly, facebook has done more acquisitions, launched new products. to me, it feels like they are full steam ahead, full business plowing through, so we have not actually seen them sort of slow down on any product launches or any acquisitions, have we? >> well, their ability to capture the market through payments is a great example. you have seen the challenges libra is facing.

that definitely at least delays if not derails the long-term prospect it can have from those avenues. i think it is more to do with how these strategies, which were supposed to pan out sooner and will pan out later and what sort of impact it can have on their revenue growth. hopefully second-half earnings results will shed better light on that. taylor: we talk about a conglomerate discount. is there a regulatory discount of companies facing big headwinds that are trading at a discount relative to, let's say, twitter, which has been sort of out of the headlines when it comes to all the regulation? >> that's a great question. absolutely is the answer, and it is showing in facebook's valuation. it is trading at levels closest to its lowest ever seen levels, so that is sort of reflecting some of that. if you look at near-term expectations, there's not a lot of risk to that, but longer-term

expectations which, like i said, it is mostly giving them credit for what the end market is growing at, not -- it does not really factor in what happens if instagram check out does succeed, what happens if payments, even if it is not libra, if it is partnership with paypal that pans out, those elements are not factored in, and that is the discount you are seeing. taylor: quickly here, is facebook doing a good job being proactive with regulators instead of reactive, which is what they were maybe a year ago? >> they are taking a lot of preemptive steps from a regulatory standpoint. there is a lot of work left and we will keep seeing regulations as an ongoing challenge for facebook, but if they are able to pick their battles and focus on avenues like instagram checkout, like i said, they can change that long-term conservatism that we see in some of these estimates. taylor: thank you for joining me.

sticking with regulators going after facebook, the social network may be forced to censor online hate globally. that's the result of a ruling by the european union's court of justice. the court says european judges can order facebook to remove offensive and defamatory post by users and the eu. courts could also order worldwide removal as long as they take international law into account. facebook says the ruling goes beyond a process that already follows to "restrict content if and when it violates local laws." sticking with more on facebook, the company is taking on snapchat once again. instagram's subsidiary just introduced a snapchat-like messaging system. it is supposed to be a quick way to share content with your closest friends on instagram. this would be the second time the photo platform has borrowed from its rival. shares of snap dropped on the news, at one point down within 7%. joining me to discuss is a jefferies analyst who currently

has a buy on facebook and hold on snap. what do you make of this product? >> we do not think it is the death of snap. we have done a ton of talking to teenagers that love snap and are not going to get off of it, but it's just one of the additional add-ons facebook can build on top of their platform to help engage, keep users there, and potentially eliminate the need to open another app. today, i do not think it will have a major impact on snap's user base, especially concerning the younger demographic. i have a heat map of where all their friends are at. i have all the content they are used to, but for an older demographic, we think it will be interesting to be able to share

private messages on the platforms with your friends, your inner, closer circle rather than the rest of the world seeing. a nice feature set, but it will not move the needle dramatically for facebook in our opinion. taylor: to push back a little bit, isn't it facebook's way of admitting that they know instagram growth is slowing, that they have to get a new product out there to keep growth expectations in line with where the market thinks they should be? >> advertisers are flocking instagram right now. the shopping app has blown the doors off when you talk to advertisers. we do not think growth is slowing materially. we think this is a nice feature add-on, but this is certainly from our perspective not going to be a needle mover, just like when libra came out, everyone said it was a watershed moment for currencies, it was going to reshape facebook, we think this is incremental. i'm not prepared to say growth is in a massive freefall. operating margin is a really good number when you look at the

balance of topline, bottom-line growth. taylor: do you get nervous that facebook -- this is the second time they are copying snapchat. they are not innovating, just borrowing. >> they are able to fast follow if you will. if something is popular somewhere else, they can add on, but i look at the breadth of solutions that they have in the core facebook reader, what is happening on instagram, what's happening with shopping, was happening with messaging. there's a tremendous amount of features, and this is analogous to microsoft. microsoft copied other vendors but over time was able to eliminate some of these vendors because the power of the sweep, the power that going to one app has. uber is going to do the same thing with driving, food delivery, and ai. he had to get up and go to work,

would you like a car delivered to your office or home? the entire industry we think is going this way. no one wants to install another app right now on their phone, so i think it is a smart move. i don't think it is a sign that they are running out of steam. taylor: on the snap side of things, would you defend the stock at these lower levels after the price reaction today? >> we have a hold on snap. stocks had a great year. we think fundamentally they have really turned around. we thought the selloff earlier today was overdone. it closed down roughly 3%, so we think it kind of came back, but again, fundamentally, we continue to believe in that story and believe they are on the right track. we like facebook better than snap, and we think facebook stock is going a lot higher, so we would prefer owning facebook at current levels. taylor: very interesting. as we approach earnings season, what do you need to see from the snap side of you to change from a hold to a buy? do you need more confirmation

that the filter has more legroom to run? >> it's more just multiples. the stock has had a huge run. you are at the higher end of the valuations. the fundamentals are falling through. no big change in terms of our thesis. great story. we continue to recommend holding shares, but again, we are buying more facebook share rather than snap. taylor: you heard it there. thank you for joining me. still ahead, back in the fold. microsoft dials back into the phone market. can it keep from repeating the past? we discuss, next. this is bloomberg. ♪ taylor: a 3-year-old indian

startup has raised $585 million from investors including tencent and ggb capital. we have the story from mumbai. >> an indian e-commerce marketplace has raised $585 million from investors including tencent holding. this bangalore-based startup sources directly from small manufacturers and farmers to supply neighborhood stores, restaurants, and even street vendors. it was founded by three young engineers who worked at online retailer flipcart before. this three-year-old startup from across the country to retailers in categories from fruits and vegetables to electronics and

apparel and toys. one of their founders says capital will be used to enhance the technology platform, grow more categories, and build their payments and delivery capabilities. taylor: microsoft is back in the smartphone business, but gone is the failed windows phones of your. in its place is the foldable surface duo, and android device microsoft hopes will not repeat the past. remember microsoft dropped $10 billion buying nokia's handset business in 2013. it was a move that did not work out for then ceo steve ballmer. can microsoft avoid the same fate? to answer that we go to our own mark gurman in los angeles. why now? mark: that is an interesting question. i think the mobile industry is

at a point where we are sort of shifting from smartphones the way we currently understand them, things that look like the iphone, to a new category, and that is either foldable's or moving to glasses and stuff like that, and what microsoft is doing is saying, "we have a new category, too." they are not coming out with a classic interpretation of the smartphone. they are doing something themselves, doing something interesting. we do not know how it will fare until the end of next year. it is not clear if consumers are actually asking for this, if anyone is going to buy it, but to your point they are running on android versus windows. opportunity can play on each other on a full double device. they had no other choice. this would be doa. people do not want windows

phones. it has a horrible reputation. it did not last long. the whole nokia purchase in 2013 was an utter disaster. android has 65% right now of the u.s. smartphone market, so they had to do it, and this was -- i think it was actually sort of a bold but obvious decision on microsoft's part. obvious because they had to do it. bold because they are putting google software on a microsoft product even though microsoft at its core is a software company. taylor: i love the title of your latest call, called microsoft's non-phone just out innovated apple. walk me through your thesis. mark: that perspective is basically when apple held their big of an earlier. it is september now. we are already in october. the definition of innovation is something really new, right?

in apple's case, they came out with a lot of stuff that will sell incredibly well. better battery life, better cameras, things that people want, but they did not really introduce anything wholly new. in fact, they have not really done anything new in five years since the apple watch announced. but we have microsoft, a company known by some as a technological dinosaur, out here trying new stuff. apple is at the point where they need to try something new, if that's something in the auto industry, something in the home, more advanced air pods with cellular conductivity that can rely on their own, but the holy grail is this headset. it is clear that microsoft, amazon trying new things while apple is sticking to its tried-and-true recipe. it generates a lot of money but maybe not so much excitement. taylor: thank you. coming up, lessons from wework and uber on track to go public in today's ipo market.

this is bloomberg. ♪ taylor: we mentioned earlier

this hour that wework will be cutting jobs this month. the layoffs are part of a cost-cutting measure. will employees capitalize on the lessons learned last week? let me ask the key founder and ceo of tusk holdings. he has his finger on the pulse of vc startups and political strategy, so you can just talk about everything. let's start with the ipo market. what have we learned from the likes of uber? >> i think we have learned a few things.

the first is clearly private valuations and public valuations are just not aligned. i think the reason for that is there are venture funds -- we are early-stage investors, so for us, it is not so much of an issue, but if you are raising $10 billion, $20 billion, 100 million dollars, you cannot write a check for less than that because the valuation has to fit him than that, so as a result, private valuations are driving up and up and up and the economics were not there to support it, so when these companies eventually become public, there is no real way to sustain that. the second problem is private companies are staying private for too long. i'm a shareholder in uber and have been an investor since 2011. i remember thinking 2015, 2016, what we go public?

when a company as a private company for 10, 12, eight years, there's no honeymoon. there's no excitement. we have been living with this thing forever. taylor: when it comes to valuations, our public markets becoming smarter than private markets? >> i think so. the incentive is in the public market just to buy a share if you believe it is a good value and that it will go up, whereas in the private market, i just have to deploy capital, right? you cannot get your management fee if you are not spending out the bond, so the incentives are often misaligned. taylor: is corporate governance a bigger priority now than profitability? >> it is going to have to start to become not a bigger priority, but if you look at wework specifically and uber and tesla and facebook and a lot of

companies, there's a problem now where you have such a lack of control of governance by vc boards that you have found is that can get too out of control. it's a tricky situation because if you are a vc like us, you have to invest in the valuation happens, right? adam neumann or travis kalanick did extraordinary things, disrupted entire industries, broke cartels, but at the same time, no one ever said no to them, and their behavior eventually got to the point where it was out of control. you cannot not invest in people, but you also cannot say we are going to just flip the switch and put in a season manager. that was what uber did and that did not work either. you replace travis with a really good manager in dara, but he is just a manager. he does not know where to take the company in the future, and the market is reflecting that. we are going to be tougher, we are going to have higher standards, and we are not just going to in order to win a deal say yes to whatever our founder

once. taylor: do you have to see a path to profitability? are you ok not seeing that for five to 10 years and hoping it will come later? >> i have to see how we ultimately get there without saying if we become the amazon of x, we will be really profitable. anyone who is the amazon of anything is going to be profitable eventually, but unit economics have to get better and you have to pay more attention to that. i think growth is a little less of an absolute priority, and this notion of they have gathered all this data or all this market share and they will figure out how to become profitable -- if you cannot tell me at least what theoretically the past two profitability is, -- the path to profitability is, you probably should not be the point man. taylor: you mentioned uber a few times. how big a concern as a b5? >> significant, right? in a business that already has negative unit economics, 10% more onto that, if it's passed on to the customer which increases demand, or is just the company bearing the cost, either way it is problematic, but the other problem is a be five is not going to just stay in

california. some new yorkers are picking up the bill. there is a hearing on it in two weeks. illinois, new jersey, every blue state is going to run with this issue. if uber is seen as a full-time employer and 20, 30 states, that is a significant hit. taylor: 30 seconds. juul -- too little, too late? >> not just that, i think their business model the entire time was let's max out on this one practice knowing it cannot last forever, but we will make as much money as we possibly can. i'm interested to see if early juul founders and shareholders were selling on the secondary market as new valuations were coming in because it was clear this was not a practice the fda was going to let go on indefinitely, yet they kept doing it anyway. taylor: thank you. that does it for this edition of "bloomberg technology," and we are livestreaming on twitter. check us out at technology and be sure to follow our global

breaking news network at tictoc on twitter. this is bloomberg. ♪

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