♪ taylor: i'm taylor riggs in san francisco, and for emily chang, and this is "bloomberg technology." bloomberg disappoints. third quarter -- uber discipline. third quarter estimates missed. we break down the numbers. over an's ceo out inappropriate relationship. and, it is one year until the

presidential election and states are struggling to update election systems. what it means for voter privacy and election security. uber is out with earnings and it is not a pretty picture. shares falling in after hours training on monday -- after hours trading on monday. growth bookings missed estimates. also light of estimates, uber eats and platform consumers. in tom white,ng analyst with da davidson, who makes a market with uber and lyft. someone said he is a little bit surprised by the reaction given that they are a little bit more positive than negative. >> when you look at the top line numbers, the revenue number was really strong. what the rates tell you is that uber is cutting down on subsidies and showing the

improved take rates for both rides and eats. rides growth, booking growth, revenue growth all in line is a sign that they are focused more on profitable revenue growth. taylor: tom, you can see the full-year adjusted ebit are loss, how much is that an encouraging sign they are able to raise processes -- raise prices on the consumer? tom: i think it is nice. i am not sure it is enough given the way that investor expectations have shifted a little bit in regards to the high-growth names. investors are scrutinizing profitability a lot more and i suspect that, had uber provided more of a step function change outlook, asa

opposed to a modest week -- it is hard to call it modest but i think the stock would have reacted better if they were able to move that needle a little bit more. taylor: we spoke last week when lyft came out and said they would be profitable by 2021, ahead of estimates. ofare hearing from the ceo uber, saying they too will turn profitable in 2021. tom: that is basically right around the ballpark of where we are forecasting. i think the challenge for uber is that it is a forecasting challenge in a lot of ways. forecasting challenge in a lot of ways. lyft operates in north american market that has two scale players, the path of profitability for investors. that is not the case in a lot of

is reallyere -- uber playing the long game. will respond and react accordingly. that is probably good for the long-term health of their business and ability to create but -- the timing of profitability. taylor: someone put out a myth uberf -- a miss here for eats. they are still fighting off that fragmented market. a sign that take rates have not improved enough to the point that they can maintain that high bookings growth. is to, the key for uber cut down on the marketing

expenses, because that is where lyft has shown the maximum improvement. it is not happening as it happened with lyft. taylor: tom, i want to show you a chart in my terminal here, the difference between uber trading at about a 48 handle and the average price target, which is about $31 per share or so. what is the difference you are seeing between the price of the share and where the analysts expect? think ab-5 is one piece of it. what is probably happening is investors have really shifted their mindset to scrutinizing profitability. case, they are making improvement on that track but

the sheer magnitude of the loss, unless a quarter is spot on perfect and has no sort of weak spot at all, investors are not willing to give companies the benefit of the doubt. is the big issue. i think it is something that will weigh on both uber and lyft , and continue can contribute into raising prices for thesumers, which could -- market for ridesharing until we get autonomous vehicles. taylor: the ceo, dara khosrowshahi, is kicking off the conference call highlighting their ability to get superior economics, highlighting germany, japan, argentina. in your analysis, how much of uber's strength has been in these international markets, these different business lines?

:andeep obviously, --mandeep obviously, uber is a global player. they don't have to spend a lot on performance advertising like expedia and booking.com have to do. they have the brand now. it is about improving the unit economics in international markets. we have seen that happen in the u.s. markets. that is why we have seen 39% growth. it is not translating in the american markets. latin america was up just 2%. taylor: tom, bear with me as i show another chart to our bloomberg audience. it is all about that lock up expected to expire on wednesday, november 6. a lot of the shares are not trading. how much of your analysis, do you think this could be insiders

trying to sell out later this week and free up some of that cash? somewe are expecting near-term pressure on the stock as a result of the lockup. was an mind that uber private company for a long time and some of the early investors in the business, we think are effectively sellers at any price. we expect it will be days, not weeks of impact. taylor: thank you to tom white, an analyst at da davidson, and bloomberg intelligence's mandeep singh. shares lower on monday after the company missed at the top and bottom line. operating revenue was lower than the $8.2 billion expected. the network says they expect their t-mobile deal to close in early 2020 and remain optimistic about the remaining regulatory steps as they continue to work

with various state attorneys general. coming up, a flurry of change at the top of mcdonald's. how a new ceo could affect the fast food chain's recent push into technology. this is bloomberg. ♪ ♪

shakeup at thete top of mcdonald's leave investors wondering how it will affect the company's strategy. from uber eats to kiosks in stores, the ousted ceo steve astor brooke -- steve easterbrook had a vision for the giant and dedicated a lot to innovation. it will be up to kempczinski to keep tabs on the efforts at the restaurants. with more, morningstar

strategist, joining us from chicago. given that we are a technology show, really focus on those key innovations that mcdonald's had made, how much of the growth in the past few years really hinged on those investments in technology? >> i would say it was a major driver. i would not say it was completely dependent on technology but it was a major part. you have to factor in things like simplification, putting company stores in the hands of franchisees, but if you look at the velocity drivers, things like the kiosks in the stores, mobile orders, those were contributed -- those were very important. i wouldn't say it was the top contributor but it played a big part in the mosaic. uplor: how much has it gone

given that customers are willing to go online and pay for convenience and that is perhaps what is driving that average price per check higher? r.j.: that is a big part of it. over the past couple of years, comparables for sale have been in that same range. menutwo of that actual price increase year-over-year, arethe other two points coming from customers ordering more, which comes through delivery, where typically you see the average check size about 155 to 25 -- about 1.5 to 2.5 times the in-store orders. as we continue to see delivery lag year-over-year, that might go down a little bit. that will be a part of it, the average check size. taylor: as we take a look at mobile ordering, mcdonald's had been making some clear gains.

14,000 u.s. restaurants, 22,000 stores globally at the end of 2018. how much more of a big push you need to see to drive the stock higher? >> i think we need to see more and more of that. what will be very interesting for the story going forward, i think that this kempczinski -- that chris kempczinski had worked very close with steve easterbrook and the mobile part. i think you will need to put his stamp on it, mobile ordering to the drive through. yield,ny called dynamic predictive ordering, another company that is more voice ordering. i think that will be a key part of the story going forward. in 2020, as it becomes more consumer facing, i think that will be one of the key stories to keep an eye on next year. taylor: how much of this is a

shift that mr. kempczinski can continue, continuing to steer the ship of what his predecessor set up, or how much more does he need to continue to invest? r.j.: i think that is the key question. he was a co-author on many of the technology initiatives the company has rolled out over the past few years. investors will really need to see the next eva lucian from chris. not just a continuation of the experience in the future, the mobile ordering, really his own stamp. the opportunity comes from the drive-through. that, to me, is an area where we have not seen as many investments in the past few years. mcdonald's had the opportunity thely to redefine drive-through with predictive ordering, voice ordering, even eventually ai involved with that as well. when you do that, you unlock

potentially new formats, smart formats, delivery only, pick up only type locations, place mcdonald's has only -- has never been in before, broader exposure for mcdonald's and open up new avenues of growth. i think people need to see that new evil lucian from chris. to mcdonald'sve competitors, how do you like their partnership with uber dash, forh door example? r.j.: i like it because they are getting some of the best economics out of the deals. from our understanding. that, i think, is good. the company does talk about it, it does drive increment talent he -- incrementality. some of the numbers they talk about might be a little bit exaggerated. while it might not be as

profitable as an in-store transaction, it certainly is helping to bring in new customers and it has gotten compared with menu innovation, one of the areas where mcdonald's has probably been a little bit behind this year. as you start to see new products introduced and customers have already adopted delivery, i think it opens up an opportunity for the company going forward. taylor: r.j. hottovy, morningstar strategy analyst, thank you. nba owner.we hear an this is bloomberg. ♪

taylor: time now for the top tech calls. bank of america has turned more positive on blackberry, raising the stock to a neutral from an underperform. littlelyst says he sees

downside and cites a favorable valuation. he says investors are overlooking key assets. a floor of five dollars for the stock. and $20 price target, citing positive trends for both cloud related security and content delivery networks. the analyst says that while there are some concerns around the competitive dynamics, cloud fair -- cloud flare's platform is differentiated enough. namuraal from the buy --at&t's new price reductions response show vulnerabilities in growth trajectory. now, golden state warriors owner has many opinions on the industry as well as valuations. on monday, he shared some of

those views with the stanford graduate school of business. >> i was a guy who came out of a very different background. andme -- i was a science technology major, i didn't know much about business. i liked it. wast in, i came here, it one of the best schools then, too. it was a great experience. for me, perhaps better than some other people because i learned so much. >> you learned a lot about silicon valley which is where you really made your career. what is it about that connection? obviously geography helps but there is something deeper going on between this school, broadly the university, and also the business school. playi think geography does a big role. 40, 50 years, we have been and what arguably is silicon valley.

the truth is that the classes are great. when you come to stanford business school, you are with great students. but you are in this environment that is kind of hard to replicate. i told my kids and i tell others that you can't really beat it. it is a culture. i think that culture pervades the business school and the entire area. >> we caught up with the dean earlier about what is going on at the school. i feel like companies are dealing with a lot more in terms of esg, leadership concerns. it is very much front and center. accountability. what do you think has to be a part of getting an nba -- getting an mba today. we will get into basketball in a moment, but what has to be part of getting an mba today? joe: it is not just about what is in the books.

there are so many issues about -- so many issues that one has to be aware of to be a ceo, if that is your goal, or to be in business. it is an international world now. it affects the business i am in, as we all know, recently. you have to get exposure to all of those issues. i think that is what stanford does. >> the dean talks to us about 40% of the students are from outside the united states. >> when you think about this place, silicon valley, and stanford, so many companies have been born of this, private companies. -- to alsoalso been be in a moment with private valuations. what do you make of this moment when people are trying to decide what something is worth and there is disagreement out there? joe: i am not really investing us a venture capitalist so much. maybe privately as an individual. >> but you watch the market.

joe: i am very aware of it all. , clearly,y that private valuations are very high and there are some structural issues going on here with regards to the giant funds that have been raised and the prices they are willing to pay for some of the startups or a little bit later state then startups. this is no different than what has gone on in the past to some extent. wheree had these periods private valuations have gotten what some believe to be too high. i think it will all work itself out. ipoing, will it make sense in the future? joe: i hope so because that is something called liquidity. when you are in a private company, you don't necessarily have that liquidity. >> all that money, whether it is private equity, family wealth offices, there is so much money

in the private market right now. you don't think that will put a damper increasingly on the ipo market? extent, youo some could argue. you have all these companies now that are considered the select group that are trying to go public or have gone public recently, they stay private longer than they could have because they had access to capital. at some point, many of them want to have the access to liquidity or want to be public companies because of the exposure. >> we have to talk about basketball. >> i have to think you walk through this campus and there are people who look at you and say, this is who i want to be when i grow up, i want to own a basketball team. what do you make of the season so far? joe: every year is the same way in the nba. it is unbelievable how you start the year end everyone has a certain mindset or expectations,

and they change. players get better, some get worse, they get older, injuries happen. the truth is that every year is the same thing. this year in the nba, unfortunately for us to some extent, we have a lot of injuries, but it is really exciting for the fans to know that there are nine or 10 teams that anyone of them might win the title. i would rather be the primitive favorite. >> i would rather not have the injuries. joe: of course i would rather. but it is sports and things happen, and you have to adjust. taylor: that was joe lacob, owner of the old estate warriors. coming up, attack of the trolls. in hong kong, fighting against social media trolls. this is bloomberg. ♪

>> this is bloomberg technology. now we join daybreak australia to bring you the latest in global tech news. let's take a look at those top tech stories of the day. >> representatives from the music sharing app were requested to appear before congress on tuesday.

tiktok is being investigated for national security concerns. china is reviewing locations would besident trump able to sign the first phase of a trade deal. and taiwan will continue to supply huawei with chips. this comes as the taiwan government denying a report that washington asked it lean on the semiconductor giant to suspend. those are the top global tech stories. >> months after twitter and facebook said they removed hundreds of accounts used to undermine hong kong's protest movement, the social media

trolls are back. of 30,000 accounts, 10,000 were created since august. joining us as a senior fellow at the asia society. abouts this telling you the reach of the chinese comes to theen it social media attacks? >> china communist party feels any story about china is a story it should get to direct. the story of hong kong has become a global story and beijing is recruiting an army of .rolls >> how successful has this been? >> the party often is a lot more successful when people who

aren't as clearly linked with the party replicate the views. we saw that with the nba scandal where we had top basketball star saying things that sounded similar to how either party refers to the situation in hong kong. strategymore effective than having a twitter account with five followers say something about the protest. -- ans seems to be a uphill battle. they are doing their best to clean up these platforms, but they are going up against the chinese government. >> it's a tough struggle for both of those companies. even though facebook is blocked , its second largest ad market is chinese companies in the chinese mainland.

i want to push and allow these platforms first -- platforms first free speech. -- platforms for free speech. >> a security investigation into tiktok, owned by china. >> i think they are figuring out where to draw the line between, this is a chinese company investing in an american product, or it has this good app that is popular globally. in the case of tiktok it has been downloaded 120 million times in the u.s., they can collect useful data about american habits.

it is something government and analyst space are try to figure out, what is appropriate behavior and what is not? onwe had this pressure going from the government. beijing trying to reach those tech conditions even faster then maybe china 2025 vision. >> the backfires go to come a lot stronger with companies like huawei. tictoc is a private company and doesn't have the same national security implications that a company like huawei does. >> you talk about tictoc and the reviews -- and the news we got on friday. >> i think that is a very safe bet.

because of the situation with russia is so radioactive, there is no way to talk about russia without implicitly criticizing trump, a lot of people on the want toan party should be strong on national security and realize beijing does pose a real threat to national security and think this is a way i can be tough on this and not have to wait into the deep mess that russia is in u.s. congress. think it is isolated just to the tech sector? >> i think this is something we will be seen across all sectors. we saw it in sports with the nba. no sector is safe from this kind of politicized asian i don't think these are intensely political issues and companies in the space need to have an understanding on the politics behind the issue. >> we see china moving forward

with the tech strategy. president xi jingping wants to develop the blockchain sectors, the blockchain just rallying last week. why has tech dominance become so important? >> it is a good litmus test for who is winning. china is going to be the country that dominates next ai. i think both countries like to a sputnikkin to moment, which countries model is superior? hopefully,ference, is that the u.s. is having the split with the trump administration, moving back to beijingues, whereas unfortunately does not seem to be moving away from the tech dominated authoritarianism they are diving deeper and deeper into. >> it is so interesting to see

mark zuckerberg talk about the need for new brother because china is coming up with their currency. >> i think it depends on the sector. u.s. tech sectors are more open to foreign investment and much easier to understand, we have more transparency and better press. we don't have the same information. any ai thatw what involves the coming as party's liberation army has. >> thank you to isaac stone fish of the asia society, and shery .hn we will have much more ahead, this is bloomberg.

sunday marked a one year until the 2020 u.s. presidential elections. while the top democratic challengers jockeyed to be the one to take on president trump, plenty of questions about the state of election security still remains. companies witha ads that feature fake news will be focusing on all of these issues this week. we look at how states are struggling to update their election systems. according to a report from the brennan center, the state will have to spend more than 2 billion dollars to protect their election systems. we have the director of the election reform program at the brennan center. in studio with me is bloomberg cybersecurity reporter.

for us the state of the state. >> since 2016 states have learned there are hackers trying to gain access to their voter registration networks. idea there is something they should be looking for. what they are having trouble with is gaining the resources necessary to got their systems and build the protection necessary to ensure that 2016-like hacks don't happen again in 2019 and 2020, and to know exactly what to look for that hasn't happened in the past. >> in your opinion and through work andur amazing research, what is the most vulnerable section for you when theomes to not only

election on tuesday but going into 2020. >> so much of our election is run on computers. sure ifthing is making there is a successful attack against voting machine or the voter registration databases, that we have resiliency plans in place so that even if the system goes down, people can still vote , and we can make sure at the end of the day those votes will still get counted. making sure enough states and counties have resources and they are usingif electronic poll books. and they have the right procedures and training in place. wen if something happens, have to assume the worst case scenario when you have nation

state actors potentially attacking small county election offices that were prepared, and people can still vote with confidence. >> are states getting enough help from the feds? >> the states will say absolutely not. in 2018 congress approved another $300 million that will be distributed to states and counties across the united states. $300 million across thousands of voting jurisdictions is not that much. >> what really struck me is of the $2 billion needed, 40% of that needs to go with cybersecurity. is that how the election hacking and election meddling is happening? >> there is no question that our move to computer resurrection

makes it easier to vote, makes sure errors are caught, and also comes with an additional risk. when we made that transition, and it happened in 2002 with the .anging chad in florida there wasn't enough planning about what that meant, that there had to be a consistent long-term investment. they are constantly updating and upgrading, or your iphone. ours the same thing with election systems. local --y are these a these local elections. have we done anything since 2016? >> the biggest change has been the push to get rid of device you touch and result in a

vote. you can still touch a screen. places there is a paper trail that can verify the button you press is turning out the results you are looking for. tomorrow is going to be a big test with these new systems. this will be the first time a lot of these paper trails are going to be tested. out will have to figure whether their auditing systems are up to the snuff. on from tuesday to 2020. >> i think one of the big things, we have eight thousand separate jurisdictions in the united states. no i.t.them have support or cybersecurity staff. getting those jurisdictions and

more resources, that means having extra cybersecurity staff . place,backup plans in because there are problems in every election, having backup , and those votes they get counted are critical. >> your thoughts on facebook not fact checking political ads. >> we can spend a long time talking about the issue of fact checking. difficult conversation to have. thing is mark zuckerberg, when he says we just want everybody to see if a candidate is lying. i think that is a little bit disingenuous. one of the problems in 2016 is we didn't know about a lot of these ads.

ads can only go to a select number of people. leaving the issue of fact checking ads, passing requirements for more transparency so everyone can see them, there is something called the honest ads act. a bill that senators klobuchar, grant and warner has sponsored is really critical. it as opposed to having these as that a lot of people don't know about. muchke you said, this is a longer discussion to be had. thank you both for joining.

newl ahead, facebook has a effort to improve people's perception of the company. this is bloomberg. >> bloomberg television is brought to you --

the u.s. has signed paperwork to exit the paris climate accord. a starts a one-year clock for full u.s. withdrawal. in the paris agreement nearly 200 countries set their own national targets for reducing or controlling pollution as heat trapping gases. an outcry over cloud deals is getting louder. 1000 employees are calling on management to ditch deals with companies like chevron and saudi arabia aramco, with details of a letter published on monday. i get the ring and bloomberg technology mark bergen. letter that came out this morning.

point is asking for the company to put together a climate change plan that includes dropping contracts with these oil companies, committing to not working with border agencies, the activists are connecting some of the immigration authorities have done with climate refugees, and also to stop donating to politicians through the political action committee they see as either climate denying or up against the science of climate change. so far google hasn't put a formal response. has repeated google has been a leader on renewable energy purchasing. they were one of the first companies to come out and say, we are going to commit to 100% renewable. it has been looking at all this leadership we have. they haven't responded directly

to the cloud contracts. >> between a business with these cloud deals and having their employees on a weekly monthly basis, really protest all of this, how do you draw the line between the business line and making your employees happy? fascinating. successfully -- a year and a half ago the employees were able to mix the contract. google employees have shown success in being able to actually stop some of the work. my sense is that some of the companies, the pentagon defense and energy industry, these controversial sectors, are big markets.

>> we stay with big attack. they own instagram. started as a single app and 15 years later facebook toadding corporate branding distinguish itself from the social network of the same name. joining me to discuss is kurt wagoner. why the branding change? a bunch of owens different services, including instagram, whatsapp and the social network. historically it uses the facebook name to encompass all of those. it's not clear what you are talking about when you are talking about facebook. are you talking about facebook think or the social network? the company is trying to use branding as part of the way of clearing up some of that and using that new brand to lay claim on some of its other products like whatsapp or instagram.

>> it struck me that when the chief marketing officer told me it would improve the perception of facebook the company. >> that's according to their research. out say when people find that these products they do like , like instagram or whatsapp, is owned by facebook, they feel better about facebook. this is a company that created something they act truly like. it would make sense why the company is putting that branding inside of instagram and whatsapp. not have aally does strong reputation at the moment, they can feel some of that from some of their other properties. moreesn't this highlight antitrust concerns when they are telling every regulator all the companies that they own? >> that is one way to think about it.

there have been some people that argue that this notion of bringing all of facebook's products closer together is there is one way for it to be harder to split up. there is a technical underlining there. tois harder for facebook spit that stuff out. they announced this big deal with the spc around privacy. clearok has not been about what data it collected. this could be seen as them responding and saying, we are going to make very clear because we are going to put our name on everything we own. >> thanks for joining. addition it for this of bloomberg technology. bloomberg technology is livestreaming on twitter. be sure to follow our global breaking news network on tictoc on twitter.

>> we are under an hour away from the market open in japan and south korea. in hong kong, welcome to daybreak asia. >> our top story, optimism floods the market as the trade deal edges closer, china is reviewing potential locations for a signing ceremony.