announcer: in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: this is bloomberg technology. facebook prioritizing its own greed over the safety of our children. that accusation from senater richard blumenthal at a hearing

where lawmakers grilled a top executive from the social network about the impact of instagram on kids. we will bring you the latest. plus, developers are the new bankers. the new report out of wells fargo predicting a wave of job cuts for traditional walls -- traditional roles on wall street. a survival drama from south korea could become netflix's most popular show ever. there has been a 50% bump in just the last two weeks thanks to a new hit show. we will tell you just how big it could be. we will connect all of that in a moment, but first a look at the markets with ed ludlow. it has been a rocky week for markets, not good for the end of september. >> we ended the final trading day with a whimper. s&p 500 down 1.2%. the nasdaq 100 was choppy between gains and losses.

tech stocks were leading the way , but we ended down .4%. the delsea semiconductors down by the -- down by .2% -- ed: cryptocurrencies, the crypto index by more than 6%, having its best day. you can see it is a sad september. our first monthly decline since january. our worst decline since march 2020 when the pandemic gripped the united states. technology was the underperformer. a lot of the market grappling with what will happen with the outlook for rates and tapering by the federal reserve. interesting stories on the day, -- in chinese technology stocks, concerns about revelatory crackdown. the state media saying gaming, that did not affect at all.

elon musk telling an audience tuesday he enjoyed working with amd despite the chip shortages. facebook closing down 1/10 of 1%. so much focus on the senate hearing where executives were grilled. it was put to test with prioritizing growth over the health of users. emily: thank you. facebook facing heat again in washington. facebook's global head of safety testified before a senate subcommittee about leak research that showed its platform, instagram, are harmful to kids. davis argues this research was not bombshell in any way. >> this research is not a bombshell. it is not causal research -- >> i beg to differ. this research is a bombshell.

it is. powerful, gripping, riveting evidence that facebook knows of the harmful effects of its site on children and that it has concealed those facts and findings. emily: senators blumenthal and blackburn are currently investigating facebook with the help of a whistleblower who sparked a wall street journal investigation into the social network's approach to kids and teens. joining me to catch up is kurt wagner. that exchange was representative of the tone of the hearing. lawmakers are not happy. how much trouble is facebook in? >> we heard this repeatedly throughout the session. lawmakers do not trust facebook. that is a problem in the sense that facebook has obviously spent a lot of time in d.c. and

outside the u.s. trying to shape regulation and shape the rules they have to follow. if nobody trusts facebook, they are not going to take their promises seriously. i feel like we have crossed this line. it does feel like facebook has lost all goodwill. it begs the question, how much sway do they now have? i would say very little. emily: let's listen to another remark from senator markey comparing facebook and social media to big tobacco. >> for teens, instagram is worse than a popularity contest and a high school cafeteria. instagram is that first childhood cigarette, meant to get teens hooked early, exploiting the peer pressure of popularity and ultimately endangering their health. emily: this is really instagram

in the hot seat. for many years it has been facebook alone, instagram has not been the main focus. now we see instagram here taking the heat. facebook published two reports that the wall street journal had pulled from, then the wall street journal published more, did that actually get facebook anywhere? >> face that -- facebook did that because they have been arguing the wall street journal misrepresented data. they said they took the most negative parts of this research and that's what they are building their headline around. the reason they did it is because there was data in there that made instagram look less bad. the journal came back and said we have these other four research -- that show a lot of issues, especially research.net

showed the product itself can put people in a downward spiral if they already feel bad. the algorithms, the likes, that stuff can add to issues people already deal with. i think facebook try to get ahead of some of this. i'm not sure it landed in the way they had hoped. emily: the whistleblower who leaked this information to the wall street journal is coming up to testify tuesday. this person is we believe going to give an interview to 60 minutes. their identity will be revealed. what we expect to happen? >> we believe the committee has a lot of documents that we the public have not seen. we only just started to see them last night when the journal and facebook started to release them. it is possible be will see new documents brought up that this whistleblower gave the committee, but i think we are going to see a lot of questions that get at facebook's intent.

facebook knew this research, how did they respond when they learned these things? did they do anything? that is where this whistleblower can have a damaging impact on facebook because we know what facebook knew, we don't know what the response was. that is where they could really go and do damage here. emily: bloomberg news' kurt wagner. thank you for your insight. now to other don't about the lula -- electronic arts has a new chief operating officer, making her the most powerful woman in videogaming. the promotion sends a message at a moment when the industry is facing an uprising against sexist culture in the gaming industry. rival blizzard facing litigation over alleged sexual harassment of women. coming up, how much trouble is

facebook in? more on senators grilling and what it means for the future of social media impact on a generation of children. that is next. this is bloomberg. ♪

>> the question that haunts me is, how can parents, or anyone, trust facebook? >> you have lost trust. we do not trust you. with influencing our children.

emily: senators blumenthal and blackburn grilling facebook's antigone davis about internal research on the effects of its platform on teens and children. the senator saying this is a -- issue. the accusation that facebook new their product had a negative impact on teen's mental health. joining us is adam cover savage -- former longtime google executive and our executive producer of a media company focused on exploring the intersection of tech and humanity. adam, it seems like these senators have their minds made up. i know you talk to lawmakers all the time, but how bag -- how bad is it for facebook this time? >> it is not great. when it comes to focusing on things that you hear parents and

teenagers are concerned about, the senate kind of whiffed. they focused on prosecutorial questions about will facebook publicly sure it's research, how facebook treats whistleblowers, a lot of questions along those lines. very few questions that asked about how we improve the online experience for kids? how do we prevent self-harm? what about invading privacy? do the eight rules make sense? how do we disincentivize parents from lying about their children's age. it would great to see congress to work together with parents, but that is not what we saw today. emily: would you agree with that? it seems to be like facebook is under more scrutiny than ever. when you're questioning the intentions of how much they care about children, that goes deep. >> i think people to some degree

-- can you hear me? i think to some degree, people have lost -- governments, politicians, i remember cambridge analytical back in the day on this scandal that everyone was racking their brains over. people have lost patience and this is a very big deal. it was interesting to hear facebook's head of security talk about some of these changes they are considering, like if people could potentially bring them better content, the idea they take a break exploration tool, but to me -- and i know this is a sentiment shared that oftentimes it takes a lot of public pressure and a lot of media pressure for some of these things to come out and for things to be done. the question is, obviously, if all of this information was there, why didn't we see

products that help children before. matter of fact, they were going to launch a product for children without all of this information known to the public. the patient's is wavering. emily: antigone davis explained their chain of thought that the goal of this research was to help children in the long run, to better understand. >> -- the option to give teens access to a version of instagram designed for them where parents can supervise and manage their experience. to have them lie about their age to access a platform that was not built for them, or rely on affability to verify the age of kids too young to have id. we are offering parents revise experiences like tiktok already does. emily: i am curious what you make of that. youtube kids does exist.

i asked for -- thoughts and she says she thinks youtube is valuable to teen mental health because you have creators out there talking about their own life experiences. his instagram different, or potentially more harmful? >> we know that kids are going to be online no matter what. if you a 10 years ago, they were on services that were designed for adults. thankfully, we have seen more services like youtube kids, and they have divided a parentally supervised sandbox. the challenge is when kids reach the between age, they start wanting independence and break out of the sandbox. because of the kids privacy law, many parents lie about their kids age when they reach that age.

that is not a good situation. that is not desirable public policy. one thing you are seeing facebook boot -- facebook doing is recognizing that even though at 13-year-old can be experience -- can be on facebook, they want to give them an appropriate experience for emily: i think one of the main concerns is that the real intentions of a mark zuckerberg or --, they obviously have children, they invoke their children in conversations about kids safety. adam mosseri brought his own kids up and he said they were -- lori, you and i have interviewed executives in the past and people are always asking what are their intentions? do they really want to her children? i am curious how you approach that question because it seems to get to the heart of what infuriates the public about what we are hearing.

>> in the time i have covered technology, we have been in this for a long time. the thing that gets lost sometimes is the humanity. do i think mark zuckerberg and adam -- these folks are trying to actively harm our children? i don't know. that said, facebook had trouble anticipating what will come and the negative backlash on their product. i think this is an interesting point, to understand how we got here and what could be harmful. now that instagram is getting its day, we haven't -- it is important to note that instagram has changed so much over the last couple of years. when facebook acquired instagram back in the day, instagram was supposed to remain separate. it would not be involved too much. and then instagram founders --

that changed a lot. a lot has changed. the product has integrated more with facebook. it is easier to get more attention. understand this is a product that has changed over the last couple of years and you have to take it from that approach. what does that mean for our children? we are seeing that in some of these studies that came out and i will mention, facebook is building out another dimension. they are devoting quite a bit of time into the meta-verse. we got to have a conversation about the meta-verse. this idea that they want to build a better world and the virtual space and what that is going to mean for our children. this is happening at the same time that china is -- emily:

china is cracking down. i felt there was an interesting quote from senator sullivan saying he is not a fan of china but agreeing with the federal -- the chinese government on limiting time. he said we are going to look back 20 years from now and see the massive mental health challenges that were created by this era. this may be the one time to say why didn't we, like the chinese communists, say, take a break. what is your reaction? >> i was amazed that one of our senators would look without for me -- with admiration on the chinese government. if we take a step back, we need to take a holistic look at how kids and families are using technology. during the pandemic, social media messaging were critical lifelines for many kids who were stuck at home. a critical way for them to stay in touch with their friends. two thirds of teens say social media was important to them during the pandemic. technology is not always good.

sometimes it makes things harder. what i hear his parents grappling with questions about screen time, jealousy, kids are going through their adolescence online. they're good, the bad, the ugly, we need to create a safe online space with good laws that can support that. but following china? that is bonkers. emily: i am curious to how you think facebook has handled this whole situation from a communications perspective. it seems like at least from the public perception, the brand trust, so much has been lost. facebook can't win. >> i wonder if there is a gap between what journalists and politicians focus on and with the average person focuses on. what i do everything the way they have done it? no. one of the things about the

coverage is that it holds a mirror to the company and sometimes looking at a mirror can be painful. sometimes it can illuminate blind spots. what we have seen over the last couple weeks is that they have tried to see how the world sees them and act accordingly. they put a pause on instagram kids, but have also announced their intention to rollout supervision tools on instagram. sometimes that holding up of the mirror can be painful, but ultimately if they pursue growth at the expense of positive experience for users, a lot of people won't keep coming back. i think they have incentive to fix some of these things that surfaced in their own research. emily: it is not just the journalists and the media perception, we are looking at the entire internal research, six separate documents having

similar interpretations, but you and i can debate that off the air. adam and lori, thank you both for joining us. coming up, changes at the amazon whole foods. who is in line for the top job when john mackey retires. this is bloomberg. ♪

♪ emily: shares of virgin galactic soaring. the faa has given richard branson's company the green light to resume flights to space.

an investigation was launched after the capsule carrying branson veered off course. virgin galactic has agreed to better communicate, and any flight changes to the faa. in london, deliver route expanding its partnership with morrison groceries. they are testing a mini facility center to offer rapid delivery of essential items which will allow deliveroo to deliver items and as fast as 10 minutes. whole foods market's, john mackey will step down. this marking a changing of the guard at the grocery chain that amazon acquired four years ago. mackey will be succeeded by current coo jason bacall before joining whole foods was managing director with -- coming up, a setback for tesla in china as chinese drivers

successfully sue the company for fraud. what it could mean for the electric car makers in one of its most important markets. this is bloomberg. ♪

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emily: this is "bloomberg technology." i'm emily chang driverless tech startup has launched semi automatic. now, it is showing up its tech to investors. we got a firsthand look. >> this semitruck is driving

itself. the technology comes from aurora. it is seeing the world around it digitally detecting other vehicles and deciding how to react. parks we use cameras and radar to see the world. also lidar. >> now, there is a safety driver behind the wheel and a copilot as backup. aurora hopes to remove them by 2023. like many startups, it is also working on passenger vehicles that can drive themselves. the big rigs hauling heavy loads of cargo is where the company believes the technology skills first. >> it doesn't matter where you are in the country, the freeway looks the same. if you're driving through a city, it's very different. the scale of products, you have

to scale the technology and a bunch of different ways. with trucking, we expect to scale it by operationalizing the business. >> in texas, the company is building a partnership with fedex. running between dallas and houston. the idea is to prove the business model works, not just check. -- not just the technology. we took a ride for the first 28 mile stretch. we encountered very traffic including dozens of large vehicles merging into the lanes and also parked cars. the trucks drove itself autonomously throughout. the drivers had their hands hovering over the wheels but did not have to take control at any point. hope is that the limited pilot will be a key steppingstone for a technology that is tantalizing the industry. logistics companies have been

grappling with a severe shortage of drivers. >> we will be moving toward driver as a service business model. our partners from the manufacturing side provide the vehicles then the folks who have the business to use those trucks provide the business and together, they own and operate those vehicles then they pay us money to drive the truck for them. >> in december, uber sold to aurora with hopes to one day combine the tech and the platform. lots needs to be done to improve the technology. in the meantime, aurora has competition. one company has already run mail delivery pilots with usps. there is a company that has already run in china without a

safety driver behind the wheel. emily: exciting and also disconcerting to see a semi on the road without the driver behind the wheel. when do we see this coming to market? does it beat robo taxis or self driving cars? >> the technology world once used, it is exactly the same. the same sensors that you saw on that piece was 2023. that's when they think they will take the driver out. if they think they're going to scale the technology, to give you a sense of how much longer it's going to take to get real commercial business, it's in the more simple straightforward use case where we are going to see this in the real world. emily: i want to move onto another story coming out of china where tesla has lost a

major fraud case involving a driver. tell us what happened. >> this involved a chinese driver who bought a used tesla through a legitimate channel. he sued tesla on the basis that it had major modification in the sense that it had major repairs. tesla still charged an elevated price. the court said yes that tesla misled the buyer saying that it was a new car when it had serious engineering done to it from an accident. the court said tesla has to pay or refund three times the cost of the car in terms of damages. it is the latest friction point between tesla and chinese consumers. we have had other examples in what is the world's best -- biggest ev market. emily: how are things going for tesla in china? obviously, a huge massive market for tesla, but not without

challenges. >> wall street is bullish about tesla's prospect still in the country, especially how they have been able to ramp up production and shanghai. it's the biggest ev market. elon musk was speaking this week and he said things are going pretty well. some of their issues with the chinese government, elon musk is directly engaging over. he says there will be centers to handle the data about the cars and owners. ultimately, it is a crowded field they are competing against. that's why we fixate so heavily on it. going into earnings season and the end of the year, wall street is bullish on the company's prospect. emily: meanwhile, gm's self unit and others have just gotten permits to charge for

self-driving car services in california which is a significant step. >> it is significant, but it is restricted. there are only certain types -- times of day they can operate. waymo can only operate in certain neighborhoods. this is one half of what they need. the main regulator still pending is the california public utilities commission. until they get additional permits, they cannot charge consumers because it is that agency that protects consumer rights, consumer protections. it is an important step forward, please are restrictive small-scale pilots. they are designed to prove the commercial viability and until they have the full spectrum of permits, they cannot move forward. emily: thank you for the updates. coming up, the wells fargo managing director talking about his latest report. he says banks could eliminate 100,000 jobs over the next five

years and white software developers should be rejoicing. that is next. this is bloomberg. ♪

emily: it could be the largest reduction for bank staff in history according to wells fargo who sees banks eliminating 100,000 jobs. advancements in technology are going to fuel the fire.

joining me is mike mayo of wells fargo. what leads you to this conclusion? mike: let me give you the good part of the story. thank you tech. take should enable banks to become more efficient than they have ever been before in history. that is modernizing back offices. it's really a swath to bots from bankers. banks are increasingly software companies and i guess that makes people like me part-time tech analysts. this is a positive partnership between banks and technology. that really should take off post-pandemic.

emily: do you see banks adding tech jobs or losing 100,000 additional jobs? mike: especially as you automate the back office, then will be the front office. there is an offsetting factor. more technologists who work in areas such as ai and a data, the cloud, jewel banking, electronic payments, they are getting added. also, anyone providing advice whether it's consumers, financial planning, institutions whether it's investment banking or bankers. that is a net number. we do expect 100,000 jobs to be eliminated from the banking industry. if you are working the back office or branch, this should

not be new news over the next several years as banks automate. they need to automate to keep up with big tech, fintech, big retailers and others. emily: there are times where you just need to talk to a real human. it takes many minutes even out to get someone live on the other end of the line. what does this mean for customers? mike: the idea is that customer service will be vastly improved. the best example was during the pandemic when big banks had more than 80% of their workforce work remotely. then digital banking provided fantastic service. the 100 page report that we co-authored showed that jd power says that customer service at banks is the best that it has been since the crisis more than a decade ago. digital banking only customers

-- technology enables better customer service. you should be able to talk to somebody when you would like to do so and bank of america is a good example of that. you can set up an appointment and talk to somebody and their number of appointments have increased. you talk about digital or rick and mortar delivery, but it's really a hybrid delivery now. -- digital or brick and mortar delivery, but it's a hybrid delivery now. emily: do you think that banks can win the war for tech talent? and i went to work at goldman sachs. now, everyone wants to work at technology companies or startups. mike: it is very hard for banks to get tech talent. the ceo of capital one has been around for decades. he said hiring tech talent, the costs are breathtaking.

it's a great time to be a computer science major. having said that, if a technologist joins a large bank, it's not rolling the dice hoping start is going to make it or not. you can have a concrete impact on tens of millions of consumers. you also have the resiliency of the bank, you know there going to be around a while. it's a more steady job. you may not have the free sushi and dry cleaning and ping-pong in the corner, but you could have a steady job that you know you're going to have an impact. the competition for tech talent has never been more fierce and thanks are bearing the brunt of that. -- banks are bearing the brunt of that. emily: there is also potentially a big payoff if you pick the right startup banks can't necessarily offer. there is one bank that you think is getting it right it could beat the other banks, which one would you bet on?

mike: our favorite bank long-term and short-term is bank of america because they have the multi product multi delivery multi geography approach. they can keep a customer. when you go to college, you get a new bank, when you move to a new town, you get a new bank. you could stay with bank of america or some of the other large banks for your entire life now. the data show that the length of the average banking customer relationship is gotten longer. emily: thank you. we shall see. coming up, netflix shares close at a record. we will look at some of the streaming giants top titles. this is bloomberg. ♪

emily: reduced traffic, boost public transit, these were some promises a decade ago when uber and lyft bank introduced themselves. ride-hailing could cost more to the environment than taking your own car. with me to dive into this is our new citylab reporter. what did this study find? showing the uber and lyft could be worse than driving ourselves? >> a little bit of econ 101, economists love to talk about external costs.

these are things that consumers or manufacturers don't pay for when we are buying or selling certain goods. for example, when we drive a car, we are not paying for the cost of the pollution or for the added miles, the attic congestion that other drivers have to sit in because we are getting onto the road. economists love to study these external costs. a lift to put them in terms of dollars and cents. getting to the findings of this study, these were carnegie mellon researchers comparing what are the external costs of taking a trip in your personal vehicle versus the same trip in a ride-hailing car? they looked at the data across a number of cities and ran a simulation and basically found that added up, the external cost of uber or lift or $.35 more per trip than taking the same trip in your personal vehicle. emily: does the equation change if you are ride-hailing an

electric car or uberpooling? >> they ran the simulation on real-world data. they did run a simulation where every vehicle out there was an electric vehicle which is something that uber and left -- lyft promised to do. they found that still, the environmental impacts are much worse. the important thing the study found is why. their finding was that it's because what's called deadheading. all of the extra time in between trips. passenger free when drivers are putting extra miles on the road putting out more pollution and congestion. they did find that ride-hailing has the potential to be better for the environment and your personal car if you share a trip than the passenger. if you're taking advantage of the carpal options -- carpool

options, that can be better for the environment. emily: it's certainly not the primary mode of travel. what are the companies saying about this? >> it's interesting. lyft did respond to me earlier this week. they have acknowledged that deadheading, all of the mileage their drivers are putting onto the road in between trips is a significant portion. it's actually 40% of the miles that over and -- uber and lyft are putting on the road. they said that they are making their algorithm more efficient to reduce that number of miles and working to make their fleets electric and also investing in bike share. uber did not respond. this is the first study to take

a hard look at the effects of ride-hailing. these companies made big environmental promises when they were first getting started and so far, we have found that they are pulling people off of public transit, adding to congestion, potentially adding to an uptick in collisions. emily: thank you for bringing that reporting. netflix closes at a record as squid game title as to a rally. it is the first korean drama to claim the number one spot on netflix in the u.s.. it could become the most popular show ever. >> that's what they said at a

conference earlier this week. it's too soon to know. netflix tends to measure based on a 28 day metric. people don't even like the metric that netflix uses. the one thing that netflix -- it's undeniable is that this is probably the biggest thing that netflix has had since bridget and her maybe ever. -- since bridgerton and maybe ever. it speaks to netflix is global reach. that's one advantage that it has on almost all of its competitors. emily: other top netflix shows, what is it that makes squid game which most people are going to be watching with subtitles, what makes it so compelling? a south korean survival drama. >> one thing i noticed having

studied the online video world, what it does effectively is it opens with this parable, this discussion of what the squid game is and what creates the stakes is explained early. the steps, you are building the character arc of this one guy. it ends with a surprise cliffhanger that makes you want to watch more more. good old-fashioned action show. it combined something like the hunger games which is one of the most popular franchises of the last 20 years with one of the biggest forces and global entertainment. emily: did netflix expect squid game to be this big of a hit? >> no. it's kind of remarkable,

their biggest hit almost always comes out of nowhere. they often think that these products will be successful, but it's hard to anticipate that a show that is not english is going to be the most successful show in history when about half of their customers speak english. emily: we will have to see just how big it comes. -- how big it becomes. finally, rave reviews for the new james bond movie could maybe pull people away from netflix. one chain in england sold 200,000 tickets in 24 hours. that is more than the last bond movie sold in 4.5 weeks. we will see how that one progresses. that does it for this edition of "bloomberg technology."

tomorrow, guests from the center of humane technology. i'm emily chang in san francisco. this is bloomberg. ♪

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>> good morning and welcome to "daybreak australia." i'm paul allen. >> we are counting down to the major market open. shery: volatility continues to hunt wall street. u.s. stocks seeing their biggest monthly selloff since march 2020. >> china orders its