>> rose: welcome to the program. tonight, we talk about the sharing economy. we begin with travis kalanick, co-founder and c.e.o. of uber technologies. >> in almost every city we are in, at some point the incumbent industry attempts to persuade the government to do what we believe is the wrong thing which is not allow computation and, so, we are very pro competition and that's the principles we try to engage in a city but, obviously, incumbents don't always want that competition. >> rose: we continue with brian brian, co-founder and c.e.o. of airbnb. >> you grow and people love your products. when they love it, they tell other people in. silicon valley, everyone is focused on the growth and numbers going up. i say we should focus on making sure people have great trips. >> rose: we continue with our

conversation with tim cook from 2015 in our ongoing inquiry what makes apple apple. >> here's the situation, on your smartphone, your iphone today, there is lyle health information, financial information, there are intimate conversations with your family or co-workers, there is probably business secrets from the work that you're doing, and there is also tracks of what you've searched on, lots of information about what you're looking at and writing, and maybe you're a journalist and maybe even your sources, right? and all of this stuff is incredibly personal and we believe incredibly private and you should have the ability to protect it. >> rose: travis kalanick, brian chesky and tim cook, when we continue. funding for charlie rose is provided by the following:.

>> rose: travis kalanick is here. he is the co-founder and c.e.o. of uber technologies, the ride service launched in 2010, present in 65 countries now. wire service manager called transportation and logistics unicorn many private investors consider more valuable than ford motor company or fed ex. $2.65 billion value. it expanded into ride sharing. a class action lawsuit over the

classification of drivers as contractors instead of employees is ongoing. the company is also facing stiff competition and opposition from some of its drivers who have been been subjected to a recent price drop in major cities. pleased to have travis at this . people seem to love uber. >> beam either get used to waiting for a bus, used to driving a car, usually, or used to not being able to go somewhere when they want to. it could be like, hey, you want to go to a restaurant but you

don't know how you're going to get back because you've had a glass of wine or two. this is about safe, reliable transportation. no matter where you are in the world, it's five minutes away. >> rose: how did you start it? it was with -- i was with my co-founder in paris and couldn't get a taxy. anyone who's been to paris knows you are very likely to be walk, and we just wanted to push a button and get a ride. my co-founder is just, like, i want to push a button and bet a ride. i said that sounds like an amazing thing, let's do that. we went back to san francisco and started working on it. >> rose: you had been a serial entrepreneur before that, success and failure? >> yes, i have been an entrepreneur basically since i got out of high school and have seen the trials and tribulations

of an entrepreneur, but i guess my approach on the failure side, is yeah, you will get knocked down but you keep finding a way to get back up and it doesn't feel like failure. so when you say failure, maybe, maybe not, but definitely what people would look at are failures of some kind or another. but when you keep getting back up and putting your all into it, you eventually find success. >> rose: uber could not have happened without... >> smartphone. >> rose: smartphone. ight. uber could not have happened without a connected smartphone with data. >> rose: as you were sitting down, someone asked the question about lowering prices. very good for the consumer, perhaps not so good for the driver. but there is an answer to that. >> well, look, what we've found

is that, when prices go down, that a lot more people can use it. it becomes affordable to a lot more people. so then you see people using it in places and at times they wouldn't before, and what that means is when a driver drops a customer off, he then can get -- he can then get another request much more quickly. so what happens is the trips per hour that that driver can do and the price goes down -- >> rose: volume goes up? the volume goes up. what happens is we've done from, for instance, here in new york, we've gone from four years ago the driver was making about $19 an hour, go all the way up to $32 an hour because everything got more efficient as we moved prices down, so the driver is making more money per hour as price goes down. >> rose: how many governments have tried to prevent you from doing business? >> i mean, in almost every city we are in, at sam point, the

inument -- at some point, the incumbent industry attempts to persuade the government to do what we believe is the wrong thing which is not allow competition. we are very pro-competition and that's sort of the principles in which we try to engage in a city, but obviously incumbents don't always want that competition. >> rose: there is the question of drivers being employees versus being private contractors. as of today they continue to be private contractors? >> yeah, that's correct. the way to think about this is it kind of starts with how the independent contractor thing works, not just here in the u.s. but around the world. over 90% of the taxi drivers in the united states are independent contractors today, right, but those taxi drivers have shifts, and in a lot of cases it's 12 hour shifts. >> rose: do they get medical benefits and things like that? >> no, they're independent contractors.

so they have shifts and they have -- and it's not their equipment, it's not their car, and they have lots of rules on how they do business. in the uber world, there are no shifts, you just work when you want and stop working when you want. of course, it's your car, so it's just really your business. we feel like the independence that drivers have on our platform is pretty clear, and it's just about the political discussion about, you know, as a community, you know, making sure that the labor side of the equation is getting a good or fair deal. >> rose: airbnb is part of the sharing economy. what else is vulnerable or open or possibly changing because of the sharing economy? >> i like to think of it as the world uber is in is on-demand economy. you push a bunt, you get a ride.

that's how we feel as consumers. on the labor ride, pushing a button and starting and stopping work, that flexibility in work is, i think, the real breakthrough in what i call the on-demand economy. >> rose: you can shape your own hours? >> you literally have control of your time, which there is very little work in the world that allows for that, and that's a true breakthrough when you can do it at scale when you're talking about millions of people who now can work on their own time when they choose and not when they don't. >> rose: are you in a hurry to do something? i mean by that, people talk about you, and they believe that you're trying to rise to higher and higher levels of scale because it means something to you. >> sure. >> rose: but would you have a young man in a hurry?profile >> well, look, you know, i

think -- if -- how should i put it... we look at all of the cities and the hundreds of millions or billions of people who live in cities around the world and we know that the transportation systems there are just not -- they're not serving everybody's needs. even here in new york with a great mass transit system, there are still 2.5 million cars going over those bridges every day. so we just believe we can help the city do better. i guess most successful entrepreneurs are not waiting for success, they're not waiting for progress. we are generally a little forward-leaning when it comes to making progress happen. >> rose: you become, i think, in love with the idea that you have been part of and you can't wait to push the edges of what that is. >> i think what it is is, for me, it's about problem-solving and loving to solve problems

and, so, if you are passionate about solving problems -- sometimes i like to describe this as, like, imagine a really great math professor with no problems to solve. a great math professor who wants the hardest problems and wants to solve them and loves solving them, that's how i feel about my work. it's not about a man in a hurry, it's more about really interesting problems in the world and how you lean into them and solve things that people maybe thought weren't even possible to solve and that's fun. you know, i like problems -- i like problems that have -- >> rose: consequences? well, certainly that. but i think i like problems where you can fight for something that matters, where you feel like maybe there is a little bit of justice that's part of solving. >> rose: and how would you define what matters in your

case? >> well, like in uber's case, imagine a system -- imagine the way in which all people get around their city, what's constrained because somehow or another it was illegal to have alternative. somehow or another, it became illegal for cars to be used for commercial purposes and, because of that, everybody for the last 50 years has had to buy cars because no cars were allowed to be shared. but when you can share them -- >> rose: the technology wasn't there to share, right? >> well, not necessarily. if you look at the past, like the -- there was an uber before it was -- before there was an uber called a jitney in the early 1900s and grew faster than uber but quickly regulations were put into effect that made it illegal for people

to share cars. >> rose: when will you be for profit? >> well, it's interesting. we, like some other tech companies -- maybe even like amazon or something like that -- where the profits come in and you go invest in the new thing. so for us, we're well over 100 cities that are profitable, but you take those profits and you invest and you either go into new cities or you invest in new technology or new kinds of businesses. now, i don't want to do too many things. we try to keep a limited set of things that we do so we can stay focused, but we do like to invest your profits into the new thing. >> rose: okay, let's talk about the new thing. uber commute? >> uber commute. so this is -- well, let's start with pool. uber pool is you push a button, car comes to you just like before, you open the door, get in the car, and there is somebody else already in the car. two people taking the same trip

at the same time, uber commute, is somebody's driving to work. they're not a commercial driver and they pick you up on the way to work and you guys just happen to be going the same place at the same time. the cost is way down with uber commute because the person is already going where they want to, they're already going to work so the marginal cost goes down substantially. >> rose: what are the new adventures other than commute and pool? >> i mean, look, close to a third of all our trips are in china. that's interesting. >> rose: a third of your volume is in china? >> yes. >> rose: and what do you think it will be by 2020? >> i mean... >> rose: that's four years. i have no idea. >> rose: but you love thinking about it. >> yeah, for sure. what i love doing is solving the problem, right? so how do you -- >> rose: okay, so what does solving the problem mean in china's case? it's the metric of demand on all

of that or china's a different place and you have to make your way around a different set of rules? what is it? >> it's the latter, right? so, for instance, we have our existing system, but there are so many things that are different in china -- maps are different, social networks are different, payment systems are different, government and how they work with businesses is different -- so now you have a whole new problem to solve. sometimes it's, like, it's different in this little way, but that little way, that chinese way of doing things can change everything, and it's interesting for an enrepreneur and certainly for a problem-solver because then you have to re-think your problem. >> rose: how will driverless cars affect your business? >> well, i think we see all of the good things that happen with human-driven transportation, like what uber does today, people driving cars. when you go into autonomous,

those benefits get bigger, in many cases, but i think the biggest one is that a million people die a year in cars and, when you go into autonomous cars -- and we know google has been working on this since 2007 -- when you go into autonomous cars, the prospect is a million fewer people dying a year globally. that's a big deal. >> rose: that's a big deal. that's a huge deal. these are, like, senseless deaths that shouldn't have happened. >> rose: how far away is that? i mean, you know, there is no right answer. nobody really knows because there is still science to be solved, there is still regulatory to be solved. the point is, like, if a google autonomous vehicle is in a desert and no crosswalks and no people, they've got that now. if there is crosswalks, they probably have it. if there is really extreme weather, maybe it starts functioning not quite right.

the thing, is there is hundreds of these types of problems that have to be solvedrone at a time in order for it to work all of the time. >> rose: issues of people, either a driver attacked fro by somebody from the back or a driver acting hysterical in terms of taking off, not stopping, running stop signs, going too fast, how big an issue is that for you? what are you going to do about it? >> well, look, you know, we -- you know, uber's number one cultural value is to celebrate the city and what that means is everything we do is to make a city better and, so, sort of the first thing we do is say what can we do -- when we first got going, what can we do to make for the safest way to get from point a to b, that's part one. part two is, well, that's great, but how can we actually help to make the city safer?

no city's perfect. no system will be perfect, but can you institute technology, can you roll out technological systems that make uber the safest place in a city? so this is things like, well, of course, things you do before the trip even happens -- making sure the right drivers get on the road and the wrong ones don't -- making sure that any feedback happening in a car goes back to a centralized system and you can deal with situations or partners -- we call the drivers partners, that, you know, if there is feedback that needs to get back to them, we do. if it's and a extreme situation, we take them off the system. then there is after the ride, too. and, so, imagine if you had a system where somebody's -- you know, if -- and this is the kind of technology that's interesting

is let's say somebody is accelerating faster than they should or decelerating faster than they should, is there a way to detect that? this is the kind of future that we're trying to figure out. if you can detect it, are there ways to prevent it if so -- pret it? basically it starts with a system of accountable and technology that makes that system more accountable over time. >> rose: accountability but sensors that can do the work of protection. >> sure. >> rose: it's been an investment from general motors. >> correct. >> rose: a car company invested in it. >> that's right, yes. >> rose: does that make sense to you if you're a car company? >> yeah, look, i think as transportation becomes a service, as fewer and fewer people own cars, there is going to be this software and hardware partnership. uber and folks like uber with the software side of things. we're not making cars.

>> rose: not now, not tomorrow? >> all you have to do is go to a manufacturer floor, see cars being made and you're, like, wow this is a whole new level, so i think there is a natural partnership between the hardware and software side of things. >> rose: what do you worry about in the middle of the night about uber? is there a disruptive technology that could change the game? >> we basically are all about making it more convenient and brig the convenience at a lower cost. whoever is able to bring the most amount of convenience at the lowest cost is going to be a big winner in premium transportation in the city. >> rose: how did you change your image? why did you feel like you needed a new symbol of uber? >> look, when we first came up with what is now the old uber logo or the old icon, we were

only black hearts. we were a high-end service, a luxury service, almost, and this was an aspiration or we were trying to show something that looked high-end and could almost look like something that would go on the front of a very nice car, but we were only in one city when we made that, we weren't global, and it was super high end. we said, look, we're almost in 400 cities, dozens of countries around the world, we wanted to be deferential to the places that we serve -- that's where the colors and the patterns come in and, by the way, you're in different countries, you get a different pattern and color on your icon. >> rose: making things universal. >> and then, you know, the "u" we turned into something more universal. "u" doesn't mean anything in sanskrit or mandarin, and we wanted to have something that was more approachable, so that was the purpose. >> rose: great to have you

here. >> good to be here. >> rose: brian brian i -- briany is here, co-founder and c.e.o. of airbnb, helping book travel accommodations around the world. since beginning in 2008, airbnb has connected 80 million guests with hosts in more than 190 countries, valued at more than $25 billion. writing in "time magazine" last year, it said bria brian cheskyy is contagious. pleased to have him back at this table, welcome. >> thank you very much, charlie. >> rose: i love the quote. you two share something of great passion for design. >> we love design. when i was a kid in college, a lot of kids put posters of

lebron james and i had johnny's design on my wall. i wanted to be an industrial designer when i grew up and told johnny that. >> rose: he and mark are close friends. >> yeah. >> rose: and when they came here we did a friend with them -- did a program with them together and had 60 minutes on apple. >> i love johnny mark. >> rose: you've talked about this before, help us understand what airbnb does. >> you can go to airbnb and book any of 2 million homes in 191 countries. >> rose: homes, parmts. homes, apartments, castles, tree houses. we started with homes and one day someone added a castle, an igloo, so we have all these different types of spaces --

when people travel, people ask where did you go. they often mention tourist districts, somewhere you wouldn't go yourself. when you travel, why can't you go there and feel like you live in the community and what better way than to live in the home. >> rose: and you started with a web site and the idea you and a couple of your friends needed to make a little money. >> i couldn't afford to pay rent. i was living in san francisco. we thought this design conference was coming to san francisco and we thought why don't we host some people and make extra money? we eventually wanted to make a bed and breakfast. we pulled out three air beds and called it the air bed and breakfast. i wouldn't have thought three air beds would have inspired 2 million homes around the world. >> rose: you think this is a sector of the economy that has huge promise and not remotely utilized. >> not even close to being utilized. we have 2 million homes. i think it's possible you will see a factor of 10, much more

than that. the whole sharing economy is a huge explosion of opportunity. we used to live in the world where there were people and there were businesses and a clear line between the two. i think we're living in a world where people act more like businesses. there is a blurring of the line. i can drive a car on the side with uber, lyft, share my home with airbnb, so many opportunities. >> rose: you don't think your competition is hotels? >> i don't think so. most average stay in hotels one to two nights. average stay in airbnb is close to five nights. it's a category creator. you ask c.e.o.s, they don't think there is overlap between our two businesses. i think we're solving a problem which is you want to go to a city for a week or longer and want to be a part of a community and save money and there's not been options. >> rose: what is the business model? >> we handle all payments from the platform and take about 14%

commission. >> rose: that's it? that's it. >> rose: they get 85% of whatever rent is incurred? >> that's the way it works. our average host makes close to $8,000 a year so meaningful, supplemental income. most people do it on the side. >> rose: most people do it on the mobile device? >> yes, they manage it on their mobile device and they also use the web. >> rose: paul graham came here and you'd had not a great success looking for money, and you went to him. >> well, it's amazing. originally, another company in wicomenator michael cyball, we were looking to raise $150,000, we were going to sell 10% of the company for $150,000. i couldn't get most people to reply to our e-mails.

we went to them, we were funding our company with credit cards, and paul admitted he thought it was a bad idea but realized there was an investment in nuclear winter, 2009, and he said we were like cockroaches because we wouldn't die. he said we're looking for cockroaches and that was at the time a compliment that he believed in us. >> rose: how do you grow? i always believe that the way you grow is the way that, you know, walt disney and steve jobs talked about how they grow. you grow when people love your products. when they love it, they tell other people. in silicon valley, everyone's focused on growth and the numbers going up. we should focus on making sure people have great trips. if everyone comes and they have a great trip, they tell people about it. 70 to 80% of our business is from word of mouth, people having great trips. >> rose: you high light the

word "belonging" as getting to the heart of airbnb. >> when people see airbnb on the surface it's very easy to think what we offer are homes and spaces. but i think behind the spaces are people, and we have 1.1 million hosts. it's about the host more than the homes and the hosts welcome you. they bring you in like family. >> rose: and you encourage them to do more. >> we do. i've asked many people what word comes to mind when you think of airbnb, a lot of people say "friendship." when you live with a person for a week in their culture, it's a meaningful experience. it doesn't always happen, but it can be. >> rose: a learning experience for both. >> for example we launched in cuba last year. we have americans from every state in the united states have now visited cuba on airbnb. it's amazing -- >> rose: how many spaces in cuba? >> we have 3,000 homes. somebody from every state in the country has visited. >> rose: often, people are there when they welcome the

guest -- >> less than half the time. about 40% of the time somebody's there. the rest of the time, you have the whole home to yourself. even when you have the home to yourself, you usually get to meet the person before you go to their home. they'll meet with you and show you the home. so there's an intimacy and a connection between two people. >> rose: you had the bad incident in san francisco, i think. >> yes. >> rose: what happened and what was the leadership lesson that you learned? >> what happened was a woman's home was trashed. it was the first time we had a bad incident happen and it was a bit of a wakeup call. i came from the school of thought where you kind of hands off market places and these things work like immune systems and the community would manage itself. this happened and there was outrage and rightly so. we were not prepared and in the wake of that we offered 24-7 support. we built a trust and safety team and have a world class trust and safety team and we offer the

airbnb guarantee, basically where we offer $5,000 protection, and one of our investors came i midnight before i was e-mailing the community and said you should make it $50,000. this was terrifying because we didn't know if we would be able to afford it. >> rose: why did he say that? because we had to instill confidence. we had to show people it didn't make any difference to us because we could afford it. before the incident, i thought of myself as a founder of airbnb. after that, i felt like a c.e.o. because i had to leave the company in a moment of crisis. >> rose: some of the people said you can't. >> a lot of people advised against it. the other thing is i wrote an open public apology letter to her. a lot of people said that is not a well advised thing, you're opening yourself up to extra liability. i thought i have to make a

principal decision where if you don't know how it ends, you will feel good about the process. >> rose: some countries and some cities don't want uber. >> we're not in three country, we're not in north korea, iran or syria. but the countries we're in, i'd say generally they're all happy to have us. >> rose: aren't there some places like san francisco they're raising questions? >> i think new york city is probably raising the most but san francisco some. >> rose: the attorney general? no, the primary issues are there is, you know, laws written before airbnb -- >> rose: local zoning laws. local zoning. there is hotel tax issues. we are now collecting hotel taxes in 25 cities in the world including countries and in country by country we're able to modernize the laws, in france, the united kingdom, and the whole message we have is we want to work with cities. the whole thing is we want cities to want us, we want to

enrich the cities and we're here to work together. i actually am optimistic, there will be a long-term solution for us in new york. >> rose: when you look at the company, what other areas might you expand to? >> well, i like to joke that, you know, we have 80 million people who have stayed in homes but people don't travel to stay in homes. they travel to go somewhere to have an experience. they happen to sleep at home at night. so i would like us to move from the space, which is a commodity, towards the business of being in the experience. >> rose: do you think people who are hosts for airbnb are different from the people who drive for uber? >> they may not be. i think there is probably similarities. i'm a rider of uber and lyft and a big guest. on airbnb they index high on hospitality and welcoming. >> rose: do you stay on airbnb.

>> i'm staying there now in soho. >> rose: you spent four hours with warren buffett. >> it was unbelievable. i got to fly to omaha, nebraska. >> rose: is this someone you reached out to? >> yes, i asked to see him and he said yes it was life changing. >> rose: great to have you. thank you very much. >> rose: we conclude in evening with -- this evening with more of our conversation with tim cook from 2015 in our ongoing inquiry what makes apple apple. anybody as big as apple has to live within rules and regulations and interface with the government of the united states. how do you feel about that? >> it's true. we operate with a group of laws

in every country we're in. we're a global company that is a complex matrix a lot of times. it's clear to me that we have a responsibility to try to influence legislation where we'll help our company, our employees, our customers, and we try our best to do that. >> rose: you engage in lobbying. >> i don't think of it as lobbying because lobbying, to me, is -- >> rose: trying to get congress -- >> the context of paying people. >> rose: no, i don't mean that. i mean having a voice in government and you articulate a point of view that you have and there are people very skilled at that. >> yeah, and we definitely do that. we do that principally around the environment and human rights

and education and other things that have stacked the operations of the company, whether regulations, and we do that around privacy because we believe that people have a fundamental right to privacy. >> rose: first privacy. yep. >> rose: where do we stand because you have been the great exponent of encryption. you have been the great exponent also of the idea that, you know, these other guys are selling information, personal information, we're simply selling products and we're not interested in releasing your personal information and we're not interested in anybody having access to it including the government, so we encrypt. others say, in the government, you know what they say. they say it's like saying, you know, you have a search warrant but you can't unlock the trunk.

>> yeah, let's talk about what it's really like. here's the situation. on your smartphone, on your iphone there is likely health information, financial information, intimate conversations with your family, co-workers, probably business secrets from the work that you're doing, and there is also tracks of what you searched on, lots of information about what you're looking at and writing, and maybe you're a journalist so maybe even your sources, right? and all of this stuff sin sin cred -- stuff is incredibly personal, we believe, incredibly private and you should have the ability to protect it, and the only way we know how to do that is to encrypt it. why is that? if there is a way to get in,

somebody will find a way in. there have been people who suggest we should have a back door. but the reality is if you put a back door in, that's for everybody, good and bad guys. so we don't know the way nor have i heard of anybody else who's come up with a way to safeguard your information unless we encrypt it. >> rose: but does the government have a point in which they say we have good reason to believe in that information is evidence of criminal conduct or national security behavior -- >> well, if the government lays a proper warrant on us today and it's bee been through the courtd so forth a judge has ruled, then we will give the specific information that is requested because we have to by law. in the case of envipted communication -- encrypted communication, we don't have it to give. so like your i messages are

encrypted, we don't have access to those. your facetime is encrypted. >> rose: hem me understand how you -- help me understand how you get to the government's dilemma. >> the problem is saying i don't believe that the tradeoff is privacy versus national security. i think that's an overly simplistic view. we're america. we should have both. we shouldn't give up national security for privacy, and we shouldn't give up our privacy for national security. i believe strongly we can have both. >> rose: but i don't know how that is. >> but think about the guys on the other side are very smart. the guys in the n.s.a. are very smart. these guys are really topnotch, and i can't talk in detail and i'm sure they won't talk in detail, but i think they have lots of ways to gather intelligent information and this is one way. the reality is, if we give that one way, we're not giving it to

just them, because we just opened it up for the world to have, for anybody, for every hacker, for everybody out there that might want information. so we must encrypt is the answer, and you find, charlie, it's not just about apple encrypting. everybody will need to encrypt. many companies are already encrypting. >> rose: do you think they're coming around to your point of view? >> i think most people have come to fre agree with the high-level tenants that encryption is a must and it's not possible to have a back door without it being for everybody. >> rose: right. i think most people are there on those. i think the f.b.i. would like help in some of their cases, and i think they're, i'm sure, working on alternate forms of intelligence gathering,

et cetera. these are very smart people. but i do believe that everybody is moving toward realizing encryption is not bad but, in fact, encryption is good because it shields you from many crimes that would occur if the information were encrypted. >> rose: you also made a speech in which you talk about the other side of this which is people who -- information that's too easily accessible, you know, that, in fact, those companies will lull you into a kind of complacency about what happens to your information which is being sent out so others can monetize it. >> we have a straightforward business model, which is if you decide to buy an iphone or ipad, we make money. we don't try to build a profile of charlie rose to make money, it's not in our value system to hnchts it's a value question for us. i'm not condemning orthopeople.

i'm saying for us it's a value question. we're not anti-advertising. we're fine with that. we advertise, but we don't feel that developing a detailed profile of what you search for, reading your email, reading your messages, this doesn't seem like a way to -- >> rose: what's privacy to you. >> i think privacy is a fundamental right. >> rose: is it an ex ploy taighttation of -- >> i think what happens in that kind of environment, charlie, you wind up, something major will occur and everybwill wake up and say i didn't know all of that was out there! and we'll go through this gut-wrenching and some of this stuff will be reeled in and i hope that doesn't happen but i think honestly that it will. >> rose: we have talked from the beginning of this conversation about how rich and big you are. you're the c.e.o. with huge

responsibilities of the largest company in the world by market account. you have $200 billion in cash. you can do a lot with $200 billion. and you're in a great place. everybody would love to be where you are. what is the pressure on you? what is the pressure to come out every year with new products? what is the pressure to make sure that your revenue, that you satisfy wall street to keep this great thing - -- >> the key for us on many of these things is to focus on what we can control. i can't control what wall street does. what we control as a company is are we making the best products that enrich people's lives? i believe strongly that, over the long term, that if we do

that right, the rest of the things will take care of themselves -- revenues, profits, market capitalization, all of these things. >> rose: but they might expect something from you and -- >> i think the expectations are always huge, but my focus is not on that. it's on this thing that we can control. i'm pretty good attuning out all of the noise out here, and i think we have to be because we kind of live in a bit of an aquarium, and you can get carried away with the noise, and if you don't shut it off, it will run your life, and that's a terrible life to have. i don't want to have that life. what i want to do is focus on things i can help on, and i want apple to focus on things apple can do. apple can make incredibly great products. we can't control wall street,

right? wall street -- i think very much that if we do this well, this takes care of itself. >> rose: you say i don't feel that pressure, i'm just doing the best i can, creating the best products, i'll bring them to market when i think they're ready and no sooner. you can expect whatever you want, you can imagine whatever you want, but i'm telling you that we're listening to our own drummer and we're coming to market when ewe're ready to come to market, and you can ask all the questions you ask, but we'll make the determination because what you expect from us are the best products in the world? >> i'd say it a little differently than that but, basically -- >> rose: well, how would you say it? >> i'd say we're in this for the long term. we run apple for the long term. we're not running apple on the reporting cycle. today's reporting cycle for every public company is 90 days. this is the most absurd thing in the world. we don't run apple on a 90-day clock. that's not how we think.

we don't make investments on a 90-day clock. we're making investments that pay off in multiple years. you and i just talk about how long it took to develop an iphone, how long it took to develop the apple watch. these are multi-year investments. the thousands of people that we have designing silicon that are the heart and engine of the hardware, these things take many years. so we don't make decisions on a 90-day clock and i refuse to subject apple to be run like that. they need to find somebody else if they want apple run like that. so what we do is make decisions that we believe are in the long-term interests of the company, not on this 90-day clock. i do believe, however, that over the long term the market realizes that and they will award the company accordingly.

but -- >> rose: that sounds like the amazon philosophy, too. >> actually, i think it probably is, in some way, yeah. i think they're making long-term decisions. but there is a disconnect between this thing called wall street and the way at least i believe companies should be run and the way we run apple. there is a disconnect. hopefully, one day that will be addressed as well because it's kind of silly, if you came in from mars and looked at this, who would ever have a 90-day reporting clock for a company that's making multi-year investments. >> rose: people like warren buffett and everyone else would say that's true. >> i think they'd agree. >> rose: you also have a lot of money overseas you haven't brought home because of taxes. >> yes. let's talk about that for a minute. the reason we have a lot of money overseas is because two-thirds of our revenues are

outside of the united states. >> rose: fair enough. and we make a lot of money -- >> rose: fair enough, but president obama and others said we wish they'd bring them home and create jobs here and other stuff they could do. and i want to bring them home as well but i can't afford to bring them home at a 40% tax rate. this just doesn't make sense. it doesn't make sense. and it's not just me. it doesn't make sense for any company, and it's not good for the united states. >> rose: okay. at what tax rate would make sense for you? >> i don't want to get into negotiating on tv and i'm not a negotiator on this, anyway. it's what congress determines. >> rose: what would you say to congress? >> i think both political parties agree the number needs to be substantially less. >> rose: less than half? much less than half. this money has already been taxed internationally and you're paying to bring it back. i think it's fair to pay

something to bring it back because it gives us more flexibility. today we have to borrow to invest in the united states because we want to invest more than we make in the u.s. between giving money to our shareholder and investing in the u.s., the only way we can do that is to borrow. in today's environment, it's a good time to borrow, but this thing will not last long. we all know that that equation will change over time. >> rose: so how does it feel to sit there and have senators sit there and call you a tax avoider? >> well, it wasn't true. we are the largest taxpayer in the united states, and in the very top list worldwide. that's the honest-to-god truth. so that part didn't feel good, but what i did feel good about was we came with a solution, and i am hoping that people find it to themselves to work with each other, both parties find a way to work with each other to get

something done. >> rose: finally, two questions. >> yeah... >> rose: first, you're in a great place, apple's in a great place, everybody recognizes hat. there are some vulnerabilities, there is some risk. what do you fear the most? what causes you to lose sleep at night? >> i'm not one to lose sleep at night. i don't get very much. but i don't lose it either. >> rose: you get five hours, i hope. >> i get about that. but i really -- truly, i focus on things where i think they're under our control. >> rose: you're not worried about china -- >> there are a whole bunch of things out there that i worry somewhat that i can't control, but i don't spend any time -- i don't put a lot of time in it because -- >> rose: but you're worried

enough to call up -- >> i'm glad you brought that up. in my view, in the media, there was a view that there was a meltdown going on in china. i'm sitting there looking at our numbers every day. i get up at 3:45. i'm looking at how did we do in all these countries and, honestly, i would not have known anything was going on in china from any numbers i was looking at. i only knew it from the news. >> rose: you looked at the figures in china. >> on a daily basis. i'm saying there is a huge disconnect between the thinking and what i'm seeing. now, maybe we're unique, but maybe we're not. maybe there is a disconnect. so i felt a responsibility, because the disconnect was so

large, to say something. so i answered an email. >> rose: they wrote an email and you -- >> i responded. it was a journalist. >> rose: and guess what happened, the market went up. >> i don't know if it's cause and effect or not. what i do know, charlie, was i'm looking at this, and we're not immune from slowdown. we are not immune. so i looked at this and said something's wrong. >> rose: people may have to cut their consumer budget. >> that's right. if the consumer is hurt in a massive way, we will feel it. so what i honestly think is in the u.s. if the market is down a lot, it generally does correlate eventually to consumer spending. china, there is not as many people in the market, and then

their penetration of their net worth in the market is generally less, so it doesn't correlate as much, but the western view is very different. so i came away -- i honestly think china is much stronger than the common, sort of the regular view. >> rose: and people wonder whether there is a direct connection between their economic prospect and the market because they see the other factors that affect the market that are not fundamental economic issues. >> i'm not an economist and i can't project the short term, but in the long term, as a company doing business there, what i see is tons of people being promoted to the middle class, unlike anything i've ever seen before, and it's clear that over the next seven, ten years, pick your time horizon, the middle class will move up by tens, hundreds of millions of people. it's that kind of change occurring. so it's a great market to be in.

>> rose: one of the big questions around the world, the great debate today, is what about the middle class, a, because in certain societies, they think they're losing out to where they were. in other societies, the rise of the middle class has been creating an emerging market which is creating a demand for products which created good times for businesses. >> yeah, i think this is a very serious problem and is one of the biggest problems of our generation, and i think it's not solved. i don't think there is enough good ideas on it right now. i honestly think that the problem stems from public education because the truth is, if you look back at you or i, i know for me public education is real important. >> rose: me, too. without public education, i'm not sitting here talking to charlie rose today. i feel that too many kids, just

because of where they're born, they're not getting a good public education because public education isn't meeting that bar today as a whole. there are teams that are very good but there are places where funding is not appropriate, and we've got to fix that because everybody deserves a chance, and we're not giving people the chance. >> rose: we're not investing. we're not investing and that is on us. that is on us. >> rose: and for you and for your company looking at the future, what is it that gives you the most optimism? >> well, i'm optimistic about america. this country has always been about re-creating itself, reinventing itself, and eventually, despite obstacles appearing so big at different points in our history, we've

always been able to scale the wall, and i think we can do that again. so, you know, that part of me, the idealism is still there. the idealism that makes me sit here is the same way i view this country. i think we've got a great future, but we have to embrace it and see it for what it is and then go for it. i'm convinced that we will. >> rose: thank you. >> rose: for more about this program and earlier episodes, visit us online at pbs.org and charlierose.com. captioning sponsored by rose communications

>> rose: funding for "charlie rose" has been provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. >> and by bloomberg, a provider of multimedia news and

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