But doc you sign makes the docusign makes the glassdoor list. We talk to the ceo about what makes the company unique. A self driving a semi exits its first makes run. Silicon valley is listening to your most intimate moments, the first of a bloomberg piece of how the craze left users vulnerable. It was one of the most read stories on wednesday. I spoke to journalists about the story, including the devices and use of contractors to transcribe intimate conversations. We spoke to guests in San Francisco and new york. We spoke to dozens of transcribers from everywhere from ireland to india and they had ethical quandaries with this service. They were eavesdropping on a lot of customers to improve the systems speech recognition capabilities. Thing was that profound disparity you mention. Mentioned. A lot of contractors felt this was a dubious, but a lot of folks we talked to did not think it was such an issue. They saw this as a way of improving Quality Assurance. Apple who hadat worked on siri described this as a way of fixing a voice plugs. Bugs. The big question is whether or not they disclosed this to consumers. Taylor any guess if big tech make takes this more seriously . We have seen Companies Issuing new disclosures and disclaimers. But when it comes to Companies Like facebook and apple, in particular, who say they have set privacy at the center of their core values. This is an indication they do not respect users and their data privacy. Dayor lets bring in matt to explain some of the security concerns. They gave the impression of privacy while not getting. Your take . They were first out of the gate and realized microphones would be potentially controversial. They had a couple of transparent measures to give them cover. One was letting you know when it was recording, the other was to go in and delete your audio recordings. They leaned very hard on that transparency. They were not so upfront with the fact they were using user data to improve the service. To figure out exactly what they were launching with alexa. Taylor i want to get to facebooks latest. Whats interesting here is facebook is a new entrant to the market. Why the heck would they get in now . Even after all of the controversy, facebook still felt it was important to do the same with their data and they did not think of it as different from the other things they collect from users. Type of andl, interact on the service, facebook thinks you understand you will parse through everything you say and use it to make their system smarter. The thing is, theres a difference between a machine doing that and human beings doing that. Especially with audio data, there was something intimate about the way this works. If it was so natural and obvious to the companies, why did they feel it was not necessary to disclose. Of course consumers are alarmed. Taylor given Everything Else going on, any sense customers are trusting facebook with this device . They are purchasing it. There are a lot of compromises we will make for our own convenience but i think a lot of people are not aware about the network looking at that audio to do Quality Assurance and trying to improve speech recognition. Facebook looks at this as an accessibility issue, making sure all types of human voices can be recognized. The fact that they need humans to do this, that was not part of the marketing. Taylor finally, i want to bring in garrett to covers google for us. Google continues to use humans over some of the technology at contractors. Does that help give them cover . Yeah. Contractorsso using that is a point my colleagues have just raised. This andearning about digging into the story, this was mostly being done by contractors. These were not google employees. In some cases they are. Mostly people employed by Different Countries far away from the headquarters these companies are based in. Home whene that hit one contractor in the netherlands walked out of his office, taking with him recordings who gave them to journalists who were able to figure out who the actual humans were. Those consumers who were not expecting that. That started a bit of a scandal and google has said they have paused human transcription. Of course, they need to transcribe these transcriptions with humans to continue to improve the service to understand people around the world. They will surely start doing that again sometime soon to keep up with competitors. To be get a sense they will start to use more technology and with that give us comfort . These companies which they could use technology, but the reality is, its still not quite get enough. You still need humans to double check that these things are learning and improving. For the time being we will need humans. Same waysla cars with tesla cars. Until we get to that point in the future when the machine can fully take over. Taylor that was Bloomberg Technologys austin car, matt de, sarah frier and gerrit vynck. The sprint merger deal is currently being challenged by 13 states and the district of columbia. Says theexecutive Wireless Phone provider will not survive much longer without the tmobile takeover because it lacks the resources to upgrade its network and has generally week business prospects. Dave bloom, the Vice President ,f networks and engineering testified quote sprint would not be viable than the next two years. It rebuts claims from states that sprint has a viable plan b. I spoke to jennifer, who was in the courtroom on monday. That was the worst of the day the companies in terms of the deal. Those were bad documents. Suggestf officer did that maybe what they could use as part of their negotiating istic to get a better price at the deal would mean an increase of five dollars a month in average and that tmobile is not taking that into account. They did do a decent job in trying to play this down. It is a very damaging document. He said, this is just a hypothetical. I didnt do any real studies. I was just guessing. I am a marketing guy and this is the way that marketers think. He did not really think that was something that was used as part of the negotiation. I would say that was probably the most damaging part of the trial today for the company. Taylor that was bloombergs jennifer rie. Peloton has seen it shares a slide due to a wall street activist short seller. We find out his reasons next. And if you like bloomberg news, listen to us on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor shares of peloton taking another hit since tuesday. Is not due to another widely criticized commercial, but thanks to one of wall streets most active shortsellers. Seest out a note saying he quote clear flaws in the Business Model and predicts the stock will fall 85 next year. I spoke to andrew on the phone on wednesday. That,ple have criticized same one we look at numbers per subscriber. Thats all. ,f you see the chart i put out it shows how much wall street is currently paying for every subscriber of peloton compared to planet fitness, and per subscriber, its over 15,000 for peloton versus match. Com, its 2500. 2100. Taylor we are showing that chart there. You can see on a per value, per subscriber basis, it certainly does look overvalued. I want to break down the ratio a little bit. If you increase subscribers, the denominator goes up, and that is pretty much what people are buying the company on. If they are a growth company, a growth stock, people are not buying it on current subscribers. People are arguably buying on future subscribers. What do you say to that . Andrew i mean, fair enough, but the business has already taken the low hanging fruit, so we know who bought the first 500,000 bikes. The real problem is who will buy the next 500,000 . The treadmill they introduced is pretty much a flop. They are behind the curve with the rest of the equipment. You see mirror technology coming out from their competitors. They are not there. It is an extremely competitive space, and most importantly, with their digital offering, they are getting for 1295, and when you buy the bike you buy it for 1395, if you are value conscious, you could buy a bike for 700 and enjoy the whole experience, and that is peloton digital. The ceo said that was their lead generation way of doing it. It seemed very sloppy. You can enjoy peloton and not have to pay over 2000 for a bike. Taylor do you short peloton or connective fitness as a whole . Andrew oh, no, short peloton. At five dollars a share, if it ends up a 2 billion company from its a major success. This is a spin bike. They did not create spin bike they did not create streaming classes. If it was a 2 billion company, it would be huge. I dont know why wall street has to think this is a 9 billion or going to be a 10 billion company. Taylor i do want to say we have tried repeatedly to reach out to management and peloton for comment and we have not heard back yet. Saying that, would you buy peloton if they were five dollars a share . Andrew no. Its like saying, would you have bought fitbit or gopro . Its just dead money. The best days are in the rearview mirror. If it was five dollars a share, no, i take that back. I would buy to cover some of my shorts. [laughter] taylor ok. Andrew this is not a knock on the product. I think its a wonderful product. This is not a 9 billion or 10 billion product. Taylor you were making a joke, i know, but i want to take a look at a serious chart showing inside my terminal for bloomberg viewers. To describe it for you, you know the story. The share price versus the short interest, which is now 66 . Its one of the companies that have ipo over 1 billion that are being the most shorted. Do you feel that your short trade could be a little bit overcrowded here . Andrew if its crowded, its crowded. If it bounces on short covering, you just sell more. You always have to properly allocate if you are a short seller, but the thesis is i would never own a stock because it is a crowded short. Theres nothing they could do to turn it around. Unless they create a bike that works out for you, maybe that will change it, but other than that, they are not going to be a 9 billion or 10 billion company year from now. In a year from now. Taylor you have talked about the bike and the treadmill and i want to get some of the fundamentals back into the conversation here. Analysts really highlighted the lowerpriced terminal that could come out into the future. If they do a lowerpriced treadmill and you hit a mass market, how does that impact your position, given you could see perhaps the company hit a Critical Mass . Andrew simple no doubt they are going to put out a lowerpriced treadmill. They are going to do it later this year or next year. They have to because the treadmill is a much more popular piece of equipment than a bike. Thats the only thing that will keep this thing alive. Understand month from the stock to go from where it is to 15, it does not have to fall off a cliff, just shows decelerating growth. This is what you will see. I was in a mall today and the peloton store was empty. Its not because people are not buying. They have already picked the low hanging fruit. This is not something for everyone. Of course you are going to put out a treadmill and it will sell, but it will compete against all the other treadmills on the market. Similarly, i could buy the peloton digital experience for 1295 with a 700 bike. As consumers become more informed, it will be a battle. Taylor does the announcement of introducing a rowing machine change your thesis . Given that is a new piece of hardware. Andrew everyone has a rowing machine. Their competition has, like, six different skus. While pellets on was preparing for the ipo, highfiving, and introducing the 4000 treadmill, their competition for digital home, health and fitness has surpassed the offerings of peloton. Tonal, if you have seen that, super cool idea. Digital weights, unique, innovative, spacesaving. These are all technologies peloton has not taken advantage of. Very important. People see stock prices instead of thinking peloton will end up a 1. 5 billion company, when you say it like that, that makes a lot more sense. Taylor that was andrew left of citron research. Up next, intel surprised the public eye releasing information it could have kept secret. Tiktok has canceled meeting with meetings with senators over immense scrutiny of privacy concerns. We find out why they pulled the plug. This is bloomberg. Taylor an unusual move for intel. The chipmaker is the first so willingly disclosed its pay in inequality data. Intel release details about the released details about the pay disparity in 2017 and 2018. The Company Provided the data to the u. S. Equal Employment Opportunity commission and the results are not flattering. Bloombergs jeff green in detroit joined me to discuss on tuesday. Jeff we probably did not learn anything that is a big surprise looking at the numbers. The big surprise is we can see the numbers at all. This is data every company had to release as of september, but intel may be the only one, at least so far, that is willing to share it. This is the macro information that feeds into what you would think of as Median Income that shows where women are and where men are in their jobs. It is not flattering, but it is the first step to figuring out where the problems are. Taylor where are the biggest problems . Jeff kind of where you would expect. White men and asian men make the top paying jobs and women are clustered in the lower paying jobs. It is a structural problem in society and particularly in tech. That is sort of what intel is saying they want to bring the light, that the industry has a problem. They are willing to share theirs, would you share yours . Taylor exactly. It is notable that intel is openly sharing more data than they need to. What is intel trying to tell us about why they are doing this . Jeff they are admitting this exposes them to vulnerability. They got beat up a bit today. Those charts dont look awesome. For some people, it is a revelation. You have them paying attention to whats going on in society so its like a fresh attack. Their thought is this only gets fixed that everyone is pulling in the same direction, and it they need pressure to be on everyone to look at this structurally and figure out whats wrong. Also on themselves. They put a part of their pay for the top executives is fixing this. There is kind of like some external pressure for everyone to be able to look, employees included, and see how this plays out. Taylor do you think this creates enough pressure where other Tech Companies would step in and do the same . Jeff not if some of the recent examples are any evidence. Citigroup did this with media n pay and there has not been a flood of banks joining them. Uber gave a report last week saying this is how many results we had. It is not like every other platform was like, here are our numbers. I guess it starts somewhere. You start to add these things up. Potentially, may be a regulator or changing government may weigh in. It is a loss leader thing where you are taking a big risk at of out of the gate that may pay off in the future. Taylor it is notable these results for 2017 and 2018 were pretty much wrapping up 2019. Any indication that 2019 could have been better . Jeff we will never know. This data was collected under a program that was brought forth by the obama administration. And the Trump Administration has said we dont need to continue this, it is hard on the companies. This data in the current form will not be collected for 2019. We will have to see if there will be a new program or companies coming up with something voluntary that shows this. That is the sad part about this. This data is really interesting and we may never get a chance to see it again. Taylor jeff, do they offer any potential solutions on how to be the first to at least try to fix the problem . Jeff one of the things they pointed out is the industry is about 26 women available intact. They made it a goal to make 26 women. But the management is only 20 women. They are saying one of the ways you change the ratio is by making 26 of the executives women because that will push the women and see the higher paying and then it is math. What you really need is more women in higherpaying jobs then lower paying jobs and that is something that in tech, premuch pretty much every industry, it has not happened. The overall pay difference in the u. S. Is women make . 81 on the dollar compared to men. This is just being able to see it one person at a time. Taylor i am not sure if you are or anyone, frankly, can answer this point. Im from new york and we thought it was a big problem in finance. We come to San Francisco and find out tech is even worse. Why is tech the biggest sector that is struggling with this . Jeff i think it is who do you get coming out of college who wants to go into these jobs you get the graduates and then they come into the industry, from everything i have seen, the data i look at, they dont stay. They look at it and say can go somewhere else with his expertise because Everybody Needs tech. They go somewhere else and they are treated better. That is another thing intel is focusing on. They call that the warm line. If you were going you can call it if you need to think you need to leave and you can talk to somebody. They are collecting the data and try to figure out why people want to leave. Why cant we keep these women . Taylor that was bloombergs a jeff green. Iktok werefrom t supposed to meet with centers over security concerns. We get into why those meetings are not happening. Check us out at technology and follow our Global News Network take on twitter. This is bloomberg. Taylor welcome back to the best of Bloomberg Technology built technology. Tiktok is under pressure from those who worry about Data Security and user practices. Executives have canceled a number of scheduled meetings with u. S. Senators set to take place in washington this week. Bloombergs paul allen and i sat down with kurt wagner on tuesday. We are told these are delayed and they will be rescheduled in the new year. Part of the issue is you may have heard other things o
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