Bloomberg Businessweek Weekend - June 3rd, 2022

weekend edition of Bloomberg Business Week. Are double issue centers around big tech and no bigger story this week in the world of technology, really the global corporate world than Cheryl Sandberg announcing she will soon step down as the chief operating officer of Meta Platforms. We're gonna get to that in just a moment. We're also talking s g and combating climate change with the CEO of the industrial

giant Johnson Controls on the push to decarbonized buildings. It's a green world or trying to be a green world. We're all just living in it, all right. Plus everything you need to know about what's sure to be a busy and costly summer travel season. All of that to come. We begin, though, with a story you saw and heard about first on Bloomberg. Cheryl Sandberg will leave her post as met as CEO in the full and few journalists know her better than Bloomberg Technology host Emily Chang. Emily

joined us immediately with her reaction. I have been waiting for this moment for years. I mean I you just had to know that she has been at the company for a really long time. She has all of these other interests and ambitions, all of which we know about, right, and she's getting married, she's got five kids now. Um. I just had a sense that this moment was coming, even though I asked her many times and she always denied it. Um. And I was talking about this with

with Kurt Wagner as well. Um, you know, this was kind of our first instinct, but we didn't know for sure, and it was you know, it's the end of a Silicon valierra. But why now, Well, of course we can speculate. I will tell you what she says about why now. She's been at this job for fourteen years. She thought this was going to be a five year job, and

she wants to spend her time doing other things. She joked that was she has set it was the honor and privilege of a lifetime to do this job, but also joked that it was not the most manageable job that you could imagine. And I will add my own thoughts about why now you know, Facebook is in the middle of making this huge pivot to the metaverse, which means really significantly evolving their business model, and that's her job. But it says so much about like we're all trying

to figure out what this. I mean, this is a big pivot, right, So not only did they change the name to meta, but they are evolving their products and they're going to have to evolve their business. What is the business model in the metaverse? And and they don't know the answer to that question yet. Cheryl s Hamberg doesn't know the answer to that question yet. She said she sees the long term opportunity and that she believes in the company as much as she ever did, but

that they don't. Essentially, in so many words, they don't know yet. Okay, So what does it mean for Meta Platforms with Javier or Levan coming in, who was the chief growth officer Meta Platforms. First of all, it means Cheryl's not going to be there, and she will be on the board and I think her you know, impact

on the company will certainly loom large. But I'm sure there'll be some type of leadership vacuum given that she is leaving, But it seems like Facebook has over the years been very focused on building out a team, building a succession plan, and they're kind of reorganizing the roles of it. So even though um Hobby will become the CEO, he's not going to have oversight over all of the very same things she had oversight of. Nick Clegg had already taken on policy and comms, which had lived under

Cheryl for years. Then you've got Andrew Bosworth the CTO, Chris Cox, the Chief Product officer, and of course Mark Zuckerberg. And out of all of those people, only Nick Clegg is kind of a recent joiner. These are all long time Facebook executives that know the history, you know, know what Mark Zuckerberg wants, know how to work with him, and they're now in charge of figuring out where this company is going. You know, people talk about her as one of the most influential women in the world. She's

one of the most influential people. She has become one of the influential people in the world, and definitely in business and obviously Silicon Valley she built and scaled the business models of Google and Facebook, two of the biggest companies in the world today. That is huge and not everyone agrees with how they did it, but you know, these are companies ranking in billions and billions of dollars and that is in large part because of Cheryl Samberg,

which makes me wonder. She's young. Yeah, she could do. She's getting married, she's got it a chapter to write. When I heard that there was going to be possibly some news, I thought the same thing. Okay, she's done, but I'm like, is she gonna go into politics? Like is like, so, how do you think about it? Someone who has followed her trajectory, has had numerous conversations and has you know, incredible insight into her, Like, how do

you think about what she might and again it speculation. Yes, so well, she just told me that's very unlike a politics or another role in business, that she wants to spend time on philanthropy, her foundation, women's issues, time with her family. You know. She also said never say never,

and I guess I would say never say never. I do think that a role in politics, at least an elected role, is going to be is going to be very difficult for her given all of the controversies that that Facebook has weathered, could we see her in an appointed role in a democratic administration potentially? Um, But my guess is she she wants to have a more manageable lifestyle and for for for fourteen years and then out

on Google before at she's been sprinting. I do wonder though, if I mean, given all of her interests that she has outside of Facebook and within meta platforms, being on the company's board, if she is going to have a more manageable life, because she's everywhere she is, she is ambitious. This is not retirement for Sheryl Sandberg. She wrote not one,

but two books while she was CEO of Facebook. So and her own challenges while she was at Facebook two right, she that that people other people in that situation would have said, now is not the time for me to be working. I I can't imagine what she went through when when Dave died, And you know, I know that going back to work was part of what kind of helped her get past it and helped her keep keep going. Was was doing that job every day. But I mean,

let's be honest, she had a pretty important job. You can't just check out of being the CEO of Facebook UM for an extended period of time. UM, and so you know, maybe maybe she you know, she never got a break. That was Bloomberg Technology host Emily Chang. Coming up more on Cheryl Sandberg and the corporate space, losing a prominent leader, one of the few women in the c suite. We're speaking with the Milk And Institute executive

and former Massachusetts Lieutenant Governor Carrie Healy. You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. Tim and I were at the Milken Institute Global Conference in Beverly Hills back in May. They

were celebrating twenty five years of the conference. Now the gathering, the annual gathering always a mixture of top financial names along with those that are tackling the big macro, social and political issues of the day. This past week, we spoke with Carrie Healy, president of the Milk And Center for Advancing the American Dream, also the former president of Babson College, former Massachusetts Lieutenant governor and a member of

the Council on Foreign Relations, Carol. Remember we began by asking her all about another prominent female leader that's soon to be former Chief Operating Officer of Meta Platforms, Cheryl Sandberg. My my guess is that she'll have another reincarnation and and come come forward and do something very interesting in the future. One of the things that I've noticed about women now is that they have longer workspans, and so you can really afford to have many different types of

career over the course of time. And I'll just be looking forward to seeing what she does next. And forgive me because I want to go more into terms of the straight line of what you guys are doing at the center. But I gotta tell you, when I think about the American dream, and this is hard for me and I think many Americans to get away from. It doesn't conjure up a picture of young innocent children being

killed by guns. I ask you, as a former lieutenant governor of a well known state and who worked on some really tough issues, whether it was sexual abuse, children abuse, you know how, and you did this in a bipartisan way. Why is it that we cannot get something more constructively

done in a bipartisan way. When it comes to gun legislation, well, well, first and foremost, it is absolutely heartbreaking I think for anyone you know, to to witness this and to imagine this happening uh here in our country again and again. So it is a horrifying spectacle for us to deal with. And when I was Lieutenant governor and I served with mintra Omnie, we were able to actually bring both um the gun advocates and also the gun control advocates together

on some gun control legislation. And it was not easy, but I think that it was extremely important that some common sense regulations were put into place at the same time, some some fairness was you know, also put into place around how applications are handled. Massachusetts is very unique in how they deal with gun licensing in that it's actually local.

The local police chiefs get to decide who gets a gun, and I think that actually makes a lot of sense because that's where people are best known in their own communities, and so we had a little bit of a leg up there. We could show respect to local officials, but we also needed to control some of the guns that we see involved in in some of the worst crimes now. But do we have to get to a point? And you know, certainly our allies are saying, this is a

this is a US problem. It's not a developed world problem. It's a United States of America problem. I mean, most people on a logical level would say, why do we need automatic firearms out there? Um, why can't we just take them away like we do in other countries. Do you see that as a as a you know, violation

of rights? And forgive me for going there, But I just because you fine, I mean, it's it's an incredibly important issue, and that was the decision that that we made in Massachusetts to limit those those high capacity UH munitions and guns. But but I think that what I'd really like to see is an honest debate about this, an honest one UH that that doesn't have to do with politics. And it upsets me terribly to imagine that this could be politicized in the upcoming UH cycle of elections.

So I think now is one of those moments where people have really gotten complete leave, fed up with the with the repetitive nature of this horror, and and hopefully good people on both sides will come together. I know that there is a growing number of people in the middle right now in the Senate and in the House UM, whether it's the problem Solvers Caucus or or the loose association of of people who have more moderate and collaborative values in the Senate, and hopefully, uh, they will come

together and and promote a reasonable compromise. Well, given your experience and what you were able to accomplish as lieutenant governor of Massachusetts, how would you advise Democrats and Republicans to actually come to some sort of meaningful conclusion here? In politics in general, I think right now is a moment where people need to put their own re election aside. Uh. There is too much focus on each person's personal career and not enough on the good of the country and

the good of the people. And so we need more people to have genuine courage and step up and be leaders in the true sense of the word and not be looking to that next election cycle, and to be able to go back to their constituents and say I did what was right. I did what was right for you and your children, and if you would like to not re eleuct me, there will be others to serve. Carrie Healy, she's president of the Milk and Center for

Advancing the American Dream. She was former president at Babson College, former Massachusetts Lieutenant Governor, member of the Council on Foreign Relations. She really has seen the world from so many different angles. Talked to us a bit more about the Milk and Center. You know, how do we need to think about getting to the American dream going forward for more now? One of the ways that I think we should be thinking about it is how do we help people reach their

full potential? How do we remove the obstacles that are in the way. What's fascinating is there was a Mackenzie study recently um that said there are thirty million America out there who have the skills to be making seventy more income. No imagine that se more income, but they can't because they don't have the degree necessary to get

that job. And a lot of employers have simply said, it's going to be easier for me to find well qualified people for my job if I make a bachelor's degree necessary, if I just make it a qualification, right carry Tim and I are saying in the background, were like, college is telling you, Jerry, and you were the former president of Babson College, would you did you come to this conclusion recently did you come to this Would you have said the same thing will you were the president

of Babson Was there something that that changed your opinion about this. I think I'm just starting to see in the last year, so the statistics, you know, I've started to dig into what are the what are the obstacles for people achieving the American dream? And I was really lucky at Babson College because it was a business school.

It was an undergraduate, undergraduate business school. So the kids come in there, the young people coming there, um were they wanted to go into business, They wanted to be entrepreneurs, and they got to start their first company in the first year and and have that experience. And so they went just charging out into the workforce and either started their own companies or got jobs immediately of them get jobs, you know, in the first six months after graduation. So

I didn't have to worry about them. I actually didn't even have to worry about looking their parents in the eye and saying, you know what, this is a good investment. You should go ahead and pay this tuition. Because I knew for a fact that it was going to pay off. That was Carrie Healey, President of the Milk and Center for Advancing the American Dream. Still ahead on Bloomberg Business Week, markets are going through what maybe the biggest mood shift

we've seen since the financial crisis. Some may even call it a vibe ship. It's happening, and some of Wall Street's most high profile hedge fund managers are among the victims.

Will explain next. This is Bloomberg Broadcasting from the financial capital of the World Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one does San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nine team, and around the globe the Bloomberg Business app and Bloomberg Radio dot Com. This is Bloomberg Business Week. Great story in the Finance section of the current double issue of Bloomberg Business Week.

It's all about the so called Tiger Cubs and other hot hedge fund managers that have been slammed in this year's financial market mood swing. Hamma Parmer wrote the piece. She's a hedge fund reporter at Bloomberg News, and she's been really busy this year, covering an array of high profile firms that had been flourishing until our concentrated bets

on tech Darlink's started to go bad. We've been seeing a bit of alatility for a little while, but it's been short spurts of alatility last year, and what we're seeing right now is sort of a prolonged period of of market draw downs and it seems to be consistent,

and buying the dip really isn't working anymore. And so I thought, these guys are supposed to be smart and how to manage this fatile Yeah, And unfortunately, like the volatility has been hitting the tech sox a great deal, and a lot of these tiger cubs are overweight and have been overweight in tech um so work for them for years and then obviously it's not working for them now.

Is it normal that, like when the overall broader market is so heavily in tech, like kind of the mass investor that that it's it's the same thing that the hedge funds, and I always think that they're in something else. I don't know why I think that. Yes, No, I mean they're supposed to be more sophisticated. Um some of the funds have been trading different things more recently, and we are seeing that in some of the performance. Some Tiger Cubs are doing worse, some are doing a bit better.

It's just a matter how much they've lost. They've all generally lost money, some have lost less, and I think that's because they have been trading a little bit differently. But still there is a general focus on these companies that have really struggled. I want to talk quit risk here because you've written about gape Plotkin. He's not a Tiger Cub, but you broke the story a couple of weeks ago of his hedge fund shuttering. Are we going to start seeing seeing more of that as these hedge

funds have a hard time clawing back those losses. It's a really good question, and I feel like a lot of people in the industry are asking this. UM. The thing with Melvin is that they had a very difficult last year, prompted by this very strange Reddit phenomena, and then on top of that, they've been dealing with the volatility this year, so it's kind of been a double wemmy UM. Other funds have been down a lot this year,

and maybe not as badly last year. So it really comes down to a fund, how much money it has on hand, how big it is, whether it's investors stick with them, and that may dictate the degree to which that they can consistently keep going or that they can

bounce back. I love a quote your story. I think it's a deputy chief investment officer of Evanston Capital, which invests in hedge funds, and she says, you know, in terms of the quit risk, that's where a manager decides at the size of their losses are too large to climb out of. I mean there is a tipping point right at some point where a manager has to look at their fund and be like, I just can't I

can't do it anymore. Yes, yes, And you could argue that was the tipping point from Melvin It was just a very very steep hole to dig you all out of. Well, it hasn't all been bad news. Ken Griffin at Citadel has returned almost in the first four months of the year. What do we know about what's been working for Citadel? So Citadel is a multi shot, multimanager fund. Them and their peers. What they do is they take little pods of traders who trade different things sort of kind of

in silos, and they trade to cross asset classes. So they're a great deal more diversified. Though what's called market neutral, which means that they are supposed to trade um, not consistently with the market, like a typical of how what the SMP is doing, UM, that's supposed to provide steady results monthly. That add up. Macro funds have also been doing really well, and these are again funds that are trading in more things than just traditional stocks and so

would have exposure to bonds. It's it's just a reminder of how much has been thrown into the equity market, right, Like if you think of at it, like all the liquidity that's been out there, and how much maybe you know, has been overexposed to equities versus when you hear about what Ken Griffin is doing over at Citadel, right, and which is kind of what you normally would tell an

investor to be a lot more diversified. And this is why allocators to hedge funds try to create a portfolio of hedge funds that have that do different things and to diversify that exposure. So I mean, look, we can't look into the crystal Ball. But I'm wondering, based on your reporting and what you've been hearing from experts, if

this is going to be a year of reckoning. It definitely seems like it's going to be a difficult year, absolutely, UM, because equity markets don't seem to be changing, you know, greatly in the near future. A lot of these funds have invested in private companies, and there's an expectation that the valuations of these private assets are going to be drawn down. So there does seem to be a great deal of pain ahead. How funds navigate it, UM well yet to be seen, and if there's creative ways to

avoid it. How about overall assets, are we down a lot? I don't believe we are. I think as ad have still been growing into hedge fund because how many times have you and I talked about in moments of uncertainty or volatility and yet assets grow. And you know what last year when we saw that really terrible UM march,

it was UM. That was when allocators, investors and hedge funds were saying, yeah, let's be up on the guys that we like, and they had a very good year in UM and so it's hard you have to gauge is this the time to get into them or is it time to be pulling out? And I think allocate

is a thinking. Well, we keep hearing from our draft for the close guest Carol, that the FED is not going to come to the rescue like they did, you know, in the spring of But you do wonder at some point when something is so beaten down at some point, is that just an opportunity like it's so it just manages, you know, just determine. You have to think about what's your time frame right and how patient you can be. That was Bloomberg News Hedge Fund reporter Hmma Parmer. You're

listening to Bloomberg Business Week. Coming up next, we dig into a multinational industrial conglomerate that aims to help curb the climate crisis from the inside out. We're talking with the CEO of Johnson can Trolls. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. It's a thirty seven billion dollar market cap company with customers around the globe,

more than two thousand locations around the world. And helping to create so called intelligent buildings to help address are worsening climate crisis. Johnson Controls International also has a great vantage point when it comes to the global economy and corporate spending. For more on supply chain challenges, order growth and inflation, we turned to the company's chairman and CEO,

George Oliver. Yeah, when we look at what's happening within our business, um, you know, we see unprecedented demand for what we do within buildings. You know, let me start by talking about what we do. Were smart solutions provider for buildings and infrastructure and uh, you know, we did a merger of five years ago which put together to leadership companies in the space, Tycho and John's Cold Trolls.

And with our strategy of of taking the multiple you know, building systems and then being able to deploy technology with a data platform that enables us to be able to significantly change the outcome of buildings. And those outcomes are reducing energy demand by improving the indoor indoor air quality and ultimately you know, making autonomous buildings. And so for us, given the the the environment that we're in, we're seeing very strong demand. We've got backlogs that are that are

wrecking high backlogs. Our challenges have been shorter term is ultimately converting with the supply chain challenges on that demand. And when you look at what we do within buildings, you know, when you look at the global carbon footprint, it represents about the of the overall global covernment footprint

buildings do. And then the opportunity that we have now as a smart building solutions provider to significantly reduce the energy that's consumed in the building at the same time that we're upgrading the indoor air quality and ultimately in an autonomous autonomous building. So for us, we're watching the

economy closely. But given what we see now going forward, where now buildings have become much more strategic um I think in the past they buildings were built with multiple systems separating apart, and now with the opportunity to bring that all together into one solution set, we're seeing very

strong demand. So when we look at the market that ultimately is being created with these new problems that our customers are trying to solve, we see roughly accumulative about tifty billion dollars of additional market over the next decade. So we're watching it closely, but right now we're really focused on being able to execute on the backlock to

support our customers. It's interesting when you talk about unprecedented demand, strong demand, um George, how much of it is because of companies looking to cut costs and be more efficient. How much of is it because of regulatory changes or the push towards you know, concerns about climate change and being much more sustainable. How much of the demand is

new Bill? Well, when you look at let me start with the commitments have been made on climate change or or decarbonization that have been made broadly across businesses as well as with governments, and I think coming back from Davos from last week, it's how do we take all of the commitments that have been made and ultimately how do we now you know, bring that together with a combination that's shared between business and government and ultimately now

capitalize on what we see the opportunity to be So for us with those commitments and recognizing now to get to net zero, buildings are going to be an important part that have to be addressed to get to the commitments that have been made. So we're seeing that, for instance, in our in our sustainable sustainable solutions business. We we see a pipeline now or let's say about seven billion dollars and will convert roughly a billion of that during

during the course of the year. So we are seeing a significant demand for the type of solutions that we can now provide. And when you are uniquely positioned as Johnson Controls, and not only do we have the building systems, but now with our open Blue platform, which is a platform that allows us to be able to bridge all of the building systems together and then ultimately create outputs and historically haven't been delivered all right, So help me

out here. So how much though is you know, in terms of demand if you had to put it into cuts of a pie or percentage wise, how much of that demand is new build? How much of is a cause of regulatory change? You know? How can you break it down a little bit? I'm curious about what's the psyche of people who are who are doing the spend. So Carola, what I would say, it's both the pandemic.

When the pandemic hit, we immediately saw our demand to be able to upgrade the indoor air quality, which requires upgrading systems and deploying digital to be able to then optimize how you deliver a clean air delivery rate within buildings. So we saw that which is really taken the built environment and being able to elevate that built environment to solve for today's problem. So a lot of retrofit, a lot of upgrade, a lot of repair and leveraging our

our technologies. Now at the same time, you've seen the new construction come back. You know, when you look at Architectural Building Buildings Index and a lot of the other metrics, you've seen where there has been an expansion and a

lot of that growth is coming back. So for us, it's been both and it's not only a significant demand for upgrading the existing built environment, but at the same time fundamentally changing how buildings are built that ultimately are going to be able to deliver a significant different outcome as it relates to energy consumed as well as the

environment that's created. One thing I want to know, George, Um, you know, it's interesting we are David Weston catching up with Larry Think over Black Rock and talking about we're gonna be living with more uncertainty, saying the inflation problem isn't you know it's policy related, but that the FET isn't someone who can fix some of these issues. Specifically talked about the supply chain UH and the supply chain problem.

How is your supply chain? Are you seeing any kind of loosening in some of the snarls that have been out there? If you look at what's happened over the last couple of years with the pandemic and then the multiple shutdowns that have occurred to contain the virus, and now some of what we're experiencing in China with the shutdowns there, I mean, then at the same time with the Ukraine crisis, and and then with in our space

the unprecedented demands. So when you put all of that together, we've we've had our own challenges and we've it's really about resiliency, and so not only with what we do to help our customers with their buildings and infrastructure and creating resilient, much more resilient buildings and communities, but also making sure that we're working with our suppliers to create a much more resilient supply chain globally. And that's what that's what we've been doing in the last two years,

and we've made a tremendous amount of progress. Now what we're seeing is with that strategy, we are seeing improvement um and and it's across all of our commodities, whether it be microchips and semiconductors or other other materials, and so we've been working through it um. But resiliency in in in supply chains and mean, George, what does that mean? Does it mean you're shifting where you're doing it or

what does that mean. We've always had a strategy in our supply chain to be local for local, and so when you are manufacturing footprint, we have manufacturing footprint and all of the key markets we support, and then we build local supply chains to support those manufacturing plants with local supply and so there are when you're building a global supply chain, there are some products that are used across multiple markets and so you can't predict, you know,

whether it be the environment and natural disasters or pandemics or you know, these some of the geopolitical challenges that that might exist. And so our strategy has been to be local for local, and we've been developing not only the right product, but also having the local supply chain that creates resiliencing and how are how we're able to then you know, be able to support our customers and

deliver for our customers. So that with the idea that you have multiple sources globally, so as you're going through some of this disruption, you've got a supply chain that has multiple sources, so you can source from multiple multiple locations. UM, all of that comes together into having a supply chain that's much more resilient. George, I'm really intrigued when you said you're seeing improvement in the supply chain, where specifically are you seeing that and you're seeing improvement when it

comes to commodities as well as it chips? Is it like? What is it? It's been When we look at the work that we've done to strategize our semiconductors and chips were making good progress there across the globe. UM. A lot of our supply chain challenge was in North America.

When we look at our supply chain, we have multi tiered suppliers and a lot of the challenges that we had with the disruptions from from COVID shutdowns and then some of the labor challenges um not necessarily within our facilities, but within our suppliers that UM and so we've worked very closely with them and being able to address their their labor challenges ultimately getting the supply chain back operating.

So it really looking at all levels of the supply chain UM as well as all when you look at the global footprint, all regions, and we've been making part pretty much across the board. Georgia, are you expecting a recession movie later this year or maybe next year? Are you? Are you when you gather your management team, do you say, guys, this is what you know. We need to have the playbook ready for Well, you can go back with the pandemic, and I think we we we demonstrated this very well.

We've been creating a lot of agility with how we operate as a company, and we've had an incredible opportunity with the work that we do within buildings and infrastructure to respond to these crisis like for instance, a good example is in the early days of the pandemic, we support critical infrastructure, which is healthcare, and we were on the front lines building hospitals in a in a matter of days that had the highest air quality and ultimately

the resource that they needed to be able to attend

to those infected. And so we've we've built, you know, we've been very agile with what we do, not only responding to the new demands and the crisis, but also agility relative to understanding a little bit of what's gonna potentially happening and make sure that we're always positioned to be able to deliver for our customers, be able to solve their biggest problems, and then ultimately make sure that we're taken into account what we see happening on the horizon.

So being agile in case of whatever comes your way, so could be a recession, could not. Is that is that fair to say? Yeah? Like I said, right, our focus right now is delivering on the backlog and delivering for our customers given what we've seen here over the

last about eighteen twenty four months. Obviously, I think the demand that we see now solving the biggest problems within buildings, which is indoor ear equality, making making them much healthier and safer, and then also being able to address the global carbon footprint that domain is going to continue because the commitments have been made and ultimately our customers have to deliver on those commitments. That's George Oliver, chairman and

CEO of the publicly traded Johnson Controls International. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser and I'm Tim Stanovick. Ahead in our next hour, a look at the gamification of the gig economy and what it's doing to workers who are the real winners and losers there. And we'll find out why this summer could be the most costly travel season of our lives. We just can't get a break, Tim Chat, Have you filled up your

tank lately? Uh? Kuchen, Kuchen. This is Bloomberg. This is Bloomberg Business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news as it happened. Sloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on

Bloomberg Radio. Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including why this year's summer travel season will be one to remember for all the wrong reasons, and speaking of traveling, we go above the clouds for a look at zero g it's a company that wants to bring the feeling of space flight to the masses. Do this you've never done it? No, it's seven thou dollars don't but obviously I've looked into it.

Can they do a press dunking maybe for us? First up this hour we die back into this week's Business Week double issue, the Tech Issue, and a story from Bloomberg News technology reporter Jackie Devlos on how gamification took over the gig economy. When we talk about gamification, we think about the idea of points and you know, you can think about it from the perspective of early on and frequent flyer miles even you know, people getting points

through credit cards, that type of gamification. Talk to us about how Uber and Lyft and gig economy apps have been using gamification to get drivers gig workers to do what they want. You know, this type of model really proliferated UM with right Share Uber Lift as you mentioned him, and it really centers around making the process of getting a ride, accepting a ride, and ultimately staying on the app longer as a driver or a delivery driver for

that matter. UM for a longer period of time, and you know it's it's small what we mentioned UM and the story, there's small nudges, and you know, this can come in the form of you know, a slash, you know, a particular color when there's a high demand area and you know it's it's a heat maps it's really colorful, or sometimes uh, you know, apps will incorporate features like a drawer a ride that no one else wants to take.

You know, it'll pop up, you know, a big number that has you know, an extra ten dollars or an extra five dollars if you take this ride. UM. So it's small nudges like that that ultimately UM you know, get so many drivers to uh to complete the work. But you know what initially UM seemed to be a relatively benign UM way of you know, getting contractors on the FPP is now turning out to be somewhat of a problem, especially in rideshare because of the driver's shortage.

A lot of these features are really frustrating for drivers, and especially when it comes to bonuses, which is the way that companies have been trying to lure them back on the road. UH. These bonuses are increasingly more difficult to get from the driver's perspective. So it's really um exposing a lot of the cracks that started to um, you know, starting to come up on these pop warms, whether it's you know, even door dash and instacrat have similar features when it comes to um dispersing some of

these jobs. So um, yeah, all gig companies are starting to kind of reckon with what that means. Now, well, it's interesting too, and you get into this whole idea. You think these gig workers, right, they can be their own boss. But as your story really gets into, Jackie, is it's not necessarily the case. And I have to say something that so resonated with me because I am seeing this and full transparency use a lot of uber.

But what's interesting is I'll often have a driver accept my ride and right they accept, not knowing it, and then they're like, I really don't want to go to New Jersey. But my point is I sit there and I wait, and I see the car park and it becomes a standoff, and I'm a little bit of a nudge and I actually call customer service and they're like, well, you you have to cancel, And I know the drivers don't want to cancel because that gets points against them.

So there's literally a standoff from me and the driver, and I'll message them and I'm like, I'm not going to cancel you because you're just sitting there. It's really rude. And meanwhile, you're still sitting here because you're not getting home. But it's interesting because the drivers, right, they assume they have complete control, but it's really not the case now, absolutely not. And that's the whole point. It's, you know, gamification makes it look much friendlier, makes it appear, you know,

um much more benign. You know, you accumulate points, you can redeem them for rewards. In fact, pup specifically, they give you more visibility into a ride. The longer you stay on the app and where rides you get, it unlocks more transparency, which is you know, really yes, And so I think you know, as you're saying, and I live in Brooklyn second, totally, you know, emphasize there, because whenever I'm in Manhattan, that's the last place most most

drivers want to go. To your point, they don't have the transparency that they would have if they were really you know, independent workers, and the flexibility that companies tout really ends up coming into question when you have features like this introduced. So so, Jackie, what are these companies doing? What have they told you that they're doing in order to essentially not be criticized for, you know, making these doing these nudges that don't necessarily turn out for the

benefit of the gig economy drivers. So in particular has kind of taken the lead in increasing more transparency. They're not all the way there yet. Starting this year, they rolled out a feature in certain markets just to kind of test it out, where a driver now has access to like an upfront fair, so before they accept a ride, they can see how much they're going to get, and you know where the passenger is going, what the duration is.

So more data points that they had before comes with a trade off, so it's not you know, transparency for free. In return, you know, you can't really see how the fair is calculated. So many drivers say, yeah, I can now see where I'm going. If I'm going, you know, I can choose not to accept and I won't be penalized. But whereas before, you know you have the ability to see the time um or the ability to see to

calculate the distance. Once you have the data points after accepting, you don't get to see that fair calculation, and so drivers are like, well wait a second, I got this piece, but then got the other piece taken away. UM. Lift also starting to introduce something similar with upfront fairs. UM. But Ooper, you know, their latest earnings called really trount and said that they're an earner's centrick company. It's not something that they've ever said before. Really putting the importance

on drivers more so now than ever. UM, and I think we're gonna start to see more driver friendly features rolled out, especially as they're trying to entice more of them to come back. So I'm going to be rejecting more is what you're gonna tell me, Jackie Transparent, You're gonna you're gonna just bann from the apps and you're gonna just have to start walking through New Jersey. Girl again. I'm not taking her anywhere. There's all to get the way over the g W Bridge that you can walk on.

Funny funny our Thanks to Bloomberg News technology reporter Jackie Devolos, you're listening to Bloomberg Business Week coming up? Have you made your summer vacation plans yet? We've got a series of stories featured in the magazine that just might make you reconsider stick around. That's all to come. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. Hey, the Karnei Show.

Bloomberg Business Week. It's a special double issue. It is the tech issue. We've talked about that, but it also has a takeover of the business section that's all about travel, and that's very timely as a summer season is getting underway. And I've got to say, I don't know about you. Were just talking with Jim Allis, who's going to join us in just a moment. But we all could use about a month off, bosses, Are you listening, because we're all kind of burned out. Can we do sabbatical? Is

that we don't really do those? Right? Yeah? I don't want to even work from home. I just want to just want to break. Let's get into it. Jim Ellis is managing editor for Bloomberg Business He's with us here in the Bloomberg Interactive Brokers studio. Jim, we want to talk to travel section of the magazine. We've got quite a few of them. Um, I want to start with with inflation and we love having you on and you you wrote a few months Wait a minute, how did

you guys approach it? Because it sounds like this is a bummer of a travel section? How dare you? The good part is that you know, people will probably get to go somewhere. The bad part is it probably won't be where they want to go and maybe just one trip and that's it, you know, it's it's it's unusual because we've got not only the the aftermath of the pandemic because of the big drop off in the number of workers that are in the travel business, we also

have inflation. So that's a double whammy that's made a lot of people's vacations are going to be shorter this year, they're gonna be a lot more expensive, and they're often going to be places that they didn't actually intend to go. And that's the surprising thing of Americans say they want

to they plan to travel someplace this summer. However, because of pricing, particularly for air fares, a lot of people are saying now, well, um we we I guess the latest studies are saying almost two thirds say that they're willing to shift where they go just to keep the prices in line. Okay, let's talk travel as you can do that anything for you, Carol Master. We thought that the Internet killed travel agents, but everyone said, oh, yeah, you know that they were gone. I mean, this is

something that supposedly have been disrupted. But it turns out that in the market like this, where people actually are having difficulties finding space, you know, either for hotels, are good fares for airlines, what they're doing is turning to travel agents increasingly to find out where might they go to get something that's a sim it's of value. I didn't say discounts, I said value because uh, you know,

hotel rates have gotten so outrageous now. We looked at hotel rates in UM at the fancy resorts in Miami and where you might have been able to go to the breakers two years ago for you know, less than four hundred dollars a night. It's now for a regular room four hundred dollars a night. And UM Now, admittedly that is the most expensive market in the US right now for vacations. Prices are all Florida, particularly Miami. The

days when Miami didn't get people in summer. Those are over and so now Miami has rates that are fifty higher this year than in before the pandemic. So what's happening is that people are people want to get out and a lot of the money that hotel you couldn't

get during the pandemic they're getting now. Fortunately you can go on a cruise or can you can you is that the bar I feel like I get bombarded with like book your traveling, your travel book, but be prepared for cruises don't really have the staffing that they normally did. You know, large numbers of cruise uh people who on the crew, who who managed the cruises are not from

the US. A lot of those people ended up back in their home countries, um, you know, during the pandemic and now have not been able to get back either because there's air service isn't back here and also because a huge backlog at the state Department to actually go ahead and give you know, sort of authorizations for these people to come back. That's causing some cruise lines now to cut back on the number of paying passengers that they can take. I mean a lot of people saw kunard.

You know, it's just luxury cruising, you know, a few weeks ago saying it was going to you know, basically take people who had already paid for cruises and tell them they can't come because they're cutting down the capacity on their ships because they don't have enough people to actually serve you on the ship. Wasn't there a story today about Delta right that, I mean that they just

can't have they don't have enough pilots. And we actually saw in some of the business travel we recently did the flight our flight was, they asked us when we got on the flight where they're they were like, oh, were you supposed to be on the earlier flight that was canceled because there wasn't a co pilot available. Yes, Well,

now it's this the crew issue. I think a lot of people didn't expect business to come back as quickly as it did, and during the pandemic there was a huge rush to retirement for people who could and that was pilots. And so now as businesses come roaring back, you don't have enough pilots to actually keep all the planes flying. You know, double that down with equipment issues, like American is cut cut back a number of foreign routes because it can't get seven eight seven's delivered in

time for the summer travel season. So what we said before we started, we can't actually repeat exactly the words we use because the world is kind of not so great right now. Hey, So all right, Um, maybe I can't get to a hotel. It's either too expensive or there's not enough staff, and I'm not going to be happy. Okay, the cruise lines maybe got some problems getting out a play. What about if I just go to Airbnb or rent

a vacation. Tim's Tim's got like two homes he wants out in the Hampton's Hampton families that if you haven't gotten one already, I had a feeling you're not going to get one. But Hampton homes this summer we're particularly expensive. I mean there were, um, right before we uh, you know, if published, there was still a couple of places one for I think a million six, one for a million three, five of the sort of super types that you might want to pick up for the family this this summer.

Excuse me, do you mean to buy the house altogether? So that was just a month of JA does that work to take a mortgage out for the month of July. That's happened that people who can afford really high end properties are really willing to spend for you know, sort of vacation homes this summer. But it's not just that. Also for people who are like me who want us out of have a bargain and just you know, get

a one or two bedroom place. Um right now, sort of weekend rentals are really difficult to get, but week long rentals are even difficult to get, and pricing is up about fift compared to and so um pre pandemic pre pandemic. So this is a real problem. You know. Add that on to hotel rates which have just skyrocketed, rental car rates which have up because the rental car companies didn't add a lot of you know, inventory of new cars before and now they can't get new cars

because there's a shortage of new cars. Subcamping in my city backyard, well, even if you can, we discovered that camping turns out to be more expensive this year than do you have any good news for us? Good news is that there's always next year. That was Bloomberg Business Week Assistant managing editor Jim Ellis. That's a little bit of a bummer. Huh, yeah it is. I mean staycations. I don't know, I really just kind of want to get out of him, change your face. Well, speaking of that,

still to come on Bloomberg Business Week. If you're not interested in long lines at the airport or high rental car prices, you do have another option simulating space travel. It is the single most unique thing that you will ever get to do. When you are floating in our cabin and there's nothing below you as far as holding you up or down, or you're upside down and you don't know which way ups or down because the blood is not running to your head. You're in a different place.

The CEO of Zero Gravity Corporation joining us on the other side. This is Bloomberg broadcasting from the financial capital of the world, Bloomberg Eleve in Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine six to the country Sirius XM Channel one nine team, and around the globe the Bloomberg Business app and Bloomberg Radio dot Com.

This is Bloomberg Business Week. Might recall our next gas we caught up with him at the Power Players Summit in Beverly Hills. It was just ahead of the Super Bowl in February. The topic space tourism with us once

again as Matt Goad. He's the CEO of the privately held space entertainment and tourism company Zero Gravity Corporation, also known as zero G. For people who aren't familiar with his Zero G, they offer weightlessness flights aboard Modified seven twenty seven's Matt tell us a little bit about the experience because it's different than uh, let's say, a Blue Origin or a Virgin Galactic because you're on an airplane.

We are, and and plus we've been doing this. We've flown gosh, probably eighteen thousand people since his company started in two thousand and four, including Stephen Hawking and and Elon Musk, who was one of our original shareholders, and Richard Branson and a lot of other people. So we've flown a few more than than the others have, and all safely and and all loving every second of it. And you know, the best way to describe it is that is the single most unique thing that you will

ever get to do. When you are floating in our cabin and there is nothing below you as far as holding you up or down, or you're upside down and you don't know which way up is or down because the blood is not running to your head. You're in a different place. And the primary difference between what we do and what are our friends at at Blue and

Version do is they give you this amazing view. They they're taking you up miles and you're getting to see the Earth from this amazing perspective and experience what's called the overview effect. And in that you're gonna get about three minutes of zero G time, which you really shouldn't waste doing somersaults are chasing skittles or playing stuff. You

should be looking down the window. And then you come to our flight and we'll we'll give you more than twice that amount of time in zero gravity in our plane, and the ability to also learn while you're doing so, very very different experiences, lightly different price points. One of the things I think is interesting too. I mean, I grew up kind of a space kid. My dad worked on the space program years ago, um, when there were a lot of engineers out there and a lot of

people who wanted to be engineers. Uh, and I was thinking. Tim. We had a conversation with Jitsh Gay yesterday at h Informatica, the chief product officer. He's an engineer, electrical engineer, and just talking about the need for engineers in our society.

If you think about the things being built and how they need those kinds of people that with those kinds of skills, what is it about what you guys offer that might just you know, create some interest among a younger community when it comes to STEM, and we're very

focused on that. We have our own nonprofit that we have focused on bringing this experience to UH school kids, UM and others to see that, you know, being in the in the space industry is uber cool and and and when you take that first experience in zero gravity and it kind of hits you that this is not what you ever thought it would be. So we're very interested and involved in bringing this experience via whether it's it's essay contests and inner city schools or things like that.

So this next group of of young men and women will have this opportunity to see that there is a very amazing career in space and and as you know time goes on, the access to space will become more available, and and what we talked about now is as a dream and you know, twenty years will have you know, a couple of space stations up there that people are going back and forth to do experiments or staying in

hotels or or filming movies or things like that. And just like you know today we talked about, you know, how cool it is, you know to fly around on jets and things like that. In in twenty years it will be you know, going to space. I wonder how much of your business is focused, Matt on providing you know, entertainment about eight tho bucks pop, versus doing research or or perhaps commercial activity because I know that you can hire it too for photo shoots and stuff. We do,

so we have a few different parts of the business. Obviously, the thing that we people hear about the most of our consumer business where for eight thousand bucks, you come up and you feel like an astronaut. You we train astronauts as well, so you're having the exact same experiences as the astronauts that we trained that will be going into space. Um, but that's the least interesting thing that

we do. I mean, the most interesting thing we do is is really you know, space experiments that make space more accessible, how things would act in space without gravity, whether they're fluid transfers or uh, some things we do biomatically. We did the first um printing of a human heart on a three D printer in zero gravity and that

is now on the space station printing everything. So what we do in research with major universities University of California, perdu M, I T, you know, and as well as NASA, and with the advent of the space stations coming along, we will i'd think likely be doing work with them on how things act in that environment, which will help them create these these stations that will replace the I S. S as And we're really excited about it and we're the platform for them to do it. So that's the

most interesting. The most fun thing we do is is taking you up and letting you flip and fly and spin and do all these things like you're in space. That's Matt go the CEO of Zero Gravity Corporation also known as Zero G. You're listening to Bloomberg Business Week. Coming up, we examine America's latest space of gun violence and what can be done to prevent the next school shooting because many would say There's probably going to be

another one. Unfortunately. This is people you're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. We spent hours with hundreds of family members. Were broken. Those lives will never be the same. They had one message for all of us. Do something. Just do something, for God's sake, do something. President Biden demanding action on guns, talking to the nation in an evening address Thursday night. That on the heels of yet

another mass shooting in Tulsa, Oklahoma, this past week. Of course, the White House had already been looking for a legislative response following the elementary school attack in Uvaldi, Texas, that, of course, on that claimed the lives of nineteen children and two teachers. We're trying not just to make sense of the tragedy, but also understand where the United States can go from here. We've got a great voice on this. Dr Marissa Randazzo is executive director of Threat Management at

on Tick. She joins us this afternoon from Washington, d C. She's got a great background, serving with the U. S. Secret Service for a decade. She was the agency's chief Research psychologist assigned to the National Threat a Estment Center also co directed the Safe School Initiative, conducted jointly by the U. S. Secret Service in U S. Department of Education. Dr Randazzo, it's good to have you with us. I

wish it were under different circumstances. Um. We we're trying to understand how this type of thing can can be prevented. And we know what is happening politically right now, That's not what we're going to talk about. But what we're gonna talk about is is real solutions here. And and you say it's possible to prevent school shootings, how well,

it's absolutely possible to prevent school shootings. I was part of a team that has been studying school shootings since the combined attack happened, and we actually went back twenty five years and the Secret Service has continued this research, and I just want to emphasize school shootings are preventable.

We can prevent them because they are sought out and plan out in advance, and because the person who engages in that violence typically tells other people beforehand, so we stand a chance at hearing about someone who's planning for this type of horrific violence before they actually get to

that point. And one other important pieces that people who carry out and students who carry out school shootings in particular, typically do it when they're at a point of feeling desperation there at the end of their rope, that they may even be actively suicidal and they see no other way out of their problems. Um and and maybe really just looking to violence as the last solution or the best solution to to to solve their problems and commit

suicide at the same time. Often is the case. So the way we prevent this is typically by setting up threat assessment teams and training lawn person personnel, school personnel, and mental health professionals in This process, known as behavioral threat assessment, was first of all by the Secret Service. It's been adapted for K twelve, It's been adapted for higher D and end even the Department of Defense has concluded this is exactly the tool that works best. It's

our best hope going forward. I mean this sounds like being kind of an offensive offensive, like being on the offense right looking for the problem areas are problem individuals. Why aren't we set up better? Is it just we still are in a society, even though in the pandemic we talk so much about well being in mental wellness and you know, employers being more sympathetic the whole world kind of getting a better understanding of how it can

impact everybody or anyone. Um is it's just still society's lack of expertise and knowledge when it comes to mental well being and willing to kind of identify it, like, what is it that we're not better about this? Well? I think I think that that's a big piece of it.

And I think the other thing that distracts us is that depression in in girls and women look different than it's typically dozen boys and men were used to kind of the Hollywood script of you're just withdrawing from activities, you're sleeping all day, you're eating a tub of ice cream. For boys and for men, clinical depression actually looks very active. It's anger, it's trigger temper, it's rage, and we miss that. We miss it a school personnel, as law enforcement, pediatricians

miss that as a possible symptom of clinical depression. It's part of what attracts some people to extremist ideas in the first place, is feeling like the only legitimate expression of their emotions is hatred. If they were to cry that we made fun of But if they are angry and seezing and full of hate, then they're not made fun of. So part of it is we have an opportunity if we know what to look for, especially em

boys and young men ris. I can't help but think that if these kids did not have access to guns, these things wouldn't happen. Because we have mental health issues in countries outside of the United States where it is harder to get a gun, and we do not see mass shootings like this. It's absolutely the case. We can't deny the fact that the US has really cornered the market on that shootings. We have so many more than

any other similar country with similar mental health problems, stressors, etcetera. UM, But I will tell you at the same time, I have been working in the field of throat assessment for over twenty five years. I've been doing research in different types of gun control for even longer than that, and and the sides haven't changed, and the and the division this has has only worsened. So what I want us to look at it what can we do right now?

And what one thing we can do is state legislatures can actually enact these extreme risk protection orders, So I can't remember nineteen or twenty three states have them. It's a temporary order, a temporary restraining order, separating someone who is planning violence or maybe a risk to themselves from their weapons until they can be stabilized. So that's something

we could actually take action on. Out to Randazzo, I am curious, first of all, after this shooting that we just got this week, and we've had a couple of shootings right in just a short time. Um, you know, I am curious. Is your phone ringing off the hook? Are people calling saying? How do we deal with this? What do we do? What's our first step? Yeah? And and actually, for anyone that has a threatening situation there there are a number of things that you can do.

First and foremost, go ahead and call local law enforcement. Let them be aware of it. Um, if it is occurring in a school, from a student, from a parent, wherever it's occurring, you can find out if that school has a threat assessment team. Your workplace may well have a threat assessment team or a workplace violence prevention team. These are teams that are trained to handle these situations or to call in outside experts who have the ability

to handle those situations. But something that's important to know is when we get a series of these news grabbing, high profile event, these horrific acts, it oftentimes prompts an influx of more more threats coming in. For for a couple of different reasons. One, sometimes hearing something like this news about it destabilizes people who are kind of barely keeping things together and may feel like, well, now that's

a way out for me. I'm also suicidal and I could I could get some notoriety at the same time, for example, um it also tends to lower people's threshold for reporting, So a coworker who may have been worried about some behavior they've seen in the workplace may now be much more inclined to bring that forward to their HR department, to their corporate security department to let them

know about their concerns. So people on the receiving end for our assessment team security law enforcement are likely going to see an uptick in those threats coming in, both because maybe more threatening behavior is occurrent, but costs so largely because people who are much more inclined I don't want this to happen to me, I've been worried about the situation for a while, and now I'm gonna tell us someone the doctor Rondozo, I'm wondering what you know.

I think a lot of people are turning to lawmakers right now to see what Congress can do to try to create laws that will prevent this. What would you like lawmakers to do so? On my wish list, first and foremost, I want to get threat assessment training, training on how to do these threat investigations every local police

department and shariff's office in the country. Federal law enforcement typically gets this training, local law enforcement often does not, and yet this is where the threats are being reported. We heard years after the Sandy Hook shooting, when the FBI finally released their full analysis, we heard that the shooter in the in the at Sandy Hook Elementary had threatened to do exactly what he ended up doing. It was reported to local law enforcement, and they didn't think

there was anything they could do. They didn't have this type of training. So, first and foremost, I want to start yesterday and get threat assessment training, threat investigations training to every police department and and sheriff's office in the country. Congress can make that happen. Just got about a minute

or so left here. We are curious about the time you spent in the Secret Service and what that was like and how that kind of makes you think about what threats are, what realistic threats are, um how that kind of has affected your thinking, And again, just got about a minute or so. It was a wonderful experience, in large part because it showed me firsthand how much we can prevent acts of violence, and often in ways

that we don't expect. So Secret Service agents handling active threat cases people threatening to assassinate often worked more like social workers to connect with that would be assassin, to find out what the underlying problem is, to give them off that pathway to violence, and and really establish a relationships to get them into care and support. Was fascinating to watch, an incredible mission that they're part of our thanks to Dr Mercer Randazzo, Executive Director of Threat Management

and on TICK. We should note that Speaker Nancy Pelosi announced Thursday at the House of Representatives will vote on a gun control bill package this coming week. And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio Thank you so much for joining us. I'm Carol Masser and I'm Tim Stanevik. Be sure to tune into Bloomberg Business Week Monday through Friday. It starts at two pm All Street time on Bloomberg Radio. You can

also watch your daily broadcast on YouTube. Just search Bloomberg Global News and check out our Bloomberg Business Week podcast. You can find that at Bloomberg dot com, Apple, or wherever you get your podcasts. Bloomberg Business Week is available on newsstands now at Bloomberg dot com, slash business Week, and on the Bloomberg Terminal. You can also see me on Bloomberg Quicktake, available at Bloomberg dot com, slash Qt, and streaming platforms like Roku, Apple TV, Samsung TV, and more.

Have a great weekend, everyone, stay safe. Everyone is Bloomberg