Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
LEAs Matteo and Paul Sweeney live here in the Bloomberg Inaract the Broker Studio in Midtown Manhattan, streaming live on YouTube as well.
So I check us out there.
You can search Bloomberg Live Radio all right. Uber is partnering with Lucid neuro to launch robotaxis in twenty twenty six. I'll do a ROBOTAXI I mean, I get into car every morning with a dude I do not know, true, and I trust him to get me from point.
But there's someone behind the wheel.
Yeah, but I don't know who this dude is. But I mean, I don't know. There's like twenty seven thousand censors on these things. It's I don't know, man deep saying he knows he does this stuff. Senior tech industry analis for Bloomberg Intelligence. What's Uber strategy for robotaxes? Because you could argue that boy that would totally impact their business model Uber if I don't need to share my money with them.
I mean Uber's strategy under this CEO, Dara Koshershahi, ever since he has taken over, is to build scale when it comes to both supply and that translates into adding more services. So that's why they expanded on their delivery side in such a big way. You know, they added food delivery, grocery delivery. It was all.
About drizzly which is the.
Look. And now they're doing the same way the adonomous vehicles supply. So they have a partnership with Weimo in two cities, but then they are at the mercy of either a Weimo or Tesla partnering with them. What they're doing here is because they don't have their own av efforts really doing this minority investment in Lucid that makes about hoousand vehicles a year, Premium evs and also Neuro which is software maker similar to Wevemo in terms of
you know, autonomous driving. They provide the actual technology and sensors and software for the vehicle to drive itself on its own. And it seems to be a sound strategy, you know, just to hedge their bets. What if the Weymo partnership doesn't pan out or get bigger as they hope to be. And that's where you know, having this investment does make a lot of sense.
So how does this deal all work? I mean break it down for it's certain like SUV Lucids, Like, how does it?
Yeah, I mean look Lucid, like I said, compare that to Tesla making one point eight million cars a year. Lucid makes ten thousand vehicles a year, so it's a much smaller company in terms of the number of vehicles. But at the same time, everyone who owns a Lucid, they like the experience. It's one of that premium EV cars that never took off. And that's why adding that sensor technology for autonomous driving on top of Lucid does make sense. Because Uber, like I said, it's all about
adding more supply. They want to cater to every segment, premium segment who wants to use AVY vehicles as part of their daily routine. And that's where you know they are thinking long term, Okay, do we have AVY supply for all types of segments and this could be something that we have an investment in. And I think it's not a big amount. It's not an outright acquisition that they're making.
Well, you know, Paul, they said the Lucid was the car the Hamptons, Like, that's really now? Yes, yes, well you.
Never know, very good. I'm not sure what the car the Jersey sure is. It's the vestment you see me cruising on.
All right.
The market cap of Uber Technologies one hundred and eighty eight billion dollars, it's up fifty percent this year. What's driving that?
I mean remember the time when Lyft used to be thirty percent of Uber. That has changed completely. Now Lift is like three percent of Uber's market cap. So that's where that scale strategy under the CEO has worked for them. That really has been the key differentiator between Uber and Lyft.
And what explains that, you know, almost two hundred billion dollars in market cap for Uber And look, I think they're doing the right thing here by adding more scale, because otherwise you run the risk of getting disintermediated, especially at Tesla, which wants to go on its own. They don't want to partner with anyone, all right.
Darrek Kastoshahi, the CEO of Uber, he got his twenty most recent year comp four point two million cash compensation, thirty nine point eight million of non cash competition each stock that stock since he got that is up twenty three point eight million. So is current pay value for that year sixty eight million dollars. This dude's worth every penny, right the shareholders. I mean, I'll pay this guy whatever he wants.
Right, Well, his fartues have really turned around this year up until twenty twenty four. This dot in do that well, so really this year with Bill Ackman taking a steak and you know about that. So there have been a lot of catalysts that have played out in favor of Uber, and like I said, Lift not performing because of their lack of scale really validated Uber strategies. So I do think he has had a good run. Yeah.
Well, Paul makes fun of me because I only have the Uber app, I don't have the list, and he kalls me all the time. The quick thirty seconds that we have here left ROBOTAXI fleets. We don't know where this one is going to take off?
Right?
Can something like this work in New York City? Robotaxis?
Well, Weimo is trying to get up permit here, So in my mind, you know Uber wants to fill in the gaps where they don't have a partnership with Wemo. So right now, Uber has a partnership with Vemo only in two cities, Austin and Atlanta, not in San Francisco, Phoenix and other cities where Vemo operates in. So this allows them to add more heavy vehicles than cities where Vemo doesn't want to partner with Uber.
Right, would you get in a heavy bit in a way?
I have? Yes? I love the experience, really yes.
So you get in the back, there's no budding in the front and the car just goes.
Yeah, I mean, and the car is reliable in the city is where they all pray vingel now has one hundred million miles driven mild So how much validation do you need?
You're right, all right, you sold me. I'll give it a shot. I mean, I don't know. Maybe not in Manhattan, No.
I saw I'm in San Francisco.
I thought about it, but he didn't do it.
But right, Mendy, thank you so much. Always always are great talks, Mendeep seeing senior tech analysts, you know, driverless card dude who knew that.
You're listening to the Bloomberg Intelligence Podcast. Catch us Live weekdays at ten am Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Donlease Matteo alongside Paul Sweeney. United Airlines right they narrow it narrowed its profit range for the first for the of the year, but they do expect travel demand to continue to rise. Now. Earlier this morning, CEO Scott Kirby he sat down with Bloomberg's Lisa Brahmins and they talked about United's earnings and also their outlook for the rest of twenty twenty five.
This year, a lot of uncertainty in the first half of the year at macro uncertainty and that led to an impact on bookings and demand at United across the
whole industry. But it felt like there was a turning point at the end of June where the tax bill passed and the situation in the Middle East was calmer and tariffs, while not certain, yet narrowing the range, and it really felt like people felt enough confidence or lower level of uncertainty that they kind of came off the sidelines and were unfrozen.
All right, that was United CEO Scott Kirby. Let's bring in the expert on all this, George Ferguson's Bloomber Intelligence senior Aerospace, Defense and airlines analysts. George, thanks for joining us, Scott Kirby. He seemed pretty confident, did he?
He does? But I guess he always sounds confident, right. I think he's counting on some capacity cuts here in the second half, and he talked about some of the uncertainty going away, So I think it's a it'll get better story. But yeah, too, c for him and for Delta didn't look that great.
George, where's business travel today?
I'd like to tell you what the airlines try to hide that, but you know, everything we can parse out of sort of Delta and United earnings makes it sound like it's lagging the leisure rebound and maybe back to twenty nineteen levels, But that would again sort of still be lagging. And so the sense I get is that it hasn't come back as strongly as leisure, and these airlines are more pointing to high end leisure as the driver of their profitability.
George, I have to point out Newark Airport because I'm a frequent visitor. There are a lot of issues there right construction new there were outages, delays. When they asked, you know, Scott Kirby about it, he said he was kind of you know, optimistic about it, but he also pointed out JFK would love to get in there. Has this been kind of a sticking point for United.
Newark for sure, right because Newark they've got a strong concentration of flights out of there. You know, he started the call too today. You know, I get the sign on for the first couple of minutes of it before joining you, and you know, he was sort of alluding what was going on at Newark Airport, and so you know, I think it's I think we're starting to put behind us the FAA problems. But Newark is always a challenging airport.
It has a lot of activity. You know, he said, the FAA and the constituents there have gotten real about the amount of throughput they could put around Newark. That would be good because essentially Newark suffers from a whole lot of throughput that's trying to get through that airport. And then you get in the middle of summer and you just have these weather events storms which we've been having I think every day now in New Jersey, which
sort of royal the whole deal. So he sounded optimistic that they've got a lot of the fix in place for the airport.
George Ware, are we on air traffic controllers? I mean, now, hard can this be? To staff this whole system up here? I just don't get it. What's the status?
Yeah? So, I mean it just takes a long time to train in air traffic control, longer than I would have expected. I mean, the last numbers I've heard were sort of over over a year. I think I want to say it was like a year and a half, but I have to go back and check my numbers exactly on that one. You know, during the pandemic, you know, we had people that probably not too jazzed about entering that business because it was one of those where you
couldn't work from home. I think that worked from home world is fading a bit now, But back again, during the pandemic, it didn't seem that exciting. And I think it has the problem that every other industry America, especially the older industries, have, and that is there's a bunch of baby boomers inside it. They're approaching retirement and actively retiring at this point. And the backfill, again, it's not the most exciting industry, I guess to go into. The
backfill has been harder. Recruitment has been harder, and when you get behind them, recruitment and training takes a certain amount of time. It takes a while to fill. And so we're still in that attempt to refill phase again. I think it's getting better as the economy maybe as some of the labor market is not as white hot as it was coming out of the pandemic, but we're still behind the curve a bit, all right.
So we heard from United, We've also heard from Delta. You know, all the numbers, But for me, what does it mean for airline fares? Am I gonna have to pay more for a ticket coming up?
You know? I think that there's going to be a stabilization affairs here. But when we look at the second half, we see capacity growth coming down. We still see capacity growth though, and I think that we've seen it sort of around GDP, and we kind of think that around GDP levels of capacity growth doesn't firmfares and it doesn't cut fares, and so I think you're you've seen some
cuts recently. I think you'll see this level of fair going through the back half of the year and less airlines cut more capacity, which would help them firmfares a bit more. But again, we see growth that's right around GDP growth, and so it doesn't look to me like a scenario where you're going to see strong growth in fares for the airlines.
George can't let you go without talking about Boeing because for me, it's just kind of my quintessential great American company, great engineering company, great manufacturing company, Seattle, Washington, won great parts of the of the United States where they with their seven thirty seven deliverables, because you've told us time and time again over the years that that's really a key metric for this company.
Yeah. So I think one of the great other American companies gave us a little bit of insight this morning, and that was GE. Right, and GE supplies the engines to Boeing, and GE kind of guided down a bit on margins for the back half of the year. Here, I mean guided down like they're nice. Their commercial businesses are like operating margins in the high twenties, right, which is really super and they guided down to sort of
mid twenties. And that's a function of getting new engine deliveries into Boeing engines for the triple seven engines for seven thirty seven, Boeing has done a better job of delivering. That's all about how they're going to win. And from what I heard from Ge today, that's going to persist through the back half of the of the year, which is I think a strong positive for Boeing. Again, a little bit of an EBB for Ge, but a strong positive for Boeing.
George, thanks so much, appreciate it as always. George Ferguson, Senior Aerospace, Defense and Airlines analysts for Bloomberg Intelligence or at least a big question for you, and this is going to tell me a lot about how who you are as a personal boy isle or window seat on the plane.
Oh i'le me too, yes, right, no, because I know, but then if people have to get up and go to the bathroom back and forth, that's kind of a pain.
But yeah, it depends. Like if I'm on a short flight, I'll go window because I like the flying into New York is always cool because fifty percent chance you're going to get the view of the city and all that kind of stuff. Okay, but it depends where I'm flying. I'm flying somewhere cool. Maybe I'll try the windness set, but buying large. I'm an aisle person like that. You need to get up and you know, take care of business you could do.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
This is Bloomberg Intelligence. I'm Lis Smith's Hayo alongside Paul Sweeney. PEPSI. Their shares get a nice boot this morning. They're about six percent international customers, a big part of their nice earnings that just came out here with all the details, KENNI say Bloomberg Intelligence senior Consumer Products analysts, Kenneth, thanks for joining us. Positive results. This is pretty good for them because it's the time when people are a little
bit more health conscience. Maybe you know, there's some negativity around soda processed food, so this is pretty good news for them.
Yeah, hih, Lisa, Yeah, I would ascribed today's rally in PepsiCo, though, where do a relief rally. You know, sentiment has been pretty low on Pepsi since our last report in the first quarter, they lowered their guidance. Wasn't really strong report. This one, I think was a report of stabilization. Organic growth was about up two percent in the quarter. Wasn't great, you know, but it was above the one percent expectation.
Operating margins widen analysts love to see that, and I guess the last piece of good news is they gave a good sense of good innovation that's coming in the fourth quarter and first quarter next year in the area of protein drinks and as we know, everybody on GLP one drugs these days are looking for protein supplements and that really is an on trend innovation. I think people are getting excited about.
The can A lot of folks, including myself, have gone to private label goods when shopping in the supermarket, trying to you know, fight this inflation thing out there. Does Pepsi with their brands, are they seeing that as a headwind, you.
Know, Paul not really not in their big freeedola a franchise. This is a you know, the eight hundred pound guerrilla in a snack aisle. It continues to gain share, believe
it or not, at least on volumes. I think some of the problem with free delay foods I should say they're overall food they combined quicker with free to lay last quarter is that I think consumers are a little more price weary to your point, but so I think they've held the line a little bit with with things like you know, bundle old package sizes and things like that. But you know, the company says it's really turning its attention more to productivity and costs to get that business going.
In the second quarter, comparable profits were around thirteen percent in that business is not great showing. So fortunately for them, though in this quarter, the international area and Pepsi beverages did pretty well and more than I'll set that weakness.
Now.
You were talking before about GLP one, So yes, people going for the more protein like how you said, but also wanting to eat smaller portions, and that's something that Pepsi is changing with its snacks, right, making the packaging smaller.
Is that correct, That's right, It's a trend. It's been going for a while, and I think they were pleasantly surprised as their competitors, Coca Cola and Carragure. When they rolled out the mini cans years ago, there's let about cry that you know, sugary drinks were adding too many calories, so they came out with us smaller versions and kind
of like a portion control kind of thing. What they probably underestimated was how much that contributed to price mixed because obviously the unit prices are higher with those smaller cans, and they've extended that same kind of concept to a lot of their you know, snacks as well, whether it's a Cheetos or feudal A and so on. To your point, and a lot of the food package food items as well.
Smaller is also more convenient, so it also plays into consumer trends for portability as much as it is for calorie counts.
I like the smaller cans of soda. That's perfect for me. The twelve ounces was too much. These things are just perfect for me, So kudos to all those folks. So what I like about a lot of the names that Ken Shake covers is their big, nice, juicy dividend payers. I'm looking at Pepsi just about a three almost a four percent dividend yield here Ken, how do your companies, like the Pepsis of the world, how did they think about their dividend policy.
Well, they are very much committed to it. They know that their shareholder base is very income oriented and so and you know, it serves the company well to have a policy like that. Buy and Lawrence is the dips and you know, consumer spending goes up and down, you know, depending on the whims of you know, economics. These are businesses that are typically recession proof, cycle proof, and so they take these steady cash flows and they do a
nice balancing act of reinvesting with innovation. They're always looking for productivity improvements that bore fruit this quarter.
Uh.
And they take care of shareholders first two dividend and then on a more selective basis, share buybacks. So they have a lot of levers to pull to reward shareholders with an income stream that predictable.
Yeah, I mean, I'm looking at the comp function for Pepsi in the last five years. Compound and any return about six perc for the stock. But then you throw in that four percent dividend, Neil, that's a ten percent return. It's not a bad way to make a living. So that's how I think a lot of people look at those Staples stocks out there. Kenscha covers them all. He's
a senior Consumer Product Sannels for Bloomberg Intelligence. He's down there in our Princeton office, although I'm guessing he's probably working from home because that is a thing now for a lot of folks.
This is the Bloomberg Intelligence podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.