10 places to work. Doc you sign makes the glass door lift. We will talk to the doc you sign ceo about what makes the company so unique. Transportation, the self driving semi makes its first commercial freight run. We will hear from the company who performed this feet. Silicon valley is listening to your most intimate moments. It is the focus of a Bloomberg Businessweek indepth piece about how the Smart Speaker craze lets left users vulnerable to their conversations being transcribed. It was one of their most read stories wednesday. I spoke to bloomberg journalists about the story, including the devices, and use of contractors to transcribe intimate conversations. Lets hear from new york and San Francisco. We spoke to dozens of transcribers and contractors. Everywhere from ireland to india. They had ethical quandaries with the service. They were eavesdropping on a lot of siri alexa customers in order to improve the systems speech recognition by transcribing recordings we submit to the cloud. Disparity you mention. A lot of contractors felt it was ethically dubious whereas Silicon Valley folks we spoke to did not think it was an issue at all despite years of privacy issues. They sought as essentially a way of improving Quality Assurance. Apple whoive at worked on siri describe this as a way of fixing a voice bugs. The bigger question is whether or not they disclosed this to consumers. Did they have the sense that you humans may be listening . Any chance they take this more seriously Going Forward . We have seen more Companies Issuing disclaimers, but when it comes to Companies Like facebook or apple apple in particular says they have privacy at the center of their core values, but this would seem to be an indication that they have not woken up to the fact that users when itore privacy comes to interacting with their devices. Matt dayets bring in to explain security concerns that surround amazon. What was interesting to me was they gave the impression about privacy while not actually getting it. Your take. Out of the gate with mark speakers, they were Smart Speakers, they realize that putting microphones in peoples homes were to controversial. One of them is the spitting light on top of an echo speaker to let you know when it is recording. The other was the ability to delete your audio recordings, and imbue those three web portal. They lean hard on that transparency. They were not upfront with the fact that they were using user lab,as a massive r and d with no idea with what they were going to launch on alexa and correct errors. Taylor i want to get to facebooks latest. We are joined by sarah fire. What is interesting is facebook is a newer entrant into the market, why would they get it now . After all of the controversy listening devices, facebook still felt like it was important to do the same. They did not think of it as a very as a very different from all of the other things they collect from their users. Type, asroll, as you you interact on the surface, facebook thinks that you understand they are going to parse through everything you say and do, and use it to make their systems smarter. Between a difference machine doing that, and human beings doing that. Especially with audio data. There is something so intimate about the way this works behindthescenes. If it was so natural and obvious to the companies, why did they feel it was not necessary to disclose it to consumers . Consumers are alarmed. Given Everything Else that is going on with the lack of trust in facebook, any sense that consumers are trusting facebook echo they purchase . They are purchasing it. I think a lot of people are not aware of the network of contractors that are listening to this audio to do asthmatics plan, Quality Assurance testing. Trying to improve the way speak recognition works. Recognition. Facebook looks like this as an accessibility issue. They think all different types of human voices can be recognized by computers. The fact that they need humans to do this because the machines arent ready, that was not part of the marketing. I want to bring in garrett, google continues to use humans over some of the technology and some of the contractors instead of real employees. Does that help give them cover . Two google is also using contractors. I first started learning about this, digging into the story and reading the reports of my colleagues and others, this was mostly being done by contractors. These were not google employees, in some cases they are but mostly it was people employed by different companies, sometimes in countries far away from the headquarters these companies are based in and where they make decisions. Hit homele, that earlier this summer when one contractor in the netherlands walked out of one of his offices, taking with him a bunch of voice recordings, gave them to journalists who were able to listen to them and figure out who the actual humans were whose voices were being recorded. Those were consumers who were not expecting to be listened to. That is a bit of a scandal. Google has said they have paused human transcription of assisted audio, but they need to transcribe these with humans to continue to improve to make sure that to make sure they can understand different languages, accents and speech impediment spirit they will surely start doing that again soon to keep up with competitors. The senset to get that does that give us comfort thats not actual humans could be listening in . They all wish they could use technology to do the review, but the reliability is, this comes to artificial intelligence, it is still not good enough. You still need humans to double check that these things are learning, that they are improving. For the time being, we are going to need humans the same way with tesla cars. There will be accidents, we need human drivers in selfdriving we get to the point where the machine can fully take over. Taylor that was bloomberg technologys alstom car, and garrett do veeck. An update on the 26 point 5 million merger deal it is currently being challenged by 13 states and the district of columbia in the new york city courtroom. A sprint executive says the wireless provider will not survive much longer without that tmobile take over because it lacks the resources to update its network and has generally weak business prospects. The companys Vice President of Network Development testifies that sprint would not be viable within the next two years. The testimony rebuts claims by states that sprint has a viable plan b. I spoke to jennifer re, who was in the courtroom. I think that was the worst of the day for the company in terms of this deal. Those were bad documents. The chief marketing officer did suggest two other executives at sprint that may be what they could use as part of their negotiating tactic with tmobile to get a better price was that the deal would mean an increase of possibly five dollars a month per subscriber. Tmobile was not taking that into account when they were evaluating what they would pay for sprint. He did do a decent job and trying to play this down. It is a very damaging document in terms of the companys case. He said this is just a hypothetical. I didnt do any real studies, i was just guessing. This is the way marketers think. In fact, he did not think that that was something used as part of a negotiation. I would say that that was probably the most damaging part of the trial today. Taylor that was bloombergs jennifer rie. Fly due has seen shares to one of wall streets active shortsellers. We will find out his reason. If you like bloomberg, check us out on the radio. You can learn you can listen on the bloomberg app, online, or sirius xm. Taylor peleton peleton taking another head. Is not due to a widely criticized commercial, it is thanks to one of wall streets most active shortsellers. Andrew put out a note saying he sees clear flaws in the peleton business model, and predicts stock will fall nearly 85 next year to five dollars a share. I spoke to andrew left on the phone wednesday. People criticize that saying, why dont we look at per subscriber cost . That is difficult with how some of the software. If you see the chart i put out, it shows how much wall street is playing currently for every subscriber of peleton, compared to Planet Fitness and spotify. You can see the ev per subscriber is over 15,000 for peleton. Match. Com is 2100. Taylor we are showing that chart there which you can see is on a per value per subscriber basis. It certainly does look overvalued. I want to break that down a little bit. If you increase subscribers of the denominator goes up, the ratio falls. That is pretty much what people are buying this company on, their growth stock. People are not buying it on current subscribers, they are arguably buying on future subscribers. Would you say to that . It is not like fair enough, but this business has already taken the low hanging fruit. We know about the first 500,000 bikes, the problem is whos going to buy the next 500,000 bikes . The treadmill they introduced is a flop. They are behind the curve on the rest of the equipment. They are not there. It is extremely competitive, and most importantly now with their digital offering, they are giving for 12. 95 what when you buy the bike, you have to pay 39. 95. If you are value conscious, you can buy a bike for 700 and still enjoy the peleton experience. Digital. Eleton the ceo said that was their lead generations way of doing it. That seemed sloppy peleton peleton. You can enjoy and not pay 2000 per bike. Lor are you sure proton peleton short peleton. If peleton ends up being a billiondollar company, that is their major success, the spin bike. They did not create the spin bike, or streaming classes. If it is a 2 billiondollar company, that would be huge. I do not know why wall street has to think this is going to be a 9 billiondollar or 10 billiondollar company. Taylor we have tried to repeatedly reach out to management for comment, we have not heard back. Atrew, would you buy peleton five dollars a share . No. Thats like saying would you buy fitbit or gopro, it is dead money. The best days now are in the rearview mirror. I take that back, at five dollars a share i would buy to cover some of my short. [laughter] a knockay, this is not on the product. It is just not a 10 billiondollar product. This is going to wind up a billion and a half 1. 5 billiondollar company. Taylor i want you to take a look at a chart i am showing here. Andrew, to describe for you, you know the story. It is the share price versus the Short Interest which is now 66 . It is one of the companies that have ipo food over 1 billion a billion dollars. If it is crowded, it is crowded. You always have to properly allocate when you are a short seller. The thesis is, i would never own a stock because it is a crowded short. There is nothing they can do to turn this business around. Unless they create a bike that works out for you. Other than that, they are not going to be a 9 billion10 billiondollar spin by company a year from now. Taylor i want to get some of the conversation. Reallys at oppenheimer highlighted that lowerpriced terminal that could come out into the future. If they do a lowerpriced treadmill, and you hit a massmarket, how does that impact your position, given you could see this company hit a Critical Mass . No doubt, they are going to put out a lowerpriced treadmill either later this year or next year. Expensive one flopped. They have to, because the treadmill is a much more popular piece of equipment than a bike. That this does not just fall off the quick fall off the cliff, this is just decelerating growth. I was in the mall, and the peleton store was empty. Not something for everyone. Of course youre going to put out a treadmill ended it and it is going to sell, but it is going to compete. As consumers become more informed, it is going to be a battle for peleton. Taylor does the announcement of a rowing machine change your thesis . Everyone has a rowing machine. The competition echelon behind them has like six different skews. For ipowas preparing highfiving, their competition surpassed the offerings of peleton. Is a super lady appeared digital weights, again with the mirror, these are all technologies that peleton has not taken advantage of. Is important. People here five, or think 30 in terms of stock prices instead of thinking peleton will end up a 1. 5 billiondollar company. Left. that was andrew theng up, intel surprises public by releasing information it could have kept secret. We will find out what that is. Tictocviral video app has canceled meetings with a senator over immense scrutiny over privacy data concerns. We will find out why the company pulled the plug. Taylor an unusual move for intel, their the first to willingly disclose what is normally private data. Its paying a quality data. In a report tuesday, intel released data about a pay disparity in 2017 and 2018. The Company Provided the data to the u. S. Equal Employment Opportunity commission. The results are not bloombergs jeff green joined me to discuss. Weep we probably didnt learn anything that was a big surprise by looking at the numbers. The surprises that we can see the numbers at all. This is data that every company had to release as of september, one el may be the only at least so far who shared it with us. We are beginning to see the macro information that feeds aso what you would think of median income. This show where women are and where men are. As you said, it is not flattering, but it is the first step to figuring out where the problems are. Taylor where are the biggest problems . 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, particularly intact. That is what intel says they want to bring to light. If the industry has a problem, they are willing to share theirs. Taylor it was 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 . They are admitting that this exposes them to vulnerability. They got beat up today. Those charts do not look awesome. For some people, this is a revelation. It is kind of a fresh attack. Their thought is that this only gets fixed if everybody is pulling in the same direction. They need pressure to be on everyone to look at this structurally and figure out what is wrong. Also, on themselves. They put a part of their pay down on top executives for fixing this. There is external pressure now for everyone to be able to look, employees included, and see how this plays out. Createsdo you think it enough pressure where other Tech Companies would step in and do the same . Recentof some of the examples are any evidence. Citigroup did this with median pay and there has not been a flood of banks joining them. Report lastve a week saying this is how many assaults we have had. It is not like every other platform has said here are our numbers. You start to add these things up potentially, may be a regulator rate change in government might weigh in. People who get ahead of this might have a way an ability to shape it. It is a loss leader kind of thing where you are you are taking the risk out of the gate that may pay off in the future. In 2017these results and 2018, as you know. Any indication that 2019 could have been better . . We will never know. This data was collected under a program that was brought forth by the obama administration. The Trump Administration has said we do not need to continue this, it is too hard on companies. This data in its current form is not going to be collected for 2019. We will have to see if there will be a new program, or if companies will come up something voluntary. This. S the sad part about this data is really interesting, and we may never get a chance to see it again. Offer anyff, do they potential solutions on how to be the first to try to fix a problem . One of the things they pointed out is that the industry isabout 26 women, or that what is available. They made it a goal to have 26 of their employees women, which they met last year. Their top executives only 20 women, so one of the ways to change this ratio is by making 26 of the executives women because that is going to push more women into these higherpaying jobs. And then it is just math. In need is more women higherpaying jobs than lower paying jobs. That has been something particularly intact, but in every industry has not happened. The overall pay difference in the u. S. Is women make . 81 on the dollar compared to men. This is being able to see it one person at a time. Taylor i am not sure if you will, or anyone can answer this. I am originally from new york and we thought this was a big problem in finance. We come to San Francisco and find out that tech is worse. Why is tech the biggest sector struggling with this . Get think it is who you coming out of college who wants to go into these jobs . You get the graduates, but then they come into the industry and from everything i have seen, the data i look at, they do not stay. They say i can go somewhere else with this expertise, because Everybody Needs tech. They go somewhere else and they are treated better. Would you have to create an environment, they call it the warm line. You can call if you think you need to leave and you can talk somebody into they are collecting that data and trying to figure out why people want to leave. Taylor that was bloombergs jeff green. Coming up, officials from tiktok were supposed to meet with senators pressing them over security concerns. We will get into why it is not happening. Bloomberg technology is live streaming. Our globalfollow breaking news network. This is bloomberg. Taylor welcome back to the best of bloomberg technology. Now i look at the United States versus tiktok. The viral video app 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 that were set to take place in washington this week. Bloombergs paul allen and i sat down with our own kurt wagner on tuesday. Kurt we are told these are delayed, and that they will be rescheduled in the new year. Part of the issue is, you may have heard other things going on in washington, d. C. These days with the potential impeachment of the u. S. President. As a result, the feeling from the tiktoc side was there is a lots going on right now. Not the best times to be havin