Is this actually the smartest way to charge in an ondemand car service . We debate. And google now owns the cheetah, big dog and other robots from boston dynamics as it buys yet another robotics company, all part of a project led by former android head, andy rubin. We begin with a debate over government surveillance, which took a new turn this week after a report recommending significant curbs on the practice was made public. This report is the work of an Advisory Panel appointed in august to review the n. S. A surveillance program. The panel says surveillance should continue but with significant restrictions. Their 46 recommendations include making it harder for the fed to get access to phone records by having phone companies or a private third party store call data. The government would have to get a court order to access the records. The panel is also calling for new criteria for eavesdropping on foreign leaders. All of this came after president obama talked surveillance with tech leaders tuesday, including apples tim cook, Facebooks Sheryl Sandberg and yahoo s melissa meyer. So what could these Panel Recommendations mean for the relationship between government tech and your security . I spoke with a c. E. O. And former n. S. A. Cybercenter employee, bob stasio and also Daniel Oconnor, the senior director for Public Policy and Government Affairs at the computer and Communications Industry association. I began by asking bob about the risks of curbing surveillance practices. I believe really what it does is slows down the process of our ability to gather intelligence and analyze it, if it does anything. For example, i like to use the 9 11 example of right before the 9 11 attacks, it became evident that one of the hijackers was communicating with i believe elements in yemen. Following that, we were not able to actually collect that intelligence and analyze it because the call was eminating from within the United States. After that, the 9 11 report, a recommendation was made to change some of our collection ability in order to catch intelligence items of that value. If we swing the pendulum the other way too much into the privacy realm, i think it might slow down our ability to find things like that. So you think if these recommendations are implemented as is, that it would be dangerous . Not all of them would necessarily be dangerous. I think, as i was saying with my pendulum analogy, following 9 11, we swung the pendulum from privacy to security. There is always that balance between privacy and security and we are trying in this recommendation to point the needle to the preferred area where it would be the sweet spot. I think what this does is it goes more towards the privacy area and may sacrifice some speed in our ability to process information. Daniel, youre part of a lobbying group that is advocating for privacy. The technologh Companies Want more privacy and protections over their data. How is it being perceived in the Technology Community so far today . Thanks for having me on. I think its a great step forward and its a 300page document. My colleagues and a different Tech Companies are going through this as we speak, but its important to start this in balancing security and privacy. After all, your viewers know that International Markets represent some of my Member Companies biggest targets right now. Its important that Internet Users across the globe to get this right. It could be a vast blow to our economic security, and thats another thing we have to consider. Is not Just National security from a pure c. I. A n. S. A standpoint, but the health of the u. S. Economy Going Forward. You represent facebook. Mark zuckerberg has said the n. S. A. Blew it. What do you think he thinks about these recommendations . Are they Strong Enough in the direction he thinks they should go in . It is a good start. Im not going to speak for mr. Zuckerberg, but there are important things on the table. First off, it makes it harder to collect and analyze metadata and it requires a Court Decision the other day that said its a violation of the fourth amendment. Another thing i like about this, and needs to go further but its good to begin this conversation. It Discusses International users. Facebook and google have half of their revenue coming from overseas. If their users do not feel like google and facebook can be trusted with their data, then it is going to be a huge blow to their business and bottom line. The other day, cisco released in its quarterly statement that their overseas sales have already been affected and there is a few studies that have come out that shows the damage to the u. S. Cloud computing and hosting economy could be over 30 billion over the next five years. Its important to get this right. In terms of getting it right, my question for bob, are we going to swing the pendulum towards privacy until something bad happens again and it will go back in the other direction . That is a possibility. I believe n. S. A. And the Intelligence Community has a lot of oversight. There is an executive and legislative oversight over the Intelligence Community and certainly the n. S. A. You have to realize the people behind the scenes are constantly trying to move this process and balance as time goes on. When a large global event occurs like this, for the snowden documents, this is a catalyst in order to swing the pendulum back towards privacy just as 9 11 was the catalyst to swing the pendulum back toward security. Thats how the process works but its happening in smaller iterations all the time behind the scenes. We just dont hear about it in the public every day. You wonder how we find a balance. You worked inside the n. S. A. At the cyberunit for years. What you think the n. S. A. Is doing wrong . I was not really on a Decisionmaking Authority to determine where we were able to stop our privacy limits, but i really think its one of the best methods we have for handling this very difficult problem. Theres really no other better way than weve come up with. Its a challenge to try to protect the United States, try to protect u. S. Persons because the problems are not going away. There are threats out there and they happen every day. In my opinion, this was a very balanced and calculated measure with a lot of oversight. That was Daniel Oconnor of the computer and Communications Industry association along with ronin analytic c. E. O. , bob stasio. Autoplay video ads could be coming to your facebook feed. What is the social network doing to appeal to marketers and keep users happy . That is next on bloomberg west. Im emily chang. This is bloomberg west on bloomberg television, streaming on your phone, your tablet and at bloomberg. Com. Facebook is getting into video ads as the Company Looks for new ways to make money. This week facebook launced a limited test program for the videos. Select users will select ads for the new film divergent. The ads will play without sound just like videos from friends do now. The sound will only be turned on if the users clicks on the sound. Our editor at large, cory johnson, drilled down into how this could change facebooks advertising business. Lets talk about how this is going to work. They think they can sell this for a higher price than they have in the price. These ads could generate up to 2. 5 million in one day. These would be short ads, 15 seconds. The audio only happens when you click on the ad. The hope is this would be this would be another tool in the facebook quiver of advertising tools. Lets take a look at how facebook ad revenue has grown since its i. P. O. Mobile has become a bigger piece of the pie, but what else . We have seen some consistent growth. The numbers at facebook are big. It is hard, in conversation, well lump this in with other things like 2013 but it is nothing like it of the kind. The company did 1. 8 billion just in advertising revenue in the most recent quarter, 13 weeks. This is a huge business. The growth, you can see working with mobile advertising. The yearoveryear growth in this segment, also impressive and really growing at a faster and faster rate. So it is big and getting bigger at a faster rate. Now how could video ads impact the growth that we have seen . Fundamentally, the notion is to get a higher revenue per user, more ads and more consumption of ads and a higher revenue that costs more for advertiser to run them or marketer. Seeing that value increase. That is one of the metrix that has continued to get better for this company, including on mobile. That was our editor at large, cory johnson. I spoke more about their ads with shawn amos, the c. E. O. And founder of fresh wire, which provides realtime premium content for brands worldwide, with big name clients including hershey, aarp, hallmark and esurance. I began by asking him if facebook can do this right without getting any backlash. They know their users are a number one priority. Unlike other platforms, facebook users take the experience personally. It is very immersive and personal and they know they have to get it right. They have been testing in rolling it out. They are touting the fact that users can scroll past these things quickly if they dont like them in their feed. The audio is off. The bigger issue is will fans and users engage with them . Not will they be upset by them. Will they . Do you think they will . It depends how brands treat the video content. If they are going to throw up a tv ad, probably game over. If they are looking for a unique content that works on the platform, you cant treat every platform the same. A tv ad is not a 15second spot on facebook. They are willing to take chances and risks. If they are willing to play with the platform, it can be a winner. By taking risks, what do you mean . What should brands do . What kind of things work . All things work. Look at what g. E. Did with their vine videos . Just a simple task and tip. Not necessarily groundbreaking but it is pretty useful and cool and innovative. The trick is just really reading the audience and platform and stepping outside the comfort zone a little bit to use the tools that facebook has given them to try something that may be a little bit New Territory for them. Now the tv Advertising Market is almost 70 billion. How much could facebook conceivably steal . They want all of it. Of course they do. This is a message that every digital platform is seeing now. No different than youtube, smaller platforms. They all want brands to believe that tv is dead and over. All the dollars should come to digital, where the engagement is. Facebook does a really good job of targeting their audiences. But tv is still a massive juggernaut and to say it is dead is a little misleading, i think. Shawn amos, the c. E. O. And founder of fresh wire. Uber made some riders very angry last weekend after surge pricing made for some expensive rides. Is surge pricing a smart strategy . We have an uber investor next on bloomberg west. Welcome back to bloomberg west. Im emily chang. This is bloomberg west on bloomberg television, streaming on your phone, tablet and bloomberg. Com as well as apple tv. Uber caught some heat this week from riders after some of them on the east coast paid as much as three to four times the normal rate last weekend for rides during the snowstorm. This is because of ubers surge pricing policy where users pay more when demand is higher. In reaction to the complaint, uber tells bloomberg west surge pricing helps to get more cars on the road quickly when demand outstrips supply, helping to guarantee the uber reliability that users count on. Users are clearly notified and must acknowledge the elevated pricing within the app before they can request a car. For more, i spoke with cory johnson and the managing director at Menlo Ventures, an investor in uber. I asked whether paying 35 a mile is fair. Fair is not the right question. It is more important to make sure that you have a car to take you home than what it costs. What uber is trying to do with surge pricing is to make sure that the car is on the road. What is worse than paying 35 is not getting home in a snowstorm. Right, but im not asking about surge pricing in general. Im asking if 35 a mile is fair. I think it is the question is that enough demand for drivers to get on the road. Is it fair to ask someone to go and drive, put themselves and the car at risk . Well, you need to give people an economic incentive to be out there and to be sure that the drivers are out there so that you can get home safe. Is it fair to ask is it fair when it comes to a Small Business . Should we be talking about the ethics of it . Your questions are so unfair, emily. It is funny that you mention the safety of the driver. I was a taxi driver in new york a long, long time ago. I was telling a driver, i was in the back of an uber car. I told the driver the story of the day i left the house in a snowstorm taking a cab to my taxi garage. The cab got out on 5th avenue, did a complete 360 spinning out in the snow. I said im not driving in this. I think that is a reasonable question. On some level, the fare is whatever is legal and what your customers will pay for. I think there is a bigger question here about what a developing brand chooses to do. If a developing brand says to its customers, were going to take how much money have you got . That is what this thing costs. That creates a different relationship with the brand. Uber is making a calculated decision that they will not alienate people with these things. What we saw this weekend, there are people up and down the eastern seaboard and were dedicated users were urked about this and im sure uber lost some customers because of this surge or gougelike pricing. You know, it is one thing to make sure there are enough cars on the road and then it is another thing to make sure that your Customers Trust you. How important is trust and does surge pricing as high as 35 a mile undermine trust in the company . Trust is super important. Anyone who has been in an uber car knows how great it is, how courteous the drivers are and how safe you feel. You ask the question about fairness. Let me ask you, one of the cancer drugs out there is 200,000 a year for recovery. Now is that fair, or is it more important to make sure that 200,000 drug is there so you can get better . For relatives it of mine who take that drug, that is a lifesaver. They dont think about how much it costs. They think about the fact that they can live an extra year. Same way, when i think about the 35, i think about the fact that i can go home, be with my kids, not what it costs. Ok, i had the c. E. O. Of uber on the show recently. We talked about how much they take. Lets take a listen to a little bit of that interview. It depends on the percent on the particular product. It is generally 20 . You take about a 20 cut . Thats right. It depends on the product. Higher end products might have higher margins. That is essentially the margin that most of the trips happen on. So it takes about a 20 cut. What about capping surge pricing . Just going two, three times higher than usual, rather than four, five, seven . I dont know. That is a decision that management makes and they have been very careful about making sure they do it at the right level. They are trying to make sure there are enough drivers available. The whole idea of capping the surge means they could limit the number of drivers. When this is going on, you want to get as many cabs on the road so that people can go home and the surge pricing allows you to get drivers back on the road. Why cant uber pay drivers more . Why dont they take a smaller cut when there is a snowstorm . Why doesnt they charge me less for new years eve . Why does the Pharmaceutical Company charging me 200,00 for this drug. They should give it away for free. If they give it away for free, nobody builds the next drug. We need to have a mechanism to drive the behavior. Cory, jump in here. I totally think that drivers and passengers should be completely safe and that, you know, going out on the road and putting their lives at risk, they should be compensated for it. Is there a better way than this . I dont care about people, i just care about businesses. You know i think this is an interesting choice for the business to make here. If customers it is not about affordability. Let me bridge in an example of someone who can afford it. Jessica seinfeld, wife to jerry seinfeld, someone i do care about. She paid 450 to take her kids to a bar mitzvah and drop them off. Her friends she sent a picture on instagram and her friends were saying things like o. M. G. , these people are crooks. That is a calculated risk that the business is taking. If they are going present something to their customers at a fixed price. A mcdonalds value meal, it is 99 cents. You know what youre going to get. Were not going to change the price if youre more hungry. You can depend on us to have that. That is one choice a business can make. I think it is really interesting that the use of this Technology Allows uber to Scale Production instantly in a time like a big snowstorm or Something Like that, but there is an interesting risk on the backend of that. Uber is feeling the wrath of that. Thank you to defend the company and of capitalism on the backs of cory, that it is choice that uber made last weekend. Is that really the right choice . I dont want to comment on a specific situation because i dont know. That is not the only person that, you know, was upset. There were many, many people. I have no doubt that there are people who took that journey and didnt realize what the surge pricing was and im sorry they didnt have a good experience, but am i super glad that there is someone out there willing to get drivers out so that she can get to a bar mitzvah so that i could get ho