Business community compared to nafta the job on ttp was so poor and it was all lead by government and totally the opposite to 20 years before on nafta. And there is the moment for the Tech Companies to stand up and not just them, but also the customers. The dry cleaner or the Small Business person whos running it on a pc that costs 700 bucks instead of 1200. This is critical to the success of the economy forward. Tett all about the tech sector for the hour when we continue. Funding for charlie rose is provided by the following and by bloomberg, a provider of multimedia news and Information Services worldwide. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Tett good eveningk im gillian tett of the Financial Times filling in for charlie rose. Its been a busy week in the Tech Industry. Shares of snap inc opened at 24 thursday morning pricing its initial Public Offering above the range. The Company Behind the disappearing photo app went pub look at a valuation twice as facebook in 2012. Meanwhile uber, another darling of the tech sector has suffered from a string of recent scandals. The latest involving a video of c. E. O. Travis cowlich we rating a driver. Now weve been here before. A decade ago wall street was riding high and producing dazzling boons and dirty scal dan equal measure. So how do we make sense of what is going on in the tech world . Is there a tech bubble about to burst . Joining me now is max chafkin who is a writer for Bloomberg Business week who has been covering uber. Richard edelman is the president ceo of ed e8man, a leading Global Communications firm, and william cohan, a special contributor to vanity fair, and author of, why wall street matters. Im very pleased to have them all at this table. Welcome. Now max, i would like to start with you. One of the things that put uber in the spotlight is that weve had this extraordinary video released of travis in a cab arguing with an uber driver. And this comes on top of the big scandal created when one of ubers own female employees wrote a blog saying that frankly its a very sexist place to work. This really is a iming of a pr nightmare for the company. Tell us a bit about this video. I mean its been an extraordinary month for uber. You didnt mention the delete Uber Campaign that started in january. There is a lawsuit with google. This video came to us, our beat reporter eric newcomer, it was passed him by a driver. And it is clearly a dashcam video of travis, the c. E. O. Of uber basically getting into a very spirited debate with a driver. And i think it kind of reminded me of the joe the plummer video if you remember that. Where you have a lot of uber drivers who have long felt that the company doesnt always have their best interests in mind. And you have a driver suddenly voicing those concerns, and being treated in a somewhat dismissive way. Tett i think one of the reasons the story is fascinating is that uber, lyft, these ride sharing apps is something embedded in our lives these days. I couldnt survive without these kind of apps. And yet as you say there is so much controversy about the way that company is actually being run. What do you think this shows about the Actual Company culture, and in particular about the personality of travis st . I argue that its all kind of tied up. I mean one thing about uber, one reason they have been very successful is that theyve been able to overcome opposition from basically taxi industry lobbyists and unions. You know, in a lot of cities, the taxi Industry Private cars are heavily regulated and they adopted this very aggressive approach. And theyve been really, really almost unbelievably focused on growth the all costs. So i think when you look at the Sexual Harassment thing, you have a company that, and i done know exactly what is going on inside of the company. But i think when you talk to people there you have a company that is singularly focused on growth to the point where they didnt really i dont think they really cared about anything other than hiring a lot of people very quickly. And that the whole function of hr at a place like uber is hiring. It isnt making sure that bosses are behaving appropriately. It isnt policing these kind of things. And i think unfortunately that comes from the top and some of that is on the c. E. O. And the senior managers and also on the board of directors. Tett i mean you have a situation where you have growth, this crazy hubris you just have seen coming ople are so busy doingo. Eir job they kind of get disconnected from the real world. It kind of sounds a bit familiar to me. I mean bill, you have spent the last years looking at crazy behavior and hubris on wall street. What do you make of this . Gillian, this is a classic narrative arc to me. One thing we like to do, the Business Press loves to do is sort of find these darling, like travis or like mr. Snapchat, mr. Snap inc and sort of build them up, make them seem almost myth logical. Make them seem largerthanlife. And we like to build them up, build them up. I think part of the reason that the uber story has gone, as viral as you said is because it has what, a 70 billion valuation. Its a private company. It doesnt i mean i would argue and we sort of had this discussion when vanity fair last year when we were talking about the new establishment list and everyone was saying how great travis is, we have to put them at number one. This is a taxi company. Were valuing a taxi company, 70 billion. It is something we all use. But even if we all use it, it is still just a tacki company. Everyone says it is so much more than a taxi company. You dont understand it is the way well have everything delivered, our whole lives, it will be the jetsons. I think we have priced for the jetsons. And i think that once you begin to say travis is just like a regular guy, puts his pants on one leg at a time. It is kind of just like a taxi company. There he is in the back of a taxi abusing a driver. The Sexual Harassment blog was stunning. As soon as i read it. Tett one of the former uber employees who was a Software Engineer who talks about this stuff in extraordinary detail about how she was three percent of the employees there were women and they were subject to extraordinary treatment. And hr did nothing. She would report it to hr and hr did nothing. Tett but this sounds so reminiscent of the banking secretarier a decade ago. I will ask richard about this. This kind of. Tett is tech the new Banking Sector . Well, i mean, i think there is it certainly has become a darling like the Banking Sector was. I mean in terms of people coming out of mbas or graduate schools or whatever, wanting to go in the tech sector. They dont want to work in Investment Banking any more. Reporters dont want to cover Investment Banking any more. They want to of could the tech sector. Tett so max you are doing the heartbeat right now. Congratulations. Richard, your job is to go around firefighting and to deal with companies that have messed up spectacularly. You dont first of all, if you were advising travis right now, what on earth would you recommend that he does . Because he came out with this extraordinary statement, which to my mind, was in some ways perhaps encouraging. He said eventually he needed leadership lessons. He said that he needed to grow up, like the rest of the tech sector. Do you think thats the right approach for a c. E. O. To take right now . I think he was really smart in trying to staunch the bleeding. And apologize wholeheartedly. And without reservation. And i think it was he was very clear that he had messed up. And that he had a lot of work to do. But i think there is much more to play out here. I think max was correct that the Sexual Harassment kind of initiative, Arianna Huffington and the former attorney general of the United States holder are leading is deeply important for the company to get done. And there was a special investigation by the two outsiders brought in to basically fix the culture. And so she is actually helping to lead it, withholder as an outside counsel. And i think it will be a fundamental look at do we have a problem. If so, what are we going to do about itment and then further, i think travis has to establish himself as a person who accepts that hes running a big company and that hes not just an entrepreneur any more. And this arc has actually been followed by many. And in a successful way. I look at a person who actually started, you know, steve jobs, there are others who have matured over a period of time in the c. E. O. Job. And i think made significant strides. And i think you know, hopefully travis can do that. Tett what i am curious about, you have a survey that comes out once a year which looks at the level of trust amongst people in 18 different countries, in different business sectors. And i remember the reason i first mentioned that is because i used to write about the Banking Sector. And im banking completely collapsed after the financial crisis. Now what was amazing to my mind is that trust amongst consumers in the Technology Sector has stayed sky high. These guys have been like gods. Do you think that is dangerous . Do you think well see a cracking of that sky high trust as a result of some of these scandals. So the Tech Industry has really benefited from cell phones and other sorts of products that people use every day that continue to show be affordable. And the sense that show theyre good employers. Now the idea show that theyre not good employers gets around, that is really corossive. The idea show that c. E. O. S are entitled, really problematic. In fact youll remember that from the data, the huge drop in trust in c. E. O. S this year cross every one of the 28 countries. We did the work in. And you know, c. E. O. S are down there with government officials. Really a great place to be krz i think journalists were even lower. But in fact, the opportunity for technology is substantial. You have people like benioff who are interested in health care or sustainable cities or i think that the arc is different to technology. I just wanted to disagree with bill slightly because i think that theres a record pierre omador who is at ebay have actually made substantial kind of philanthropic, bill gates also, and have been activists in the foundation world. Tett okay so they can try and buy their way into a halo. But im curious, bill, having seen wall street go from god to devil, becoming everyones favorite pinata if you are a politician, do you think that there is a chance of that happening with tech . And if you were running your own massive pr company, what would you be advising all those Tech Companies to do . I think there is a chance that it happens with tech. And its because of this arc of the narrative, if you will let me go back to that a little bit. Because i think regardless of the industry, i think we like to build up these titans of industry. And then when they stumble we like to kind of tear them down and bring 24e78 down. And you know, once it is not a great place to work any more. Everybody is flocking to tech because they perceive it to be like its a google plex. Free food all day long. You can take your skateboard with your computer and go to your little nook. And if you want to take a nap, you can take a nap. It just seems fabulous. And i think a lot of people on wall street who were forced to work really long hours. And ive written stories about people on wall street who have committed suicide because of the long hours and how horrible that is. And so wall street between the financial crisis and the long hours has gotten a very Bad Reputation which they havent been able to dig themselves out of. If that arc begins to change for tech then i think you will see. Its interesting. Mbas, tbrad yaits of our leading universities vote with their feet very quickly. Theyre like traders in that regard. They will go into a hot industry when it is sexy and exciting. But once they see a crack or its not giving them the kind of image that they want for themselves, they immediately go to something else. Tett im curious because you covered the tech sector, not just uber. One thing happening, as we have these ipos with these crazy valuations. It sounds a bit like 2 thousand all over again. The amazing thing about the snap ipo today is that weve come out with this prize, 50 on the first day, and snap actually if business right now is actually not growing that fast, is threatened by other rivals and its not even giving its shareholders any voice. So i think its important when we are comparing tech today to tech in 2 thousand or to banking to look at, are these Companies Creating value for consumers. And i think that is one thing maybe getting lost a little bit. Is that people, you brought it up. People really like uber. Their numbers are increasing every week. And i think you know, branding problems aside, a business like that has value. And i think snapchat, yes, we can sort of make fun of it, it is sort of silly. But the thing is that teenagers and people in their 20s are spending enormous amounts of time with this app. And yes, its an app that we as sort of older folks maybe dont totally understand, but it is getting a lot of attention at a time when Mainstream Media companies are really struggling. When you look at sort of what espn is going through, what some of the News Networks are going through, theyre really struggling to find younger users. And younger users, not just click on a link like facebook but sit in front of it for minutes and hours at a time. And i think thras, when people are, you know, paying sky high val yaigs for snapchat stock, that is what they are banking on. They think that this is television and snapchat owns television. Tett thats a great point. As a parent of betweens and teenagers i do not feel like snapchat adds much value to the world or global civilization or period but one day will you have betweens and 20s too. But you make a good point. Clearly these businesses are thriving right now. When we km back to uber, one of the things that is really interesting about the video that us kad this whole scandal, todays scandal, yesterdays scandal, is the television that travis actually has with the driver. Because he says were not dropping the price on stsh dissh. Taxi driver says yes, he says we have competitors if we didnt drop the prices wed be out of business. And to my mind in some ways that is a really interesting wrinkle because it suggests that maybe this uber miracle isnt that miraculous after all. Maybe it is more fragile than you realized. I think hes right. Its more fra givment i think he realizes it is fragile, a lot of people that see sky high valuations dont understand that it is very easy for consumersers to move say from ub tore lyft or one of these other startups that are basically trying to build companies on top of ubers driver network. And the thicket that is maybe even a little scarier, if you are sitting where travis is sitting, it is very easy for drivers to move. If you get into a uber you will notice often that they have two or three smartphones for different apps. And because ubers model is really attractive to investors because these drivers are not employees. Theyre contractor ises. Uber cant tell them when to work or when not to work. But that is a dubl edged sword because they can leave at any time. They can two time or three time uber as much as they want. And because so many investors have poured money into ubers competitors, those companies arent able to subsidize payments to drivers. So it is kind of in a box even though it has enormous valuation. Drivers, i have found uber drivers will bad mouth uber and actually tell you that you are better off if you just use get or lyft. Tett you have had people say dont use uber. A uber driver that i was in with my wife said do not use this is not the right service, you should use get or lyft. To your point there, these companies, snap, snap inc. , uber, have, yes, theyre like networks. Theyre like tv networks. They have a lot of eyeballs now. They have a lot of people engaging with them. And i think there is a lot of value to that, but i dont understand the valuations. So 70 billion for uber. To me it is just a taxi company. Snap inc. , okay, it was priced as you said, the high end of the range and traded up 50 . It has a loss of 550 million. That sounds sort of amazonnesque. Even amazon now is actually making money for the first time. And maybe it will grow into its paws as we like to say, maybe it will be like facebook and just be a rocket ship to the moon. But i do not understand these valuations. As someone who was a banker on wall street during the last internet bubble, i never understood them then. And you know, as is Warren Buffett investing in these companies. He didnt invest then and he was right. He is not investing now but he invested in apple and made a ton. Apple is an extremely Profitable Company and doesnt have anywhere near these valuations. I think the difference between wall street and the tech sector is that the tech sector has absolutely got to retain its employee base. They are the key to the success. They are not so of moable as the 258 ent on wall street. They have to have programmers and that is the essence of their success strategy. And so if you think forward about whether its uber or any other, youve got to absolutely put employees at the center of your communication strategy and so go from inside out, and rebuild 24 trust. Because in fact, now you see some degree of crack in the ed i fis. And whether its pay, whether its benefits, whether its a reconsideration of Workplace Safety for women, all of these have to be part of the recommendation for travis. Well, lets turn this around a bit. Because one of the interesting angles of this whole thing is the quest