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First Move with Julia Chatterley
Congress Says Boeing Management Failings Led to 346 Preventable Deaths in MAX Jet Crashes; Snowflake Starts a Bumper Month for Tech Listings; Instagram Interrupted, Stars Saying Enough to Hate and Misinformation. Aired 9-10a ET
Aired September 16, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:01]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I am Julia Chatterley. This is FIRST MOVE and here is your need to know.
Boeing blamed. Congress says management failings led to 346 preventable deaths in MAX jet crashes.
IPO blizzard. Snowflake starts a bumper month for tech listings.
And Instagram interrupted. The stars saying enough to hate and misinformation.
It's Wednesday. Let's make a move.
Welcome once again, and as always, to FIRST MOVE, great to be with you. Lots of news and analysis coming up, as always, including an apparent
calendar confusion on Wall Street. We've got a Snowflake in September.
Yes, I mean, Cloud software firm, Snowflake beginning trading on the New York Stock Exchange today. The most expensive U.S. software listing ever in
fact, priced at $120.00 a share. All the details and analysis on that valuation coming right up. It's one of a dozen IPOs in the United States
this week alone. That's the most since 2014. Is it a sign of pent-up demand or a whiff of irrational exuberance perhaps, too? You decide.
We will discuss. Timing is key, too.
It looks to be a positive start once again. Our early September swoon seemingly behind us. At least for now, stocks aren't the economy, of
course, and the challenges remain.
Data this hour showing U.S. retail sales rising by a weaker than expected 0.6 percent last month. The July numbers were revised lower, too. It's a
marked slowdown from the gains that we saw in May and June.
They, of course, reduced by financial aid, including the enhanced jobless benefits that have subsequently expired. Something I think that the Federal
Reserve will no doubt note in their presser today.
That global stimulus, too, contributing to the OEC's raised outlook for global growth, it now sees a 2020 contraction of 4.5 percent. It sounds
pretty lousy, but the numbers did look a lot worse just a few short months ago.
Many emerging market nations they say will continue to struggle, exporting nations, too. Just think of Japan. Japanese exports tumbling almost 15
percent year-on-year; imports falling 20 percent. It's a worry for multinationals that of course, sell to them. Lots for the new Prime
Minister to consider, too, and he took over today.
Let's get right to the drivers. I want to begin with Boeing. Three hundred and forty six unnecessary deaths, that's the damning assessment of U.S.
House lawmakers on Boeing's efforts to conceal faults in its 373 MAX airliner.
Their report blasted the plane maker for burying crucial information, resulting in two fatal crashes.
Pete Muntean has been pouring over the details of this report. Pete, 18 months in the making. It's still horrifying, galling to read, overlooking
issues, concealing information from pilots that could have saved lives in their view.
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: So many damning new details in this report, Julia, and what's so interesting is that it doesn't really
focus on the actions of the pilots leading up to those two 737 MAX disasters, but rather the years before at Boeing and the F.A.A.
You mentioned more than 250 pages which calls into question technical assumptions made by Boeing, management miscalculations made by Boeing and
oversight gaps at the F.A.A. In this, two things really came to light that are especially new in this instance. One, that a Boeing test pilot
struggled for ten seconds in a simulator with that MCAS system that's been at the heart of all of these investigations and that it ended with
catastrophic results.
Also, that Boeing engineers e-mailed each other talking about how they wanted to downplay the significance of the MCAS system and get it
considered part of an existing system rather than an entirely new one.
Samya Stumo who was 24 years old when she died in one of those crashes, I spoke to her father and he says this all shows that Boeing and the F.A.A.
failed.
(BEGIN VIDEO CLIP)
MICHAEL STUMO, FATHER OF CRASH VICTIM: They're still hiding the ball like they did before and like they did between the crashes when they kept the
plane in the air when they knew the thing was a killer plane between the Lion Air crash and the Ethiopian crash that killed my daughter.
(END VIDEO CLIP)
MUNTEAN: Boeing continues to stand by the 737 MAX design. It says that when recertification flights end and the plane is okay to carry passengers
once more, it will emerge as one of the most scrutinized aircraft in history.
Meetings are taking place right now between regulators and Boeing in London. The F.A.A. says that it stands by its numerous mandated design
changes to the 737 MAX and that that is not good enough for the House chair of the Transportation Committee, Peter DeFazio. He says that the entire
F.A.A. process needs to be revamped -- Julia.
[09:05:06]
CHATTERLEY: Yes, it makes perfect sense to me. Firstly, Pete, what is Boeing saying in light of this? Because to your point, there are fresh
details. There's also many things that Boeing have been addressing over this time and these jets are expected to be recertified perhaps even by the
end of this year and back up in the skies.
Does this change anything?
MUNTEAN: Boeing says it's done thousands of hours of testing, thousands -- more than a thousand test flights of this airplane in simulators and in
real life. It says that it's done everything it can to prove that the 737 MAX is safe to carry passengers once again and it expects that this process
will be done soon, although the process is not being rushed along and the F.A.A. says it will not be rushed along either.
CHATTERLEY: Pete Muntean, great to have you with us. Thank you for that.
All right, Snowflake begins trading on Wall Street Wednesday in one of the year's most hotly anticipated IPOs and the biggest in the U.S. so far.
Shares priced above the target range at $120.00 a share, giving it a valuation of over $30 billion.
Cold company name, hot stock, at least as far as evaluation is concerned. Paul La Monica, I think before we get into some of the valuation concerns,
let's call them that, let's just talk about what Snowflake actually does, please.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, definitely. This is a Cloud software firm. They help large Fortune 500 companies analyze data within
the Cloud, store data, warehouse it, so it really is all about helping big firms just manage data, which is key, the lifeblood of this digital economy
right now and Snowflake has an interesting relationship and partnership with companies like Amazon Web Services, Google Cloud and Microsoft Azure,
but they're also competing with them.
So it is going to be fascinating to see where Snowflake goes from here, especially now that they've got a big investment from another giant in the
software industry, Salesforce and Marc Benioff.
CHATTERLEY: It's quite fascinating, isn't it, because there are lots of Clouds floating around now whether it is the Amazons or the Googles, and
the utility value of Snowflake is that you can analyze data using this company from all of these Clouds.
So even though they have their competing products, this allows you to branch every single one of them and it's a one-stop shop -- Paul. Talk to
me -- or go on.
LA MONICA: Exactly. Yes, I was going to say, I think that's the appeal of this company and it's probably the reason why Salesforce invested in it.
They're going to be getting a private placement of stock following the IPO.
But interestingly, Julia, Berkshire Hathaway, which despite the fact that it's now the top investors in Apple or one of the top investors in Apple,
not known for being the most tech savvy of investors, especially not with unprofitable startups.
Berkshire Hathaway is also getting a placement of shares as well. So it really just shows how even Warren Buffett has evolved and Berkshire
Hathaway has evolved with its investing strategy in 2020.
CHATTERLEY: We're of two minds, Paul -- one mind, two together. That's exactly where I was going to go. When someone tells the story and then
leads us on to the fact that the valuation on this one is eye-watering.
This is an eight-year-old company. It is now worth more than $30 billion, as you pointed out. It is loss making. The net revenue retention rate is
the highest, I believe of any IPO. It's whopping, so customers are lulled and they spending more money, but really?
LA MONICA: Yes, I mean, it is -- I know I've mentioned this several times with you on the show before, and not to point out the rapidly graying of my
hair, I covered the tech bubble of 2000. I remember when all these dot-coms went public and then flamed spectacularly.
I am a little nervous about the valuations with a company like Snowflake because again, it is not yet profitable. Their losses that they posted in
their past six months of this fiscal year was lower than the previous year, so they're heading in the right direction and revenue has more than
doubled, but they're still posting red ink, so that I think has got to be worrisome to investors when you look at the eye-popping valuation here.
But, hey, if it's good enough for Warren Buffett, maybe, again, that is a key difference between now and 2000. I mean, granted, Buffett just invested
in Amazon last year. He didn't invest in Amazon during the height of the dot-com bubble, but he is not waiting 20 years to invest in Snowflake, I
find that telling.
CHATTERLEY: Yes, me, too. Paul La Monica, thank you so much for that.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
A slow-moving hurricane is unleashing widespread flash flooding that could reach historic levels along parts of the U.S. Gulf Coast. Sally came ashore
just before day break in Alabama.
Ed Lavandera is the port city of Mobile. He is there for us now and Ed, I've been watching all morning. You were getting absolutely pummeled by
rain earlier.
Talk us through it and what you're expecting in the coming hours. More, I believe.
[09:10:20]
ED LAVANDERA, CNN CORRESPONDENT: Yes, Hurricane Sally has officially come on shore. We are in the town of Mobile, Alabama, which is just west of
Florida and this is a section of the Gulf Coast here in the United States that is just being hammered by relentless rainfall and intense winds.
The storm came ashore as a Category 2 Hurricane and it is a deceiving Category 2, and what makes this particular storm very bad for this region
is just how slow it is moving.
If this were moving a little bit faster and coming ashore inland and then losing power and strength, that would be one thing, but this storm is just
creeping across the land here and that means that this region is going to be exposed to these dangerous winds and intense rainfall for much longer
than we would hope, and that is going to be the story here throughout the day as the eye of this storm might be on shore already, but it is just
creeping along and that is making the situation very intense.
Emergency officials are urging people to stay indoors and to remain patient. There is a great deal of concern, obviously, that people would
want to get out now that the sun has come up and it is daylight just to begin surveying the damage, but it is far too early to tell.
We do know that there is going to be extensive damage in many parts of this region, but we just don't have a full sense of all of that, the scale of
this because we really haven't been able to get out and about to survey exactly just how extensive this is going to be.
But the winds have been intense. We are close to just on the edge of the eye wall of this storm as it is coming inland and it will remain like this
for the next few hours, and hopefully soon, we can get on the back side of this storm and have these conditions improve and weaken a little bit and
that will make it a much better situation. But until then, it remains a very dangerous situation here on the Gulf Coast in Alabama and Southwest
Florida -- Julia.
CHATTERLEY: Thank you so much. Ed, thanks for being there and giving us that report. Get some cover, please, now and try and get warm.
Ed Lavandera there in Alabama for us.
All right, as the U.S. approaches 200,000 coronavirus deaths, President Trump, again, contradicting his administration's top health advisers. Here
is how he responded to a question at an ABC News Town Hall in Philadelphia last night about why he hadn't supported a mask mandate.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Now, there is -- by the way, a lot of people don't want to wear masks. There are a lot of people
who think that masks are not good and there are a lot of people that -- as an example you have --
QUESTION: Who are those people?
TRUMP: I'll tell you who those people are. Waiters, they come over and serve you and they have a mask. I saw it the other day where they where
they were serving me and they're playing with the mask. I'm not blaming them, I'm just saying what happens. They are playing with a mask so the
mask is over -- and they're touching it and then they're touching the plate. That can't be good.
(END VIDEO CLIP)
CHATTERLEY: The White House says it is looking forward to working with Japan's new Prime Minister. Yoshihide Suga was sworn in earlier after a
Parliamentary vote. The 71-year-old leader replaces Shinzo Abe who stepped down due to health issues.
All right, still to come here on FIRST MOVE, Apple's latest reveal, two new watches, two new iPads for its subscription bundle, the real game-changer.
What about the iPhone 12? Come on, guys.
And Uber's, I believe, their units with Careem on COVID proofing its cars and its business. Stay with us, that's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks remain on track for a higher open this Wednesday, perfect investment weather in fact then for the
blizzard of IPOs set to price on Wall Street this week, including Snowflake's debut.
Today, as we were just discussing, not the only news to follow though, some earnings results, too. Stay-at-home stock extraordinaire, FedEx higher by
some seven percent premarket, after reporting a nice 13 percent revenue pop.
Remember they're requiring in significant size, too, 75,000 jobs, I believe into the winter season and Christmas. Watch financial stocks today though
as the Fed releases its latest policy statement and economic forecast. The last before the presidential election.
The Big Banks still down significantly since the COVID lockdowns as low rates zapped their earnings power. Wells Fargo, in fact, down by more than
50 percent.
Let's talk all of this through. Christine Romans joins me now. Christine, great to have you with us. I have to say, there's an irony here in that the
Fed did such a great job in stabilizing the system that they provided cover for Congress not to agree on doing more to support and we're seeing the
weakness filtering into the data now.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes. Absolutely, and I think you can expect three things from the Fed today and
Fed Chief Jerome Powell. You can expect maybe some questions and a little more detail on its low inflation target strategy just for how long it can
keep interest rates so very low. We're going to get new near-term forecasts.
Maybe they are a little more optimistic in the near term, but going out into 2023, what are they seeing about the healing of the labor market and
overall economy? And, also, what is the need for more stimulus from Congress?
We have heard Jerome Powell say again and again when he talks to investors and when he talks to Congress, he always says, more needs to be done to
make sure the recovery is secure. Will he go -- how far will he go with that again today?
CHATTERLEY: I think he will go pretty far, Christine, if I had to guess. Whoever wins this presidential election, they have to pick up the baton and
it is going to be a weaker economy that they have to deal with if they can't do more in the short term. Either side has to deal with that.
But I do want to ask you, because the other thing of course that global economies have been dealing with is trade tariffs and the trade war even
before we had to deal with the COVID crisis.
The W.T.O. coming out yesterday and saying that the President's tariffs breached global trading rules. The President gave a response you would
expect, he said, they're completely inadequate, and I have to say inadequate in handling Trump's use of tariffs, but also inadequate perhaps,
too, in handling the underlying reason for doing them, which of course this administration said was technology theft. He has a point?
ROMANS: Years and years of rampant intellectual property theft, among other things that the U.S. has complained about, and administrations on
both sides of the aisle, multiple administrations have complained about this.
I will say, I think it's so interesting that the President to lose in front of the World Trade Organization, something that the Chinese cheered, he'll
wear that as a badge of honor. He is the kind of President who is elected to go against these big multinational, international watchdogs and he is
going to say America did the right thing, I'm the only one who was tough enough to stand up to China and the W.T.O.
I think that is very near-term, local politics, what is really important in the story for the White House and that they'll be able to say, see, look,
we took China on and the world didn't like it and that means it's good for America.
[09:20:33]
CHATTERLEY: Yes, you're right. Never forget the proximity to a presidential election, 48 days. Thank you for that. Christine Romans, thank
you, as always.
All right, let's move on. New watches, new iPads and a new bundle of services, but not a new iPhone just yet. Apple virtually presented its
latest hardware lineup, as well as a subscription package that includes all of its services for the first time, including the new Fitness Plus.
What I mentioned though and what we will have to wait a little longer for is its flagship product, the iPhone. Can't reiterate that enough it seems.
Dan Ives, Managing Director of Equity Research at Wedbush Securities joins us now. Dan, always great to have you on the show, and as you called it, a
virtual drum roll before we get to iPhone 12. When do we get it?
DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Yes, I think first week in October. And, remember, this is in my opinion, it's a
once in a decade upgrade cycle. It's a super cycle for Apple going into 5G and iPhone 12 and that continues to be, along with services which we saw
yesterday in terms of the bundle. That is the one-two punch. That's why I believe this is a stock that continues to move higher, despite some of the
pullback in the last few weeks.
CHATTERLEY: Yes, what gives you that confidence, Dan? Because I know we talked about this before but you make the point that almost 40 percent of
the -- what -- 950 million iPhone users around the world simply haven't upgraded in the last three and a half years. Is it simply because they were
waiting for this 5G ready phone or was it price, too in that the phone that they had worked perfectly well? Why will this make all the difference?
IVES: Yes, it's a combination of factors. I think there are a lot waiting for 5G, part of it is just battery technology. It has gotten better in
terms of replacement.
But that replacement cycle is elongated and right now, they're going into almost a perfect storm of demand for Apple and I think, you combine that
with more monetization in terms of wearables, Air Pods. Look, Air Pods alone we think it is going to sell about 90 million units this year. With
services, that's why the stock gets re-rated and that's why we believe, I mean, $2 trillion today, we think a $3 trillion market cap in the next two
to three years is also on the horizon.
That's why I still think greenlight to own Apple and tech.
CHATTERLEY: Yes, so you would even still be buying at these levels?
IVES: Yes. I mean, to me, this continues to kind of be a golden time to be buying Apple because of the super cycle and because of what we're seeing in
terms of overall demand.
CHATTERLEY: We're going to move on. Is it a fraud or isn't it? You know what I'm talking about? We're talking about Nikola. You said it's a massive
opportunity, but it comes down to execution. What do you make of all the drama surrounding this stock, Dan?
IVES: Look, I mean, it is obviously a controversial name and of course the GM partnership, you know, in terms of for Nikola that was significant. And
I think right now, it really comes down to prove it from an execution perspective and that's what really needs to come over the coming years.
But it really is right now about the EV market. We're talking about a trillion dollar market in the next decade.
CHATTERLEY: But you know, when you have a stock that's got now an SEC investigation hanging over it, when there's debate with certain short
sellers coming out and saying it's fraudulent, when the company itself has acknowledged that perhaps issues three years ago with a car that was being
seen as driving, but not under its own propulsion and that was the video we were just showing there, is it one that you feel comfortable enough to
recommend to clients or do you just say, look, this is my price target, it's a show-me stock, we're not touching it right now? How do you handle
that?
IVES: It's a great question. Look, we're neutral rated on the name and in our view it's a prove-me story. But I also look at the GM partnership and
the validation significance. I mean, if GM, a stalwart of the U.S. does their due-diligence and makes a move, like an 11 percent stake, I mean,
that speaks volumes.
So I continue to view it as, it's an execution story moving forward for Trevor and the team, but this is going to continue to be a controversial
name going forward.
CHATTERLEY: I like your moderation on all of these things, which is why I'm going to push you again. So, if an excitable client came to you and
said, okay, I really like the story, I know it's controversial. I want to buy it. Would you say, okay, but I don't agree and I don't recommend it,
but let them do it anyway? Or would you say, don't do it?
IVES: I would say if you want an EV story, there's a ticker called TSLA. Because for right now, in the EV market, it's Tesla's world and everyone
else is paying rent and I think right now that's the proven EV play and I think there's a lot more noise out there.
Nikola could prove it and they have on the hydrogen side as well as GM. But it's a prove-me. It's similar to what we've seen by many others.
But in terms of EV, you play Tesla.
[09:25:29]
CHATTERLEY: Yes, couldn't be clearer than that. Oracle, TikTok, do you think this deal goes ahead?
IVES: I think greenlight may be tonight in terms of what we get from the White House. Look, once the Chinese government got involved, poison pill in
terms of the algorithm, then the acquisition of Microsoft is off the table, so then fundamentally it came down to a partnership.
I think it's ultimately a Goldilocks scenario for TikTok and for Oracle because it's wins for both. The government obviously gets a positive in
terms of Big Brother sort of making sure with the data, there is no back end to Beijing and the Chinese government basically stopped the sale here.
So I think overall, a positive ending to what is really a Rubik's Cube political situation.
CHATTERLEY: I mean, anything other than them being shut down is a win if that's the alternative here. But Dan, to your point, does this deal which
is clearly very different from Microsoft buying TikTok and perhaps buying TikTok elsewhere in the world and being able to manage the Cloud part of
this business and the data part of this business, the Oracle deal is very different. Is U.S. consumers' data safe under the Oracle deal in your mind?
IVES: Yes, I think it's safe and I think it's a happy medium because to get to shut down a hundred million consumers, as well as a Microsoft
acquisition, basically almost an arranged marriage or forced sale was not ideal.
So, I think this kind of meets the middle and it's a win for Oracle and Ellison, especially they go up against Microsoft and Amazon, and other
competitors in the Beltway and obviously, it's a balancing act, but I continue to think it gets over the goal line, given right now there's only
one dance partner left and it's Oracle in terms of a partnership.
CHATTERLEY: Yes, not the time not to be dancing two months out from a presidential election. Dan Ives of Wedbush Securities, thank you, as
always.
IVES: Thank you.
CHATTERLEY: The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:30:32]
CHATTERLEY: Welcome back to FIRST MOVE. The U.S. stock markets are up and running this Wednesday, a day where a very special tech unicorn is prancing
through Wall Street. Cloud software firm, Snowflake will begin trading soon at the New York Stock Exchange, the biggest U.S. IPO so far this year and
we do have a higher open as you can see on Wall Street there as we brace for the Snowflake squall.
You want a green day when you're listing, certainly. All this despite a weak read on U.S. retail sales, rising a mere 0.6 percent in August,
missing expectations, that's clear. And of course, a revision lower to the month of July, too.
Now, Snowflake is not the only big IPO launch today. U.K. e-commerce firm, the Hut Group looks like a hit, rising some 30 percent in London trading.
Hut is the U.K.'s biggest ever tech IPO. Hut is a hit, at least for now.
Staying with tech and the story of Careem, a huge ride-sharing name in the Middle East, now under the wings of Uber. It's refitted its fleet to
protect riders and passengers as a result of the COVID pandemic. It's now adding deliveries and payments as part of what it calls a super app for the
future.
Careem operates in more than 100 cities in 14 different countries. It has created more than one million job opportunities in the region, and I'm
pleased to say, joining us now, Mudassir Sheikha is the CEO of Careem and with us now.
Mudassir, fantastic to have you on the show. Wow. This has been a challenging time. I know it has. You've lost a third of your workforce, I
believe. You've struggled with the business at times. You've had to make changes. Talk us through it and where you are today.
MUDASSIR SHEIKHA, CEO, CAREEM: Hi, Julia. Pleasure to be with you. Look, it's of course, been a tough time for the business, but we are in a much,
much stronger place than frankly, we've ever been.
The core business, ride-hailing, is a lot safer as a result of all the stuff that we've had to do to protect our captains and customers and the
business is a lot more efficient as a result of some of the impact that we saw.
We looked at literally every line item in our P&L and started focusing more on automation and how do we do acquisition more efficiently, how do we do
customer acquisition and retention. Everything is much more efficient led to a lot of savings.
And then as a result of COVID, some external factors also helped, so as you probably remember, a large part of our business was done on cash, given the
lack of digital payment options in the region. And as a result of that virus, lot of the cash started getting converted into digital payment
methods, which started to make up -- it is more efficient.
And then lastly, this is something that has been one of the bigger shifts in the business, is we were initially having a fleet that was moving
passengers and then we had a separate fleet that was doing deliveries for us and delivery was a small part of our business as we went through the
crisis.
Now there has been a big, big focus on making our fleet multi-modal, so the same fleet is now doing both passenger transport and deliveries at
different times of the day, which increases the utilization, and all in all, it makes us a lot more safer and efficient in the core business in
addition to some of the things that you mentioned around the super app.
CHATTERLEY: Yes, and it gives the drivers the opportunity to be a passenger driver or to provide a delivery service, so it opens up options
for them, too, which makes sense to me.
I just want to hone in on the ride-hailing business for the moment, because I've seen in the past you said there were moments during the crisis, the
peak of the crisis, where business was down 80 percent. Can you give us a sense of what you're seeing in terms of customer demand as a proportion of
where we were pre-COVID?
SHEIKHA: Yes, so okay, so the business has of course been recovering across the board in almost all markets and we are gradually trending our
way back to pre-COVID levels. We are not there yet. But the recovery has been stronger than expected.
We had made an assumption that the business would not fully recover until the end of next year, but the business is showing a stronger recovery than
those expectations.
And the delivery side of the business has actually been growing quite healthily and that business is already quite a bit above pre-COVID levels
and then you put the two together, we are starting to reach pre-COVID levels.
[09:35:10]
CHATTERLEY: Yes, pre-COVID overall. Do you think the ride-hailing ever fully recovers, even with a vaccine? Do you think customer behavior will
change as a result of what we've been through?
SHEIKHA: Of course some use cases will shift, but all in all, we are quite confident that we are still in the very early stages of this business and
the majority of the addressable market is still ahead of us.
So just to give you a sense, even in ride-hailing -- or let's not call it ride-hailing, let's call it mobility of people, we expect we are at let's
say two percent of the trips that have been in our cities, and even if the addressable market from a hundred shifts down to 80, we are still at two
percent and there's a lot of innovation that still needs to happen to make sure we have a platform that can go after the use cases that we have not
been able to go after at scale yet.
How many people use Careem for school trips? How many people use Careem for commute? How many people use Careem for other things? So there are a lot of
use cases that are still out there that we need to innovate and get them under the belt and we believe that the business will be bigger than what it
was pre-COVID. But some use cases will suffer.
CHATTERLEY: Yes, that's a fascinating point about market saturation and your view that there are other avenues that simply aren't using this as a
tool, a utility tool to get around at this stage.
Talk to me about the growth in delivery. Talk to me about the growth in payments that you're seeing. Can you give us some numbers here?
SHEIKHA: So I think delivery at a very high level is 30 percent, 40 percent above pre-COVID levels already, and the delivery also expanded in
school. So before COVID, we were primarily focused on food delivery and that continues to be the bulk of the deliveries that we do, but since COVID
we have lost a few other things.
First, we launched an offering that we called Shops, so basically any retail shop out in the offline world can list on the Careem super app and
can start getting orders from customers.
So it really helps them and helps customers in this time where there might still be lockdowns. The third thing that we did was around business-to-
business version of deliveries, where businesses that want to now start serving their customers through their own channels, but want stuff
delivered are able to use Careem to get things delivered to their customers. It's a B2B offering and that has seen some growth.
And finally, outside of all of this, if you need anything delivered, if you need anything moved from Point A to Point B, we have a service that we call
order anything that we send you a delivery captain and then you can use that delivery captain for literally anything that you might want done in
the city.
So the offering expanded and as a result of the offering expansion, some of the factors that we were seeing, the business has actually seen a very
healthy growth.
CHATTERLEY: Yes, and we've seen that shift. Go on.
SHEIKHA: Go.
CHATTERLEY: No, I was going to say we've seen that shift --
SHEIKHA: On the payment front --
CHATTERLEY: Carry on.
SHEIKHA: On the payment front, like I mentioned, there were some factors that led to an increasing adoption of digital payment options, so in some
countries like Saudi, all food delivery was banned for cash payments.
So all of a sudden all of the transactions that were happening on cash that was leading to relatively inefficient cancellations and inefficient means
of handling cash, have all of a sudden moved to digital payments and that's led to a rapid increase in the payment business as well.
CHATTERLEY: Yes, it's quite fascinating. You know, you were bought by Uber in 2019. Do you think Careem, if you were still independent, would have
survived what we've been through? Do you think having the backing of Uber, the fire power of Uber saved the company through this period?
SHEIKHA: That's a great question. Look, I think we would have been able to survive because we were already quite efficient in the way that we grew the
business and the way that we ran the business.
So survival would have not been an issue. It's our ability to play offense that would have probably been a bit different.
So as this crisis hit, yes, we had to play some defense to make sure that we protect ourselves and protect our captains, first of all. But then we
were very, very quickly able to go on the offense and say, okay, this is where the market is going. The delivery businesses need to expand. This is
a better opportunity than any other.
We launched the super app and got the digital transformation of the region into the next gear and we've been able to make the investments required to
take advantage of the crisis.
And the extent that we have done this has definitely been helped by the support of Uber.
[09:40:29]
CHATTERLEY: Yes. I have so many more questions, including your drivers and your workers. I mentioned the job creation and the challenges that
presents, too. So come back and speak to me soon, please, and we'll continue the conversation.
Mudassir Sheikha there, the CEO of Careem. Thank you, sir.
All right, coming up on FIRST MOVE, as the global fight against coronavirus continues, our next guest says there is a way to contain the pandemic and
it doesn't require a vaccine. Stay with us. That's next.
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CHATTERLEY: Welcome back to FIRST MOVE and a reminder of where we are in the battle against COVID-19. The number of diagnosed cases worldwide is now
approaching 30 million.
In India, more than five million people have been affected. The U.S. has had more than 6.6 million cases and with scores of research groups in
different countries racing to develop COVID vaccines, our next guest says the pandemic could be brought to a halt in just two to three months without
a vaccine.
Joining us now, William Haseltine, he is Chair and President of the global health think tank Access Health International. He is also a former Harvard
Medical School Professor.
Sir, fantastic to have you on the show. You have our attention. How? How do we bring this epidemic to a halt in just two to three months?
DR. WILLIAM HASELTINE, CHAIR AND PRESIDENT, ACCESS HEALTH INTERNATIONAL: The first question is, is it crazy or is it possible? And the answer is,
it's definitely possible because that's what the Chinese did. They didn't have a vaccine, they didn't have a drug, yet they had an outbreak in Wuhan
and Hubei which is equivalent to our worst in New York and they brought it to a halt in two and a half months and have continued to manage the
epidemic. So it is definitely possible.
[09:45:23]
HASELTINE: Now, the rest of the world is not China. We don't have their organization and we may not have their self-discipline. So what I've been
looking for is what I call COVID control American style. That could translate to European style -- different kinds of countries.
So what does that entail? First thing, a very fundamental insight, there's a scientist at M.I.T. and Harvard Broad Institute, Mike Mina who came up
with a deep realization that being infected doesn't mean contagious.
What we should focus on is finding those people who are contagious and isolating them from the rest of us, and that can be done relatively simply
with an antigen test. That doesn't measure the RNA. It's not a complicated test.
The way to think about it is, it is as simple as a pregnancy test. You put a little bit of saliva on a piece of paper and you know the answer in 15
minutes and it can be very inexpensive. No more than 50 cents, and possibly less, and I can give you the reasons I think that.
So what my proposal is, is I have everybody in the country test themselves at home once every three days. If you do that, you'll identify the people
that are contagious. The second step is to make it possible for them to be isolated at home with their family. That means paying them to do that, to
make up for lost wages, supplies, medical care that they might need. My guess is less than $500.00 a day, but that would do, and it would also
provide an incentive for people to let the health authorities know that they're infected.
Do that for ten days, and I believe if we did that systemically, we could control this infection like they did in Wuhan and Hubei within two to three
months.
CHATTERLEY: Okay. So there's a lot in there. I like the idea of people owning up, because this is like a non-communicable disease right now where
people are embarrassed or afraid to tell people and that limits the contact tracing.
So one, this requires no contact tracing because people are finding it at home with a saliva based test. It knocks that out. And there's incentive to
be honest because you want to get the money to finance staying at home here.
HASELTINE: Right.
CHATTERLEY: Do we have -- because I'm just doing the math quickly, I guess that equates to what? A hundred million tests a day if everyone in the
country in the United States --
HASELTINE: In the United States, about 120 million tests a day, that's right.
CHATTERLEY: Yes. Absolutely. Talk to me about the difference between the rapid antigen test and what we're using right now, which is the so-called
PCR test, which sometimes it takes a week, more, to get the results back and it's simply too late. Do we have enough antigen tests and is the
technology there to be able to provide this?
HASELTINE: The technology is there. Ever since I published this story, I've been inundated with people from all over the world who have
technologies that are being submitted to the F.D.A. to do exactly what I suggest, and they are proven.
There's one company that's already sold more than 70 million of these tests globally and that's just ramping up. It's very simple to manufacture.
I mean, you can essentially print them like you would a newspaper. Think of how many newspapers we print every day. It's not that difficult, and it is
inexpensive to do. And they can be quite reliable.
The thing about an antigen test as opposed to a PCR test is they're not as sensitive and there are people who are infected who will be missed. But
that doesn't mean we're going to miss those who are contagious, because, as I said earlier, an important realization is that infection is an equivalent
to contagion.
You're contagious for a short period of time and these antigen tests are best -- work best during that period. If you're going to treat somebody,
you want to follow their viral concentration for a long period of time. But if you're trying to contain the infection, you want to focus on those who
are contagious.
I think that's a deep conceptual mistake we've made in the west. The Chinese did it very differently. They focused on people who were exposed
because they couldn't tell whether they were infectious or not. So they controlled everybody, a whole city, whole airplanes, entire residential
buildings -- they just locked them all down.
We can do better because we can identify now those who are contagious, a much smaller number. And as you pointed out very astutely, we don't need
contact tracing to make this work.
CHATTERLEY: Yes, I mean the key -- and we're talking about this with companies that had this technology back in April, quite frankly, but they
were still envisaging taking the saliva and analyzing it in a machine so it was going to be more in the workplace, rather than like a pregnancy test in
the home which would be key.
The cost difference here between what you're suggesting and using a vaccine is vast as well. I have around 30 seconds, William. Do you think this is
going to be a model that we use for the next pandemic and not this one, if you're honest?
[09:50:32]
HASELTINE: I think it will be for this one because the vaccine isn't going to do what we're hoping. Even at the best, we're going to have a year, two
or three where we're going to have to control the pandemic using public health means, not just the vaccine.
A vaccine isn't going to solve our problems. At best, it looks like it will be 50 percent effective, maybe less, and this is going to go on for a long
time because we're not going to be able to get the vaccine to the people who need it for at least another year and we need to do something now to
put this genie back in its bottle.
CHATTERLEY: And this is the key. Thank you, William. Great to have you on the show.
HASELTINE: You're welcome. Thank you for allowing me to talk about this.
CHATTERLEY: William Haseltine, no, thank you. The President of Access Health International.
All right, coming up, the star-studded boycott of Facebook, Kim Kardashian- West joins other A-listers protesting against hate and disinformation. We'll have the details next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. A social blackout from social media queen, Kim Kardashian-West. Donie O'Sullivan joins us.
Donie, don't panic. It's only a day and it's only Instagram and Facebook. In all seriousness, big stars here making a stand against Facebook and
Instagram due to misinformation and hate. It's important, even if it's just a day.
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: That's right, Julia. Kim Kardashian, Leonardo diCaprio, Jennifer Lawrence, and many others joining
this boycott today of Facebook and Instagram for one day to protest Facebook's handling of hate on its platform and also to call on Facebook to
stop allowing politicians to lie in political ads.
Now, you know, the question, I guess is, how big a difference will this really make? People like Kim Kardashian, you know, just going offline for a
day, but I mean, I guess it does draw attention to the issue given the fact that we are talking about it.
This is being sort of spearheaded by the organizers of the Facebook Ad Boycott which happened in July where you saw major brands like Coca-Cola
temporarily stopping ads on Facebook.
Those organizers, including the Anti-Defamation League and the NAACP, which keep hitting Facebook hard saying that they're not doing enough to clear up
its platform and they're specifically mentioning, which I think is a very unfortunate example for Facebook, is in the aftermath of the shooting in
Kenosha a few weeks ago.
[09:55:07]
O'SULLIVAN: There was a Facebook event that was calling on people to take up arms in Kenosha and Facebook didn't catch that, which was really sort of
inexcusable for Facebook -- Julia.
CHATTERLEY: Yes, I was just trying to imagine how much earnings loss one day of not posting on social media costs some of these stars. There was an
estimate in 2017 that Kim Kardashian made $360 million a year due to social media posts, so -- with inflation over a million a day. Interesting.
O'SULLIVAN: And, I mean, cynics, skeptics, people who are skeptical of this campaign would say, well, they know they can only get the Hollywood
stars to quit this for a day rather than for a prolonged period.
So, you know, there is probably some truth in that just like a lot of people rely on Facebook and Instagram, whether you're a star or a company
to reach people.
CHATTERLEY: Yes, a hundred percent. We'll see if it does anything at Facebook. Donie O'Sullivan, thank you so much for that.
And that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe, and I'll see you tomorrow.
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