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First Move with Julia Chatterley
President Trump Continues To Block Transition Efforts; Hong Kong Lawmakers Resign Over New Anti-Dissent Rules; Alibaba's Record Online Sales Highlight China's Economic Strength. Aired 9-10a ET
Aired November 11, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:36]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here is your need to know.
Denial and deflection. President Trump continues to block transition efforts.
China countdown. Hong Kong lawmakers resign over new anti-dissent rules.
And single-minded spending. Alibaba's record online sales highlight China's economic strength.
It's Wednesday. Let's make a move.
Welcome once again to FIRST MOVE and another jam-packed show for you coming up this Wednesday.
The President of Lyft will be here to talk about reviving the gig economy amidst this pandemic and how perhaps ride-sharing firms might help with the
vaccine rollout, too. Plus, the stone-cold reality of getting fragile vaccines delivered. We've got the CEO of cold storage specialist, Trane
Technologies.
I have to tell you though, the vaccine ventures have well and truly overwhelmed any nervousness about the ongoing standoff in D.C. Investors,
at least for now, remain undeterred, and the rotation that we've been seeing out of pandemic winners, the tech stocks, for example, into losers
has continued, now, even tech stocks could bounce today.
German, Japanese and U.K. stock markets have gained seven percent or more, just in the past week. The standout exception, though, and you can see it
there in front of you, China and Hong Kong pulling back for a couple of reasons.
In fact, regulators flexing their muscles over Big Tech, Alibaba and JD.com tumbling almost 10 percent in today's session. The sector has shed over
$250 billion worth of value in the past two days alone.
Also, a further blow to democracy, it seems in Hong Kong as opposition lawmakers have all resigned protesting the removal of four pro-democracy
colleagues. We will give you all the details on that in just a moment.
There is a stark contrast, I think, between the political dominance in China versus what we're seeing right now in terms of the dysfunction in
Washington, D.C. It also matches the present day COVID reality between the two nations also, almost 62,000 Americans currently hospitalized for COVID-
19. I can tell you, that's an all-time record.
This is where the eyes of the White House and Congress should be focused on a plan for COVID and a plan for financial aid. And we can only sit and
watch and hope.
Let's get to the drivers. The ongoing refusal by the President to recognize his successor, Joe Biden, the President-elect's reaction was short and to
the point.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT ELECT OF THE UNITED STATES: Well, I just think it's an embarrassment, quite frankly, the only thing that -- how can I say
this tactfully? I think it will not help the President's legacy.
(END VIDEO CLIP)
CHATTERLEY: The President's approach was clearly on the mind of the Secretary of State Mike Pompeo when he was asked about the prospects for a
smooth transition of power.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: There will be a smooth transition to a second Trump administration.
All right, we're ready. The world is watching what is taking place. We're going to count all the votes. When the process is complete, there will be
electors selected. There's that process, the Constitution lays it out pretty clearly.
(END VIDEO CLIP)
CHATTERLEY: It's worth saying, he later softened his language in an interview with FOX News. Joe John's joins us now.
Joe, he does make a point there, and on the one hand, you could look at this and say, look, if there are going to be recounts, there's legalities
with regard to concerns about fraud here that need to be tackled on the one hand.
But then you've got the other approach that seems to be going on around the President, which is a consolidation of power in what would normally be a
transition period. Joe, how long can this go on for?
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Anybody's guess. As you know, this has been a very erratic administration over the last four years
and it appears to be coming to an erratic end, but you make an excellent point about the dislodging of numerous government officials, especially in
The Pentagon of the United States.
By our count, more than six individuals, including the firing of the Secretary of Defense over Twitter over the last few days. And we're told,
at least by our Pentagon unit with CNN, that that may have something to do with the President's disagreements and the controversy surrounding his
desire to completely move out of Afghanistan.
[09:05:31]
JOHNS: But there is a larger question here about whether this purge for lack of a better word, which is usually associated with authoritarian
regimes, that might actually extend to other parts of the government.
Like, for example, the head of the F.B.I. has been mentioned, the head of the C.I.A. has been mentioned, all of this disturbing in at least one
respect, and that is that at the end of a long campaign and while the country is still distracted about the politics, in large part due to the
President's own representations, we may find ourselves in a situation where the National Security apparatus of the United States is being undercut --
Julia.
CHATTERLEY: Yes. And this is the key. I mean, you said it, authoritarian regime. I mean, I was going to use the word dictatorial, because it's the
kind of thing that happens when presidency --
JOHNS: Julia --
CHATTERLEY: Have I lost you?
JOHNS: For some reason, I've lost you. I can't hear you.
CHATTERLEY: Okay. Then we shall thank Joe Johns. Joe was just warming up there. But you raised some great points, and we will continue to raise
them. Joe Johns there and I apologize for the issues that with the connection.
Let's move on. While there is confusion over leadership in the United States, China, it seems tightening its grip on Hong Kong. Authorities
expelled four lawmakers from the Legislative Council earlier; in response, the pro-democracy opposition resigned en masse.
Ivan Watson joins us now. Ivan, I have to say I looked at "The New York Times" this morning and I think they captured it perfectly with their
headline "China effectively silenced Hong Kong's legislative." You can basically translate that to Beijing effectively silencing Hong Kong's
democracy at this stage.
Just walk us through what we've seen in the response.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's a pretty dramatic day here. Basically what happened is that the Chinese Central Government
imposed a resolution that authorizes Beijing's handpicked leader of Hong Kong, the Chief Executive, Carrie Lam, grants her the power to strip any
elected lawmaker of their seat, essentially, for not being patriotic enough.
Some of the reasons could be that they don't support the Basic Law of Hong Kong or they don't pledge allegiance to China, or they support Hong Kong
independence from Mainland China, or solicit for an intervention or another clause just carries out quote, "other activities endangering national
security."
Well, as soon as she got this authority, this power, Chief Executive Carrie Lam stripped four lawmakers elected to the Legislative Council of their
seats, and they just happened to be from the opposition Democracy Movement. Take a listen to how she justified this.
(BEGIN VIDEO CLIP)
CARRIE LAM, CHIEF EXECUTIVE OF HONG KONG: To sum up, what we need to deal with at the moment is that there are four legislators who have been deemed
in accordance or by the law to not genuinely swear to uphold the Basic Law and not genuinely pledging their allegiance to Hong Kong SAR.
(END VIDEO CLIP)
WATSON: According to this new resolution, those lawmakers have no right to appeal. They cannot go to the courts, for example, to argue their case. In
response, the rest of the opposition lawmakers in the Legislative Council, they announced that they will now be resigning en masse in solidarity with
their expelled colleagues and in protest against what they say is China's move to kill Hong Kong's autonomy once and for all.
Take a listen to what one of those lawmakers had to say.
(BEGIN VIDEO CLIP)
CLAUDIA MO, HONG KONG LEGISLATOR: This act of resignation is not just in protest against Beijing's rule of rule by decree. It's no longer rule of
law. It's not even rule by law. It's rule by decree.
And of course, we are also doing this in support of our four ousted colleagues.
(END VIDEO CLIP)
WATSON: As one of the ousted lawmakers claims to CNN, Julia, he called this the death of organized political opposition in this former British colony -
- Julia.
CHATTERLEY: Yes, it basically gives Carrie Lam the authority here to disqualify anyone that opposes Carrie Lam. You know, Ivan, I can't say
enough what would have happened had this happened 12 months ago. We saw it. We saw people in the streets. You were there.
[09:10:10]
CHATTERLEY: You were reporting on it. And yet, this time around because of the National Security Law, we can't even see people on the streets. People
are afraid to go on the streets.
What happens next, Ivan?
WATSON: Well, I think it's really important context here because after last year's street protests that had grown increasingly violent, we have been
seeing this year a pretty dramatic crackdown going on, on any form of organized political dissent here in Hong Kong.
Now, the Chinese government is defending this resolution that lets you strip elected lawmakers of their seats, saying that it's reasonable,
constitutional and legal, according to the spokesperson for the Chinese Foreign Ministry.
But in the context, last summer, the Hong Kong authorities postponed Hong Kong's elections for the Legislative Council, which were supposed to take
place in September on the grounds of public health reasons, citing the coronavirus pandemic.
We've seen opposition activists and journalists being increasingly prosecuted week after week on a variety of different charges. And some of
these activists are fleeing Hong Kong overseas, requesting asylum.
We have seen that street protests which were kind of a proud freedom here in Hong Kong, up until the last couple of months, they get crushed very
quickly by riot police. And of course, over the summer, we had the National Security Law that Beijing imposed on Hong Kong, which grants Chinese
Security Forces expanded power to investigate and charge and prosecute people here in the city that is supposed to enjoy autonomy as part of its
handover agreement from Britain to China in 1997.
While the supporters of this crackdown say that this is preserving Hong Kong's one country, two systems' agreement, what I can see is that the
freedoms that citizens enjoyed here six months ago, a lot of them have simply de facto disappeared today.
CHATTERLEY: Yes, it depends on what your perspective is and where you sit and how you perceive a collection of different policy moves. One in
isolation perhaps can be justified, put them all together and you get something very different.
Ivan, great to have your perspective. Thank you so much. Ivan Watson there.
China's online retail giants should be riding high on massive Singles Day sales. Alibaba says it's already pulled in a record $56 billion. The
problem is worries about antitrust regulations are pushing it shares and rival JD.com down some nine percent in the session today.
Selina Wang is following the story from Tokyo. All of these things, Selena, you can't help but connect the dots here as well. The regulators here
flexing their muscles with these Big Tech giants who are incredibly powerful.
We've seen the same in the E.U., of course, and in the United States. China just moves quicker, and so do investors.
SELINA WANG, CNN CORRESPONDENT: Julia, that's exactly right, connecting the dots here. I mean, China has proposed these new antitrust regulations. You
combine that with the sudden delay of Ant's IPO which we talked about yesterday and it's really ushering this new era of more restrictions on
Chinese tech companies.
The government, as you mentioned, around the world, governments are as well worried about the massive influence of these tech companies. In China,
Baidu, Alibaba, Tencent, Meituan-Dianping, they are becoming more and more important and influential and indispensable for people's daily lives,
whether we're talking about finance, payments, consumption, communication, and more.
And they are concerned about how they could be squeezing out competition. Now, it is unclear at this point, these are just drafts of how this is
going to be implemented. But it appears from the draft that they will be looking to curtail behavior like colluding to share sensitive consumer
data, subsidizing at the low cost to eliminate competitors and price discrimination among customers.
And as you mentioned earlier, this is part of this global trend. They are worried about companies like Facebook, and Google as well. Governments
around the world and their ability to take massive troves of consumer data to increase their dominance, Julia, a trend that we are seeing only
increase amid the pandemic when people are turning more and more to digital consumption.
CHATTERLEY: Yes, absolutely. And I did promise shopping chat, Selena, so we do have to do an about-turn here and talk about Alibaba's Singles Day. It's
clearly not one day, it is 11 days, two discount windows, I believe. And wow, what a performance. Talk to me about what we've seen very quickly
because I am running out of time here.
WANG: Yes, I mean, this event dwarfs Black Friday and Cyber Monday for many years. $56 billion in the first 30 minutes of November 11th, on top of, as
you mentioned, days of this presale window.
People in China will get ready for this event months in advance. They start to preload what they want to buy, waiting for those big discounts. You
could virtually purchase anything on Singles Day.
[09:15:18]
WANG: You can purchase a car, vacation trips, electronics, cosmetics, and much more, and we've talked about this revenge shopping idea yesterday,
which is that people in China have been locked down. They had saved a lot of money and they haven't been able to travel overseas, so they have been
able to travel domestically.
So that means a lot of the luxury spending. They would have bought overseas, they are now probably going to be buying on Alibaba's platforms.
But the question here is, we are seeing this seemingly V-shaped recovery in China's economy and their consumption.
The question is, when you see these massive numbers, how sustainable are they? Is this just a one off event where we're seeing a big spike and
people stocking up and still staying cautious? Or is this big bounce back here to stay? -- Julia.
CHATTERLEY: Great questions. Selena Wang, thank you so much for joining us from Tokyo there. Thank you.
All right, let me bring you up to speed with some of the other stories making headlines around the world. The European Union has signed a new
agreement with Pfizer and BioNTech to buy as many as 300 million doses of their new vaccine. Deliveries could begin by year's end pending approval of
course by health regulators. This is the E.U.'s fourth contract with companies manufacturing experimental vaccines.
The U.S. has just set an alarming new record with nearly 62,000 people now hospitalized with coronavirus. More than 100,000 cases have been confirmed
every day for more than a week and 45 states are showing an upward trend. Texas has become the first state to surpass one million infections.
All right, more on what we could be doing to contain the virus comes up next. I'm joined by the former head of the Centers for Disease Control, the
C.D.C., Dr. Tom Frieden, who leads the Health Initiative Resolve to Save Lives.
And a boost for Lyft as voters back ride hailing gig economies labor model. Lyft's CEO joins us on earnings and more.
Stay with us, that's next.
(COMMERCIAL BREAK)
[09:20:06]
CHATTERLEY: Welcome back to FIRST MOVE, live from New York where it is green on the screen for U.S. stocks pre-market. Tech stocks are set to
outperform in fact, after two days of seeing profit taking and that pushed the index lower.
The Dow, less than a quarter of a percent from new record highs after Tuesday's near one percent advance. This week's blockbuster news as we keep
discussing on vaccine trials continues to help drive sentiment with the Pfizer BioNTech version, 90 percent success rate, at least so far in
preventing infections.
And more great news on that front, this time from Russia, not to be outdone it seems, announcing today that its vaccine Sputnik is 92 percent
effective. Fascinating. But we aren't there yet with vaccines, of course and the number of Americans hospitalized with COVID-19 hitting an all-time
high.
More than 61,000 people are currently receiving hospital care, and while we see light at the end of the tunnel for the latest vaccine news, as far as
the COVID crisis is concerned, concerns arising over the coordination, the technology needed to distribute them.
Joining us now is Dr. Tom Frieden. He is President and CEO of Resolve to Save Lives and former Director of the Centers for Disease Control and
Prevention. Sir, fantastic to have you on the show once again.
What do you make, firstly, of the vaccine news? And are we perhaps getting ahead of ourselves amid the complications of distributing it?
DR. TOM FRIEDEN, FORMER DIRECTOR OF THE CENTERS FOR DISEASE CONTROL AND PREVENTION: Well, first off, it's very encouraging. I don't think any of us
in public health expected a 90 percent effectiveness rate. That's far in excess of what we see for things like influenza, but it remains to be
confirmed. We'd have to see what the data shows whether it's really 90 percent, whether it persists for more than a week or two, and if it works
in all groups, including the elderly.
And even with that, we have to make sure it's safe and accessible and trusted and rolled out effectively. It will really be through much of 2021
that vaccines if and when they become available, will get rolled out in this country and globally as well.
CHATTERLEY: Talk to me a little bit about what the effective rate we hope is for the elderly piece of the population, because I think we're looking
at that, in particular as a significant proportion of those that are hospitalized. If we can vaccinate the older members of society, if we can
vaccinate, perhaps those with preexisting conditions, then return to some degree of normality for the rest of us, perhaps come sooner than we think
versus having to vaccinate the vast majority of the population. This is a critical piece surely.
FRIEDEN: There's an enormous gradient in risk. People who are older are at vastly higher risk than people who are younger, and people with underlying
conditions are at higher risk as well.
But I think it would be a misguided approach to think, well, if we just vaccinate those folks, it will be okay, because roughly 40 to 50 percent of
all adults in the United States have some underlying condition that puts them at an increased risk and it's somewhat unpredictable who is going to
get particularly ill.
Vaccine programs take time to roll out. It's important to maintain trust in them. And they're not easy. You have to get healthcare providers, you have
to deal with logistics, you have to educate people, and you have to track for adverse events.
So a vaccine is really important, and the news is very encouraging. But vaccination is not going to be a fairytale ending to the pandemic. We're
still going to be dealing with it at least through most or all of 2021, and quite possibly beyond that.
CHATTERLEY: Yes, it's such an important context. Dr. Frieden, talk to me about what the transition team, President-elect Joe Biden needs to be
focusing on here, because we've talked earlier on the show about a de facto vacuum, at a terrible point in the pandemic, where we've got record
hospitalizations. We've got 46 American states now seeing rising COVID cases once again.
The vacuum in leadership is the last thing we need. How should we be preparing? And how as individuals should we be reacting?
FRIEDEN: We only have one government at a time in the U.S., and it's the current administration that's responsible for what happens between now and
January 20th.
What we're hearing from the Biden team is very encouraging. The President- elect is clear about three things that we've been lacking so far in this response. First, base it in science; second, communicate clearly, openly,
honestly; and third, make sure that we have an approach that is organized so that it is clear who is in charge, what the role of different parts of
government is and how we can minimize deaths while also minimizing harm to education and our societal and economic progress.
[09:25:03]
CHATTERLEY: You makes such an important point as well about the mask wearing and obviously the C.D.C. is now adjusted its guidance in terms of
protecting yourself by wearing a mask versus simply protecting others around you by wearing a mask.
Dr. Frieden, can you compare that and the prospect of mask wearing in general versus -- and this comes from some of the skepticism and pushback I
get when I retweet articles with regards masks is, what about just boosting your immune system? What about just taking lots of vitamins and protecting
yourself that way versus wearing a mask?
Can you separate and analyze the two things for me in response?
FRIEDEN: Well, first, I think it's really important to think of a multilayered response. We have to get away from the idea that one thing is
going to make a big difference. Maybe the one thing that will make a big difference is basing our response on science and public health.
But really, we need a multilayered approach. We need to wear masks. It protects others and ourselves. We need to wash our hands regularly.
Maintain our distance. We also need to shut risky indoor places.
There are things you can do to boost your own resilience. Get regular physical activity. That's really good for you. Consume healthy food,
including enough vitamin D, which may actually have some immune strengthening functions. A vitamin D tablet, not more than a thousand
International Units a day may also help.
Also improve the way we treat patients. Get patients diagnosed quickly. Don't go out if you're sick. Stay in for your own sake and the sake of
others. Get tested quickly.
These are all things that can bring COVID down and get our economy back. No one thing, not even a vaccine, not an election, nothing else is going to
make that kind of a difference.
CHATTERLEY: Yes. And as you say, if it is going to last until perhaps even the back end of 2021, if not beyond, it has to be part of our daily lives.
There's no stop gaps and short term measures here. We just have to accept it.
FRIEDEN: Absolutely. Thank you very much. And really keep in mind that the end will come. We will be able to control this, but we'll get through it
only if we're very careful now.
CHATTERLEY: Yes. Sir, great to have you on the show once again. Thank you so much for your time.
FRIEDEN: Thank you.
CHATTERLEY: All right, we are counting down to the market open. That's next. Stay with us.
(COMMERCIAL BREAK)
[09:30:23]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Wednesday and it is Veterans Day here in the United States, which could
mean slightly quieter markets. The bond market is closed on this day.
That said, we are green and tech is outperforming after two days of value, what we call value stock dominance amid COVID vaccine hopes. So everything
that has been beaten up is rising and continues to do so.
The Dow has outperformed the NASDAQ the past two days by its widest margin in years. Remember Alicia Levine from BNY Mellon, she told us yesterday
that that rotation doesn't mean an end to the NASDAQ, the tech heavy stock market rally. It just means better gains may be had in some of those beaten
down sectors like airlines, cruise lines and the banks.
JPMorgan this week calling the investment outlook quote "Market Nirvana" because of vaccine optimism and the prospect of divided government in
Washington. Let's just hope we don't need more stimulus, and we do.
Shares in ride-hailing company, Lyft, meanwhile, are higher this morning after an earnings beat versus Wall Street's estimates. The company also
scored a key win earlier this week. California voters backed a proposal known as Prop 22. It's a measure which means Lyft drivers and other gig
economy workers will continue to qualify as contractors rather than employees.
Joining us now, John Zimmer, co-founder and President of Lyft. John, fantastic to have you on the show. Just pouring over your earnings this
morning, rides I believe still down over 47 percent year-on-year, but hey, that's a lot better than down 90 percent during the early months of the
pandemic.
This is a challenge. The pandemic is a challenge for ride hailing. We've got to be clear.
JOHN ZIMMER, CO-FOUNDER AND PRESIDENT, LYFT: Correct. Yes. Thanks for having me, Julia. It's in -- yes, in a tough situation, it was good
progress. So ride share is recovering. We grew 47 percent quarter over quarter in terms of revenue. And so we're seeing good signs of the
recovery.
CHATTERLEY: Talk to me about forecast here. I mean, we've had some real vaccine enthusiasm. It filtered certainly into your share price, too. What
does that mean, in terms of your thinking and forecasts going ahead? Or can you not rely on it yet?
ZIMMER: Yes, I mean, I think just along with everyone in the world, nobody knows the exact timing of a vaccine. What I can tell you is that Lyft is a
strong recovery stock, because it's so tied to economic activity and mobility.
So we're optimistic with the news of the vaccine, and even you know, prior to the vaccine, having that 47 percent revenue growth quarter over quarter
shows there's already signs of moving in the right direction.
CHATTERLEY: Yes, hopefully we'll get there sooner rather than later. Let's talk about Prop 22. I mentioned that huge investment from some of the big
gig economy, tech giants lobbying for this move for a carve-out not to have to take your drivers, your contract workers and make them employees, simply
because for all you guys, you'd said, look, it doesn't work with the business model. It would simply cost too much.
But you have said you'll work with Labor Unions potentially to provide more support. Can you be more clear? Can you give us some clarification? What
does that look like?
ZIMMER: Yes, so just zooming out a bit. This is all a result of a law that was passed in California called AB 5, of which I believe 50 industries or
more were carved out. Proposition 22 didn't ask or carve out said specific to classification, it is best for drivers, riders and the business and the
overall economy for drivers to remain independent contractors. In fact, that's something drivers favor on a six to one basis.
And voters agreed with Proposition 22 at about 60 percent of the yes vote. What Prop 22 does is it preserves that flexibility offered for independent
contractors because people use the platform in all different ways. But it also adds new benefits like healthcare, disability, and an additional
insurance for drivers so that they are protected, but can remain independent contractors.
In terms of working together with people, you know, I think that the country as a whole is ready to come together more to, yes, have debates
about disagreements, but to be productive about them.
And so I'd rather stand in the same room talking across the table than kind of not talking to each other. I've done that over the last two years. I've
talked to labor leaders. I've asked them for feedback. I've asked how we could potentially work together on parts of this.
We haven't yet reached that, you know, way of working together, but I'm hopeful we can continue those conversations.
CHATTERLEY: You see the skeptics look at this now and say they can't formally unionize now under these laws. Their powers are significantly
restricted and I get your point about contract workers perhaps wanting flexibility.
So some of them didn't want to be constrained by some of the rules that an employee would be. But others are saying, hey, things like medical care are
costly and they matter. John, do you follow and do you think that Dara Khosrowshahi, the Uber CEO's idea of a pool of money, cash that can be
given to some of these drivers to spend on what they like, medical cover, whatever it is, is that a good idea or is that something that's feasible in
your mind?
ZIMMER: Yes, so first, I just want to highlight, there is a healthcare subsidy that if you drive 15 hours, you get 50 percent coverage under the
new law that was just passed as Prop 22, and hundred percent if you drive 25 hours or more of engaged time.
So that is contemplated, that is part of this. That is additive to what drivers in California are getting now.
In terms of a pool -- a portable benefits pool, yes, I don't think that was -- the origin of the idea wasn't from our competitor, but the broader idea
is a good idea. To say, hey, there are a lot of people that are working in -- you know, 10 hours with one platform, 20 hours with another. So let's
allow them to accumulate benefits and allow them to utilize those and draw down on a savings account in a way that best serves them.
CHATTERLEY: I get your point as well about whose idea, the idea of a pot of money is or at least providing some further subsidy to some of these
workers as well. But you know, I look at the broader business model, the losses, and I know you're still talking about making losses in the fourth
quarter -- at making profits, my apologies -- in the in the fourth quarter of 2021.
But the idea of restricting your margins any further when you're already loss making and providing more support to the drivers just makes the
skeptics out there go, this is no business model at all. It doesn't work.
John, push back. Tell me why this works and how to get to profitability, particularly in a pandemic.
ZIMMER: Sure. You know, I mean, I love pushing back on skeptics. That's been our path. We've been the challenger brand, you know, the Lyft business
is about eight years old. If you look back six -- five or six years ago, Uber had 30 times the amount of capital, and the skeptics said Lyft
wouldn't survive.
Since then, we've tripled our market share. We've added more great service for our drivers and riders, and we will continue to do that. We've
committed to profitability in Q4 on an adjusted EBITDA basis, next year, we will hit that milestone, and you know, let us prove that.
The business is healthy. We've made it more healthy by removing $300 million of annualized cost by the end of this year and we look forward to
getting a little oxygen from the recovery. And then it will shut down that argument.
CHATTERLEY: Yes, you know, I'm a convert. I am a gig economy user. I'm a consumer on massive scale, I have to say, but John, you know, is the CEO of
one of these companies, do you think you're fair to contractors?
ZIMMER: I believe so. I'm proud of what we did with Proposition 22. I'm proud of the million plus jobs that we create year-over-year. I'm proud
that we give single parents flexibility to get income whenever they want, and they can turn it off whenever they want.
There's always more we can do. I feel a deep responsibility to the driver community. But you know, one percent of the U.S. workforce in the last year
earned money on Lyft. It is meaningful.
You know, the fact that we have a million plus drivers that use the platform every year, that's meaningful. And talk to the drivers. The
drivers, as a whole appreciate this work, appreciate the flexibility and I'm excited to add benefits behind that as Labor Laws adjust to this new
reality.
CHATTERLEY: Yes, I hear you. Quick question as well. You said six to one drivers prefer this. They want the flexibility. They like what they've got.
What's the source? Is that your own testing and understanding of what drivers want here? Or is that independent research?
ZIMMER: That's independent research. I believe the most -- the latest, the six to one was from The Rideshare Guy. That's a website that a lot of the
drivers get their information, and he ran a survey.
In the past, we've run surveys to get similar kind of four to one ratio. But yes, I encourage, you know, all users to talk to drivers and get their
opinions.
CHATTERLEY: Yes, it's fascinating, because, you know, again, the critics would say, why did you guys have to spend $200 million to lobby for this if
everyone is on board? But I know politics don't necessarily really work that way.
ZIMMER: Exactly.
CHATTERLEY: Yes. Yes.
ZIMMER: There's a lot of politics. I tried to get to a compromise position way before the proposition, trying to work with the governor, trying to
work with a legislator, trying to work with labor leaders. But politics are complicated, especially in a world where people are you know, tweeting
messages of what they stand for.
We need to get in the same room. We need to have a conversation. I think we can do, you know, better and better for our society if we work together.
[09:40:09]
CHATTERLEY: John, this is a model, very quickly for other states, do you intend to use this perhaps as a model because that's now the thought?
ZIMMER: Yes, this is a clear turning point in this discussion. You have a very progressive state in California that supported President-elect Joe
Biden by I think, a margin of 30 points. And you had, you know, Democrats, Republicans and Independents coming together to support this measure.
So yes, I believe it's a turning point. Yes, I believe it's a model for other states, and we're not closing any doors on who we talk to. We do want
to talk to labor leaders. I respect them. I have been talking to them.
And again, I think we can forge a path forward that is good for society and good for the business.
CHATTERLEY: Come back and talk to us soon, please. I want to hear about progress on these discussions. John Zimmer, co-founder and President of
Lyft. Great to chat to with you, sir. Thank you.
All right, after the break, the market for the cold storage and transport of vaccines heats up. We'll look at the latest innovations by Trane
Technologies, these guys are the specialists. The CEO is next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. You're looking at a so-called freezer farm run by UPS. They can be used to store vaccines like the one
from Pfizer and BioNTech which must be kept at super cold temperatures.
Trane Technologies whose Thermo King System is used to transport vaccines, medicines and food is also stepping up to the challenge. It's a giant in
climate control technology with 36,000 employees over 880 facilities around the world and sales in excess of $13 billion.
And I'm pleased to say Michael Lamach is the company's Chairman and CEO and he joins us now. Mike your company itself is fascinating and your footprint
is huge, but I do want to hone in on your cold storage technology solutions.
Just give us a perspective here on how big the challenge of distributing and transporting these vaccines is.
MICHAEL LAMACH, CHAIRMAN AND CEO, TRANE TECHNOLOGIES: Well, it is great to be with you, Julia. I think it's been daunting over the past year. We think
about our own just health of our family and our coworkers, ourselves, and I also think about the 1.7 trillion square feet of space in the northern
hemisphere that people think about indoor air quality difference.
So as we get to the cold chain and moving vaccines, it's daunting, but I think in some ways, we are very optimistic that we've got this worked
through and the complex logistics are going to work well.
CHATTERLEY: I mean, I want to go through some of that. But I just wanted to give people a sense of, to some degree, the challenges that already exist.
The World Health Organization says 20 percent of temperature sensitive stocks are damaged during transportation, 25 percent of vaccines end up
degraded due to breaks in the cold chain.
Mike, when we're talking about trying to keep a vaccine at what -- minus 70 degrees Celsius, does that pose even greater potential degradation
challenges?
LAMACH: Yes, Julia, when you think about the temperature on Mars, it is minus 60 degrees, the fact that you're actually developing technology at
minus 70, even minus 80 C, close to 96 degrees Fahrenheit, it is very, very challenging to do that.
And we've not moved vaccines. We've not moved anything to this magnitude really ever in the world, and particularly as the mRNA vaccines are
established, and those are the vaccines that are needing to travel at these really sub-freezing temperatures. That's where we've been focusing a lot of
our attention.
I think the infrastructure is in place around the vaccines that are minus 20 to 30 degrees Celsius, and of course, refrigerated vaccines for two to
eight degrees Celsius. But the focus, the bottleneck, the innovation has really come in that ultra-low freezer temperature, and that's again, where
we've been putting a lot of our focus and energy to make sure the capacities are there to meet the demands.
CHATTERLEY: What's the degradation risk then, if you're saying that the traditional transportation is around minus 20, minus 13? If we're talking
minus 70, it's clearly got to be more than potentially 25 percent if we get it wrong?
LAMACH: Yes, it is the mRNA vaccines that are out there at minus 70, minus 80. You can see as much as minus 50 percent reduction in the yield of the
vaccines, actually making it into inoculation into somebody's arms. You have to be very, very careful about this.
So we have to map the entire process from when the manufacturer packages all the way through to one of the shots come into your arm and the various
breakpoints along the way.
And so, you know, anytime it moves from, you know, air to a terminal, through customs, perhaps, you know, to a truck or a trailer, those are all
potential breakpoints. And so, actively managing and actively looking at temperatures and humidity and whether or not the chain of custody has been
broken in terms of doors being opened on these units is very, very critical.
And there's also the combination of that plus dry ice and dry ice plays a factor here, and I don't think the world has ever seen the volume of dry
ice supplied to a situation like this, and so there are challenges again, with even dry ice used. You know, it is a partial mitigation around keeping
temperatures low for longer.
CHATTERLEY: Yes, I mean, dry ice produces gases as well, doesn't it? CO2, I believe? It burns, so even just handling large quantities is a problem. But
what worries me is what you said about the 50 percent potential deterioration here. That takes an efficacy rate of 90 percent down to 45
percent. So we have to be really careful.
Talk to me. I'm sure you're working and talking to governments all over the world. I don't know whether you'll be able to tell with your part of
Operation Warp Speed, but you can play coy if you need to.
Mike, how prepared are people? Is there anything that concerns you in how prepared in the conversations that you're having, I know, with governments?
LAMACH: Yes, Julia, I'll tell you. It's interesting because we -- Thermo King had the entire cold chain, and so we've had a bird's eye view into all
aspects of how these vaccines might move at different requirements.
I'm also Chairman of the National Association of Manufacturers and here, there are 14,000 manufacturers from the very largest to small, including
pharma companies and technology companies and logistics companies and the degree to which people are working together to support this, to support
COVID in general and essential work, but specifically around vaccine production, inability to move it.
There is a high level of optimism here for me, but when you think about the problem and the need might be five billion to 15 billion doses of the
vaccine around the world over time, this degradation factor is huge, and so moving from you know, 50 percent to 30 to close to zero, in terms of the
loss just means you're going to save people's lives.
So this is a very serious issue for us and we think about it relative to our purpose more so than we do as an opportunity, a short term opportunity.
We don't want to be the bottleneck in getting this vaccine, you know, into people and helping save lives.
[09:50:13]
LAMACH: And so we're very focused on all of these breakpoints. We're talking to all governments, and there are different points of readiness.
There are different strategies around how they are going to address their population.
And so it's a complex, not only logistical puzzle, but also working with governments directly. We want to be sure that we're selling the product,
the people that really do need it that really have something ready to go because there is capacity limitations that we want to be careful that we're
getting this to the best place fastest around getting people inoculated quickly.
CHATTERLEY: Such a great point. Once the vaccine is ready, you've got to make the choice based on timing of vaccine prepared and readiness and
safety checks with the technology to get it where it needs to go. Mike, I'm glad you're the man in charge here.
LAMACH: Julia, even with vaccines, even with deep freeze, you might only have six hours between the thought process and the actual inoculation. And
so, it's a very tight window that needs to be managed at all points in the supply chain.
One of them is just the storage that would be required on site. We developed a very specific container for this purpose that can store as many
as 60,000 doses and you think about -- vials, I should say, three to six doses per vial compared to something in the market today, which might be
more like a thousand vials in a unit that might be the size of a residential refrigerator, very common for a large hospital in fact.
CHATTERLEY: Hospital. Makes sense.
LAMACH: So getting these huge systems that are mobile is very important.
CHATTERLEY: Mike, come back and talk to us soon as I'm running out of time, but -- I am being told off, I'm continuing to talk to you.
Mike Lamach, come back soon, sir, and thank you for you and your team's work. Chairman and CEO of Trane Technologies.
LAMACH: All the best, Julia. Thank you. Stay safe.
CHATTERLEY: Great to chat with you.
All right, TikTok's deadline to reach a sale to American owners is Thursday, but with President Trump's focus on his political survival,
TikTok's fate suddenly, uncertain once again. That's next.
(COMMERCIAL BREAK)
CHATTERLEY: TikTok is asking a U.S. Court to suspend an ultimatum from the Trump administration. If you remember back in August, the White House set a
deadline for the app to be sold to new American owners by Thursday of this week.
A tentative deal is already in place. Walmart and Oracle are set to take over as part owners from TikTok's current Chinese owner, ByteDance. But
nothing is finalized.
The Chinese haven't signed off if you remembered either. But the White House is currently distracted. Clearly, no one quite knows what will happen
next.
Paul La Monica joins me now. Wowsers, Paul. They have got bigger fish to fry quite frankly. They asked for a 30-day extension and heard nothing
back. So, now what?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, now I think the question becomes whether or not this deal actually will go through at some point as
you pointed out.
Obviously, Julia, the Trump administration is distracted to put it mildly, fighting for its political life, if you will. And that means that TikTok's
sale to Oracle and Walmart may be in limbo.
Obviously, I think people are still happily using the app. It's not as if this deadline has meant that now, all of a sudden, people are no longer
able to post videos. It hasn't been shut down, but the company is in limbo waiting to see whether or not it remains in the hands of China's ByteDance
or those U.S. assets do still need to be sold to those American partners.
[09:55:40]
LA MONICA: Oracle, obviously really interested in the data and, you know, for Walmart, it just adds to the social commerce for what the company is
making as it really goes after Amazon.
CHATTERLEY: I have to say and also China hasn't signed off on this yet. So quite frankly, as all parties are concerned, keep calm and carry on. I
think that's the strategic plan. We will continue to follow this story.
Paul La Monica, thank you so much for that. It's my method in life right now. Keep calm and carry on.
That's it for the show, guys. This is FIRST MOVE. I'm Julia Chatterley. Stay safe. We will see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
