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First Move with Julia Chatterley
China Bans DiDi's App and Investigates Three Other Tech Firms; OPEC Plus Talks Enter a Third Day as Arguments Continue Over Oil Output; Jeff Bezos Steps Down as Amazon's CEO after 27 years in Charge. Aired 9-10a ET
Aired July 05, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:42]
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Live from New York, I'm Alison Kosik in for Julia Chatterley. This is FIRST MOVE, and here is your need to
know.
Cyber clampdown. China bans DiDi's app and investigates three other tech firms.
Oil deadlock. OPEC+ talks enter a third day as arguments continue over oil output.
And bye-bye Bezos. Jeff Bezos steps down as Amazon's CEO after 27 years in charge.
It's Monday. Let's make a move.
Welcome to a new week on FIRST MOVE. I hope our American viewers around the world had a fantastic Independence Day. As it fell on a Sunday, the U.S.
markets are closed today and traders are taking a break after driving all the major indices to record highs last week.
We need to look elsewhere for some market action. Europe is trading broadly higher. The London FTSE leading the way as the U.K. government prepares to
announce details of the final phase of easing COVID-19 restrictions in England.
In Asia-Pacific, a growing crackdown on tech companies in China dragging the Nikkei and the Hang Seng lower, more on that in a moment.
Meantime, oil prices are rising amid a dispute between Saudi Arabia and the UAE regarding oil output. The impact could be even higher gasoline prices
than what we're seeing now. They're at a seven-year high here in the U.S.
Now, let's get to the drivers. Chinese national authorities are investigating three tech services citing national data security, this comes
just after China blocked the ride hailing app DiDi on Sunday.
David Culver joins us live now with the latest from Shanghai. Great to see you. So, you know, I heard about this happening and it seemed incredibly
just sort of like a sudden decision from China's internet regulator. It seems like this makes it nearly impossible for DiDi to actually do business
there especially new business for new riders who need to actually download the app.
DAVID CULVER, CNN CORRESPONDENT: It is certainly going to make it difficult, Alison, and good to be with you as well. It's going to tarnish
the reputation here as we're starting to see play out online. And perhaps this is a lesson in who is the boss.
Beijing, making it clear, China's Cyberspace Administration announcing a probe into several tech companies including as we mentioned, the very
popular ride hailing service, DiDi. The agency is citing national data security concerns as they put it, and it has suspended the company from
adding new users for several apps.
Now, in the case of DiDi, it's also banned app stores from offering DiDi for download. DiDi is likened to the Uber of China. It boasts some 377
million users here in Mainland China alone. The Chinese regulatory agencies says that DiDi severely violated laws by illegally collecting and using
personal information. That's how they word this. DiDi said it will comply and rectify and improve risk avoidance.
Analysts we spoke with they say this could have wider implications. Take a listen.
(BEGIN VIDEO CLIP)
MATTIE BEKINK, CHINA DIRECTOR, THE ECONOMIST CORPORATE NETWORK: China is not alone and trying to strike the right balance between innovation and
regulation at a moment when corporations become more powerful than many nation states, when geopolitics and business are intertwined like never
before, you know, for all of these reasons, you know what happens to these firms in China has implications for other tech firms and other industries,
perhaps in China that everybody is watching, but also for foreign firms.
(END VIDEO CLIP)
CULVER: It is worth noting the cyberspace administration of China is targeting companies that have something in common. They recently went
public in the U.S. stock market, it raises questions if geopolitics might be at play here. Chinese state media certainly fueling a nationalistic
reaction, which is also playing out on Chinese social media.
"Global Times," the state-run tabloid, they ran a commentary saying in part, quote, "We must never let any internet giant become a super database
of Chinese people's personal information that contains even more details than the state let alone giving them the right to use those data at will."
[09:05:02]
CULVER: So, this is another example, Alison, of the power of the central government and in March, we saw President Xi Jinping stressed the need to
regulate platform companies and businesses that offer these online services for customers in this country, and several tech companies in the past few
months, they've faced investigations that in turn have led to record fines and massive overhauls -- Alison.
KOSIK: There is a lot that these companies have to swim around in and get around, especially when they are operating in China. David Culver, thanks
for joining us.
OPEC+ is trying to resolve a stalemate that's pushing oil prices higher. The cartel is meeting right now with its partners to try to persuade the
UAE to back their latest plans. Anna Stewart joins us live now.
Anna, great to see you. So, this is the third attempt for this OPEC meeting. It is getting underway as we speak, will the third time be a
charm?
ANNA STEWART, CNN REPORTER: Well, Alison, they got the weekend to mediate, but it's unclear at this stage whether that will have achieved anything at
all. Now, as we believe on the table for OPEC+ currently is increasing oil production by 400,000 barrels a day and extending OPEC+ supply deal into
the back half of next year.
Now, it's clear to see why they want to return some oil to the market. As economies rebound post pandemic, there is an increased demand for oil. But
of course, you don't want to flood the market because then you have a sort of crash in prices.
Now, as we understand it, the UAE wants to see its own baseline. So, its own share of the overall OPEC supply cuts to be recalculated. It wants to
be able to produce more and that has been opposed so far.
Now, until agreement is reached, it is very unclear what prices will be like for the months to come. So, investors aren't particularly happy, and
also there's a big risk. It is something that has been mooted before that the UAE could decide to just leave the OPEC cartel altogether, it could
lead to a big free for all with the UAE and other nations producing what they like, flooding the market with oil and that would see a big crash in
oil prices.
So, that is why investors are watching this meeting very, very closely today -- Alison.
KOSIK: Yes, there could be huge ramifications from this meeting. You know, thinking of that, I mean, this OPEC impasse, it has really upped the
tensions between the UAE and Saudi Arabia, and it is more than just about oil. There's this laundry list of issues, including Yemen, Israel, the
pandemic, and more.
STEWART: Exactly. I mean, Saudi Arabia is the de facto leader of OPEC, and it has been a staunch ally of the UAE for decades. But in the last couple
of years, really, we've seen some cracks, I guess, in this relationship. And one of the fault lines is of course, Yemen. The UAE withdrew its forces
from Yemen in 2019 leaving Saudi Arabia to fight Houthi rebels by itself.
There are some issues over an alliance, the UAE has with separatists in the south. You've got the changing dynamic of relationships within their
region, whether you're looking at the UAE's much improved relationship with Israel or Saudi Arabia's with Qatar.
You've got the pandemic, the UAE currently can't get into Saudi Arabia due to a travel ban based on the delta variant, and then added to all of that
at OPEC+, you have Russia at the table, potentially upsetting that diplomatic balance.
So as ever, Alison, it's a meeting about oil, but there is so much more going on around the sides.
KOSIK: And we shall see how this one ends up. Anna Stewart, great seeing you.
STEWART: See you, Alison.
KOSIK: Jeff Bezos is stepping down as the CEO of Amazon exactly 27 years after he founded the company and just 15 days before he's scheduled to
blast off into space. Clare Sebastian joins us with more.
I'll tell you what, listening to what he has got planned in his retirement, it certainly looks nothing like your average American.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Not at all, Alison. Let's be clear, he is not leaving Amazon, Jeff Bezos, despite leaving us for 11
minutes in two weeks' time, he is actually staying on in the company as what is called Executive Chairman. This is a title that we see increasingly
as sort of longtime CEOs or founders of big companies step aside and try to focus more on big picture, the likes of Bob Iger from Disney to Kevin Plank
from Under Armour have taken on the same title.
This is what he said about what he wants to do. He said, "I intend to focus my energies and attention on new products and early initiatives." But look
at it this way, over the past almost three decades, Jeff Bezos has won over consumers to an extremely high degree, everyone loves Amazon. He is one of
the shareholders of a company, the shares right now close to a record high. It's worth almost $2 trillion.
But as he steps down from the CEO position, they've got new challenges. They've got to win over workers. We've seen an increasing amount of unrest
there. And increasingly, the company has to win over lawmakers. Take a look.
(BEGIN VIDEO CLIP)
JEFF BEZOS, EXECUTIVE CHAIRMAN, AMAZON: Our obsessive focus on customer experience.
What has worked at Amazon is focusing on the customer --
Customer obsession has driven our success.
SEBASTIAN (voice over): For 27 years, this has been Amazon's stated mission. From pioneering customer reviews to Alexa, its AI personal
assistant, to two-day shipping and then same day delivery.
Jeff Bezos put customers first, even it seemed above shareholders.
BEZOS: As you know, we are a famously unprofitable company.
[09:10:07]
SEBASTIAN (voice over): It took Amazon more than four and a half years after going public to make a quarterly profit. Two decades to see the
billions start to roll in.
BILL CARR, FORMER VICE PRESIDENT OF DIGITAL MEDIA, AMAZON: We were reinvesting the revenue and profit that we were earning from our operating
businesses back into the business to continuously improve the customer experience.
SEBASTIAN (voice over): Bill Carr, a former Amazon executive says Bezos was willing to take risks. Case in point, Amazon Prime, which launched in
2005.
CARR: We had actually just invested several hundred million dollars in a fulfillment center network that was designed to ship packages to customers
in a timeframe of more like four to five days. So, we knew that we would have to scrap that over time.
But if we had focused on our sunk cost investments we have, we would have never made that leap to Prime which is what customers wanted.
SEBASTIAN (voice over): Today, a growing chorus of voices believes Amazon's growth has come at too high a cost.
STACY MITCHELL, CO-DIRECTOR, INSTITUTE FOR LOCAL SELF-RELIANCE: I think customer focus was always about how do we dominate everybody else in this
industry. There's a growing level of concern about Amazon's power and I think you see that, you know, across the public, but particularly workers.
You know, we've seen a lot of walkouts, a lot of wildcat strikes over the last year, you know, especially with the dangers of COVID.
SEBASTIAN (voice over): As the COVID-19 pandemic drove its sales up 38 percent last year, Amazon hired half a million people growing its workforce
by more than 60 percent.
SEN. BERNIE SANDERS (I-VT): There is no excuse for workers at Amazon not to have good wages, good benefits, and good working conditions.
SEBASTIAN (voice over): While an attempt to unionize at an Alabama facility in April ultimately failed, that threat hasn't gone away. One of
the biggest U.S. labor unions, the Teamsters has made building worker power at Amazon its top priority.
RANDY KORGAN, TEAMSTERS NATIONAL DIRECTOR FOR AMAZON: Millions of our members over the last hundred years have helped to propel this industry
into the middle class, and we've just got to make sure that it stays there.
SEBASTIAN (voice over): Amazon says its wages are fair and workers also get benefits like healthcare coverage and a 401(k) plan. In June, Amazon
told us they'd invested a billion dollars in new safety measures in 2020.
In his last shareholder letter as CEO, Jeff Bezos updated his mission to become Earth's best employer and Earth's safest place to work.
ANDY JASSY, CEO, AMAZON: At AWS, we are customer focused.
SEBASTIAN (voice over): It is a challenge, his successor, Andy Jassy now inherits, the man who built Amazon Web Services from scratch into the
number one player in the global Cloud market. He will likely have to do more of this.
BEZOS: We have a policy against using seller specific data.
SEBASTIAN (voice over): Defending Amazon before lawmakers who believe it's a threat to competition.
Amazon after Bezos, just like Bezos himself will have to reckon with the risks of stratospheric success.
(END VIDEOTAPE)
SEBASTIAN (on camera): Well, Alison, by all accounts, Andy Jassy, who has now taken over as Amazon CEO is a continuity figure. He has been at the
company for 24 years, schooled in the leadership ways and means of Jeff Bezos, but unlike Jeff Bezos, he has a lower profile and some experts say
that might be an advantage because of course, the antitrust challenges, the legal challenges facing Amazon are mounting by the day.
We've got legislation moving through Congress, Amazon cared enough to ask for the recusal of the now Chair of the F.T.C., Lina Khan, who has
expressed views in the past about Amazon and antitrust. So, this is a pivotal moment and I think we will see if not a shift in the way the
company operates, a slight shift in tone due to this new leader at the top.
KOSIK: Andy Jassy certainly has his work cut out for him. Clare Sebastian, great piece. Thank you.
And these are the stories making headlines around the world.
The search for survivors has resumed at the site of the collapsed Florida high rise after the remaining structure was demolished late Sunday night.
Rescue teams say it will give them more access to the site and make conditions safer.
Natasha Chen joins us live now with more. Natasha, you know, it's just devastating and it is heartbreaking to see that building come down. I can
only imagine what the families are feeling this morning. Good morning to you.
NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Good morning, Alison. The crane that's behind us sort of in between the buildings there, that empty space
is where that tower was up until 10:30 p.m. local time. And you're right, when you see that rest of the structure come down. Officials yesterday
said, you know that this demolition was anything far from what it typically could be a spectacle.
This, in fact, was the continuation of the tragedy when you think about the lives that we're lived in that building, the things, the possessions that
people were hoping to retrieve, but cannot. But it was really important to be able to do this before the storm comes through this evening.
[09:15:01]
CHEN: Even though Elsa, the storm, it may not directly hit Surfside, there was concern about high gusts of wind potentially taking the building down
in the wrong direction. The structure itself was very unsafe. So, that posed an immediate threat to the search and rescue teams who are going
through the pile.
So, this was important for the safety of the people on site. And the officials did say that there was a lot of communication with families about
what to expect with that, and how this would allow them better access, especially since prior to the demolition, they couldn't really get to that
part right next to the building because of the instability of the structure.
We did -- CNN did speak with Colonel Golan Vach, who is within the Israeli Rescue Unit. He told us the conversation he had with families just a couple
of days ago.
(BEGIN VIDEO CLIP)
COLONEL GOLAN VACH, ISRAELI SEARCH AND RESCUE EXPERT: I said to the families two days ago that the chances to find somebody alive is close to
zero. I'm realistic, but we are still full of hope. This hope keeps us very active. And we scale up each day, we wake up in the morning, if we have
sleep -- slept at all -- with a lot of energy to find -- to find their loved ones alive or not alive.
(END VIDEO CLIP)
CHEN: He also talked about finding pieces of furniture, just signs of the life that was there. Of course, we still have 121 people unaccounted for,
24 people confirmed dead among them, a seven-year-old girl Stella Catarosi, who was the daughter of a City of Miami firefighter. I did speak with a
relative of theirs a couple of days ago, who said that she was found alongside her mother, and that there are three of those family members
still missing including Stella's grandparents and her aunt who was visiting from Argentina -- Alison.
KOSIK: It really is heartbreaking. Natasha Chen, live from Surfside. Thank you.
Pope Francis is recovering after undergoing colon surgery over the weekend. It was carried out hours after the 84-year-old Pontiff delivered his Sunday
address. Barring any complications, the Pope will be in the hospital for about seven days.
In the U.S., Fourth of July, fireworks lit up the skies last night from coast to coast. Families around the country came together even as some
areas reported rising cases of the delta variant of COVID-19.
On Sunday, President Biden warned the pandemic is not over.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Two hundred forty five years ago, we declared our independence from a distant King. Today, we're
closer than ever to declaring our independence from a deadly virus. That's not to say the battle against COVID-19 is over, we've got a lot more work
to do.
(END VIDEO CLIP)
KOSIK: And you're watching FIRST MOVE. Coming up, going boldly -- millions in America have been on the road or in the air for the Independence Day
holiday. We'll speak with the CEO of travel giant, booking.com.
And while simply taking a flight may feel ambitious for many of us right now, it is a whole different world for the super rich, Jeff Bezos is
preparing to blast off in more ways than one.
(COMMERCIAL BREAK)
[09:21:07]
KOSIK: The American Automobile Association is expecting nearly 50 million drivers will travel this Independence Day holiday between July 1st and
today. That's up a 40 percent -- up 40 percent from a year ago.
Europe is also gradually reopening to travelers, but rules are changing frequently; and many countries in Asia, including Indonesia and Malaysia
still struggling to control the spread of COVID-19.
Joining us now is Glenn Fogel. He is the President and CEO of Booking Holdings, and he joins me live. Great to meet you.
GLENN FOGEL, PRESIDENT AND CEO, BOOKING HOLDINGS: Thanks for having me.
KOSIK: And good timing, because now, we are all getting out and traveling. As we see sort of the pandemic, we hope coming to at least loosening up a
little bit. But as we get out, we are seeing prices skyrocket whether it is plane fares, rental cars, and hotel rates. Is this something we just have
to get used to or will prices come down at some point?
FOGEL: Well, it really depends on where you are. And as you mentioned, different parts of the world, different things happening. And I'm in the
States right now where you know we are having our July 4th Holiday Freedom Day and its freedom to travel here in the States. Other parts of the world
not so much so, and it really depends on where you are.
Certainly in the States, people have been a little bit surprised by seeing some very high prices, particularly in something like car rental. If you
need to rent a car, it has some very high prices. But a lot of this is somewhat temporary, because for example, in the rental car area, the fleets
had been really reduced over the pandemic period.
It's not as though you can then fleet up, as an expression, you can't get cars right away into the fleets to lower the prices. That takes time.
Similarly, some of the hotels are having trouble getting enough people that work there, so it's hard to open up all of the hotels.
So, I think a lot of this may be temporary, but without a doubt, people are happy even with the high prices, people are happy to go traveling right
now.
KOSIK: And for travel aggregators like your company, there's certainly stiff competition out there, Expedia, and Airbnb, just to name two. What
kinds of things is booking.com doing to combat competition and grow more in the United States?
FOGEL: Well, one of the things that we really been very proud of, our service has been very much so a flexible service, meaning people can book a
hotel, for example, but be able to cancel it at no charge.
So much of our inventory is able to be cancelable for free. We'd see over 90 percent of our bookings right now are going that route where you have
the flexibility to cancel if for some reason something new would come up or you're concerned about the virus picking up for whatever reason. That's
something that we find is a bit of a competitive advantage in some places. I think that's something that we're really looking forward to, to make sure
every single person in America knows going to booking.com will get you that flexibility.
KOSIK: What about what Booking is doing about alternative accommodations? I'm talking about something other than hotels. Is Booking moving in the
direction, maybe acquiring single home properties, preparing for that space?
FOGEL: Well, we've been building that out for some time. Now, I have said in the past, I have talked about in the United States, for example, we
don't have enough of those private homes, we need to get more of that inventory. And that is something that people are looking at more and more.
This pandemic has really given people a look at something that they feel is safer, because if you're not in a big crowd in the lobby, you may feel a
little safer and that's why you may go to a private home.
So, we absolutely are increasing the number of homes we can put onto our platform in the United States. In other parts of the world, we have great
inventory. So, for example, I mean, in Europe, people know that we have a great inventory of private homes there and people are using it all the
time.
KOSIK: There's also a lot of pushback for vaccine passports in the U.S., something that has been talked about but doesn't seem to really get to the
finish line. Do you ever see passports -- vaccine passports coming to fruition and not just here in the U.S., I'm talking about globally so
there's continuity with this?
[09:25:05]
FOGEL: Yes, I have been saying this for a very long time, how much we need some type of process, some sort of a system, governments getting together,
and it's been called a vaccine passport, whatever you want to call it, but a way that somebody can prove that they are a safe traveler.
So, I've been vaccinated now for quite some time, and I feel that I'm a pretty safe person. I'm like carrying the virus probably. So, I should be
allowed to go more than say, somebody who perhaps isn't vaccinated and maybe more of a risk and that would enable countries to feel that, hey,
I'll take this person because they are a safe traveler. It really is problematic.
Now, in Europe, they have the green certificate, which is a type of a passport for proving that you are vaccinated. One of the issues though, I'm
in the States, I can't get that green certificate there. In fact, I'm a New Yorker, so I should be able to get the Empire app, which allows me to prove
that I am vaccinated in New York. But unfortunately, I got vaccinated in Connecticut. So, I can't use that.
This is a type of complex thing that we really need the government to come together, create process, great systems that enables everybody around the
world to be able to show whether or not you're a safe traveler or not, and this is not something new.
People for a very long time had to prove their vaccine for different diseases to be able to get into different countries. In fact, before this
pandemic, if you want to go to some countries, you had to prove that you had a vaccination against yellow fever, it is called a yellow certificate.
Unfortunately, the governments have not gone together yet to get this going, which if they did would really help improve the international travel
industry.
KOSIK: Very quickly. Are you on vacation right now? I like your backdrop.
FOGEL: Yes, as a matter of fact, this July 4th weekend, I am on a little bit of a holiday. I am on the south shore of Long Island. It's a great
place to be. I'll tell you, going anywhere right now, after this terrible pandemic makes everybody feel a lot better.
KOSIK: Well, it looks beautiful, Glenn Fogel, President and CEO of Booking Holdings. Thanks for your time today.
FOGEL: Well, thanks so much for having me.
KOSIK: There's more FIRST MOVE after the break.
(COMMERCIAL BREAK)
[09:30:07]
KOSIK: Welcome back to FIRST MOVE, I'm Alison Kosik.
No opening bell today as traders get an extra day off, an extended weekend following Independence Day, so was left up to Europe to reap the benefits
of that strong U.S. jobs report on Friday. There are also renewed hopes of recovery on the continent as restrictions ease and travel opens up.
One stock doing particularly well in London is Morrisons. There are reports the supermarket chain could be the subject of a bidding war after it agreed
to a U.S. private equity offer over the weekend worth $9 billion.
From cyberspace to outer space. It's a big day for Jeff Bezos after more than two decades at the helm of Amazon. Bezos is officially handing the CEO
title over to Andy Jassy. Bezos will still have a leading role as Executive Chair, but will also focus on ventures like his space company, Blue Origin.
It's a far cry from selling books out of his garage all those years ago.
Tech commentator Lance Ulanoff is here with me now. Lance, great to see you.
LANCE ULANOFF, TECH COMMENTATOR: Nice to be here.
KOSIK: You know, this certainly is a retirement that I cannot relate to, that many Americans can't relate to. You know, he is going from -- he is
going from cyberspace to outer space after leaving his mark on e-commerce and so much more, including our expectations on what we want when we order
online. What now for Amazon?
ULANOFF: Well, I mean, look, Amazon is going to -- it's an engine, right? It grew by like 38 percent over the pandemic. Jeff Bezos's wealth expanded
astronomically. And of course, you know, while Jeff Bezos may not be, you know, at the helm every day anymore, he'll have a big impact on it
You know, the bigger impact for Amazon going forward is whether or not the company gets regulated, whether or not there's anti-monopoly action taken
against it. But I think, you know, for me, I'm looking at this moment, and I remember when Bill Gates stepped away from Microsoft, and it feels a
little similar, you know, with Jeff Bezos stepping away to some extent, because he's had such an outsized impact on our online experience,
especially our shopping experience.
He has really transformed retail for virtually everyone in the world. Our expectations are low prices, instant delivery for virtually anything, and
this really did just start with books.
I can -- honestly, I can remember when it started, because I was online, I was working in the tech media industry, and we heard about this company
named Amazon. And we're like, they're selling things online? I mean, no one was really selling anything online. And we're like, books? Who really wants
to buy books online? I can go to the library.
And he has had a vision then, and he has been somewhat singular in that vision because even though they sell everything under the sun, the sort of
bare -- the bones of it all has remained the same.
KOSIK: So, one more question about what you think will happen next for Jeff Bezos because his whole -- the space startup that he has Blue Origin,
he is heading to space in 15 days on his first crewed flight. Is space exploration now his new priority? And where do you see him taking it?
ULANOFF: Well, it's one of them. I mean, look, he wants to go to the moon. He's in heavy competition with Elon Musk's SpaceX. He would like to win
some of those contracts to deliver things to the International Space Station, too. Certainly, land on the moon.
You know, they are trying to build all kinds of vehicles. You know, they are starting with a little of space tourism, and he'll be the first one up
there. I know he cares about it deeply.
You know, we -- Jeff, and I happened to be the exact same age and I know he grew up watching the first people, humans land on the moon, and I'm sure
that is burned into his brain and he wants to get back there.
So, this is a -- what's going to happen this month with him and his brother on that flight is critically important. It has to go perfectly. It's also
risky.
It's very risky venture for one of the richest people in the world, but I think it just speaks to his commitment to this program and how desperately
he wants Blue Origin to be right up there with SpaceX in the space race.
KOSIK: But investors still have their eye on Amazon and as Wall Street analysts like to say, Andy Jassy faces a tough compare that Bezos is a real
tough act to follow, especially since he is leaving the job on top. What are the challenges do you think that Jassy faces to measure up and exceed
expectations?
ULANOFF: Yes, look, I think that Jassy really -- you know, he has to take maybe a slightly different approach to Amazon, its growth, the people
working within it, a better messaging to make sure that people understand that people who work for Amazon are being supported and protected.
[09:35:02]
ULANOFF: I think, Bezos did that, but it was sort of slow and halting, and I think that everything was maybe moving too fast even before the pandemic.
The growth -- he has got to manage that growth, he's got to maintain it. You know, the cost of running that company is astronomical and constantly
expanding. So, they have to make sure that the revenues continue.
They have to continue innovating. You know, Amazon made a big difference in our adoption into virtual assistants with Alexa, and they've managed with
low prices and good hardware to put it in every part of the home. But that can't stop, that has to continue. At the same time, they have to ensure
that they are using the technology for good.
You know, Jeff Bezos even recognized because they built face recognition software, that this is an area where regulation can probably help. So, he
was behind that. Jassy has to continue that.
He is going to face strong regulatory concern over the next few years, and he is going to have to be ready to respond to that, and also to try and
hold on to the company as a whole and not have it cleaved off anything that they've acquired over time.
And by the way, Bezos will still be involved in deciding what they acquire going forward.
KOSIK: Yes, he will still be watching and he'll still have a say in many sense, in a big way, right, even though he is not going to be in the day-
to-day.
ULANOFF: Yes.
KOSIK: All right, Lance Ulanoff, great talking with you. Enjoyed it.
ULANOFF: It was my pleasure.
KOSIK: A major supermarket chain in Sweden is recovering from a cyberattack aimed at an American software company. Coop Sweden told CNN a
major it disruption affected its cash registers, forcing it to close more than half of its 800 stores. It comes as U.S. cyber officials track a
massive ransomware attack on software vendor Kaseya.
Alex Marquardt has more now from Washington, D.C. Alex, Good morning. What's the latest?
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Well, good morning, Alison. Because it has been a holiday weekend here in the United
States, and so many people and so many companies are taking today off as well, we probably won't know the full extent of this ransomware attack, the
full impact on these companies until at least tomorrow when most people go back to work.
But what we do know now, according to cyber researchers is that this is possibly one of the biggest ransomware attacks that we have ever seen, that
thousands of companies could have been affected and not large companies, small companies in fact, Alison, because how this worked was -- as Kaseya
sells its software to what are called managed service providers, and they in turn have hundreds or thousands of their own customers. These are
customers who don't have major IT departments. And so these are the types of small operations that are being impacted by this major ransomware
attack.
Now, according to cyber researchers, the ransomware group REvil, which is believed to be based in Russia has demanded $70 million for a decryption
tool. And one reason that they are doing that, these researchers say is because there are so many potential victims that they simply cannot handle
demanding all of these different companies for individual ransoms, which they have done as well as low as $45,000.00 for many of these companies,
then going on up from there.
So, this is potentially going to be very damaging for hundreds or thousands of companies, again, that full impact, we will begin to get a better sense
of tomorrow.
In the meantime, the White House says of course that it is monitoring the situation. They are helping assess the damage and working with the victims.
The White House says that the F.B.I. and the cyber arm known as C.I.S.A. at the Department of Homeland Security are managing that.
But Alison, this begs the question of, you know, how the White House is going to reach out to Russia on this. This is a criminal group, believed to
be based in Russia, but this also comes several weeks after ransomware and cyberattacks emanating from Russia were front and center in that Summit
between Presidents Biden and Putin in Geneva.
The White House has not yet said what level of responsibility they believe Russia bears for this attack -- Alison.
KOSIK: Okay, CNN's Alex Marquardt live for us in Washington. Thank you.
Coming up on FIRST MOVE, up, up and away. We look at the future of private aviation with the CEO of Wheels Up.
(COMMERCIAL BREAK)
[09:42:06]
KOSIK: Private aviation is soaring as people return to the skies with a sharp rise in first time fliers. According to a report from WingX, business
jet activity in June surpassed pre-COVID levels.
Private jet company, Wheels Up saw its client list grow rapidly in the first quarter of 2021. So, what is behind the rise in interest?
Joining me now is Kenny Dichter. He is the founder and CEO of private aviation company, Wheels Up. Great to meet you.
KENNY DICHTER, FOUNDER AND CEO, WHEELS UP: Great to meet you, Alison.
KOSIK: So we all kind of get it. The pandemic has changed the way we travel. You know, for regular folks, we are still flying commercial, but
for the uber wealthy, they are really flocking to private aviation. What's going on here?
DICHTER: Well, Alison, you know, private aviation isn't just for the uber wealthy. You know, our mission here is to democratize private aviation and
uberize it, make it like an Airbnb.
There's a lot of assets out there. It's an inefficient space. And we're here looking to become the Amazon of private aviation. So again, I would
say the working wealthy are the folks that we're targeting.
KOSIK: So, how do you democratize very expensive flights?
DICHTER: It's simple. You know, you have a utility efficiency story in our space, which means airplanes traditionally have not been on a digital grid.
We purchased a software called Aviana last year, and basically we're allowing operators all around the country, and then the world to list their
availability and their feasibility in real-time on our space, and we're setting up a two-sided marketplace here.
Again, more Airbnb or Uber than the traditional model, so well, again, it lowers pricing when you can get better demand and better utility and better
efficiency on our asset set.
KOSIK: Is some of this better accessibility also available to Wheels Up because Wheels Up has replaced Delta private jets as the partner in the
American Express Premium Private Jet Program? Meaning, will this allow more fliers, maybe Delta fliers who can redeem Sky Miles for Wheels Up flights?
DICHTER: Well, Delta is an unbelievable partnership. We did a deal with Ed Bastian and his team last year to bring Delta private jet into Wheels Up
and part of that deal was putting a marketing -- a co-marketing deal together with Delta Air Lines where we could put special benefits on for
their first business class, economy plus in certain cases and their business customers and make private aviation accessible.
Think about last mile, if somebody flies from Reno to Atlanta and wants to go out to Sea Island, that last mile, Wheels Up can provide that end to end
service in partnership with Delta, and of course, Delta and American Express have a longtime partnership.
Wheels Up just announced with American Express our partnership and we've put together some great benefits for platinum members and we have a
relationship with their Centurion members and we're excited about what that can bring.
[09:45:10]
DICHTER: American Express is such a powerful brand, and to bring Wheels Up again, we talked about democratization between Delta and AmEx, that's
democratization in our space.
KOSIK: When will Wheels Up post a profit, though? When will you turn a profit? I know that you've got a lot of costs from maintenance to
infrastructure, and the list goes on.
DICHTER: So, you know, we put out our first quarter numbers. It was our first set of numbers as a public company. We're trading under ASPL today,
which is the SPAC symbol. We will UP when we go public later this month, we're projecting that.
But it's very simple, we could be profitable today, if we didn't want to go and push the growth that we're pushing here. In the first quarter, we had a
68 percent revenue growth, 56 percent new member growth year. We're investing in growth. We're investing in our member experience.
So, at the end of the day, I think that, you know, if you look at our annualized run rate from our first quarter, we printed over $260 million of
revenue. You know, if we want to at some point in the future, I think about Amazon, invest a little bit less than and look to the EBITDA profitability,
we can be there, but ultimately, with this public transaction, we're looking to go deeper and invest in our customer.
KOSIK: Now, you are in Montana where WarnerMedia, our parent company is putting on the match a golf tie up featuring Phil Mickelson and Tom Brady.
It's not just about golf, though. Talk to me about your plans to donate one million meals to Feeding America.
DICHTER: Well, in partnership with WarnerMedia, there's going to be, I think over a million meals that are going to be donated in during the
broadcast, and we did an unbelievable partnership this year starting in March, right when the COVID crisis hit in 2020. And we founded an
initiative called Meals Up. I'm very proud of it.
We've been part of the match series since Match One. Match one, two, three, four and Claire Babineaux and her team at Feeding America, incredible
partners here. We're pulling for Tom Brady who has been a big Wheels Up supporter, member, Ambassador Deluxe since the beginning and it's amazing
that we can take our brand, be flexible, use our Meals Up initiative and Feeding America and do some good during this unbelievable programming.
So, we're excited to be out here in big sky and we're excited to be part of the match.
KOSIK: Sounds fantastic. Kenny Dichter, CEO of Wheels Up, thanks for joining us.
DICHTER: Thank you very much.
KOSIK: Ahead on FIRST MOVE, Freedom Day is on the horizon in England, but how will the delta variant changed the fate of the country?
(COMMERCIAL BREAK)
KOSIK: As Americans celebrate the Fourth of July, across the pond in England, people are looking forward to their own freedom celebrations in
two weeks. They are anxiously awaiting July 19th when COVID restrictions are set to be lifted, despite the delta variant still running rampant.
[09:50:08]
KOSIK: Nic Robertson has the latest.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): Britain's leap of faith is nearing when enough vaccine is enough to remove remaining
restrictions, and the balance between politics and science tips in favor of more politically driven decisions.
DR. RAVI GUPTA, U.K. GOVERNMENT'S NERVTAG ADVISORY GROUP: The problem is that there are too many unknown parameters in figuring out what vaccine
coverages is needed.
ROBERTSON (voice over): Dr. Ravi Gupta is an immunology expert and a member of the government COVID advisory NERVTAG team.
GUPTA: Fixing a target of vaccination percentage is probably the most appropriate thing at the moment because we're not going to get to the
levels that we really need, because to do that, we need to go to children and that's going to take time.
ROBERTSON (voice over): British politicians appear ready to test the science standing by an already delayed so-called Freedom Day, July 19th,
when remaining COVID restrictions are removed.
SAJID JAVID, BRITISH HEALTH SECRETARY: The Prime Minister has called it our terminus state. For me, 19th July is not only the end of the line, but
the start of an exciting new journey for our country.
ROBERTSON (voice over): In his first full day on the job last week, the U.K.'s new Health Secretary was bullish.
JAVID: No date we choose comes with zero risk for COVID. We know we cannot simply eliminate it, we have to learn to live with it.
ROBERTSON (on camera): The problem here in the U.K. is that infections are rising rapidly because of the delta variant. In the past, the response
would have been to put on more restrictions, but now, the moment of really testing new vaccine data has arrived.
BORIS JOHNSON, BRITISH PRIME MINISTER: The speed of that vaccine rollout has broken that link between infection and mortality, and that's an amazing
thing. That gives us the scope, we think on the 19th to go ahead, cautiously, irreversibly to go ahead.
ROBERTSON (voice over): Israel among the first countries to near full vaccination, and a bellwether for vaccine efficacy was recently forced to
reverse some of its COVID protections dropped when it ended all restrictions June 1st as COVID infections spiked.
A reality that seems to shape Johnson's characteristic sunny optimism, adding this caveat, "Freedom Day will not be complete freedom."
JOHNSON: Try to get back to life as close to it was before COVID. But there may be some things we have to do, some extra precautions that we have
to take, but I'll be setting all that up.
ROBERTSON (voice over): Getting those precautions right, Dr. Gupta says is critical.
GUPTA: The more transmission we allow, the more opportunity the virus has to evolve further and you know, delta maybe just the beginning of another
line of things the virus is able to do.
ROBERTSON (on camera): We are undoubtedly less in the dark about this pandemic than we were a year ago. Even so, as a new phase of living with
COVID-19 nears, we remain in seriously uncharted territory.
Nic Robertson, CNN, London.
(END VIDEOTAPE)
KOSIK: For more on this, let's bring in Bianca Nobilo who is live in London. Bianca, great to see you.
It just feels like the U.K. is kind of rolling the dice and that there's this inevitability and acceptance that there is going to continue to be a
spike in infections and that people are okay with it.
BIANCA NOBILO, CNN CORRESPONDENT: That's not a bad way to characterize it, Alison, because at the moment, we are seeing a huge surge in cases. There
has been over 70 percent increase in the last week of cases in the United Kingdom. The British Medical Association has said that the hospitalizations
in the last weeks have increased by over 50 percent.
So, it's a peculiar point in this pandemic for Britain because it does appear that the vaccine effort has at least weakened, if not broken that
link between the rises in cases and hospitalizations and deaths. And that is what the Prime Minister, the Health Secretary and the government will be
banking on.
So, what can we expect the Prime Minister to say today, Alison? Well, we are expecting him most likely to drop that mask mandate and saying to
people that they will be able to use their own discretion as to whether or not they want to use face coverings, whether it's at work or whether it's
in public transport.
But we still don't know because the British Medical Association have said that they think it's unwise at this point because of the rising cases for
facial coverings to be dropped in places like public transport where there's little ventilation. We know that that's a dangerous place when it
comes to COVID.
We're also expecting the Prime Minister to give more information about how this will be up to people's individual discretion. It will be a freedom of
choice after so-called Freedom Day on the 19th of July
And what could be driving the fact that the Prime Minister is making this move is taking this gamble in a sense at this time when we know that cases
arising. Well, it could be the fact that the new Health Secretary, Sajid Javid is a lot more bullish when it comes to the pandemic.
[09:55:09]
NOBILO: He said the release of lockdown is irreversible. It could also be that the wider context is one where the government has been under a lot of
criticism for trying to impose rules on the public, which it isn't willing to abide by itself, and I am speaking specifically about the former Health
Secretary, Matt Hancock and the scandal around that in recent weeks -- Alison.
KOSIK: Okay, Bianca Nobilo, thanks for joining us.
Finally on FIRST MOVE, something you don't see every day, but then again, U.S. Independence day is no ordinary day.
All right, this may look like some sort of deep fake, that Facebook says it is cracking down on, but you are seeing the real thing. This is really Mark
Zuckerberg celebrating July 4th.
He took to an electric surfboard to brandish the red, white, and blue to the tune of "Take Me Home, Country Roads."
We're just going to leave this here for you to enjoy for a moment.
All right, stay safe. "Connect the World" with Lynda Kinkade is next.
I am Alison Kosik. I'll see you next time.
(COMMERCIAL BREAK)
[10:00:00]
END
