fortune--2020-01-07--The Driverless Car Moonshot Is Over

The Driverless Car Moonshot Is Over

Good morning. It’s Cliff Leaf here, stepping in for Alan.
The moonshot is over. That was a key takeaway from Fortune’s fascinating conversation last night with Waymo CEO John Krafcik. Sitting down with Executive Editor Adam Lashinsky, at our annual Fortune Brainstorm Tech in Las Vegas dinner, Krafcik said that the real man-on-the-moon moment in driverless cars occurred in 2015, when a truly autonomous vehicle—one with no driver controls or emergency stop buttons—transported a human passenger through the streets of Austin, Texas. That feat took Waymo—now an independently run company within Alphabet—six years to accomplish.
Four years later, roughly 100 Waymo-converted Chrysler Pacifica minivans now driverlessly drive passengers through the streets of Phoenix, Arizona, each day. Some 1,500 active monthly users hail the vehicles via their Waymo apps and take them wherever they’d like within a service area as large as San Francisco. (The prices for the rides are comparable to those for Uber and Lyft.)
The sheer everydayness of this Jetsons–like experience—even if it’s limited for now to parts of Phoenix—was striking to hear. But as Krafcik told the Fortune audience, it took miles to get to this point; more than 20 million miles, in fact, of real-world road testing, with half of that coming in just the last year or so.
Backing up those 20 million miles of rubber-on-road have been tens of billions of computer-simulated miles, which have helped Waymo improve its algorithms, Krafcik said. As for the investment thus far—which the Waymo CEO pegged in the billions of dollars—“it would be hard for any company other than a company like Google to deliver,” he said.
So how, Adam posed, will the company make back those billions? Four ways, Krafcik said. There’s ride-hailing, then urban delivery. (“Using those same vehicles that we’re employing in Phoenix to move goods from point A to point B.”)
Then long-distance autonomous trucking. Waymo is generating revenue now through autonomous ride-hailing, but Krafcik expects commercial trucking to follow. Trucking “is a bigger market opportunity,” he said. And finally, Waymo can sell tech to automakers that want to develop their own applications.
The problem with thinking of such ambitious quests as “moonshots,” said Krafcik, is that it encourages us to frame the challenges in the wrong way. Missions like the original Apollo effort, he said, had a high probability of “some catastrophic failure”—which isn’t exactly an appropriate risk profile when you hope to deliver millions of something every day (as in driverless rides). “So we had to move beyond moonshot thinking, which got us to 2015, to this new sort of thinking—where we’re scaling, where we’re able to do this over and over again with very high confidence of perfect outcomes every time.”
Sure, it will require billions of dollars of additional investment. But then, what else are you going to spend all that Alphabet cash on?
More news below.
Clifton Leaf
@CliftonLeaf
clifton.leaf@fortune.com
TOP NEWS
Iran Says Retaliation Will Be a "Historic Nightmare"
Iranian officials reportedly issued menacing threats following the killing of Maj. Gen. Qassem Soleimani, with Iranian media reporting on Tuesday morning that Iran is assessing 13 "scenarios" for retaliation. Meanwhile on Tuesday, the body of Soleimani had reached his hometown. At the funeral procession in Kerman, a stampede had reportedly broken out, killing 35 people and injuring 48 more. Bloomberg / Reuters
U.S. Denies It Is Withdrawing Troops
The U.S. top military official denied that the government is pulling troops out of Iraq amid the escalating conflict with Iran, claiming that the release of a letter by the Commander of U.S. forces there was a "mistake" and that the letter was a "draft." The U.S. Defense Secretary also said there had been no decision to leave Iraq. FT
Japan Asks Lebanon for Help
Japanese authorities are asking their counterparts in Lebanon for help with Carlos Ghosn, a day after officials in Japan said they may push for the former executive's extradition back to the country where he was charged. The Middle Eastern country does not normally extradite its nationals, and does not have an extradition agreement with Japan. Meanwhile, Japanese media were reporting that Ghosn escaped Japan in part on a public bullet train, despite constant surveillance, and authorities there had put out an arrest warrant for his wife, Carole. Reuters / FT
Facebook Will Remove Some Manipulated Videos—But Not All Altered Content
Facebook is attempting to crack down on "deepfakes"—images or videos that have been altered using sophisticated machine learning algorithms—but said it would stop short of removing video content that has been altered as part of a parody or satire, or has been edited to omit or alter the order of words. WSJ
AROUND THE WATER COOLER
Why Are There So Many Scooters in L.A.?
Electronic scooters have taken over cities worldwide, from Tel Aviv to Paris—and the backlash has usually quickly followed, including swift regulation by local transport authorities. But in Los Angeles, the city is hoping that the e-scooters will offer one more way to relieve traffic congestion. “People need choices, and that’s really what it comes down to,” said Seleta Reynolds, general manager of the Los Angeles Department of Transportation. “And Lord have mercy, people need choices in Los Angeles.” Fortune
Hong Kong Landlords Face a Tough Year
Anti-government protests in 2019 are contributing to a tough 2020 for Hong Kong, which has the highest commercial rents in the world. The protests have taken a toll on shopping districts and tourism in particular. Retailers have been hit hard. Retail-leasing transactions dropped 26% in the second half of 2019 compared to the first half of the year, and several high-fashion brands have said they will close their central Hong Kong stores. Bloomberg
A Mystery Illness in China
China is battling an undefined respiratory illness, after 59 people contracted the mysterious sickness. The illness, which bears similarities to pneumonia, was first reported in Wuhan at the end of December, with seven patients now in critical condition. But in other regions, including Hong Kong, reports of the illness had prompted temperature screening and face mask stockpiling, bringing back memories of the SARS epidemic. The Guardian
What Happens When You Take New Year's Day Off?
After Mitoshi Matsumoto, who owns a 7-Eleven franchised store in Japan, decided to close for New Year's Day, the chain's parent company terminated his franchise—and stopped supplying him. The latest battle between Matsumoto and the company points to the ongoing debate in Japan over extreme working conditions, particularly overwork. New York Times
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But that's not all! Fortune is also getting ready to launch a raft of new newsletters, two of which you can sign up for in advance. Fans of the Sino Saturday edition of CEO Daily will be excited to learn that Clay Chandler and the Hong Kong team are preparing a daily newsletter on business in China, called Eastworld. And our Rome-based ace, Bernhard Warner, will write a daily newsletter on finance news, awesomely named Bull Sheet.
This edition of CEO Daily was edited by Katherine Dunn.


fortune--2020-01-07--For Iran, Retaliation Could Be Just a Retweet Away

What Goes Into the Production of a New Girl Scout Cookie Brand

After the U.S. killed top Iranian military general Qasem Soleimani in a January 2 drone attack, the Department of Homeland Security issued a warning Saturday about the potential for retaliation by the regime. While Iran has threatened military action in response, the U.S. warns that “Iran maintains a robust cyber program and can execute cyber attacks.”
Iran is capable of temporarily disrupting critical infrastructure in the U.S., the warning says, but the Middle East power has another tool in its cyber warfare arsenal: social media disinformation campaigns. While that kind of activity is most associated with Russia, Iran has also used Facebook, Twitter, and Instagram to stoke tensions in the U.S. and around the world.
In August 2018, Twitter announced it removed 2,617 Iranian accounts that were engaging in “malicious activity.” In May 2019, Facebook revealed that it had also removed a trove of Iranian-linked Facebook accounts, pages, and groups—as well as Instagram accounts. The social network also disclosed that it had removed Iranian-linked disinformation accounts in the previous year.
Many of the removed accounts were falsely claimed to be run by people in the U.S. and Europe. In some cases, the Iranian-linked accounts impersonated “journalists or other personas and tried to contact policymakers, reporters, academics, Iranian dissidents and other public figures,” writes Nathaniel Gleicher, head of cybersecurity policy at Facebook.
Zack Allen, director of threat operations at ZeroFOX, says many of the accounts appear to have focused on influencing U.S.-Iranian relations. They also spread messages favorable to Iran’s regime.
Some of the removed Iranian-linked pages had names such as, “No racism no war”, “Wake Up America”, and “I Need Justice Now.”
Facebook and Twitter say the “coordinated inauthentic behavior” came from within Iran, but the companies stopped short of blaming the country’s government.
“Since Iran is in the limelight right now [after the death of Soleimani], it is relatively safe to assume that they can ramp up efforts,” Allen tells Fortune. “They definitely want to shape public image of their country, and will likely desire to do so to seem strong.”
Iran’s past social media disinformation campaigns followed a familiar playbook.
“Many of these accounts replied directly to influencers on social networks, so monitoring for suspicious behavior or chatter against accounts, especially in media, will be an important security tool for organizations going forward,” Allen says.
Iran’s efforts—especially in a social media presidency where Donald Trump has been tricked into retweeting troublesome Twitter accounts to his more than 69 million followers more than once—could make an impact.
Inside Iran’s cyber playbook
According to DHS, Iran is “capable, at a minimum, of carrying out attacks with temporary disruptive effects against critical infrastructure in the U.S.”
“It’s clear that data-destroying attacks against corporations are within their capability,” Chris Wysopal, chief technology officer and co-founder of Veracode, tells Fortune. “I would expect the soft targets of U.S. cities and hospitals which are in the midst of a ransomware epidemic to be the easiest targets, but larger corporations are at risk too.”
Sheldon Adelson, a prominent supporter of Israel, knows first-hand how damaging Iranian hackers can be. After the casino magnate made a comment on a panel in 2013 that the U.S. could send a message to Iran about its nuclear ambitions, Iran made him pay for it—literally.
In February 2014, hackers inserted malware into the computer networks at Las Vegas Sands and leaked customer data. The casino company spent $40 million recovering data and rebuilding its infrastructure.
But since the Soleimani drone strike, Iran’s hackers have been quiet—relatively speaking. Last weekend, a group of hackers claiming to be from Iran posted a cartoon of a bloodied Donald Trump, along with a pro-Iranian message about the death of commander Soleimani, on a U.S. government website. While the hack hasn’t been confirmed as actually coming from Iran, security experts say it’s just one example of what may be to come—one small example, at that.
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—7 companies founded in the last 10 years that you now can’t live without
—Electronic health records are creating a ‘new era’ of health care fraud
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—What a $1,000 investment in 10 top stocks a decade ago would be worth today
—Amazon is on a collision course with employee activists outraged by the climate crisis
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fortune--2020-01-07--Impossible Foods Unveils the Other Fake Meat

After a big year for its plant-based burger, Impossible Foods has something new on its plate.
The California-based company unveiled Impossible Pork and Impossible Sausage on Monday evening at the CES gadget show in Las Vegas.
It’s Impossible Food’s first foray beyond fake beef. The Impossible Burger, which went on sale in 2016, has been a key player in the growing category of vegan meats. Like the burger, Impossible Food’s pork and sausage are made from soy but mimic the taste and texture of ground meat.
Impossible Pork will be rolled out to restaurants first. The company isn’t yet saying when it will come to groceries. Impossible Foods only recently began selling its burgers in grocery stores, although they’re available at more than 17,000 restaurants in the U.S., Singapore, Hong Kong and Macau.
Burger King will give consumers their first taste of Impossible Sausage. Later this month, 139 Burger King restaurants in five U.S. cities will offer the Impossible Croissan’wich, made with plant-based sausage coupled with the traditional egg and cheese. Burger King did a similar test of the Impossible Whopper last year before expanding sales nationwide.
The pork products and the Impossible Burger are made in a similar way. Impossible Foods gets heme — the protein that gives meat its flavor and texture — from soy leghemoglobin, which is found in the roots of soy plants. To make heme in high volume, it inserts the DNA from soy into yeast and ferments it. That mixture is then combined with other ingredients, like coconut oil.
The company tweaked the ingredients to mimic pork’s springy texture and mild flavor. For the sausage it added spices.
Impossible Pork has 220 calories in a four-ounce serving. That’s not much less than a serving of Smithfield 80% lean ground pork, which has 260 calories. Smithfield’s animal-derived pork has more total fat, at 20 grams, than Impossible Pork, which has 13 grams. But Impossible Pork has far more sodium, at 420 milligrams. Smithfield has 70 milligrams.
But health concerns are only part of the reason consumers are eating more plant-based meats. Animal welfare and environmental concerns are also a factor. Nearly 1.5 billion pigs are killed for food each year, a number that has tripled in the last 50 years, according to the World Economic Forum. Raising those pigs depletes natural resources and increases greenhouse gas emissions.
“Everything that we’re doing is trying to avert the biggest threat that the world is facing,” Impossible Foods CEO Pat Brown told The Associated Press.
Brown said the company decided pork should be its next product because customers were frequently requesting it. Impossible Foods started working on the new products about 18 months ago and accelerated development in the second half of 2019.
Brown said ground pork is also critical to meeting the company’s international expansion goals. While Americans eat more beef and chicken, pork is the most widely consumed meat worldwide, according to the National Pork Board. Chinese consumers eat more than 88 pounds (40 kilograms) of pork per year, compared to 65 pounds (30 kilograms) for Americans.
Brown said he believes a product like Impossible Pork is critical in China, which has limited arable land and relies heavily on imported meat. Last year, Chinese pork prices surged after African swine fever wiped out millions of pigs.
Brown said Impossible Foods is talking to Chinese regulators and potential partners that could make Impossible Pork — as well as plant-based burgers — in China.
“This is a huge opportunity for China in terms of its food security,” Brown said.
Impossible Foods is also waiting for approval from European regulators to sell its products there.
In the U.S., 2019 was a breakout year for plant-based meat. U.S. sales jumped 10% last year to nearly $1 billion; traditional meat sales rose 2% to $95 billion in that same time, according to Nielsen.
Impossible Foods rival Beyond Meat — which already sells plant-based sausage links — had a successful public stock offering in the spring. Impossible Foods ran short of burgers in the first half of the year thanks to the buzz from Burger King. After partnering with OSI Group, a food service company, Brown said Impossible Foods produced twice as much of its plant-based meat in the last quarter of 2019 as it sold in all of 2018.
“We have to keep scaling up as fast as we possibly can,” Brown said.
Brown said he welcomes new competitors in the space, including deep-pocketed rivals like Nestle and Tyson Foods. The meat industry is vast, he said, and plant-based meats are still only around 1% of sales.
His only concern is that plant-based products taste good enough to convince meat eaters to switch.
“A crappy product won’t win over meat lovers,” Brown said.
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fortune--2020-01-07--CES 2020 Kickoff Highlights the Decoupling of U.S. and China’s Tech

The world’s biggest consumer technology trade show kicks off Tuesday in Las Vegas amid an escalating tech cold war between the U.S. and China.
While new generation tech that has been the focus of China’s innovation efforts—like artificial intelligence and 5G—will be at the forefront of CES 2020, major Chinese tech players like Alibaba, Tencent, and JD.com are absent from the first major global tech event of the decade.
The U.S.-China trade dispute is spilling into CES in spite of plans for the two countries to sign a “Phase One” trade agreement on Jan. 15 in Washington. A Chinese consulate and commerce ministry-backed station at the expo will offer free legal help to Chinese attendees, who have also been encouraged to carry documents certifying their intellectual property rights. IP theft has been a sticking point in trade negotiations.
Escalatory U.S. policy against Chinese tech companies in 2019 has led to a new push in China to establish technological independence from the U.S.—a move that that will have major international repercussions, according to a Jan. 6 Eurasia Group report on top risks for 2020.
“The decision by China and the United States to decouple in the technology sphere is the single most impactful development for globalization since the collapse of the Soviet Union,” the report said.
A little over 1,000 of the 4,500 companies exhibiting at CES 2020 hail from China. Two years ago, one third of participating companies were from China, and last year it was more than one in four.
The uncertainty brought on by political tensions between the U.S. and China as well as difficulties obtaining U.S. visas are contributing to the drop-off in attendance from Chinese companies.
“Our company decided not to attend this year because we knew it would take forever to get our visa, if they don’t get rejected after all,” one Chinese A.I. chip startup founder told the Nikkei Asian Review.
Of China’s top domestic smartphone makers, only OnePlus and Huawei appear on the CES exhibitor directory. Top name brands like Xiaomi, Oppo, and Vivo are absent.
Artificial intelligence will be at the forefront of CES 2020, but China’s leading A.I. startups will be absent, including Megvii, SenseTime, and Yitu, which all landed on a U.S. government trade restricting “entity list” in October 2019 for their alleged involvement in a Chinese government campaign against ethnic minorities in Xinjiang province.
Voice recognition company iFlyTek and surveillance company Hikvision, which were also added to the entity list in October, attended CES 2019 last January but will not be attending this year.
The world’s most valuable startup, ByteDance Ltd., which owns popular app TikTok, will also be absent from CES 2020. U.S. senators have labeled ByteDance a national security risk and the Committee on Foreign Investment in the U.S. is currently reviewing its 2017 purchase of the app that is now TikTok.
The Consumer Technology Association (CTA), which runs CES, said in an emailed statement that it expects a similar level of participation to CES 2019, but foresees the overall exhibit space for Chinese companies to be “slightly down.”
“China remains a top international market at CES, with many Chinese companies exhibiting at the show to build their brand and forge global partnerships,” the CTA statement said.
Not all Chinese firms staying away
Smaller Chinese A.I. firms, like Beijing-based ForwardX Robotics and A.I.-powered startup RaSpect Intelligence Inspection Limited, are exhibiting at CES, however. RaSpect is backed by Alibaba and SenseTime, neither of which are attending.
Some high-profile Chinese companies will also be attending, including Huawei, Baidu, Lenovo, Haier, Hisense, and DJI.
Telecommunications giant Huawei has been on the U.S. government entity list since May 2019. Huawei representatives will be participating in a “fireside-style chat” at CES to discuss, among other topics, “the impact of U.S.-China conflicts on its business and leadership position.”
Huawei will also showcase consumer products like smartphones and laptops, which U.S. government restrictions have effectively shut out of the U.S. market.
The Eurasia Group report predicts that Southeast Asia, Africa, Europe, and Latin America will become “battlegrounds” for the U.S. and China to compete over supplying consumers with “not just smartphones and the networks that power them, but mobile payments, e-commerce, and financial services too.”
ZTE USA, the U.S. subsidiary of embattled Chinese telecoms company ZTE Corporation, also has a booth at CES 2020. ZTE was nearly bankrupted in 2018 by U.S. government sanctions and fines, and did not attend last year’s expo.
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—7 M&As that defined a decade of dealmaking and reshaped the economy
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fortune--2020-01-07--This is Why There Are So Many Scooters in Los Angeles

Los Angeles has become a breeding ground for electric scooter companies eager to take the lead in the second most populous city in the U.S. since it launched its pilot program in March. After 10 months, the Los Angeles Department of Transportation has logged 19 million scooter rides and expects the vehicles to play a role in relieving congestion from the traffic-stricken city, its leader says.
“People need choices, and that’s really what it comes down to,” said Seleta Reynolds, general manager of the Los Angeles Department of Transportation, at a Fortune Brainstorm Tech dinner in Las Vegas on Monday night. “And Lord have mercy, people need choices in Los Angeles.”
About 65% of all trips taken in the city are shorter than 5 miles and 85% of those trips are taken by people who drive alone in their cars, Reynolds said. The dinner kicked off CES, the annual technology trade show, and the LADOT official was speaking as part of a mobility panel discussion that included Pamela Fletcher of General Motors and Franz Reiner of Daimler Mobility.
Reynolds explained why Los Angeles chose not to stifle the number of scooter companies entering the city. “I did not want to put my finger on the scale; I did not want to artificially deflate the market,” she said. “I wanted every company that wanted to come to L.A. to come and be able to compete.”
Los Angeles’ approach to scooters vastly differs from cities like San Francisco, which initially banned scooters before handing out permits to select scooter companies for a limited number of scooters, and Atlanta, which banned scooter use at night after several deaths. Cities’ biggest qualms with electric scooters are citizen safety and a supply that threatens to overwhelm sidewalks.
Without regulation, scooter companies are able to deploy an endless number of scooters that can be haphazardly piled on street corners, parked in private driveways, and thrown in bodies of water. (Yes, really.) They also present a new danger to drivers on the roads as well as scooter riders, who may not be skilled at operating the vehicle.
Reynolds—who came to LA after working for San Francisco’s transportation department—says in Los Angeles, data has shown that scooters only represent a small portion of severe injuries and have yet to result in a death. While she admits that the electric scooter market still has some work to do to eliminate some of the “chaos,” she said a lot of the frustration from residents is stems from change.
To the city’s department of transportation, scooters represent a piece of the larger ecosystem that aims to provide transit options for everyone. Unfortunately, everyone has yet to be equally served, said Reynolds.
“They’re solving a real problem,” she said. “But what they’re not doing is deploying in low income neighborhoods that don’t have other choices and where folks may not be able to afford a vehicle.”
Los Angeles’ department of transportation is exploring what role it can play to incentivize companies to equally serve low-income neighborhoods, Reynolds said. Ride-hailing and scooter companies have to be part of the bigger picture, she added.
“We invest in public transit because it returns a public good,” Reynolds said. “We need to start expanding that definition.”
For more from the CES dinner, read “Google’s Waymo Reaches 20 Million Miles of Autonomous Driving” by Aaron Pressman.
Fortune’s annual, invite-only Brainstorm Tech conference will take place from July 13 to 15, 2020 in Aspen. For more information, click here.


fortune--2020-01-07--Google’s Waymo Reaches 20 Million Miles of Autonomous Driving

Autonomous cars from Waymo, owned by Google parent Alphabet, drove 10 million miles on public roads in about the past year, doubling the company’s self-driving record of the prior 10 years, CEO John Krafcik said on Monday.
“We’re now beyond 20 million miles of fully self-driving, like, really self driving,” Krafcik said in an interview at a Fortune Brainstorm Tech dinner in Las Vegas during the annual CES conference. “You need to have a lot of real world experience. There’s no way to avoid that. You must have it.”
The company started life in 2009 as a Google research project known as Chauffeur. It was renamed in 2016 and got permission to start its driverless service in the Phoenix area a year later. Waymo doesn’t disclose its revenue or profitability.
The company’s driverless cars, mainly Chrysler Pacificas outfitted with special hardware and software, are currently offering a ride hailing service in Phoenix. The service has about 1,500 monthly active users there. The company also uses its autnonous fleet to make deliveries in the Phoenix area and runs self-driving heavy trucks, Krafcik says.
Krafcik, who took the top jon at Waymo in 2015, is the former CEO of Hyundai Motor America. He also headed online car pricing startup TrueCar.
Asked when the Waymo services might expand beyond Phoenix, the CEO offered few specifics. “We’re considering moving that to other cities,” he said. Waymo also has extensive experience in California, but doesn’t yet have permission to charge for rides in that state.
Waymo’s rivals include self-driving projects from Uber, Apple, and Tesla, among others. California’s Department of Motor Vehicles reported that Waymo drove the most miles of any autonomous car company in 2018, at 1.3 million, followed by GM’s Cruise unit and startups Zoox and Nuro.
For more from the CES dinner, read “Why There Are So Many Scooters in Los Angeles” by Danielle Abril.
Fortune’s annual, invite-only Brainstorm Tech conference will take place from July 13 to 15, 2020 in Aspen. For more information, click here.


fortune--2020-01-07--Uber and Hyundai Unveil Flying Car Model for Future Air Taxi Service

Uber is working on a flying car with Hyundai, the first automaker to buy into Uber’s dream for a network of air taxis dotting the skies of major cities.
The two companies outlined their partnership Monday at the CES technology conference and plan to show off a full-scale model of the vehicle this week on the trade show floor in Las Vegas. Hyundai’s aerial taxi would be able to take off and land vertically, accommodate four passengers and cruise at up to 200 miles per hour. It would be fully electric with a range of 60 miles.
The concept is similar to those designed by Boeing and a handful of other companies in collaboration with Uber Elevate, the ride-hailing company’s aerial division. In addition to sci-fi ventures, the group also oversees Uber helicopter rides, which are available in New York City. Uber has said it will conduct the first public demonstration of a flying car this year and allow customers to book aerial rides by 2023.
In more terrestrial pursuits, Uber said earlier Monday that it’ll start selling bus tickets through its app in Las Vegas, making it the second city to sign up for a public transit program the company introduced last year. Customers in the city will see public transit as one of the options in the Uber app, alongside car rides. They can then plan their route and purchase tickets for the same price they would pay using traditional methods. Riders will be able to use the tickets when their phone is offline. Uber expects to introduce the feature to additional cities around the world in the coming months.
Selling bus tickets is the latest deviation from Uber’s core ride-hailing business, part of a larger strategy to encourage customers to open the app more frequently. The company sees increased usage as a way to drive people to other services, including delivery of meals or groceries, rentals of electric bicycles or scooters and someday, flying car rides.
The company’s transit partnership with Las Vegas is nearly identical to an arrangement it made last year with Denver, the first place where Uber offered public transit ticketing. While there are just two cities that support ticket sales through the app, Uber and its main U.S. competitor, Lyft Inc., both display public transit routes for many more places.
David Reich, Uber’s head of transit, acknowledged that the feature may deal a blow to Uber’s main business among cost-conscious customers. He said the trade-off is worth it if people learn to use Uber more regularly and trust it to offer comprehensive transportation information. “Sometimes they’ll take something other than Uber, and that’s OK,” Reich said.
Las Vegas will get a new transit option as soon as this year, courtesy of Elon Musk. A startup founded by the billionaire, called Boring Co., broke ground last year on a tunnel beneath the Las Vegas Convention Center, where CES is held. Musk plans to pack riders into vehicles designed by Tesla Inc. zooming through the narrow tunnel. Reich said Uber is open to conversations with Musk but that there’s currently no plan in place to sell tickets for Boring Co.’s Loop transit system.
For the flying car project, Uber is working with NASA and a half-dozen manufacturers, including Textron Inc.’s Bell and Joby Aviation. The arrangement with Hyundai stands out because the automotive giant could produce air vehicles at “rates unseen” in the aerospace industry, said Eric Allison, the head of Uber Elevate. High volume would, in theory, decrease the price per trip and make an air taxi network financially viable, he said.
Uber said it’ll provide partners with airspace support services, connections to ground transportation and a large base of customers. The companies will collaborate on finding places for the vehicles to take off and land, with Uber likely leveraging existing relationships with real estate companies including Hillwood Properties and Signature Flight Support.
While Uber has held talks with the Federal Aviation Administration, the effort is likely to face heavy scrutiny from the regulator over logistics for takeoff and landing, noise and safety concerns. Hyundai said its vehicle will require a human pilot initially and eventually operate autonomously. Neither Hyundai nor Uber provided a timeline for dispensing with human pilots.
The move represents a pop of innovation for Hyundai, which, like other car manufacturers, has been hit by changing consumer habits that favor access over ownership and a preference for vehicles not powered by gasoline. For Uber, the arrangement expedites ongoing efforts to evolve from a ride-hailing company to a de facto global transportation and logistics provider. It may also offer a welcome distraction from Uber’s stock price, which has slipped about 30% since its disappointing initial public offering last year.
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—7 companies founded in the last 10 years that you now can’t live without
—Electronic health records are creating a ‘new era’ of health care fraud
—Apple, Amazon, and Google want to create a smart home standard
—What a $1,000 investment in 10 top stocks a decade ago would be worth today
—Amazon is on a collision course with employee activists outraged by the climate crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-07--The American Dream Mall’s 17 Year Development Nightmare Has Ended

When shoppers visit the long-awaited American Dream mega-mall in New Jersey this spring, they can expect to see it crammed with stores, restaurants, and entertainment activities. It didn’t always seem that way.
Developers have leased almost 90% of its available 3.3 million square feet, a figure which rises to nearly 100% when leases under negotiation are included, according to a filing. In particular, all retail anchor stores have been spoken for—which is critical for malls because those locations, typically department stores, are key in driving foot traffic.
That the $5 billion behemoth is close to full capacity appears to buck the slow demise of physical retail, where shoppers have been lured away by the convenience of online options. Fewer than half of U.S. malls are expected to survive ongoing store closings, according to Bloomberg Intelligence, and the American Dream project itself has also had its fair share of problems: More than 17 years in the making, the project was hampered by a tortured construction process with many setbacks.
But American Dream has said it can beat the odds because of its attractions—counting a Nickelodeon Universe park, an ice skating rink and a ski slope among them—and its accessibility to New York City. It seems to have paid off, with all of the stores bigger than 20,000 square feet now leased, and about 70% of smaller ones, the filing showed.
The mall, owned by Triple Five Group of Canada, opened partially in October. The retail side of the mall will start opening in March with some 450 businesses.
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fortune--2020-01-07--‘We Would Not Be Sellers’: Most Wall Street Analysts Advise Against Bailing on Stocks Despite Iran T

‘We Would Not Be Sellers’: Most Wall Street Analysts Advise Against Bailing on Stocks Despite Iran Tensions

If there’s one thing the markets hate, the old adage goes, it’s uncertainty—and investors globally are now facing a fair share in the wake of Friday’s news that a U.S. airstrike in Baghdad had killed Iran’s top general, Qassem Soleimani.
Soleimani’s death has escalated tensions in the Middle East and raised fears of a potential conflict between the U.S. and Iran. While the markets around the world responded in kind last week—all three U.S. indices were jolted into losses on Friday—things have since calmed somewhat, with the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all registering slight gains by the close of trading Monday.
Yet crude oil prices briefly surpassed $70 a barrel, indicating anxieties about oil production in the Middle East. Meanwhile, gold prices have rallied to a seven-year high and Treasury yields have slipped since the start of the year—signaling that investors continue to be cautious in the wake of a geopolitical event that could have far-reaching ramifications. (It is also proving an early test for Saudi Aramco, which has seen its shares slide to their lowest levels since debuting on the domestic Tadawul exchange last month.)
Still, some analysts are already taking a longer view in dispelling concerns that rising tensions between the U.S. and Iran could stifle what have been robust conditions for markets around the globe.
“Geopolitical events by their nature are unpredictable, but previous periods of increased tensions suggest that the impact on wider markets tends to be short-lived,” Mark Haefele, CIO at UBS Global Wealth Management, said in a note Monday.
UBS noted that commodities investors should not expect “a sustained oil price rally” given adequate spare capacity and expectations of “an oversupplied oil market in 2020,” adding that it’s unlikely crude prices sustain levels above $70 a barrel. But the investment bank also described gold as “a good hedge against political uncertainty,” forecasting that a weaker dollar could also support higher gold prices this year.
John Lynch, chief investment strategist at LPL Financial, echoed a similar sentiment as far as equities are concerned—noting that “history shows that stocks have largely shrugged off past geopolitical conflicts.”
He cited LPL research that found that the Dow Jones Industrial Average fell an average of only 2% during 16 “major geopolitical events” dating back to 1990, including the Gulf War, the September 11 attacks and the U.S. invasion of Iraq. Meanwhile, in the wake of each event, the Dow averaged gains of 5% and 7.9% over the subsequent three and six months, respectively.
“As serious as this escalation is, previous experiences have indicated it may be unlikely to have a material impact on U.S. economic fundamentals or corporate profits,” Lynch said. “We would not be sellers of stocks into weakness related to this event, given stocks have weathered heightened geopolitical tensions in the past.”
So while headline risks abound, some analysts believe it will take more than the current geopolitical uncertainty to knock the world’s markets off-course.
More must-read stories from Fortune:
—That great 2019 S&P rally? It has big warning signs for 2020
—The relationship between geopolitical crises and market outcomes isn’t simple
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—5 CEO exits that sum up the memorable business year that was 2019
—What a $1,000 investment in 10 top stocks a decade ago would be worth today
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fortune--2020-01-06--American Settles With Boeing for Massive Income Hit From the 737 Max Grounding

American Airlines Group has reached a settlement with Boeing over last year’s financial blow from the 737 Max grounding, and the carrier said it would share about $30 million of the proceeds with employees.
The companies are still in talks over compensation for damages beyond 2019, American said in a statement Monday. The Max’s absence since March shaved at least $540 million from American’s 2019 pretax income, the airline has said, and the benefits from the confidential settlement with Boeing will be received over several years.
American is the second U.S. carrier after Southwest Airlines to negotiate 2019 compensation with Boeing. The deal won’t have a material affect on American’s results for the fourth quarter of last year, and the company expects “substantially all” of the settlement to be in the form of reduced aircraft costs for grounded planes and future deliveries. Employees will receive their payment through the airline’s profit-sharing program in March.
“Our ability as an airline to weather these unprecedented times is thanks to our phenomenal team, and it was important to us that we get a deal done before the end of the year” American Chief Executive Officer Doug Parker said.
The Fort Worth, Texas-based airline has pulled the Max from its flight schedules through April 6 as aviation regulators continue to oversee safety changes to the aircraft. Southwest has taken the plane out of schedules through April 13, while United Airlines Holdings has removed it until early June.
U.S. regulators issued the flying ban for the Max on March 13 after crashes at two airlines within five months killed 346 people. Boeing said in July it had taken a $5.6 billion pretax charge to cover potential costs incurred by airline customers due to the grounding.
Earlier on Monday, Grupo Aeromexico SAB announced its own compensation agreement with Boeing.
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fortune--2020-01-06--U.S. Sends More Forces to Mideast While Esper Denies Iraq Exit

The U.S. ordered additional forces to the Middle East as tensions with Iran continue to climb and Defense Secretary Mark Esper said the U.S. hasn’t decided whether to leave Iraq.
The three-ship Bataan Amphibious Readiness Group has been ordered to move to the Persian Gulf region from the Mediterranean, where it has been exercising, according to a U.S. official. The group is composed of the amphibious assault ship USS Bataan, transport dock ship USS New York and dock/landing ship USS Oak Hill, and includes about 2,200 Marines and a helicopter unit.
The move followed reports of a letter purportedly telling military officials in Baghdad that American forces were repositioning in advance of a departure. Army General Mark Milley, chairman of the Joint Chiefs of Staff, told reporters Monday that the letter was a draft and should never have been sent.
“There is no decision to leave, nor did we issue any plans to leave or prepare to leave,” Esper said.
The Pentagon chief told reporters Monday that he believes the Iraqi people and lawmakers want the U.S. to maintain a presence in the country, 17 years after it invaded to oust Saddam Hussein.
The comments came a day after Iraq’s parliament, in a non-binding vote, called on U.S. troops to withdraw.
Esper also said any U.S. strike on Iran wouldn’t target cultural sites. That appeared to contradict comments from President Donald Trump over the weekend, when he said on Twitter that he had included Iranian cultural sites on his list of 52 targets for attack should Tehran retaliate against the U.S.’s assassination of Iran’s top military commander, Qassem Soleimani.
The defense secretary also said the U.S. remains committed to the campaign to defeat Islamic State. Over the weekend, the U.S.-led coalition against ISIS said it would suspend operations in Iraq to focus on protecting bases that have come under attack.
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—Donald Trump and the power of incumbency
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—USPS could privatize as early as next year
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fortune--2020-01-06--Why Tensions With Iran Pose an ‘Asymmetric Risk’ to the Stock Market

When economists started drafting their 2020 outlooks a few weeks ago they had penciled in, as they do every year, the likely risks to the markets and the global economy. A meaningful trade deal between the U.S. and China not materializing was high on the list. Ballooning corporate debt was there too, as were China’s failure to right its economy and further delays to Brexit.
Conversely, the impeachment (let alone the removal from office) of President Trump was seen as a mere trifle for most 2020 forecasts. As for an airstrike taking out Iran’s top military commander, plunging the two arch-enemies into a precarious game of brinksmanship? Not even the most pessimistic prognosticator could see that one coming.
And yet here we are, not yet a week into the new year, and the global markets are facing a test unlike any they saw in 2019.
The markets were impressively resilient throughout the past year, most notably shrugging off the impeachment of a U.S. president for only the third time in the nation’s history.
Rising geopolitical tensions between the U.S. and Iran isn’t likely to be the same kind of ho-hum affair.
“With the impeachment proceedings, it was by and large mostly taken for granted that the president would be impeached and not be convicted, not be removed from office,” says Dennis Shen, a director in sovereign ratings for Berlin-based Scope Ratings, a credit ratings agency. “With Iran, there’s a much higher asymmetric, or tail, risk.”
Iran and the risk to the stock market
Marketplace observers, like military planners, hate the “negative asymmetric risks,” those in which the potential downside far outweighs the desired upside. An economist, analyst or portfolio manager is paid to think through all kinds of risk scenarios to assess potential return, or, like Scope, credit worthiness. For them, an impeachment scenario is fairly straightforward. War is not.
This lack of clarity has played out at points in the markets over the past few days.
Since President Trump ordered the airstrike last week that took out Iranian General Qassem Soleimani global markets have, predictably, sold off—moderately at first, and then, more worryingly, at an increasing rate.
And while U.S. markets recovered broadly in afternoon trade on Monday, many of the usual indicators of rising market volatility (gold rallying to a six-year high and crude spiking) plus some new ones (the price of bitcoin soaring) are there. Together, they reveal that investors are undoubtedly unnerved by the Soleimani slaying and the events that’ve followed. Namely, that would include Iran’s official pullout of the nuclear deal, Iraq’s vote to expel U.S. troops, and the escalating war of words from Trump and the Ayatollah Ali Khamenei.
On the geopolitical front, nobody is sure what will happen next. Possibilities include a tit-for-tat cyber war. Or, maybe it’s a military skirmish fought by proxy militaries. Maybe there’s a disruption to oil supplies. Maybe crude spikes to $75, then $80, or even $90 or above. Then again, maybe not.
For markets, the what-ifs are nearly as bad as the real thing, particularly in the short term as we’re seeing. And, just a few days into the ordeal, the uncertainty is sky high.
On cue, the Vix, or so-called Volatility Index, spiked nearly 10% Monday morning as the markets opened in the U.S. with every major index in the red. Zoom back, and the Vix is not nearly at the worrying heights it reached during the worst of the Great Recession, a decade ago. But it’s clear: the markets are no longer on cruise control—no longer where they were just four days ago.
Some of the sell-off and ramp-up in volalitity is to be expected. “Markets at the moment are of course highly vulnerable because markets had such a good run last year, that anything unexpected is a major market event,” said Holger Schmieding, chief economist at Berenberg. “Sentiment-wise, we are looking for reasons to end the euphoria of last year. The question for me as an economist is that really something that adds up to a major threat to the global economy? And I think it does not.”
Schmieding says the latest tensions in the Middle East, no matter how bad they seem at the moment, are not enough to get him to rewrite his 2020 economic outlook. He still predicts U.S. economic growth at 2.1%, down from 2.3% in 2019.
But being an economist, he’s on the look out for worrying data points. Chief among them would be a big spike in the price of crude for an extended period—say, $90 a barrel for three months or more (Brent is hovering around $70 at the moment)—something that would hit consumers at the pump, goose inflation and sink consumer optimism.
At the moment, that scenario doesn’t seem likely. But still it’s the kind of turn of events—”asymmetric” in other words—that could doom an incumbent president in an election year.
“Higher petrol prices, and an economy that takes a hit from that is not the backdrop you’d want to have this autumn,” Schmieding says.
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—2020 Crystal Ball: Predictions for the economy, politics, technology, etc.
—Why you actually may want to buy “bears” in a bull market
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—What $1,000 in 10 top stocks a decade ago would be worth today
—Apple’s stock soared 89% in 2019, highlighting the company’s resilience
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fortune--2020-01-06--Could Disney Have More Faith In X-Men Spinoff ‘The New Mutants’ Than Fox Did?

It’s been half a decade since The New Mutants first began taking shape at Fox, and the troubled X-Men spinoff finally appears to be headed to theaters—for real this time.
In a new trailer released Monday morning, writer-director Josh Boone’s long-delayed superhero pic appears much the same film it was when Fox first started marketing it nearly two-and-a-half years ago. Even more surprisingly, the film—about five young mutants held prisoner in a secret facility—has a release date of April 3, just three months away.
That The New Mutants is hitting theaters at all, let alone so soon, constitutes a radical shift in fortune for Boone’s film, which has spent the past few years trapped on a hard drive at Fox headquarters. The New Mutants first entered development in 2015, with Boone attached to write and direct a darker, young adult-centered X-Men movie with a distinct tone and vision outside of the franchise’s core films. The Breakfast Club, A Nightmare on Elm Street 3: Dream Warriors, and One Flew Over the Cuckoo’s Nest were all thrown out as creative influences.
Fox, at the time, was hot on Deadpool, its R-rated superhero hit. After years in development, that film had become a smash hit, making $782 million worldwide against a svelte $58 million budget to become both the highest-grossing X-Men film and R-rated film (until it was surpassed by its sequel, then last year’s Joker).
Cameras first rolled in 2016, with production finishing up the next year; plans to release the film in April 2018 were scuttled in favor of opening another Fox superhero title, Deadpool 2, but reports eventually got out that Fox was unhappy with Boone’s cut of the film. Though there wasn’t necessarily “bad blood” between Boone and executives, as some fan sites speculated, the release of It in September had reportedly led executives to ask for a different, scarier version of the film than they’d originally reached a deal with Boone to make—without crossing into R-rated territory.
Further delays, cast member shifts, and extensive reshoots—reportedly aimed at making The New Mutants scarier—set the film back even further until it was eventually undated from Fox’s slate to avoid conflicting with Dark Phoenix, the “core” franchise’s next step after 2016’s X-Men: Apocalypse.
Then came Disney’s acquisition of 20th Century Fox. Well after Boone had wrapped production on The New Mutants, the ground didn’t just start shaking beneath his feet: it fell out entirely.
Remember, the first trailer for The New Mutants dropped back in October 2017, promising a darker X-Men spinoff with young stars like Anya Taylor-Joy (then hot off her breakout role in Robert Eggers‘s 2016 folk tale The Witch), Maisie Williams (riding the wave of HBO’s Game of Thrones, which had just concluded its penultimate season), and Charlie Heaton (of Netflix’s Stranger Things, still climbing in popularity between seasons 1 and 2). The film would be edgy, scary, and teen-targeted—the first X-Men horror movie.
But as Disney picked up the keys to the Fox catalog, that framing for The New Mutants began to feel increasingly out of step with the new owner’s family-friendly modus operandi. And when Dark Phoenix emerged as a significant bomb last summer, forcing Disney to take an expensive write-down on what was meant to be one of Fox’s most bankable assets, many speculated that Disney would simply torch the X-Men to the ground and rebuild. (That Disney had hobbled the film by firing its marketing team months before led some to speculate that its executives had wanted this outcome all along, given that Dark Phoenix aimed to set up future X-Men films Disney had no intention of making.)
Kevin Feige, architect to the Marvel Cinematic Universe, expressed interest in developing X-Men films, which has felt, subsequently, like something of a double-edged sword. The tones of Fox’s X-Men films were grittier and somewhat stranger—and in Deadpool‘s case, raunchier—than those of many a film under the Marvel umbrella. While Deadpool could run independently on Ryan Reynolds power, and was already a proven box-office hit, the same couldn’t be said for other X-Men entries. And with Hugh Jackman done playing Wolverine after 2017’s Logan, and the other actors not far behind, how was Marvel to exactly introduce Fox’s mutants to its Avengers? Dark Phoenix and the undated New Mutants began to feel increasingly like vestiges of a fallen empire.
But Disney is proceeding with a release of The New Mutants, sending it into theaters even as the rest of the X-Men franchise bears uncharted territory, with it additionally unclear whether any of the Fox-era X-Men producers—including Dark Phoenix director Simon Kinberg, Lauren Shuler-Donner, and Hutch Parker—will collaborate with Feige on any future films.
The movie Boone may be able to thank most for The New Mutants seeing the light of day is, ironically enough, Joker, from Warner Bros. and DC Comics—Disney’s biggest competitor in the superhero space.
When WB gave writer-director Todd Phillips the go-ahead to pursue an edgy, provocative reimagining of that Batman arch-villain in a Scorsese-lite ’81 New York sandbox, it was a gambit even executives at that studio didn’t fully believe in. Phillips was handed a small $62.5 million budget, the lowest-ever for a modern-era WB superhero pic, with some execs reportedly hoping the modest figure would deter Phillips from making it.
But, far from a black sheep, the film has emerged as a smashing success for WB, grossing over $1 billion after earning rave (though polarized) reviews at the Venice Film Festival, and launching lead actor Joaquin Phoenix into the awards race. (He won a Golden Globe just last night, with the Oscars still ahead.)
Audiences were drawn in by Joker‘s darker tone and focus on psychological horror delivered by a prestige actor. In nearly every respect, the film was a far cry from the VFX-overrun crowdpleasers DC had previously delivered to mixed results, among them the hit Aquaman and bomb Justice League. And its success has led DC to reevaluate its plans for the future of its superhero universe, opening the door to other darker and more experimental movies.
Almost accidentally, Joker is also a vindication of Warner Bros., a proof that its past decade spent developing DC Comics titles has led to more than them merely existing as an also-ran beside the Marvel-Disney industrial complex. Joker is, beyond all shadow of a doubt, a movie that Disney would not make; and because of that, it holds tremendous value to a studio fighting to hold its space amid the shrinking real estate of theater screens not occupied by Disney.
Into that same kind of equation fits The New Mutants, a product of Fox’s post-Deadpool interest in stretching out superhero cinema’s genre potential, taking costumed heroes to a place Disney would be unlikely to follow. Now, of course, it exists as the last breath of a studio swallowed up by Disney, the unintended ellipsis at the end of a sentence Dark Phoenix‘s atrocious box-office performance last year would seem to have already punctuated.
That it will finally see its day in theaters, with a plum April release date, suggests that Disney has, if not perhaps faith, at least curiosity in seeing what audiences will make of a darker, edgier X-Men film. Having watched Joker rack up accolades and over a billion worldwide, Disney is now in an unexpectedly enviable position with The New Mutants, a film accidentally tailor-made to respond to Joker and open a comparably darker doorway for Disney and Fox (whether they plan to walk through it).
The question, really, is what Disney has to lose from releasing The New Mutants. The answer? Not much. The film’s seemingly complete, and it surely cost Fox less than half of Dark Phoenix (ballparked at $200 million), even with reshoots. If it’s a modest success, the door could swing open for future films in its mold, made small and cheap then snuck onto the release calendar around bigger Marvel Cinematic Universe tentpoles—or, barring that, onto Disney+, where part of Marvel’s Phase Four strategy will play out. And even if it disappoints at the box office, there’s no way anyone’s losing $100 million—Dark Phoenix numbers—on this one.
Besides, Disney likely isn’t too worried about having a bad day at the box office that month. It will open its heavily marketed live-action Mulan remake just one week prior, setting The New Mutants up for a second-place finish at best (third if kiddie flick Peter Rabbit 2: The Runaway has legs). The film’s main purpose in that slot appears to be giving Disney something in theaters to counter-program James Bond vehicle No Time to Die (out April 10) and the animated Trolls World Tour (April 17), both from Universal, ahead of Disney’s Marvel entry Black Widow opening early in May.
But intriguingly, the worst-case scenario—that Feige, as new acting overlord of the X-Men empire, would bury the film entirely—appears to have been averted. The X-Men franchise, in the unlikely form of one of its quirkiest genre experiments, will live to fight another day, at least one last time.
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—What the 2020 Golden Globes tells us about this year’s Oscars
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—Aldis Hodge on going to “that dark place” for death row drama Clemency
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-01-06--Our 5th Annual Brainstorm Health Conference

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Good afternoon, Brainstorm Health Daily readers. I’ve grabbed the reins back from Sy today to share some exciting news about our upcoming FORTUNE BRAINSTORM HEALTH conference on April 21-22. As faithful readers of this newsletter know, we focus on the increasingly busy intersection between human health, medicine, business, and technology—spotlighting the entrepreneurs, thinkers, leaders, and investors who are building the brave new world of digital health.
And once a year, we gather the best and brightest of these folks for two days of candid conversation, intimate idea exchange, and inspiration. This year—for our FIFTH ANNUAL BRAINSTORM HEALTH CONFERENCE, at the Ritz-Carlton in Marina Del Rey, California—we may well have our most extraordinary lineup of speakers yet.
The theme for this year’s event is a straightforward one: Investing in Transformation. What are the most promising technologies, scientific advances, and business models to invest in, and what are the best ways to place our bets? How do we invest wisely in biology’s last frontier—the brain—so that we can at last make progress against Alzheimer’s and other neurological diseases, and better understand depression, anxiety, and consciousness itself? How do we invest smartly in human capital, in wellbeing in the workplace, in technologies from AI to blockchain and beyond? Where should we put our money to ensure that we’re building the health infrastructure we truly need in the coming decades, from reimagined hospitals to effective and affordable telemedicine? How should we invest in the unknown, so that the next generation of advances will be even more powerful than the last?
To help us explore all of these knowns and unknowns, we’ll be joined by a bevy of influential corporate chieftains (including the CEOs of Amgen, Ancestry, AT&T Business, Baxter International, Beyond Meat, Box, Cisco, GE Healthcare, Levi-Strauss, and many others); by the leaders of Google Health, the American Heart Association, the National Institute of Mental Health, Stanford University School of Medicine, and Verily; by brilliant physician-communicators and researchers like CNN Chief Medical Correspondent Dr. Sanjay Gupta, Stanford University’s Dr. Lloyd Minor and B.J. Fogg, Santa Fe Institute’s David Krakauer, MIT economist Dr. Andrew Lo, Harvard’s Dr. John Quackenbush, Caltech physicist Dr. Maria Spiropulu; by top investors like Sue Siegel, by sports leaders like NBA Commissioner Adam Silver; by serial entrepreneur and philanthropist Sean Parker—and that’s just a start. We’ll also, as with every year, have plenty of surprises in store.
Leading these brilliant women and men in conversation, of course, will be my two incredible BRAINSTORM HEALTH co-chairs Arianna Huffington, Founder and CEO, Thrive Global and Dr. David B. Agus, professor of medicine and engineering, and founding director and CEO of USC’s Lawrence J. Ellison Institute, Transformative Medicine. Naturally, this newsletter’s dutiful shepherd, Sy Mukherjee, and a slew of other FORTUNE editors will be there as well to moderate the discussions.
Which brings me to YOU—our longstanding community of BRAINSTORM HEALTH DAILY READERS.
By necessity, we keep these events cozy—but every year we open the conference up to a limited number of delegates from this newsletter’s loyal reader family. And we want you there this year to celebrate our fifth anniversary with us, on April 21-22 in Marina Del Rey. We want YOU there to offer ideas, to network, and to help shape the conversation about where the best investments for 21st century health might be.
To apply, please click here and click on the “Registration” tab on the left. Happy New Year.
Clifton Leaf, Editor in Chief, FORTUNE
clifton.leaf@fortune.com
@CliftonLeaf
DIGITAL HEALTH
Withings is still around, and announcing a new ECG watch. French digital health firm Withings is unveiling another smartwatch offering, this time including an electrocardiogram sensor (as is in vogue among wearable companies these days, most prominently the Apple Watch). The ECG feature is currently being reviewed by the Food and Drug Administration, according to MobiHealthNews. (MobiHealthNews)
INDICATIONS
Pharma starts the new year with price hikes. A new year, new drug price hikes. Major pharmaceutical companies including AbbVie, Pfizer, and others have raised the list prices of major medications in the first week of 2020. These price increases are a common trend among biopharma companies at the beginning of the year, when they set the floor for higher prices for their existing products. (CBS News)
THE BIG PICTURE
Repeal of Obamacare's individual mandate hasn't destabilized the market. A new report from the Kaiser Family Foundation finds that the repeal of Obamacare's individual mandate to purchase insurance (instituted under the 2017 tax law) hasn't done much to destabilize the market. In fact, the effects are relatively negligible (enrollment has only declined about 5%)—which may have implications for the ongoing lawsuit seeking to invalidate the entirety of the health law following the individual mandate's repeal. "Severability is the key word going forward." (KFF)
REQUIRED READING
Just How Safe Are Direct Listings, Really? by Polina Marinova
The 4 Main Reasons People Change Careers, by Anne Fisher
3 Guiding Principles for the Next Decade, by Alan Murray
These Books Will Help You Understand the Relationship Between Human and Machine, by Clay Chandler
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fortune--2020-01-06--The Harvey Weinstein Trial Begins Today

The Harvey Weinstein Trial Begins Today

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
Happy New Year! We’re facing potential war, a climate emergency, and the first trial of the decade. So, let’s dig in.
I prepared for the Harvey Weinstein criminal trial, which starts today, by doing a good, old-fashioned journalistic deep dive. There’s a lot to process: He stands accused of raping one woman in a Manhattan hotel room in 2013 and performing a forcible sex act on another woman in 2006, charges that could lead to serious prison time. By lunchtime on the East Coast, prosecutors in Los Angeles had charged him with rape and other crimes against two additional women, and more charges are likely, as his record of misdeeds is staggering. The Cut has compiled a list of 100 allegations of harassment or assault during the mogul’s lengthy tenure. He has denied all criminal wrongdoing.
I started with Ronan Farrow’s Catch and Kill, a book based on his reporting for The New Yorker, and Jodi Kantor and Megan Twohey’s She Said, based on their reporting for the New York Times. I know these are books about the reporting process, but they are not inside baseball. They are about how power—and specifically power in media—works, and they are chilling, necessary reads.
I also went to the theater to watch Bombshell, a film about the downfall of Fox News honcho Roger Ailes, led by Gretchen Carlson. I even subscribed to Apple TV+ specifically to watch The Morning Show. The series, whose executive producers included Reese Witherspoon and Jennifer Aniston, brilliantly depicts the complex way powerful men are allowed to roam free as affable predators, aided and abetted by others.
The combination of all of this left me shaken, gutted, and profoundly c ertain: The system is badly broken, and by design.
When I talk about my own experiences, I typically mention just one because it has such a tragic-comic ending. I was assaulted by my boss, the CEO of an international organization, in the back of a taxi after a work event. He was the second to last to be dropped and became enraged when I wouldn’t go up to his apartment. I don’t know how long it took me to get him out of the cab, but the cabbie left the meter on. The next day, I went to the office, and here’s the fun part: I expensed my own assault and… just went back to work.
Hey, I needed that job. I knew who his friends were. I knew his influence and understood the threat. I knew how the world worked, even if I didn’t know it.
Research shows that nearly 40% of women and 14% of men have said they’ve experienced sexual harassment at work, yet the vast majority will never file either a legal or internal complaint. Women in the military. Women in the hospitality or retail industries. Women in manufacturing. Hell, former CBS chief Les Moonves even assaulted his own doctor.
As we head back to work today, it’s a safe assumption that we all will be side by side (or Slack by Skype by Hangout) with someone who has been harassed or assaulted in the workplace at some point, and probably didn’t find any sort of relief or safe haven. My guess is that the Weinstein trial will be an uncomfortable reminder of how the world has always worked.
By design.
So, this is an excellent time for companies to take a culture gut-check, and make sure they’re clear on issues of harassment, equity, and workplace respect.
It’s important for leadership to be present if employees are upset; thoughtfully designed surveys can help you dig beneath the surface. (We’ve covered these topics in the past.) Make sure everyone knows about safety- spe cific resources like reporting hotlines or counseling services, and that there are no repercussions for using them. (Ask your ERGs and unions for help reaching their constituents.)
Make sure frontline leaders know when, how, and if to check-in with anyone who may be struggling with the news or having trouble in their interactions at work. (If their upper-level supervisors don’t know how to advise them, it’s a leadership blind spot.)
And, in particular, make sure male leaders have the support they need to understand what constitutes good boundaries—and don’t allow them to stop coaching, including, or developing women on their teams. Professional dinners are fine. Hiding behind trumped – up fears of hysterical backlash is not. Hold everyone accountable, publicly.
In a beautifully timed move, Time’s Up has published an entertainment-industry guide that explains respectful best practices during auditions and intimate scenes, and how to report bad behavior.
“The entertainment industry is not a typical workplace, so figuring out your rights and options around workplace harassment, discrimination and misconduct can be confusing,” said actor and activist Alyssa Milano in a statement.
But few industries are typical anymore.
Do the women who work in your corporate catering facilities know their rights? In your manufacturing plants? In your emergency rooms? In your design and research groups? In your high potential pools? In your podcast and video sessions? At corporate conferences? Among your academic advisees? Are they safe? Would they tell you? Are you sure?
These are the actual stakes in the Weinstein trial. It’s not about Harvey Weinstein or Matt Lauer or Les Moonves or Roger Ailes or what their accusers did, thought, or wore, but about the society that continues to make harassment acceptable by protecting and overvaluing the men who do bad things. A society who would elect a person with credible accusations of misogyny, racism, and sexual assault—who bragged about inappropriate behavior on tape—to the highest office in the land with barely a shrug.
I recommend that senior leaders take the worst-case scenario approach and assume that the women walking or dialing into work today aren’t sure of their rights, or that they’re safe, or that you care. Extend that all the way to its painful conclusion that they believe you know how the world has always worked, even if you don’t know it. I think it’s now safe to assume that they don’t trust you.
So, what are you going to do to earn their trust?*
(*Feel free to forward this to your CEO.)
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On Point
Iranians are being stopped at the U.S. Border In the aftermath of President Trump’s order of an air strike killing Qassem Soleimani, one of Iran’s most powerful generals, Iranian-American travelers are being detained at the U.S. border, reports Politico. “We are working to verify reports of a broad nationwide directive to detain Iranian-Americans at ports of entry so that we can provide community members with accurate travel guidance,” said the executive director of the Washington chapter of the Council on American-Islamic Relations in a statement. CAIR says more than 60 people of Iranian descent, including U.S. citizens had been detained and questioned.
Politico
The mixed bag of the Golden Globes The awards ceremony offered something for everyone to like or hate, Ricky Gervais was brutal (and called The Hollywood Foreign Press “racist”), female directors were largely snubbed, Fleabag fans were thrilled, as were fans of Succession, 1917, and Parasite. (Old-fashioned films also saw a resurgence, a nailbiter for Netflix, says Fortune’s Stacy Wilson Hunt.) Both Ellen DeGeneres, who won the Carol Burnett Award, and Kate McKinnon, who introduced her, were resplendent in their remarks.Best Actress in a Limited Series winner Michelle Williams made an eloquent case for reproductive health and abortion rights in hers. She’d tried her best to live a life of her own making, she said, “And I wouldn't have been able to do this without employing a woman's right to choose, to choose when to have my children and with whom.”
Mashable
The first municipality in Japan adopts a rule protecting LGBTQ rights to self-expression It’s a big victory for inclusion advocates in Japan; Minato Ward in Tokyo is said to be set to revise its gender equality legislation to be even more accommodating. “The ward’s plan would mean changing, among other regulations, school uniform rules that require boys to wear pants and girls skirts so that students can choose the type of clothing they wear,” reports Japan Times. The ordinance change also protects the use of makeup, street clothes, and work uniforms by any gender. Experts expect the change will eventually include a mechanism to recognize LGBTQ couples with the same status as married heterosexual couples, mirroring changes made by other municipalities.
Japan Times
Terry Gilliam is exhausted, y’all The film director and former Monty Python member was surprised to learn that his particular brand of irreverent humor is now missing the mark. In an interview with The Independent, the self-branded “offensive” man delivered on his promise by throwing a bunch of rhetorical grenades. “There’s no room for modern masculinity, I’m told,” says Gilliam. “‘The male gaze is over,’” he said, with air quotes. On the age of Weinstein, “Yeah, I said #MeToo is a witch hunt,” he says. “I don’t understand why people behave as if this hasn’t been going on as long as there’ve been powerful people. I understand that men have had more power longer, but I’m tired, as a white male, of being blamed for everything that is wrong with the world.” He also says he doesn’t understand why people get mad when he identifies as a Black lesbian in transition.
The Independent
On Background
Uh oh, Uber academic research may be biased The ride-sharing company has been cooperating with academic researchers since 2015, and has contributed economic data to at least 10 major university papers. But the company is now facing allegations that “selective data sharing” and “conflicts of interest” could be skewing research outcomes to indicate the company’s business model is more sound that it really is. It’s just hard to know. In a recent critique, Hubert Horan, an independent transportation economist, says that the papers are based on inaccessible “proprietary data” and perform “non-replicable analysis.” Another says that Uber only shares data with researchers they believe are “congenial” to their business.
Times Higher Education
The impact of ignoring Black people in the opioid epidemic Opioid-related overdoses increased more rapidly in white populations than Black ones in the U.S. in the early days of the epidemic, making it appear to be a white-centric phenomenon. After researchers suspected that doctors were simply less likely to subscribe pain meds to Black patients in a persistently wrong-headed belief that they feel less pain, an idea that the bias was a good thing took hold. "Any notion that the failure to treat black patients’ pain has protected them from opioid misuse has dangerous implications for the growing number of black Americans who do struggle with opioid use disorder,” says Dr. Utsha Khatri, Shoshana Aronowitz a doctorally trained nurse, and Eugenia South, an assistant professor of emergency medicine in this opinion piece. Opioid use disorder is rising among Black populations—and bias will doom them to worse outcomes.
The Philadelphia Inquirer
Kids in the U.S. are 70% more likely to die before adulthood than kids in other wealthy countries The research, published in the journal Health Affairs, finds that the U.S. lags behind other wealthy, democratic countries on a variety of factors, leading to increasingly poor outcomes for kids. “In all the wealthy, democratic countries we studied, children are dying less often than they were 50 years ago,” said the study’s lead author. “But we found that children are dying more often in the United States than in any similar country.” Since 1961, that accounts to roughly 600,000 deaths that wouldn’t have occurred if the children had been born and raised elsewhere.
Vox
Quote
“The past two years have been grueling and have presented me with a great opportunity for self-reflection. I realize now that I was consumed with my work, my company and my drive for success. This caused me to neglect my family, my relationships and to lash out at the people around me. I have been in rehab since October 2017, and have been involved in a 12-step program and meditation. I have learned to give up my need for control.”
—Harvey Weinstein


fortune--2020-01-06--Harvey Weinstein Indicted on New Sex Crimes Charges in Los Angeles

Harvey Weinstein has been indicted on new sex crime charges in Los Angeles, just as his trial on separate rape and sexual assault charges in New York was poised to get underway, prosecutors announced Monday.
The Hollywood mogul has been charged with raping one woman and sexually assaulting another in separate incidents over a two-day period in 2013, Los Angeles County District Attorney Jackie Lacey said in a news release.
“We believe the evidence will show that the defendant used his power and influence to gain access to his victims and then commit violent crimes against them,” Lacey said in a statement. “I want to commend the victims who have come forward and bravely recounted what happened to them. It is my hope that all victims of sexual violence find strength and healing as they move forward.”
Weinstein allegedly raped a woman in a hotel room on Feb. 18, 2013, after he pushed his way inside her room, prosecutors said. The next night, he allegedly sexually assaulted a woman in a Beverly Hills hotel suite. That woman is expected to testify at Weinstein’s trial in New York.
Weinstein faces up to 28 years in state prison if he is convicted of forcible rape, forcible oral copulation, sexual penetration by use of force and sexual battery by restraint. His arraignment has not yet been scheduled and prosecutors will recommend $5 million bail.
The Manhattan district attorney’s office declined to comment on the new charges.
The news came the same day that Weinstein and several of the women who have accused him of sexual misconduct converged Monday at the New York City courthouse where a judge and his lawyers handled the final preparations for his high-stakes trial on charges of rape and assault.
Speaking at the New York courthouse Monday prior to the announcement, Weinstein’s attorneys suggested they knew charges might be coming. They asked the judge for potential jurors to be sequestered partly because of the possibility that charges could be brought elsewhere against Weinstein while the trial was ongoing. The denied that request.
“There is a potential L.A. situation going on,” his lawyer, Donna Rotunno, told reporters after the hearing.
“We don’t know what is going to happen. We’re hoping not,” added another of his lawyers, Damon Cheronis. “We have no control over what happens in Los Angeles or anywhere else.”
Earlier Monday, Weinstein, 67, entered the courthouse in New York leaning on a walker following a recent back surgery. When asked outside the courtroom how his back felt, Weinstein responded with a thin smile and a so-so gesture with his hand.
“Not so good,” he said. “Better.”
Inside, his lawyers and prosecutors spent the morning sparring about procedural matters, including how to keep publicity surrounding the trial from influencing the jury’s thinking.
In a brief hearing, the judge declined to gag Weinstein’s attorneys from speaking to the media — in addition to denying the motion to sequester jurors. The judge also turned down a defense request to call as a witness a police detective who had been accused of mishandling part of the case.
Across the street, actresses and other women who say they were sexually harassed or assaulted by Weinstein dismissed him as a villain undeserving of anyone’s pity.
“He looked cowardly. He wouldn’t look at us. He wouldn’t make eye contact,” said Sarah Ann Masse, a performer and writer who said Weinstein once sexually harassed her in his underwear during a job interview. “This trial is a cultural reckoning regardless of its legal outcome,” she said.
Jury selection in the trial will start Tuesday, more than two years since the allegations first came to widespread public attention and catalyzed the #MeToo movement.
Weinstein’s lead lawyer, Donna Rotunno, said she was hopeful a fair jury could be found that wouldn’t pre-judge the case.
“In this great country, you are innocent until proven guilty,” she told reporters outside the courthouse.
Weinstein faces allegations that he raped one woman in a Manhattan hotel room in 2013 and performed a forcible sex act on a woman, Mimi Haleyi, who had come to him seeking film work in 2006.
He has pleaded not guilty and says any sexual activity was consensual. If he’s convicted of the most serious charges against him, two counts of predatory sexual assault, Weinstein faces a mandatory life sentence.
For that to happen, prosecutors must demonstrate Weinstein had a habit of violating women, beyond the two directly involved in the encounters in which he’s charged. To that end, they plan to call actress Annabella Sciorra, who says Weinstein forced himself inside her Manhattan apartment in 1993 or 1994 and raped her after she starred in a film for his movie studio.
They also wanted jurors to hear from a few of the more than 75 women who have come forward publicly to accuse Weinstein of sexual misconduct ranging from harassment to assault. The first allegations were brought to light by The New York Times and The New Yorker in October 2017.
Prosecutors got permission from the court to try to buttress their case with four other witnesses: Sciorra and three other accusers who haven’t been named.
One of those women said she had an encounter with Weinstein at a Manhattan hotel in 2004. A second was to testify about an interaction with Weinstein at a SoHo apartment in 2005. A third was described in court papers as having had an incident with Weinstein at a hotel in Beverly Hills, California, in February 2013.
Speaking outside the courthouse as proceedings began, a group of Weinstein’s accusers spoke with reporters, including Masse, the actresses Rosanna Arquette, Dominique Huett and Rose McGowan, model Paula Williams, Louise Godbold and the actress and journalist Lauren Sivan.
McGowan thanked the women who will testify during the trial as alleged victims for representing many more women who may never get their day in court.
“They are standing for us, and I am immensely proud of them,” she said. “We didn’t have our day. But hopefully they will. Their victory will be our victory. Their loss will be our loss.”
Rotunno has argued the case is weak and said she plans to aggressively cross-examine the accusers.
In court on Monday, prosecutor Joan Illuzzi immediately set a combative tone by referring to Weinstein as a “predator,” drawing an objection from the defense table.
The lawyers also clashed after prosecutors asked the judge to bar all attorneys in the trial from speaking about the evidence outside court. Illuzzi accused Rotunno of “degrading and humiliating and putting down our witnesses” in statements to the press leading up to the trial.
“I have not degraded anyone,” Rotunno responded.
Judge James Burke refused to issue a gag order, but told both sides: “Leave the witnesses alone, OK? Don’t talk about them in any way.”
The judge also barred the defense from calling detective Nicholas DiGaudio as a witness. DiGaudio was removed the investigation amid allegations he had withheld evidence that could have helped defend Weinstein.
Illuzzi revealed that prosecutors hope to use seven photographs from a trove of more than 70 images collected as evidence against the defendant. It was unclear what the photos show, but the prosecutor said: “We do think they’re very important for the jury to see.”
Jury selection could could take two weeks or more, in part because of immense media attention on the case could mean some potential jurors already have their minds made up. Weinstein’s lawyers tried to get the trial moved out of Manhattan, but a court rejected that.
More must-read stories from Fortune:
—What the 2020 Golden Globes tells us about this year’s Oscars
—Nicolas Pesce on his R-rated Grudge reboot
—Inside 1917: designing a World War I battlefield
—Little Women director Greta Gerwig and cast reveal how they reinvented a feminist classic
—Aldis Hodge on going to “that dark place” for death row drama Clemency
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fortune--2020-01-06--5 Ways to Save a Terrible Job Interview

5 Ways to Save a Terrible Job Interview

Here’s something to consider before your next job application: A 2018 survey from CareerBuilder found that roughly half (49%) of employers make up their minds about whether you’re a good or bad fit within the first five minutes of a job interview.
It’s no wonder, since companies spend an average of three hours interviewing a typical candidate during the whole recruitment process, according to a 2019 report by HR software company Lever. Only about 30 to 40% of candidates who interview onsite receive an offer. So one could argue that despite doing your homework —all of the prep work and practicing with a friend or a coach— the possibilities of failing the actual interview are considerable.
While the CareerBuilder survey detailed some of the most outrageous ways interviewees “blew it”—asking for a sip of the interviewer’s coffee during the interview or showing up with a Darth Vader costume— there are some definite nonstarters. The top five deal-breakers that interviewers said would immediately get a candidate nixed included getting caught lying about something (71%), answering calls or texts during the interview (67%), acting arrogant or entitled (59%), showing a lack of accountability (52%), or swearing (51%).
But sometimes, poor performance is more subjective. Perhaps you became extremely nervous or the interviewer misunderstood something you were saying. Or maybe you were simply not as well-prepared as you thought. What do you do then?
The question makes Brian Richie, senior advisor with Labtuit.com, a career advising and coaching organization based in Mountain View, California, think back to his collegiate days at the University of Florida, when he showed up for what he thought was an informal informational interview with the athletic department only to find that he had a full-fledged job interview. He wasn’t dressed appropriately and didn’t even have a copy of his resume —when asked for one, he pulled out his laptop.
“He looked at me like I had six heads,” Richie recalls of the interviewer, who scolded him about not being prepared or able to sell himself, cutting the interview short. “It was one of the most humiliating experiences I’d gone through up to that point,” he recalls. But it also taught him about what he needed to do to make a great impression the next time.
Here are five strategies for during and after a less-than-stellar interview.
1. Don’t overreact
In the moment, it’s easy to panic when you feel like you’re not doing well. But, it’s important to keep the moment in perspective, says Bryan Zawikowski, vice president and general manager of the Military Transition Division of Lucas Group, an Atlanta-based executive recruitment firm. “I jokingly tell people that are nervous about going into interviews that if they really mess this up, they will never have to see that person again in their lives,” he says.
Keep in mind that you might not be assessing the situation objectively, especially if you’re anxious. If you find yourself overcome by nerves, admit that you’re somewhat nervous —people expect that, he says.
2. Regain composure
Do your best to regain your composure in the interview, Zawikowski advises. Turning a case of nerves or a mistake in the interview into a more relaxed, positive approach can impress hiring managers and show them that you’re able to perform under pressure. Let’s say you realized that you misstated something, made a mistake, or didn’t answer as strongly as you would have liked. Revisit the question.
“A lot of people are so embarrassed once they step in it that they don’t realize that most interviewers are aware that you’re human and that you’re going to make mistakes,” Zawikowski says. “Do you own it and come back strong?” That can make all the difference in how interviewers see you.
3. Take your time
If you feel the interview isn’t going well, try to slow the pace. Be thoughtful in answering questions, taking time when you need to do so, says Richie. Sometimes, interviewees feel like they need to answer in rapid-fire fashion. But, slowing down and saying, “That’s a great question. Do you mind if I think about that for a few seconds?” can give you the space you need to formulate the best answer.
4. Pivot
If the interview isn’t going the way you wish or the conversation isn’t showcasing your skills in their best light, you can redirect the discussion, says Bradenton, Florida HR expert and career coach Angelique J. Hamilton. If you aren’t being asked about your strongest points or best skills, simply say, “Something we have not yet discussed is . . .” and delve into what you believe you can bring to the company.
Another way to change the conversation is to ask questions about the company and get more clarity about what the interviewer values or sees as critical for the role. Then, you can adapt your discussion points accordingly, Hamilton says. “Once you have that information, you can come up with the best stance for that situation,” she says.
5. Follow up
After you leave the interview, you have another chance to follow up in a thank-you note. But before you approach the contact with a corrective tone, be sure you aren’t misreading the situation, Richie says. Check with your recruiter or any contacts you have to get feedback before you thank the interviewer. That may give you a better sense of how you performed. That’s also good information for the next interview, whether it’s with this company or another one.
“If you can’t obtain feedback from the bombed interview, brainstorm it yourself. Ask yourself what questions had you squirming the most. Try to pinpoint the areas that threw you off your game and set a plan of action to improve confidence there,” he says. By stepping up your confidence after a setback, you might succesfully —and inadvertently— display important skills that you’ll need in almost any workplace.
More must-read stories from Fortune:
—Why new hires are getting high pay but older employees aren’t getting raises
—What the best workplaces in the world have in common
—No, humanities degrees don’t mean low salaries
—5 proven ways to decrease stress at work
—Ready to jump at that great job offer? Read this first
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