TikTok Braces for Supreme Court Showdown with Washington

Summary

Title: TikTok Braces for Supreme Court Showdown with Washington

Podcast: WSJ Tech News Briefing
Host: James Rundle, The Wall Street Journal
Release Date: January 10, 2025

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Overview

In this episode of the WSJ Tech News Briefing, host James Rundle explores two major developments in the tech landscape: the impending Supreme Court case that could determine TikTok's future in the United States and the strategic pivot of ride-hailing giants Uber and Lyft towards integrating autonomous vehicles (AVs) provided by competitors. The discussion provides in-depth analysis of the legal, technological, and economic implications of these stories.

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1. TikTok's Supreme Court Showdown

Background

The Supreme Court is set to hear arguments on TikTok's status in the U.S., a high-stakes case that juxtaposes national security concerns with free speech rights. ByteDance, TikTok's Beijing-based parent company, has been given until January 19th to divest TikTok or face an outright ban in the United States.

Arguments from TikTok and Its Defenders

Jess Bravin, a WSJ reporter, details TikTok's defense strategy, emphasizing their stance on free speech:

Jess Bravin ([01:42]): "TikTok is appealing because they lost at the lower court and they're going to say that this is a classic free speech case. And when the government wants to restrict speech under the First Amendment to the US Constitution, it has to meet very, very strict legal standards."

TikTok argues that the government has not sufficiently proven that the app poses a national security threat. Instead, they propose less restrictive measures such as greater transparency regarding data collection and potential Chinese government influence.

Government's Position

Conversely, the U.S. government maintains that foreign adversaries do not possess First Amendment rights within the country and that national security concerns justify restricting TikTok. Jess Bravin elaborates on this stance:

Jess Bravin ([03:13]): "Their view is that foreign adversary governments have no First Amendment rights inside the United States, and so it's not even appropriate to look in that direction."

The government asserts that they possess unique insights into national security threats that necessitate action against perceived risks posed by TikTok.

Supreme Court's Approach

The Supreme Court is expected to handle the case with caution, given the evolving nature of technology and societal interactions. Jess Bravin anticipates that the Court will avoid establishing rigid precedents that might become outdated as technology advances:

Jess Bravin ([03:20]): "The court has been very cautious, not wanting to go further than necessary because this is a fast evolving area of technology and a fast changing way that society interacts with itself."

ByteDance's Stance and Political Developments

ByteDance argues that divesting TikTok is "not feasible" due to the proprietary nature of TikTok's algorithm, which is controlled in Beijing:

Jess Bravin ([03:51]): "ByteDance says that the algorithm that makes TikTok what it is... is controlled in Beijing and they simply can't share it."

Additionally, President-elect Donald Trump has filed a brief urging the Supreme Court to delay enforcing the law, allowing for potential negotiations post-inauguration:

Jess Bravin ([04:20]): "He has filed a brief essentially asking the Supreme Court to punt to block this law from taking effect for now so he can look at the situation once he becomes president again."

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2. Uber and Lyft’s Autonomous Vehicle Strategy

Shift in Strategy

After abandoning their in-house AV projects in 2020 due to high costs and the impact of the pandemic, Uber and Lyft are now partnering with companies like Alphabet's Waymo to integrate autonomous vehicles into their platforms.

Preeta Khurana's Insights

Preeta Khurana, a WSJ reporter, explains the rationale behind this strategic pivot:

Preeta Khurana ([06:22]): "Uber and Lyft had their own grand plans to develop their own self-driving cars. They gave up on those costly endeavors during the pandemic... So what you're seeing now is that Uber and Lyft are aggressively going after Waymo and others..."

By leveraging established AV technologies, Uber and Lyft aim to enhance their service offerings without the exorbitant costs associated with developing their own AV fleets.

Integration and Features

The integration allows users in cities like Austin and Atlanta to hail AVs from partners like Waymo directly through the Uber and Lyft apps. Features include remote vehicle controls such as unlocking doors, honking horns, and adjusting internal temperatures via smartphone:

Preeta Khurana ([07:44]): "You can hail a self driving car from Waymo and other companies... everything from unlock the car to honk the horn, to open the trunks... using your phone."

Lyft also envisions a future where users can list their personal autonomous vehicles on the platform, creating opportunities for micro-entrepreneurship.

Commercial Implications and Market Growth

The demand for AVs is rapidly increasing, with Waymo's passenger numbers surging from 20,000 in August 2023 to nearly 500,000 by August 2024:

Preeta Khurana ([08:36]): "Customers have warmed up to the technology quicker than a lot of people were anticipating."

This growth signifies a strong market acceptance and potential profitability for partnerships between AV providers and ride-hailing services.

Challenges and Driver Impact

Despite the promising growth, scalability remains a challenge, especially in regions with harsh climates or dense urban environments. Preeta Khurana highlights potential operational issues in cities like Boston and New York:

Preeta Khurana ([11:00]): "There will absolutely be a combination of human drivers and self-driving cars as we think about the future."

Additionally, human drivers are experiencing changes in their earnings and work strategies as AVs begin to capture a significant portion of the market:

Preeta Khurana ([09:58]): "It's become really hard to make money. So he would never drive to and from the airport. But now he started taking airport trips because Waymos aren't there yet."

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Conclusion

This episode of WSJ Tech News Briefing provides a comprehensive analysis of two pivotal issues in the tech world. The Supreme Court’s decision on TikTok could set critical precedents for the intersection of national security and free speech in the digital age. Meanwhile, Uber and Lyft's collaboration with AV technology providers like Waymo underscores a significant shift towards leveraging existing innovations to remain competitive in the evolving transportation landscape. These discussions highlight the dynamic interplay between technology, regulation, and market forces shaping the future of the tech industry.

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Notable Quotes:

• Jess Bravin ([01:42]): "This is a classic free speech case... the government has to show that there's a compelling government interest."
• Jess Bravin ([03:13]): "The government knows things and can make predictions about national security that really no one else can."
• Jess Bravin ([03:51]): "ByteDance says that the algorithm that makes TikTok what it is... is controlled in Beijing and they simply can't share it."
• Preeta Khurana ([06:22]): "We let other companies build this and we'll become the platforms on which these technologies operate."
• Preeta Khurana ([07:44]): "You can hail a self driving car from Waymo and other companies... everything from unlock the car to honk the horn, to open the trunks... using your phone."
• Preeta Khurana ([11:00]): "There will absolutely be a combination of human drivers and self-driving cars as we think about the future."

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This detailed summary encapsulates the key discussions, insights, and conclusions from the episode, providing a comprehensive overview for those who haven't listened to the podcast.

Transcript

[Jack]

What's the best time of day to get a deal? All day with Jack in the box's all day. Big deal meal. You get to choose from four entrees like the supreme croissant and five tasty sides plus a drink starting at $5. So hurry in or take your time. You've got all day at Jack. Every bite's a big deal.

[James Rundle]

Welcome to Tech News briefing. It's Friday, January10. James I'm James Rundle for the Wall Street Journal. The Supreme Court is due to hear arguments today on a case that will decide TikTok's future in the United States. Its defenders say they are standing up for free speech, but the government says the Chinese owned app is a credible threat to national security. And then ride hailing giant Uber once sought to build a fleet of autonomous taxis. Now it's embracing driverless cars made by competitors and offering new app features. Our reporter Preeta Khurana joins us to talk about why Uber and Lyft are trying to find a niche with robo tax years after abandoning their projects. But first, oral arguments are set to begin today in the Supreme Court as TikTok faces off against the US government. Its Beijing based parent company ByteDance was given until January 19th to divest itself of TikTok or face a ban. In the US can the app used by nearly half the country pull off an 11th hour reprieve? WSJ reporter Jess Bravin joins us to talk about what to expect as TikTok fights for its life in the U.S. jess, what are the arguments you're expecting to hear today from TikTok and its creator community and from the US government?

[Jess Bravin]

TikTok is appealing because they lost at the lower court and they're going to say that this is a classic free speech case. And when the government wants to restrict speech under the First Amendment to the US Constitution, it has to meet very, very strict legal standards. It has to show that there's a compelling government interest. It has to show that there is no less restrictive way to achieve that interest. And here TikTok says the government fails that test. They say that the government hasn't shown that this app really is a national security threat. And the government acknowledges that China, foreign adversary designated by law, hasn't used it in a way to undermine US national security yet. And TikTok is going to argue that there are less restrictive ways to address it. For example, greater disclosure, disclosing to Americans that the app is collecting a lot of data about them, disclosing to Americans that it is potentially subject to the direction of the Chinese government. So that's their point of view. What's the government's point of view? Very different. Their view is that foreign adversary governments have no First Amendment rights inside the United States, and so it's not even appropriate to look in that direction. But even if you could argue that Americans First Amendment rights are implicated by a decision to shut down this app, it's fully within the government's power to do this that the government knows things and can make predictions about national security that really no one else can.

[James Rundle]

So with the amount of eyes on this case, how carefully do you expect the Supreme Court to tread today in terms of setting precedent for future cases?

[Jess Bravin]

If the Supreme Court treats this case the way it has treated other Internet and cyberspace type cases, it will tread carefully. The court has been very cautious, not wanting to go further than necessary because this is a fast evolving area of technology and a fast changing way that society interacts with itself. And they don't want to lock in very extensive doctrines that might not prove to be appropriate as things move on.

[James Rundle]

So we talked about how the government wants TikTok to be sold. What has TikTok's parent, ByteDance, said about possibly selling it to appease the government?

[Jess Bravin]

ByteDance says in their brief that that's just not feasible. That's an illusory option because the algorithm that makes TikTok what it is, that is so addictive, that's a proprietary algorithm that is controlled in Beijing and they simply can't share it with or won't share it.

[James Rundle]

And of course, what has President elect Donald Trump said about this?

[Jess Bravin]

He has filed a brief essentially asking the Supreme Court to punt to block this law from taking effect for now so he can look at the situation once he becomes president again on January 20 and can attempt to negotiate a solution that would satisfy the government's security concerns without requiring the app to shut down.

[James Rundle]

That was our reporter Jess Braven. Coming up, Uber once tried to make its own robo taxis but sold its self driving car unit in 2020. Can it still find a way to benefit from the growth of driverless cars? That's after the break.

[Waymo]

Taxi. Imagine hailing a cab with no one in the driver's seat.

[Jack]

Welcome. Please buckle your seatbelt and enjoy the ride.

[Waymo]

Self driving car company Waymo has spent billions developing its tech. What's changed is machine learning.

[Preeta Khurana]

I'm not really thinking about who's driving.

[Waymo]

But will this big bet pay off for Waymo and its parent, Google owner Alphabet? Find out in driverless Waymo and the Robo Taxi Race, a new series in the WSJ's Future of Everything feed.

[James Rundle]

Autonomous vehicles, or AVs, are taking off in popularity in California and elsewhere, but remain incredibly expensive to develop. After ending their own AV projects, Uber and Lyft are now trying to find ways to engage with the technology that could upend their business models if they get left behind. Starting this year, both companies will have driverless cars from Alphabet's Waymo and others on their apps. WSJ reporter Pritka Rana joins us now with more on how Uber and Lyft are revamping their businesses for AVs. Prytka this is a pretty significant turnaround for Uber and Lyft, who once had ambitions to run their own autonomous vehicles. What's been happening over the past few years at these companies to get us to this point?

[Preeta Khurana]

Uber and Lyft had their own grand plans to develop their own self driving cars. They gave up on those costly endeavors during the pandemic as they they were looking to cut cost and business shut down for them at that point. So they sold off their autonomous driving divisions and at that point they made the decision that this is a really expensive technology to build. We let other companies build this and we'll become the platforms on which these technologies operate. So what you're seeing now is that Uber and Lyft are aggressively going after Waymo and others and saying, hey, you guys have spent billions of doll is trying to perfect this self driving technology and you're still learning. Partner with us. We already have the customers who will hail this kind of technology. We've spent over a decade building that customer base. So why now should you go out and spend additional money to build your own apps, scale your own app, spend money on advertising, Just come to us, focus on what you know to do best, which is build the technology and let us do what we know best, which is connecting you to customers.

[James Rundle]

So what does that mean in practice being the platform for these companies? What sort of features will be available for customers in Austin, Texas and Atlanta?

[Preeta Khurana]

So in the coming months you can hail say a self driving car from Waymo and other companies. On Uber and Lyft you can now do everything from unlock the car to honk the horn, to open the trunks of the cars, to even adjust the temperatures inside the car using your phone. So that's some of the things that they're building. You know, Lyft is even saying in the future we want to create technology that will allow people to list their own autonomous vehicles. On our app and say you can run a mini business where your own personal Tesla can be listed on the Lyft platform and it'll drive around making money on the side while you're not using it. So those are the kinds of things that these companies are thinking about now.

[James Rundle]

So what are the commercial interests in this? For the AV makers and for the.

[Preeta Khurana]

Ride hailing services, customers have warmed up to the technology quicker than a lot of people were anticipating. Waymo went from just under 20,000 passengers in California in August of 2023 to close to 500,000 passengers in August 2024. So that's a huge, huge jump. So for Waymo, of course this technology was expensive to build in the first place. They use high end Jaguars, which are also expensive. So for Waymo, at least for now, they're happy to partner with Uber and then on Uber and Lyft's and they kind of know this is where the future is going and they want in on a slice of the pie. And so for them, they get a slice of these bookings. So that's how for now, the companies are presenting it as a win win for both sides. But only time will tell how the competitive landscape develops, what that means for the labor market. Could there be a scenario where Waymo says, actually we have enough customers now, we have enough brand recognition, a lot of people want us, we're just going to scale our own app, we don't need you anymore. Uber.

[James Rundle]

Uber is a company that is built on its drivers. What are the concerns that drivers have?

[Preeta Khurana]

Some of the drivers I spoke to in San Francisco, where Waymo has been testing its cars and now has its own app, so they're actually competing with Uber. In San Francisco, I spoke to a driver who said, you know, it used to be good money driving around downtown, but now you just see Waymo after Waymo in downtown and they're eating up all the business. So he says rides in downtown, it's become really hard to make money. And so he would never drive to and from the airport. But now he started taking airport trips because Waymos aren't going there yet. So we're already seeing it change the labor market in a, in a very small way in San Francisco. Not to say that it's at a point where it's displacing human drivers yet we haven't seen any evidence of that. But human drivers are changing their strategy and are having to change their behavior from before.

[James Rundle]

So how challenging will it be for robotaxis autonomous vehicles to become more widespread outside of California.

[Preeta Khurana]

Some of the analysts I spoke to raised a good point. Right now, a lot of these taxis are being tested in warmer climates. But what happens, say in Boston in the middle of winter when the sensors all get covered in snow or say densely populated cities like New York where, you know, it might get stuck, it might create even more congestion. So there are scenarios where robotaxis may never work too well. So there will absolutely be a combination of human drivers and self driving cars as we think, think about the future. But yeah, they've gotten to a point where the technology works and it works pretty well. But how scalable is that is the question people are asking now.

[James Rundle]

That was our reporter, Preeta Khurana. And that's it for Tech News Briefing. Today's show was produced by Julie Chang. I'm your host, James Rundle. We had additional support this week from Cordelia James. Jessica Fenton and Michael Lavalle wrote our theme music. Our supervising producer is Kathryn Millsop. Our development producer is Ayesha Al Muslim. Scott Salloway and Chris Zinsley are the deputy editors. And Philana Patterson is the Wall Street Journal's head of news Audio. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.