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

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.

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."

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."

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.

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."

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.