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Quest Means Business

Musk's Twitter Takeover; US Economy Adds 261K Jobs In October; Austria Urges Citizens To Take Small Steps To Save Energy; Chinese Stock Soar On Hopes Of Economy Re-opening; Growing Frustrations Over China's Stringent Rules; Hertz Beat Q3 Earnings, Revenue Estimates. Aired 4-5p ET

Aired November 04, 2022 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:23]

RICHARD QUEST, CNN INTERNATIONAL HOST: Closing bell on Wall Street, and as you can see the numbers, Dow is at the best of the day, almost -- 400

points. It's been a tremendous up and then down and then even a bit of a loss, and now we're back up again. Sort of roller coaster day, all on the

back of the jobs numbers, which we will get to.

But the market has now closed. The day is over. The markets and the main events: Widespread layoffs at Twitter. Elon Musk is complaining of a

massive drop in revenue on the same day employees find out their fate via e-mail.

America's hot jobs market shows gradual signs that it is cooling down.

And tonight, the CEO of Hertz, a company that was bankrupt just a few years ago now making loads of money, and we will discuss the travel rebound and

the plans to buy hundreds of thousands of EVs.

We are live in New York, it's Friday, November the 4th. You managed to make it to the end of the week.

I am Richard Quest and on Friday, I mean business.

Good evening.

It has only taken seven days, but now Elon Musk is slashing jobs at Twitter after a report that he cut his seven and a half thousand workforce in half.

And the method that has been used, brutal.

The doors were locked at the company's offices, access to internal systems were cut, and staff members were informed via e-mail. If you got an e-mail

to your work e-mail, you kept your job, and if you got an e-mail to your personal e-mail, you are out of a job.

The mass layoffs have already been hit with a class action. A small group of workers are alleging the company has violated labor laws by not giving

notice in the correct way, as Musk -- as he shakes up Twitter.

Now, of course, the problem is how it makes money. He has tweeted: "Twitter has had a massive drop in revenue due to activist groups, pressuring

advertisers."

Donie O'Sullivan is with me. He has been covering this in all its manifestations. Let's do the firing first. This is -- I mean, first of all,

the lottery of where you got your e-mail told you whether you had been fired.

DONIE O' SULLIVAN, CNN CORRESPONDENT: Yes, it was absolutely brutal. I think this e-mail went out at about eight o'clock or so on the East Coast

here in the US last night. The e-mail not signed by anyone, not signed by Elon Musk, going to all staff saying in the morning, if you get an e-mail

to your personal e-mail, you're gone. If you get an e-mail to work e-mail, you're still at the company.

I've been speaking all day to lots of workers who have been left -- look, some of them are kind of relieved, they're seeing the direction this

company is going and they're happy to get out. But obviously, many more devastated, and you know, we've been hearing a lot, too, how people are on

visas, particularly foreign workers who are here in the US who may now have to leave the country and whatnot. So just devastation there -- Richard.

QUEST: Now, the point is here, he only has owned the company for seven days, one could arguably make a biblical analogy about how long it took the

Creator to make the world, but that's another issue. At least, He rested on the seventh day. On his seventh day, he seems to fight everybody.

But the point here is, how could he know who to keep who to let go? Which was the good? Which is the bad? Within in any team, who was the dross and

who was the good?

O'SULLIVAN: There doesn't seem to be any rhyme or rhythm to it. I think that's the same -- that very question is what a lot of the people who were

fired today are asking: How did they decide to fire me?

We do know that they just totally eliminated some teams. So, there was one team called the Curation Team. They had a pretty important role. They would

have had a very important role next week with the election here in the US of when there were viral lies, conspiracy theories, and we know we are

going to see so much of that next week with the election.

They would curate tweets and basically put the information into context and that would be boosted out then to the Twitter audience to try and push back

on some of the misinformation. That team is completely gone.

[16:05:02]

QUEST: Donie, thank you.

As Twitter employees are learning their fate themselves, Elon Musk was speaking at an investment conference in New York and just confirming the

extent of the job cuts.

(BEGIN VIDEO CLIP)

RON BARON, FOUNDER, BARON CAPITAL: So today, we fired half of Twitter and that should save us what? $4 billion a year?

ELON MUSK, OWNER, TWITTER: No, it is not going to save $4 billion a year, I wish but -- I mean, to be frank, Twitter was having pretty serious

revenue challenges and cost challenges before the acquisition talks started, and any company that is dependent on advertising has had a hard

time.

(END VIDEO CLIP)

QUEST: Frances Frei is with me. She was hired to fix Uber's broken culture in 2017. Now, with me from Cambridge, Massachusetts. We'll get to

the Uber and what you wrote in your fascinating article in the "Harvard Business Review," but give me your gut -- your gut feeling today when you

heard how he had done it and what he'd done?

FRANCES FREI, FORMER SENIOR VICE PRESIDENT, UBER: Well, I was, I guess, not surprised, but disappointed. When you do lay off, you can either do it

in a trust building way or a trust destroying way and this was almost a "Saturday Night Live" skit of how to do it in a trust destroying way. And

with all the humans involved, it's just so disappointing because it was so unnecessary to do it in this way.

QUEST: Allowing for the trust, which is crucial, it is also arguably the least efficient and effective way because you don't know what -- you could

have thrown the baby out with the bathwater.

FREI: Yes. I mean, not only did he not know, but let's say that there was some economic reason to do it. The way in which he chose to do it just

showed everyone who he authentically is, which is someone that doesn't take care, doesn't really acknowledge the logic.

He brought with him a billion dollar of debt severance, a billion dollar of cost, he is not taking any responsibility for that for the way in which he

purchased the organization.

So he is showing himself to not have empathy, he might be showing his real self, but that's going to make us all now very, very suspicious of him and

he needn't have done that.

QUEST: What about those who -- those who funded this transaction, besides his own wealth? All the other -- the venture capitalists, the pension

funds, all the institutions that all lent to the banks that lent him money to buy this? How would they be feeling today?

FREI: Well, I hope they're feeling the humanity and the cost of what is going on. I hope they're not simply looking at the return. Sometimes, the

people in the background of the financing don't -- aren't held responsible for what happens and it is just the people upfront.

But this again, is just a really unfortunate way to do it, and it happens if you look at the layoffs that were announced today, here and with Stripe,

Stripe did it beautifully.

So, I think he's also going to suffer from the fact that he did it on the same 24-hour period of someone who did it in a trust building way.

QUEST: You advise Uber, the Kalanick's, and I'm just reading from your article. It's well worth looking up in the "Harvard Business Review."

"The First Step to Becoming a Genuinely Empowered Leader."

"Trust," you say it again, "Core drivers of trust, the trust triangle. Trust."

Can there be -- I mean, at one level, I own it, therefore I do what I want. But can there be any rebuilding of trust here?

FREI: Well, today would have been a great chance for him to have rebuilt the trust he lost in the first six days, and so this was a great

opportunity.

With each day that passed, we have more and more evidence to overcome him showing who he really is, which is, you know, so far, if you look at the

data, it is someone that doesn't broadly care about the employees. The employees that left, how the employees that stay care about the employees

that left.

So, his logic is wobbly, his empathy is wobbly. And what I fear is his authenticity is really clear. So, he could only rebuild trust, if he, from

this day forward, acknowledge that he didn't have empathy, and start to have empathy and improve his logic.

But that would require a learning mindset, and I'm not sure, Elon Musk is many things, I'm not sure he has a learning mindset.

QUEST: Frances, if he calls you up and says, "Will you take on the task?" As Uber did, would you take it on?

FREI: I only help good people win. He would have to convince me in that call of -- he would have to acknowledge all of the problems he had

including today and he would have to say, "I'm open to changing, starting now. Will you help me?" Short of that, not a chance.

[16:10:02]

QUEST: Thank you for joining us. I appreciate your time tonight.

An early profitable moment for you in the program tonight.

The tech guru, Shelly Palmer has described today's firing method by Twitter as twisted, where you got your e-mail and told you if you've been fired. I

call it grotesque.

Firstly, because firing by e-mail is callous and destructive in its own right. Secondly, because Musk is only on Twitter for a week. His people

can't know who is good, who is not, who should be kept, who should be let go.

I can hardly imagine the previous management preparing the necessary dossiers aim to execute. And what about the banks and the investors who

funded this purchase? Would they like their sons and their daughters to be fired in this way?

It was in 1973 when the then British Prime Minister Edward Heath, described the mining company Lonrho and its CEO Sir Tiny Roland as the unacceptable

face of capitalism.

Having seen how Twitter's new owner carried out today's job cuts, is it not justified to ask whether we have a new example of capitalism's unacceptable

behavior?

We'll continue in a moment with US jobs growth, which slowed and we hear from the White House, one of the President's top economic advisers.

It is QUEST MEANS BUSINESS. In a moment.

(COMMERCIAL BREAK)

QUEST: US job gains slowed last month. The economy added 261,000 workers, slightly less than the previous month and down significantly from earlier

this year, you'll see July over half a million.

So the moderation is there and the unemployment rose slightly to 3.7 percent. Markets initially jumped on the report. The Dow was up 600 points,

then gave back its gains, then went back up again.

Rahel Solomon is with me.

Rahel, if we look at those numbers and the trend, I am guessing that this is exactly what you would want to see a moderation in the numbers. But the

fear of course is it's not going to stop there, it is going to go much further lower.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: And I think the fear also is that we could have seen a much lower number even today, right? Because

remember, Richard, the expectation was for job growth of about 200,000. So, this did still come in hotter than expectations.

So, I just want to show you very quickly where we saw the job gains because I think that gives us a sense of what is happening under the hood of the US

economy.

So, you can see Richard, it was pretty broad based, from healthcare to professional tech services, and manufacturing. Take a look at that, 32,000

jobs added.

[16:15:09]

SOLOMON: And Richard, what is important to point out here that I don't think has gotten as much attention today is, these are new jobs. These are

not jobs that were lost during the pandemic.

Remember, we clawed our way back from the job losses from the pandemic. This is new job creation. This is essentially companies finding that there

is new demand for their goods and services. So, I think that was really interesting.

When you look at labor force participation, that didn't budge, actually not moving much from the beginning of this year. Wages, that appeared to

moderate just a bit. So I think, look, there was something for everyone in this report.

I know how much you dislike the on the one hand, but on the other hand, but there was something truly in this report for everyone.

QUEST: But the reason I don't like it is because the report has to be seen in terms of the greater economic picture, and the higher interest

rates and that is not reflected in this number yet.

I think the fact that the number is lower is employers are starting to rethink their strategy of how to employ and when to employ.

SOLOMON: Well, I think we are certainly seeing examples of that on the fringes, right? We talked about Twitter, which is obviously just a very

specific story to Twitter.

But you are seeing it in the tech space, right?

I mean, CrunchBase data provider told us this week that it estimated about 45,000 jobs being lost in tech. We've seen it in the real estate industry,

which of course, is a pretty clear connection with what's happening with interest rates in terms of the tech industry and real estate. But that's

still on the fringes, Richard.

I mean, for the most part, it appears that employers are really holding on to their workers, perhaps pulling back a bit on new jobs or sort of hiring

plans. But we're not seeing them let go of workers just yet. We haven't seen that in the unemployment data.

And while job creation is slowing, I mean, it is still robust. I mean, this is still robust compared to pre pandemic.

QUEST: Which of course will be interesting to see how that continues. Rahel, thank you.

The President said the Jobs Report shows the economy remains strong, whilst acknowledging the challenge of rising prices. In the last hour, President

Biden said the administration is doing all it can to bring inflation down.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Because of actions we've taken dealing with the Petroleum Reserve and other things, prices are coming down

here at home. They're now down $1.22 since their peak this summer.

Folks, our economy continues to grow and add jobs, even as gas prices continue to come down. We've got a lot more to do.

(END VIDEO CLIP)

QUEST: With me is Heather Boushey, member of President Biden's Council of Economic Advisers with me from the White House. Good to see you.

Thank you on a Friday. Thank you for joining us.

Look, this Jobs Report. You know, not too hot, not too cold, just about right. However, it's not -- it is a sort of a moment in time when we know

that monetary lag is likely to make the situation on jobs worse, but that's difficult for the administration going into the Midterms next week.

HEATHER BOUSHEY, MEMBER OF PRESIDENT BIDEN'S COUNCIL OF ECONOMIC ADVISERS: Well, certainly what we saw today in today's report was good news for the

US economy, good news for workers, good news for their families. The economy added 261,000 jobs. That is unequivocal good news win American

workers get jobs across the economy.

Those gains were widespread. They were across a variety of industries, and in fact, we have seen this very sharp uptick during the Biden

administration in manufacturing jobs.

So, the end of the President's watch, we've added over 700,000 manufacturing jobs. We are about 137,000 jobs above where we were pre

pandemic in terms of manufacturing. And this has been one of the President's focuses is, you know, getting -- building and making things

here in America.

QUEST: The worrying part is, from your point of view is that the message may not have got through in time because Americans are focused on

inflation. They are focused on what will be arguably a worsening economic situation next year.

BOUSHEY: Well, certainly the President has been very focused on inflation, as has his economic team. You know, we all know that this is not

just a US phenomenon. It's a global phenomenon. And of course, you know, these high energy prices that the American consumers had to face driven, of

course, by Putin's unprovoked war in the Ukraine that has upended global energy markets and caused these price spikes.

But as the President noted, you know, he has taken a series of steps that has helped to address gas prices. The prices that people pay at the pump

for gasoline, they're down by now over $1.20 per gallon and that is an important accomplishment.

You know, certainly some of that has to do with the fact that we have really so many millions of barrels of oil from the Strategic Petroleum

Reserve, among other things.

[16:20:00]

QUEST: If you take away that, it is significant and you look at say for example the ports and what's been done there. But there is not -- I mean,

the problem with inflation is that when it comes to curing inflation, as you know, there's not a lot the fiscal side can do. I mean, you can cut

back, but you're not going to do that, arguably, you have to spend more if unemployment goes up.

So this is really one where monetary policy has to bear the brunt of squeezing inflation. And I wonder, you sit and watch, but you can't do much

more than you're doing at the moment?

BOUSHEY: Well, certainly price stability is the purview of the Federal Reserve, and we, at the White House, do not comment on Fed policy. But

having said that, there are things that the President is focused on to address specific pain points facing families.

The Inflation Reduction Act dealt with high cost of prescription drugs, high cost of access to healthcare, and of course, the transition to clean

energy, you know, smoothing those costs for families helping to lower those costs over time. And that is, of course, one of the reasons that we've seen

so much new investment announced over the past few months in new manufacturing in the United States to produce electric vehicles, batteries,

solar panels and the like.

So there is a connection there that the President has focused on the things that he can control. And again, the Inflation Reduction Act, which

unfortunately was passed on a partisan basis, was a core part of his agenda alongside doing things to make sure that supply chains could get opened up

and doing what he could in the face of businesses that have had a hard time recovering from the pandemic, and doing what he could to address high gas

prices facing families through releasing barrels of oil through the Strategic Petroleum Reserve.

QUEST: And I just want to ask you, it is sort of economic related in a wider sense, our lead story today, and in fact, the only thing anybody is

talking about today, besides maybe these job numbers, is the way Elon Musk has fired half his workforce at Twitter by e-mail and the way in which he

did it.

There is a sort of aghast-ness at brutality of this sort of behavior. I just said before we went to the break, is this the unacceptable face of

capitalism to treat workers in this way? What do you think?

BOUSHEY: Well, certainly one of the things that we've seen over the course of the pandemic is workers saying, hey, you know, you need to treat

me with dignity and respect and workers having that ability to make some different choices.

You've actually seen a bump up in folks trying to form unions, trying to collectively bargain, so that they do get that dignity at work. And I think

this example, you know, these are tough times for those workers, but it certainly is not indicative of a larger trend of what's happening in the US

economy.

QUEST: Heather, it's good to see you. Thank you. On a Friday, we are grateful that you joined us from the White House. Thank you.

A new survey is offering a look at the impact of Europe's energy crisis and the high cost in the inflation. The Ipsos Poll found more than one in four

Europeans are in financial distress, a quarter; 22 percent have been told recently, have been told not to turn up the heating at home.

Austria is trying to help its citizens cut back on energy consumption. It is launching Mission 11 with the idea to save 11 percent of energy use,

including having a shower instead of a bath.

Wolfgang Urbantschitsch is the Executive Director of E-Control in Vienna, and joins me now.

This is -- the reality is, I mean, it's a bit of a hope and a prayer that the weather won't be too cold this winter, even with stocks of gas at

record levels. It could be very difficult and people are going to suffer.

WOLFGANG URBANTSCHITSCH, EXECUTIVE DIRECTOR, E-CONTROL: Well, it will be difficult, but it will be manageable because in Europe and also in Austria,

of course, a lot of work has been done. Because, as you just mentioned, we have a storage level, which is extremely high all over Europe, it's 95

percent, which is equivalent to about 28 percent of the consumption for one year in Europe. So this is very good preparation.

And the second, of course, is that Europe managed to diversify the sources. So, we know of course, there is less and less gas coming from Russia to

European countries, but what happened on the other side is that there is more gas coming from other sources such as the United States, of course and

other countries by LNG shifts, and this is why Europe is quite well prepared.

But you already mentioned this Mission 11. It is extremely important to reduce the consumption, to use energy in general and especially gas in a

more efficient way.

[16:25:10]

URBANTSCHITSCH: Because all of these together, these three goals and these three tools, they bring us through this winter; and also, of course,

to the future, because what we also need is, of course, more renewable power generation.

QUEST: Right.

URBANTSCHITSCH: Yes, so that's really important.

QUEST: The reality of switching off lights, turning the thermostat down, putting an extra sweater on, switching off the public lights in the street.

I mean, there are two views. One is, it really doesn't make that much of a difference overall. But the other view is that it does create an

environment where people are aware and are more concentrated in what has to be done.

URBANTSCHITSCH: Yes, as you say, they are more concentrated and I think what we need is this awareness that this is actually what happened, the

last couple of weeks and months. People are extremely aware of the fact that it is necessary to use the energy in a more efficient way, and we are

on a good track.

And at European level, it was decided, of course, always together with the Member States that we want to reduce 15 percent of the gas consumption this

winter, 10 percent of electricity consumption, and what is also important, to make sure that there is security of supply, also to reduce the peak

consumption of energy, and there, it is extremely important to have this awareness and there will be more new tools, which makes sure that people

are aware of the fact that tomorrow, the day after tomorrow, we need to be even more careful, and then we can help together.

It's not only the industry, it's not only the big consumers, of course, but it's also the household, which can participate, and therefore I think we

will be successful in this winter.

QUEST: The success of this winter, I guess, thereafter, we have to ensure that next winter, 2023, I know it seems a long way off, but sufficient

systemic reforms are put in place, that there is no risk of it next winter.

URBANTSCHITSCH: Yes, what we need is infrastructure. We need infrastructure when it comes to power generation, renewable power

generation paths, we have -- we must not forget the networks, and the problem so far was also the acceptance because you know, this not in my

backyard mentality is of course, a mentality, which you can find all over the world, especially also in Europe, where there is not a lot of space.

And now, there is more acceptance when it comes to change the system to invest into infrastructure and to accept that the energy system will

change, and this is a turning point.

And so far, it was, let's say only about climate change and reducing the CO2 emission, but now it's about independence, and now it's about to make

sure that we in Europe, together with our partners, such as the United States, of course can provide our security of supply.

QUEST: All right, I'm grateful for you, sir, tonight. Thank you for joining us from Vienna. Very glad for that.

And it won't be long indeed before Vienna's famous Christmas market setup. So, I'll be in Vienna myself at the end of this month for "World of Wonder"

and we'll be broadcasting from there.

So today, a bit of everyday inflation. Vienna is stocked with signature vanilla crescent cookies, I'll be tasting a few of those. Inflation might

make them bitter sweet.

To make the cookies, you need flour and eggs and the Austrian press checked in with seven stores. In September, they found the price of eggs had risen

40 percent year over. Flour was doubled in that same span.

So, put it that way, your vanilla cookies are going to be much more expensive. I'll try them anyway.

Look, I'm just doing it in the public interest of economic research. On your behalf, I will try some vanilla cookies, even though it's in high

price. But I'll do it, soon.

As we continue tonight, rising costs hitting where it hurts and specifically company, Hertz. The CEO of the car rental giant.

Now, this was bankrupt two years ago, three years ago, now making good money with a new strategy, well worth asking the CEO, how and why.

(COMMERCIAL BREAK)

[16:30:00]

QUEST: In China shares soared on over the country's relaxing its COVID rules sooner rather than later. The Shanghai Composite was up nearly 2-1/2

percent. The Hang Seng in Hong Kong posted its best week in 11 years, as investors found strong reasons for optimism. A report that China may

actually scrap the policy that holds airlines liable for bringing someone into the country who has COVID.

China's leader Xi Jinping has been hosting the German chancellor in Beijing. Chancellor Scholz says Chinese authorities will let German expats

in mainland China get the Pfizer-BioNTech COVID vaccine. Selina Wang has been covering the backlash to China's zero-COVID policy. And in doing so,

of course, she's experienced these challenges first hand filing this report from quarantine.

SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: As most of the world learns to live with COVID China is still stuck in this endless cycle of lockdowns,

quarantines, and mass testing. It's taking a heavy toll on the economy and people's lives. Public patience is wearing thin and frustrations are

mounting the death of a 14-year-old girl in a quarantine facility in China has unleashed new frustrations over the cruelty of the country's zero-COVID

policies.

Her father posted a video online demanding justice calling on the Communist Party to investigate her death. But that video has been censored on social

media in China, along with videos of a father in another city desperately trying to revive his three-year-old son. He wasn't able to get his son to

the hospital fast enough because of COVID restrictions in Lanzhou City. The boy later died. The death of the three-year-old boy has unleashed protests

in Lanzhou City.

[16:35:00]

Residents took to the streets. They were met by armed police. In year-three of the pandemic, every positive case and close contact in China is still

sent to government quarantine facilities. Anyone returning from China from overseas also has to quarantine. In fact, I'm in the middle of a 10-day

quarantine myself right now. This is my second quarantine in mainland China this year. Earlier this year I had to do a 21-day government quarantine.

This time it's shorter but every time I reenter this country, I am shocked and jarred by the dystopian nature of society here. After landing in

Beijing, I got busted off to a sealed quarantine facility sorted into a room. Every day I'm woken up by a knock on my door from a COVID worker that

takes a PCR test. Food gets left outside my door three times a day. No outside food delivery is allowed.

And every few hours I can hear the noise and smell the scent of disinfectant being sprayed by a worker holding a giant machine just outside

my door in the hallway area. Now this may sound extreme to most of the world. But this is the reality of zero-COVID China and it's no surprise

that this country has become increasingly isolated since the pandemic began. Selina Wang, CNN, Beijing.

QUEST: Extraordinary (INAUDIBLE) Selina. And perhaps to make the point in the U.S. leisure and hospitalities and globally seeing the strongest gains,

particularly today's jobs report, a resurgence in tourism. It's given the car rental giant Hertz a welcome boost. The company's reporting to beat its

Q3 earnings and revenue estimates, although its profits took a hit on rising costs for other reasons.

The CEO of Hertz Stephen Scherr, he joins me. Now Stephen, considering this, you know, I remember during the pandemic, I was reporting on the

bankruptcy and the restructuring and the investors and all the prepackaging, to go from that to this is quite remarkable. You're making

good money.

STEPHEN SCHERR, CHIEF EXECUTIVE OFFICER, HERTZ: We're making very good money. And we are very much alive and well past the bankruptcy in the

restructuring. This is a company now that has 500,000 cars in the U.S. Nearly a million if you look across the whole expanse of the Hertz

organization. We are really taking a number of bold initiatives, particularly around electric vehicles and working to dramatically improve

the experience of our customer.

And I think it's paying off and we happen, obviously to be in a moment of a very heated travel demand. You're hearing that across the patch, whether

it's airlines hotels or ourselves in the rental car business. And so, it's a very interesting time at a really sort of changing moment for the rental

car industry broadly.

QUEST: What will be the fighting ground between yourself and your competitors in the future? Because clearly, you know, I always remember Bob

Crandall, you remember him from American Airlines. He used to say, look, we all find the same metal tubes. It's what you do inside them that matters.

Where you send them that matters. Now, de facto, you're all renting roughly the same cars, you've all got, particularly at major locations.

You're all on the same lots in some shape or form. So what's the fighting ground going forward?

SCHERR: Well, I would say, you know, the observation that Crandall made back then is, of course, in some sense, true. You need to distinguish the

experience that you're offering to your customer. But I would tell you that I think Hertz is standing apart from the competition in a couple of ways.

Perhaps the most significant is we're giving our customers a broader choice of vehicle, including electric vehicles.

And we aim to have our fleet at about 25 percent electric by the end of 2024. That's a very distinguishing characteristic. We are now offering more

than anyone the choice to take up in an electric vehicle. And that kind of choice matters. Secondly, we have broadened out the customer base. It is of

course classically leisure customers that still do the lion's share of business with us, as do corporate customers.

But we're now renting cars and principally electric vehicles to Uber and Lyft drivers who are finding it a profitable venture to rent a car from

Hertz, as opposed to own it. And so, we're setting ourselves apart from the competition both in terms of choice and equally in the context of expanding

our business focus to a range of different customer sets.

QUEST: Right. Now E.V. charging which of course are going into in a big way. That's not only charging your own cars but these Uber and Lyft driver

cars. But you were telling me before we went on air, you don't -- where you make the money on this is not from the charging.

SCHERR: No, I mean, the principle focus around the charging network and our interest in it has all to do with facilitating what is the mainstay of our

business, which is we rent cars and we want that experience to be an excellent one.

[16:40:00]

And we are at the edge as I said to you before of the rental car industry in terms of the introduction of electric vehicles, again, across a whole

range of different customers. To make that business large, to enable it to grow across customer segments, it is important that they're develop a broad

nationwide charging network, obviously, not just in the United States, but abroad and in all of the markets.

And Hertz is an interesting partner for those that have ambition to be involved in the development of the charging network. And that is we have

and sit on property in proximity to 90 percent of the U.S. population. And we know in the U.S. where half a million cars are going. And as they become

increasingly electric, it matters. And so, what we want to do, Richard and I said to you -- I said this to you when we met earlier, is charging for

the sake of charging is of interest to us, not in the context of where we make our money but as a facilitating force to grow an electric fleet that

can become and will be a profitable and very large venture for us.

QUEST: If I think though, to the other avenues in which you can -- I mean, it's a million cars, that's a lot of cars. But the ability to -- for

example, I think with Avis who bought Zip and then the car sharing programs. Now you're doing it to an extent with offering cars for Uber and

Lyft drivers. But can you imagine going further into the to the consumer sector? Or is that simply -- because you do leasing on fleets but -- for

corporate fleets. But is that just not worth it? Is it too much trouble to do it individually?

SCHERR: No, I don't think any of these initiatives are trouble at all, I think they just need to prove out as business models that are worthy of

pursuing. You know, I can look across the rental car space. And obviously there are the majors, including ourselves. But equally, there are smaller

players, some of which you refer to that have different twists, different turns on the model. You know, some that are renting other people's cars.

Some that have cars that are being picked up on the street. I think for a company like Hertz. And given our size, we could pursue any one of those in

the context of, you know, an offset, if you will or an element of our overall business. The model needs to play itself out. We're obviously

company of great scale. We can offer to a customer more than any one of the smaller players the opportunity for one way rental or the opportunity to

choose between an electric vehicle or a combustion engine car.

We can offer people opportunities to rent in many, many locations around the world. And we do that with reliability. That's a distinguishing

characteristic relative to some of the smaller players. But that's not to say that they are not engaged in business models that could well be of

interest to us and that we could pursue it.

QUEST: All right. Good to see you, sir. I'm grateful. A million cars. Thank you very much. Joining me now. All right. Don't forget, I'll be at World

Travel Market on Monday in London, recovering from that. That's QUEST MEANS BUSINESS for now. I'm Richard Quest in New York. Whatever you're up to in

the hours ahead, I hope it's profitable. Avant Garde after (INAUDIBLE)

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