TikTok Braces for Supreme Court Showdown with Washington
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Welcome to Tech News Briefing. It's Friday, January the 10th. 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, Preeti Khurana, joins us to talk about why Uber and Lyft are trying to find a niche with robo-taxis 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 the 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 Braven joins us to talk about what to expect as TikTok fights for its life in the US.

Jess, what are the arguments you're expecting to hear today from TikTok and its creator community and from the U.S. government? 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 U.S. 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, a foreign adversary designated by law, hasn't used it in a way to undermine U.S. 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.

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? 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.

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? 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.

And of course, what has President-elect Donald Trump said about this? 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 20th and can attempt to negotiate a solution that would satisfy the government's security concerns without requiring the app to shut down. 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. Taxi! Imagine hailing a cab with no one in the driver's seat. Welcome. Please buckle your seatbelt and enjoy the ride.

Self-driving car company Waymo has spent billions developing its tech. What's changed is machine learning. I'm not really thinking about who's driving. But will this big bet pay off for Waymo and its parent, Google owner Alphabet? Find out in Driverless, Waymo and the Robotaxi Race, a new series in the WSJ's Future of Everything feed. 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 Preetika Rana joins us now with more on how Uber and Lyft are revamping their businesses for AVs.

Pritika, 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? 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 were looking to cut costs 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 dollars 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 app, 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. 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?

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.

So what are the commercial interests in this for the AV makers and for the 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 end, 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 Uber

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. Yeah.

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

So how challenging will it be for robo-taxis, autonomous vehicles to become more widespread outside of California? 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 robo-taxis may never work too well. So there will absolutely be a combination of human drivers and self-driving cars as we 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. That was our reporter, Preeti Karana. And that's it for Tech News Briefing. Today's show was produced by Julie Chiang. 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 Catherine Millsop. Our development producer is Aisha 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 TMB Tech Minute. Thanks for listening.