Uber Sells Chinese Business to Didi; Telsa Make $2.6 Billion Offer for SolarCity; U.S. Oil Prices Fall Below $40; U.K. Productions Falls to

MEANS-BUSINESS-01

BUSINESS-01

for SolarCity; U.S. Oil Prices Fall Below $40; U.K. Productions Falls to

Lowest Since 2013; Scuoler: I Expect Bank of England Stimulus; Trump in

Dispute with Fallen Soldier's Parents; Olympic Games Begin in Four Days;

Typhoon Nida Shuts Down Hong Kong; Venezuela Decrees Forced Labor; CNN

Obtains Rare Access to Theranos Lab. Aired 4-5p ET - Part 1>

Jason Carroll, Dylan Byers, Nick Paton Walsh, Ivan Watson, Rafael Romo,

Sanjay Gupta >

Didi Chuxing instead. Didi will take over Uber's operations in the

country. Tesla has made a $2.6 billion offer for SolarCity, the top seller

of solar panels in the United States. Musk is CEO of Tesla and chairman of

SolarCity. New signs that the Brexit vote may have done some notable

damage to the British economy. July the first full month after the

referendum saw the biggest drop in British manufacturing since 2012.

Donald Trump takes to twitter in his ongoing feud with the parents of a

fallen American soldier. Donald Trump lashing out at the media, lashing

out on CNN. We all know that Trump has benefitted from 24-hour news

coverage. Australian athletes say they were robbed when they had to

evacuate the Olympic Village. This adds to the growing list of problems

that organizers have really had to deal with in the run up and the buildup

to the Olympic Games, while making security a top priority. Hong Kong has

been hit by a typhoon that's forced cancellations of over 180 flights to

and from this major financial hub. The military is assuming more and more

control and it's now in charge of food production and food distribution as

well. And Amnesty International is condemning a government decree that

could force citizens to work on farms. The chairman of Saatchi & Saatchi

has been put on leave after coming under fire for comments about women.

Kevin Roberts says women are happier not taking on leadership roles. She

was called the youngest female billionaire in the world. But after the

initial success, Elizabeth Holmes and her medical tech company Theranos

have been mired in controversy. >

Acquisitions; Stock Markets; Donald Trump; Military; Families; Death;

Politics; Government; Hong Kong; Storms; Women>

[16:00:00] ZAIN ASHER, CNN ANCHOR: That round of applause marks the end of another choppy trading day on Wall Street. Part of the problem was oil prices. We saw it at around $40 a barrel. Energy stocks are actually a real drag. The closing bell has rung. It is Monday, August 1st. Tonight, Uber is taxing out of China. The only thing surging was the company's debt.

And Donald Trump is under fire for criticizing a dead soldier's family.

And a lab is behind a multibillion dollar controversy. Our exclusive tour of Theranos Laboratories

I'm Zain Asher and this is QUEST MEANS BUSINESS.

Good evening. Tonight Uber has cancelled its trip in China and hitched a ride with rival Didi Chuxing instead. Didi will take over Uber's operations in the country. In return Uber will take an 18 percent stake in Didi, making it literally the biggest shareholder. The megadeal makes the end of Uber's long and very expensive drawn-out quest to dominate the Chinese market. Here's our Andrew Stevens with more.

(BEGIN VIDEOTAPE)

ANDREW STEVENS, CNN MONEY, ASIA PACIFIC EDITOR: Basically this was a war of attrition over more than two years. And the bigger team with the deeper pockets ended up winning. Didi Chuxing is in something like 400 cities, it's got 300 million registered users against Uber's 50 million, and they could last longer. Both sides were losing money and losing money heavily, trying to get market share. They were paying subsidies to both their drivers and to their passengers as well. We don't know the exact numbers, but it's been widely reported that Uber was losing a billion dollars a year, and they were in that market for more than two years.

A chastening time for Uber. But they do walk away with a pretty substantial consolation prize, if you like, a 17.7percent stake in really now the only ride sharing game in town in the biggest market in the world, which is China of course. As far as for the retail public goes, prices are probably going to have to go up now. Because there has been so many discounts. Now with only Didi lift, they are going to want to see profits turning fairly quickly.

(END VIDEOTAPE)

That was Andrew Stevens reporting there. The deal complicates an already complex family tree of ridesharing services in China. Our Samuel Burke is joining us live now from London. So Samuel, Uber literally tried everything. They tried multiple promotions. The tried bonuses. They tried subsidizing rides, nothing worked. Why not?

SAMUEL BURKE, CNN MONEY BUSINESS CORRESPONDENT: Well, at the end of the day, no matter what they did, you had this company, Didi, going at it just as hard as they were going at it. And they had created so many partnerships along the way. The most important one -- you almost need a family tree here, Zain, to see all the companies that are involved on both sides. But most importantly, you have Didi here, and they partnered with Kuaidadi. That made them a very strong partnership. And that was what helped them take on Uber.

Below that, you had the investors in Didi. You had Alibaba, Tencent, Apple. Have you heard of any of these companies? I don't think they wanted to see their money being thrown away in this war against Uber. So pressure, not only on this side, but also on the side of Uber. The had Baidu investing, and then another Chinese giant. A lot of people thought, and at least Uber did, if they had a Chinese company partnering with them that that would get them through. Well, it didn't.

You also have these partnerships. Andrew mentioned Didi, Lyft. The reason he used the word Lyft is because you have Lyft as a partner of Didi. GM is invested in Lyft. They're into Didi. You see almost every corporation that you could imagine when it comes to ridesharing is involved in this one way or another.

ASHER: I'm looking at that graphic and trying to piece it together and figure it out. It is so complicated. But I do have to ask you. What does this deal mean for consumers, especially when it comes to raising prices?

BURKE: I think this is bad news for consumers, because basically what's been happening here is Uber and Didi have been cutting the rate so low that it really wasn't realistic to ever keep them. They were subsidizing it. Interesting to note that the Chinese government was getting involved and saying, "Let's cut out the subsidies, you have to at least run this at real world prices." That helped put the pressure on Uber. So I think at the end of the day here, consumers are going to lose out, have real world prices. Drivers, it could be good for them. A lot of times when these companies are at war, it hurts drivers. So it could be good news for those drivers in China, Zain.

ASHER: So Uber basically giving up on its model on its China market. What do we know about when Uber is going to go public? When will the IPO going to come, Samuel? What do you think?

[16:05:06] BURKE: We're always pushing them on this. Things cooled off for a lot of tech companies. And for a while there all of a sudden everybody went silent. Now you seen a couple of tech companies do well. Companies like Line, you and I were talking about this on the phone actually earlier. That's a Japanese company.

All of a sudden there is new life for these companies. At the end of the day, we don't know, Zain. But what we do know, Uber now has this 20 percent investment in Didi. Then that company goes public, Uber could get a huge chunk of change. They're kind of thinking that maybe they have a stake in the company in the way that Yahoo had in Alibaba. Also now, Didi is invested in Uber. They've put in a billion dollars. Actually, they've put in significantly more than that. They've put in 32. So what they have is a huge stake in these companies when they go public. So it could be good news, a payday for both of those companies.

ASHER: All right, Samuel Burke, live for us there, thank you so much, appreciate that.

And as Didi takes control of China's ride sharing market, Elon Musk is trying to take control of the clean energy industry. Tesla has made a $2.6 billion offer for SolarCity, the top seller of solar panels in the United States. Musk is CEO of Tesla and chairman of SolarCity. Our Paul La Monica has been following the deal. He joins me now. What investors have been scratching their heads over this deal. Help us make sense of it. How does this deal really benefit Tesla? Especially when it comes to efficiency and cost savings as well.

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: Right. The goal for Tesla, because they just built that huge giga factory in Nevada to produce more batteries. Their goal is to be the dominant player in alternative energy, not just selling electric cars, but also these solar panels. Investors maybe aren't buying that just yet. I think there are concerns about Musk being spread too thin, because Tesla is trying to launch their affordable Model 3 car. Musk is also preoccupied with that little SpaceX venture --

ASHER: So much going on for him.

LA MONICA: -- and add everything on top of that you've got the fact that - - oh, yeah, the people who run SolarCity are his cousins. Some people arguing that maybe there's a little bit of nepotism here. He was the chairman before.

ASHER: Is there a conflict of interest in that? The fact that SolarCity is run by his cousins.

LA MONICA: Well I think it's reasonable to be concerned that maybe he won't be as objective because they are family. But I think that Musk and others would argue that despite the fact that he has these blood ties, he still is a businessman at heart and is going to do what's best for his company and not the extended Musk family. But I think investors are worried that the plan he has is just a little too ambitious.

ASHER: SolarCity has had issues with debt and losses as well. What would this deal mean for them do you think?

LA MONICA: I think it is a good thing that it may get SolarCity out of the public eye. It won't have investors worried about just their own profits and losses, since it will get baked in to Tesla. But that doesn't completely eliminate the bigger concerns about Tesla and all the money it's spending on the giga factory. On the new cars that is developing. This is just one more thing that could wind up being a huge money pit for Elon Musk.

ASHER: So talk to us about -- you know, we talked about how investors have been responding, how they're skeptical of the deal. If you look at Tesla's share prices, on Friday they had dropped, what was that about 10 percent. Now they're sort of rebounding a bit. Does that mean that Tesla investors are sort of coming on board with this deal?

LA MONICA: I think they may be a little less concerned with more of the details emerging. And also, this is a deal that had been rumored for a while. The price is not as steep as once expected. The bigger issue for Tesla right now is just proving to Wall Street that as companies like GM and Ford and others in Europe and Asia are finding religion in electric cars, Tesla is going to have a lot of competition. This isn't a market it's going to own exclusively and I think that is a big concern for investors right now.

ASHER: I have to ask you about oil prices. Oil hovering at around $40 a barrel. What will that mean for Tesla and the Model 3? They're trying to get electric cars to appeal to the everyday, common man.

LA MONICA: That's a great question. When you look at the Model S and Model X, these are cars primarily the affluent are buying and driving. They're probably not doing it because they want to save money on gas. Some of it is an environment statement and also it's a prestige factor. For the average person that might be able to afford the Model 3, which is still going to be pretty pricey, the rumored price tag of around $35 to $40,000, but it's definitely cheaper. People may not be as inclined to want to buy an electric car if gas prices remain this low for an extended period of time.

ASHER: Who knows how long they're remain this low, $40 a barrel, we can hardly believe it. Paul la Monica, live for us there, thank you so much, appreciate that

LA MONICA: Thank you, Zain.

ASHER: Well, stocks in Europe ended mostly lower. Bank shares were the biggest losers following the release of stress test. Shares in Italian lender Unicredit closed off more than 9 percent. Monte dei Paschi shares rose slightly after a lender unveiled a multibillion dollar rescue plan. That came despite a poor showing on the stress test.

[16:10:04] New signs that the Brexit vote may have done some notable damage to the British economy. July the first full month after the referendum saw the biggest drop in British manufacturing since 2012. The crucial purchasing managers index or PMI slumped to 48.2. That's worse than initially estimated, and way below the levels seen in June when production actually grew. Anything below 50, by the way, so you can interpret these numbers, anything below 50 indicates a contraction rather than expansion. Ahead of the British manufacturers organization, EEF, says, "It's a wake-up call for the U.K. economy." I asked Terry Scuoler, a little earlier, if this was a sign of things to come.

(BEGIN VIDEOTAPE)

TERRY SCUOLER, CEO, EEF: Perhaps too early to say yet. When we look at these numbers there's clearly a bit of a down dip. I'm not going to call this a recession. Clearly one would argue this was linked to Brexit. This is one indicator. Clearly we've just got to regroup here, reflect here, and just build our economy going forward. But you're right, perhaps this is a wake-up call and we do need to take notice of it.

ASHER: What will this mean for the Bank of England? Will they lower interest rates? What do you think?

SCUOLER: Well, we thought the Bank of England was going to lower interest rates last month, did we not? I think, however, when we look forward to Thursday, I think the governor and his team must surely be looking at some stimulus to our economy. Maybe to head off that potential downturn or recession, as you mentioned earlier. So yes, I think we're in all probability looking at a rate cut here of perhaps 25 basis points. I think more interestingly, of course, we could be looking at some other aspect of stimulus, perhaps further quantitative easing. So, yes, I think that surely would be in the cards.

ASHER: And when you look at these numbers, what is particularly concerning? Is it new orders? Is it output? Is it employment? What is of particular concern to you?

SCUOLER: We at EEF look at about eight or nine key indicators. And I think you've mentioned two of them there. Domestic demand, what we call export demand, investment intention, I think have taken a knock here. Of course all the more reason why we just need to have confidence now in our economy. All the more reason, by the way, why we need to look to our government in the coming months, on a reflective basis, to look at an overarching industrial strategy, and look at the tea levers of growth. Surely we can look to our new Prime Minister, the new Business Secretary to take those steps, in terms of whether it be infrastructure, whether it be progressive tax policy, to help boost our industry and economy.

ASHER: Where you surprised that the weaker pound didn't help boost export orders as much as anticipated?

SCUOLER: If we go back, of course, to 2010 when the pound fell markedly, there was limited benefit from the dropping of the pound. I remain fairly confident that a weaker, more competitive pound is perhaps a better way of putting it, will in due course boost our exports. Remember, of course, that a weaker pound means higher import prices, and that is a knock on effect to consumer pricing and potentially inflation. But I do on balance over time firmly hold the view that a weaker pound will support our export drive and our export ambitions.

ASHER: Can these numbers tell us anything about what to expect from the construction sector and the services sector later on this week?

SCUOLER: I fear, if I'm honest, that we may see some further dipping of confidence here, although I hope that that is not indeed the case. Equally, I would say in response to that, if that is the case, then of course we have a significant raft of potential very, very large infrastructure programs on the table here, on the books here, and one could look at Southeast Airport expansion, Hs 2, some major defense programs, of which one of course has been secured recently in terms of Trident nuclear submarine replacement. But we do need wherever possible, and the government needs to get behind these, major investment programs and start committing to them. That would be seen as an enormous boost and incentive to British business.

(END VIDEOTAPE)

ASHER: Coming up here on QUEST MEANS BUSINESS, Donald Trump takes to twitter in his ongoing feud with the parents of a fallen American soldier. That's next.

[16:15:00] (COMMERCIAL BREAK)

ASHER: Donald Trump is currently holding a rally in Columbus, Ohio, and we'll bring you coverage from that state in just a moment. The father of a slain Muslim-American soldier at the center of a controversial feud with the Republican nominee, told CNN's NEW DAY that he and his wife, they don't want to drag this out. They don't want to prolong this dispute.

(BEGIN VIDEO CLIP)

KHIZR KHAN, FATHER OF FALLEN U.S. SOLDIER: We are private citizens. We are private people. We want to be out of this controversy. My good wife Ghazala had been insisting that I not respond. I take a more dignified path than responding to undignified attacks and comments. Therefore, we jointly decide that there is no need to escalate this. We have made the point.

(END VIDEO CLIP)

ASHER: Jason Carroll joins us live now from that Trump rally in Columbus, Ohio. So Jason, one of the things about this controversy or about covering Donald Trump in general is actually staying shocked. Does this controversy feel different from all the other ones do you think?

JASON CARROLL, CNN U.S. CORRESPONDENT: I think it does to a number of people, especially, Zain, if you look at the response that is coming across both sides of the aisle and not just from Hillary Clinton, who basically said I don't know where the bottom is when it comes to Donald Trump. But when you look at other prominent GOP leaders who have come forward and have spoken out about this. Senate majority leader Mitch McConnell distancing himself from this. House Speaker Paul Ryan issuing a statement about what Trump said as well.

Then you look at what Arizona Senator John McCain said. As you know, John McCain has been on the other side of the criticism as well. Trump criticized John McCain at one point, saying that he was not a hero because he had been captured. John McCain saying that Donald Trump's views do not represent the views of the Republican Party. So I think in this instance it is somewhat different. But when you talk to the people who are in here at this particular rally where we are in Columbus, Ohio, as I have spoken to them, before Trump started speaking, and he just ended right now, but Zain, they tell me the whole controversy over this family makes no difference to them whatsoever. They feel as though this is something that's been Trumped up by the Clinton campaign and the media. And in their eyes, Donald Trump is speaking what they want to hear, in a sense, Zain.

ASHER: You know, it's interesting, Jason, because a lot of times we've heard people say that Donald Trump should start acting more presidential. But why, when it works for him not to? It works for him to say the most controversial thing, because then he knows he'll get 24-hour media to cover him.

CARROLL: Well, look. I mean, first of all, when it comes to acting more presidential, that's not just coming from the outside, it's coming from the inside. You'll remember his wife Melania Trump said it. His children have advised him to be more presidential. When it comes to some of his friends, he said last week, we were at a rally in Columbus, not just in Columbus, Ohio, but also in Denver, you know, and Trump even said there, he said a friend of his had spoken to him and said, look, stay focused on Hillary Clinton, you don't need to talk about the Khans. You don't need to talk about Michael Bloomberg, New York city's former mayor who also criticized him.

[16:20:00] They said, just stay focused on the issues, just stay focused on Clinton. But clearly it's something that Trump did not listen to. But when it came to this town hall here in Columbus, I can tell you, it's just wrapping up now, not one question about what happened with the Khan family. And Trump did not mention the Khans here either as well. So perhaps he may be finally starting to listen.

ASHER: His supporters don't even seem to care anyway. Jason Carroll, live for us there, thank you so much, we appreciate that.

Dylan Byers, CNN's media reporter, join us from Los Angeles. So Dylan, it's interesting, because amid all of this controversy, what you've seen is Donald Trump lashing out at the media, lashing out on CNN. What's interesting is that, you know, we all know that Trump has benefitted from 24-hour news coverage. So why is it smart of him to portray himself as a victim of the media?

DYLAN BYERS, CNN MONEY, SENIOR MEDIA REPORTER: First of all, you're absolutely right that Trump has benefitted from 24-hour media coverage. It's hard to imagine how he would have run as successful a campaign as he's run without national media, which has given him such a platform. And he has dominated the news cycle day-after-day, hour-after-hour. The same reason he attacks the media is the same reason that he attacks anyone. That he attacks Mexicans. That he attacks Muslins. He's catering to a very small but very vocal and very energized base that really doesn't trust the media at all.

And, you know, look, I was just looking at his twitter account. The last six or seven tweets from him are all against CNN. He's really mad at CNN right now. For him, he thinks that does well with his base. Having traveled around the country and gone to places like Iowa and New Hampshire and Nevada and the two conventions recently, there's a lot of distrust of the media. They really love that. You'll never find a louder applause line than the line that tries to take down the media. So that's proven very successful for him. The question is does that prove as successful with the general election voting population. You know, there was an article from "The New York times" today that pointed out only 9 percent of the country has cast its vote for either Donald Trump or Hillary Clinton. There are a lot more people out there with whom this anti-media line might not go over so well.

ASHER: You know, it's interesting is that normally when there's a controversy with Donald Trump, we see him being very quick to sort of change the media narrative. He's very, very good at that, Dylan. Why hasn't he done that this time? Why hasn't he come out with some other line or some other story for the media to sort of hone in on?

BYERS: Well, that's a very good question. You know, throughout the Democratic Convention, Hillary Clinton and other Democrats tried to portray Donald Trump as someone who is not just erratic, irresponsible, and unfit for the office of the presidency, but also someone who is very thin skinned. Someone who could be baited by a tweet. Donald Trump doesn't like it when people go after him and he certainly doesn't like being a victim of anyone else's attacks. One argument says this is strategic and he's trying to rile up anti-Muslin or islamophobia among his base. But there's another argument that this just got under his skin and he didn't like being on the losing side of the narrative, so he dug in and as a result only ended up digging himself in deeper.

ASHER: So I want to talk about the timetable for the presidential debates, because Donald Trump's camp says they don't like the dates that the presidential debates are scheduled for because they coincide with NFL games. What's the real reason they're bringing this up?

BYERS: Well, some of the debates do coincide with NFL games, as they have for cycles going back for as long as I've been alive. Look, the commission on presidential debates is a bipartisan organization. It comes together a year, more than a year before these debates take place. And it hammers out dates that it can do. It's a hard thing to do. There are religious holidays, there are business holidays. There are major sporting events, all sorts of things they have to wrestle with. They have to pin down the venues.

This isn't a partisan issue. This isn't the commission on presidential debates and Hillary Clinton and the Democrats getting together in a room and deciding they're going to disadvantage Donald Trump. This is a really interesting thing about Donald Trump. In addition to trying to command the news cycle and distract attention away from other things, he consistently complains that he's not getting fair treatment. He complains that he wasn't getting fair treatment from Fox News and Megyn Kelly.

Right now he's complaining he doesn't get fair treatment from CNN. He's complaining that other candidates were on stage with him during the primary weren't fair to him. And now once again he's trying to sort of push this narrative that somehow he's a victim of unfair treatment. I think at a certain point you have to say, what is someone -- what do you call someone who just consistently complains that they're not getting fair treatment when in fact the rules are what they have always been?

ASHER: You know what, it's worked for him. This whole year, this method has worked for him. Dylan Byers, live for us there, thanks so much, we appreciate that.

BYERS: That's quite right, thank you.

[16:25:00] ASHER: We'll turn to a story we are following. Australian athletes say they were robbed when they had to evacuate the Olympic Village. We reported a small fire, you remember this, a small fire broke out there on Friday, forcing the Australian team to leave the building. Now that team says a laptop as well as some protective clothes were stolen from the Olympic Village. And this really does add to the list, the growing list I should say, of problems that organizers have really had to deal with in the run up and the buildup to the Olympic Games. Security remains a top concern. Only four days to go before the games begin. I want to go straight now to CNN's Nick Paton Walsh, He joins us live now from Rio. So, Nick, I have to ask you, are people really confident -- are they confident with the local police's ability to handle security there?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think confidence gets a boost from the fact that Brazil has really had no history of terrorism. Only in the past few weeks after a series of arrests has the word "ISIS" become part of the national dialogue here. You see on the streets down here a remarkably overt security presence, almost too much, frankly. When I first arrived, I was shocked, you couldn't turn without seeing heavily armed uniformed men almost wherever you turned. But one of the key things, the security at Olympic venues appears to have been addressed very late by organizers and some say perhaps not entirely satisfactorily.

(BEGIN VIDEOTAPE)

WALSH (voice-over): You couldn't really get any more obvious when it comes to Rio trying to make you feel safe. Copacabana and almost everywhere you look here and the venue for the opening ceremony, there's someone smiling with a gun. But they seemed to have missed something quite important.

(on camera) That is one of the biggest challenges for organizers, security screening for the huge crowds that want to get into the venues. But the basic task of working out who is going to be manning the x-ray machines at the end of these lines has been left to the last minute.

(voice-over) Just one month ago they hired a contractor to man these machines. On Friday it was announced the military police would take over as the contractor wasn't ready. But still, some employees of the contractor, not shown here, were being asked to come to work this weekend. One agreed to talk to us anonymously. He wasn't asked to provide a police criminal background check, he says. And only had to do a quick online training course.

UNIDENTIFIED MALE (trough translator): There are people who we will turn out for the job without any real training for the work we're being asked to do. Our job is to look after people's security and some of the people doing the work in my view aren't up to that. The training course was very quick. There should have been more to it.

WALSH: It's not clear, with just days you can count on one hand, to go whether he's needed again.

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