Episode Transcript
Transcripts are displayed as originally observed. Some content, including advertisements may have changed.
Use Ctrl + F to search
0:10
Hello! Welcome
0:13
to Slate Money, your guide to the
0:15
business and finance news of the week.
0:17
I'm Felix Hamlin of Axios with Emily
0:19
Peck of Axios. Hey, Felix. I'm
0:22
here with Elizabeth Spires, who writes The
0:24
New York Times, and it's amazing. Hello.
0:27
We're going to talk about the FTC, run
0:29
by Lena Kahn, who has come out
0:32
with a sweeping ban
0:35
nationwide on non-compete clauses. We are
0:37
going to talk about restaurant reservations
0:39
and whether we should start having
0:41
to pay for them. We
0:43
are going to talk about the Biden
0:46
administration's crackdown on airline
0:49
fees and forcing airlines
0:52
to give refunds. It's a good one. It's
0:54
coming up. It's late money.
1:04
Emily, we had massive news this week. What is
1:06
it? So, this week, after
1:08
more than a year of saying it
1:10
would do this, the
1:12
Federal Trade Commission announced a rule
1:15
banning non-compete agreements in employment contracts.
1:17
Those are the agreements that you
1:19
have to sign, or some people
1:21
have to sign, 30 million estimated
1:24
workers have signed, that
1:26
say if you leave your job at your
1:29
current employer, you can't go work for a
1:31
competitor for a certain amount of time, or
1:33
you can't go work for a competitor within
1:36
a 50-mile radius. They used
1:38
to be used mostly for executives,
1:40
but in more recent years, employers
1:43
have really gotten into non-competes using
1:45
them famously for the sandwich
1:48
maker Jimmy John's. Use
1:51
them. A lot of doctors
1:53
are subject to non-competes and nurses and
1:55
other kinds of healthcare workers. As
1:58
the years have gone by, people have really started
2:00
to complain about them. And the
2:02
FTC is saying, you know, they
2:04
make it harder for, you know,
2:07
workers to take new jobs, to
2:09
get raises, they blunt competition between
2:11
firms for workers, and that helps
2:13
keep wages low. So yeah,
2:15
this week, they put out this rule, banning
2:18
them, it's supposed to take effect in 120
2:20
days, which would be in about August. And
2:22
at that time, if you
2:24
have signed one of these agreements, it would be voided,
2:27
unless you are a senior executive making more than things
2:29
$151,000 a year, then you still have to abide by
2:31
your non-compute. But
2:35
going forward, even those executives can't
2:37
be subject to them anymore under
2:40
this rule. And the senior executives who
2:42
are still bound, do they need to
2:44
be executives or do they
2:46
just need to be paid more than $150,000
2:48
a year? Really good question.
2:51
Yeah, they not only do they
2:53
need to be paid more than
2:55
$151,000. They also need to have
2:57
policymaking responsibilities at the company they
2:59
work at. So if I'm
3:01
like a hedge fund trader, or
3:04
a bank trader or something like that,
3:06
banks famously have this thing
3:08
called gardening leave, where you can't start a
3:10
new job for a certain amount of time,
3:12
that all basically goes away if
3:15
those people weren't actual
3:17
executives, which most of the time they're not.
3:20
Yeah, according to this rule, although there's
3:22
a whole separate conversation in the
3:24
finance industry about whether or not this
3:26
rule applies to them because of other
3:28
rules and regulations in the finance industry.
3:31
I'm absolutely it's wild to me
3:33
that like doctors have
3:35
this, you would think that in
3:38
the healthcare industry and among doctors,
3:40
at least normally they pretend that
3:42
they're not competing with each other. But
3:45
they're like, oh, you can't compete. Yeah, it's really
3:47
wild. I mean, I have spoken
3:49
to some doctors and they're basically
3:52
stuck a lot of times because in
3:54
a lot of places in the country, it's maybe one or two
3:56
big companies That own. One
4:00
in the hospitals in an area and
4:02
nice doctors really get stuck. Some of
4:04
them wind up moving cars that noncompete
4:06
some restrict you to. You know you
4:08
can work for a competitor within. Fifty.
4:11
Miles or something of here says a
4:13
lot of people wind up moving for
4:15
new jobs that the doctor use Case
4:17
really exposes the extent to which Nine
4:19
can be tough. Really just been used
4:21
to walk workers in the jobs. In.
4:23
On theory they exist to keep people
4:26
from walking off with trade secrets, but.
4:28
That's. It just doesn't apply to doctors and
4:31
think he has. You don't want doctors to
4:33
have any secrets of the the counter. Argument
4:35
All this is that. The
4:38
assertive as free market conservatives
4:40
like to argue that the
4:42
nine competes are somehow. Good
4:45
for workers in a roundabout
4:47
way because they you know
4:49
incentivize am. Companies.
4:52
To invest more in training in
4:54
educating workers. Which. As not
4:56
an argument I buy at all. There
4:58
is a conservative commentator and Forbes you
5:01
be. Read a whole column about why
5:03
nine to be. It's good. For
5:05
workers and also good for
5:07
corporations, obviously. But he made
5:09
an argument. partly. Around
5:11
this idea of training and
5:13
suggested. That people who were trained by
5:16
company and and last were free riding.
5:18
On the know the companies. That.
5:21
I guess is sort of educational
5:23
services that they were providing ah
5:26
which which completely contradicts my understanding
5:28
of was three writing means because
5:30
there's I in theory that the
5:32
company is getting a higher quality
5:34
of workers, more sophisticated quality of
5:37
work. Sensibly. Without.
5:39
Paying more for. The.
5:41
Labour right, Companies can also keep
5:43
those well trained employees by offering them
5:45
more. Money in out to stay. With.
5:48
With them and it just will cost a lot more
5:50
I think. That's. Why I'm players don't
5:52
like. The scenes because it it will
5:55
cost them more to retain. Workers
5:57
that sort of the bottom line the more
5:59
right. national defense is that companies don't
6:01
want workers running off with
6:04
trade secrets to competitors. But
6:06
I'm not even sure that holds up because running
6:08
off with a trade sequence to competitors is still
6:11
a problem even in the
6:13
absence of non-competes and there's still recourse
6:15
for it. Non-competes know.
6:17
Right. It's still illegal to run
6:20
off with the trade secrets. That's
6:22
why trade secrets and IP
6:24
law exists. And you can also have employees
6:27
sign non-disclosure agreements if there are particular
6:29
things you want them to keep quiet
6:31
about. You can also incentivize people
6:33
to stay with different kinds of compensation
6:36
plans and benefits that
6:38
could also work. There definitely
6:40
are workarounds. The obvious thing to
6:43
note here is that California has
6:45
made non-competes unenforceable forever
6:49
now and it's basically
6:51
the most economically vibrant state
6:53
in the union. So we've
6:56
tried it. We've seen it in California. It
6:58
seems to be fine. It doesn't seem to
7:00
be any problem in California with banning non-competes.
7:02
So in principle, it
7:04
should be fine. Although in practice,
7:06
Emily, there's going to be a
7:09
whole bunch of legal challenge to this. Oh,
7:11
yeah. So the day after, so the
7:14
FTC announced the finalized rule Tuesday. On
7:16
Wednesday, the
7:18
Chamber of Commerce and the Business
7:20
Roundtable filed a lawsuit against the
7:22
FTC in court in Texas, of
7:24
course, before this judge who has
7:26
already like batted down some other
7:28
Biden regulations and such.
7:31
And they are trying to keep
7:33
this rule from ever taking effect.
7:36
And I mean, I think
7:38
they have a shot. The judge, like
7:40
I said, who they're up against has
7:42
already batted down some other Biden stuff.
7:44
The eviction moratorium comes to
7:47
mind, CFPB in
7:49
another case. And even like
7:52
some former FTC people that I've
7:55
spoken to say that this was
7:57
like a really big swing from
7:59
the agency. And yeah, it's
8:02
not really clear. It's going to hold
8:04
up in court. There's this thing now
8:06
called the major questions doctrine, which says
8:08
like, if there's
8:10
like a major question that
8:12
a regulation involves, then Congress
8:15
has to be explicit
8:17
and has to be the one making the
8:19
new rule and that a regulator can't do
8:21
it if it's like a really big thing,
8:23
like the student loan relief that Biden tried
8:26
to pass at the Supreme Court knockdown. So
8:28
the term major questions is in the chamber's
8:30
lawsuit and in a lot of like the
8:33
quotes about this and yeah,
8:35
I don't, I don't know if it's going to make
8:37
it through these court challenges. Yeah, it's a very major
8:39
question. It's a very fuzzy legal concept though.
8:41
And there's a lot of gray area and
8:43
you know, the political impetus behind the agencies
8:45
of power and the executive of power, I don't
8:48
know how it really holds up in practice though. I mean,
8:50
there's not a lot of, I
8:52
think direct precedent for
8:55
something like this, you know, being reversed
8:58
on a major questions basis. Well,
9:01
I mean the major questions doctrine
9:03
is relatively new, but the principle
9:06
that legislation should come
9:09
from the legislature and
9:11
not from the executive branch is
9:14
I think relatively intuitive,
9:17
right? It's relatively intuitive. And in
9:19
places like California, when California wants
9:21
to ban non-competes, it passes legislation
9:23
to that effect. If
9:26
you want to ban evictions,
9:28
you can ban evictions, but you want a law to
9:30
that effect, getting the centers for disease
9:32
control to do it is
9:34
a little bit weird. And
9:37
I think what we're seeing is a
9:39
bunch of these things coming from the
9:41
executive branch because the legislative
9:43
branch is so completely OTOs and they
9:46
can't pass anything. I think this Congress
9:48
has passed fewer laws than any Congress
9:50
since, you know, the 18th century or
9:52
something. And that's, I think, a
9:55
big problem, you know, that we do have a
9:58
Congress that seems to be incapable of passing. anything.
10:01
And that is placing more
10:03
and more onus on the executive branch
10:06
to do stuff. And in an ideal
10:08
world, we would see
10:10
much a much more active legislature debating
10:12
laws and passing laws. And I do
10:14
feel like this solution is the second
10:16
best solution. I would personally prefer to
10:18
see this coming from Congress as well.
10:20
Yeah, all that said, the Federal
10:23
Trade Commission is supposed to regulate
10:25
competition. And when there's unfair competition,
10:27
it's supposed to combat it. And
10:29
literally, this thing is
10:31
called a non-compete, non-competition
10:34
clause. Like, it couldn't
10:36
be more squarely in the purview of
10:38
the FTC, right? But yeah, the Chamber
10:40
and the Business Roundtable are like, this
10:43
is too broad. This should be
10:46
lawmaking. But I mean, regulators have
10:48
long taken whatever their agenda
10:50
or mission is and created rules around
10:52
their agenda or mission. It's actually not
10:55
like outside the bounds. I think it's
10:57
just in this new environment, this new
10:59
very conservative environment, where there's
11:01
a lot of, you know, moaning about
11:03
regulatory overreach that we're now like, maybe
11:05
it is a regulatory overreach. Also,
11:08
Lina Kana has really used the
11:10
limits of the agency, you know,
11:12
to great effect. I think, yeah,
11:14
historically, the FTC has not been
11:16
this aggressive or, you know, in
11:18
some ways this powerful. Yeah,
11:21
it's been, I think, 50 years since
11:23
they've set any kind of, like, nationwide
11:25
rule in this proactive way, rather than
11:27
just, you know, going after individual
11:29
deals as anti-competitive. They have
11:31
taken action against companies for
11:33
abuse of non-compete clauses in
11:36
the past, but nothing this
11:38
broad, obviously. So this is very
11:40
much Lina Khan flexing her
11:42
muscles. Yeah, oh yeah, this is.
11:44
And I was just doing some reporting maybe for
11:46
a story next week,
11:48
looking at, you know, how the FTC
11:50
and the Department of Justice, both, and
11:52
we've talked about this before as part
11:54
of, you know, Lina Khan and Hipster
11:56
antitrust, they're looking at what
11:59
mergers happen. or anything
12:01
happens, they're not just looking for
12:03
what are the harms to consumers,
12:05
but how does this lack of
12:07
competition harm other kinds of classes
12:10
of people and things? How does
12:12
it harm specifically workers?
12:14
Because non-competes, I
12:16
mean, you could argue that they harm consumers,
12:18
but they definitely harm workers.
12:21
Or like we talked about the Penguin House,
12:23
Simon & Schuster deal that the
12:26
FTC sued to stop. And the argument
12:28
there was that it harmed authors, also
12:30
trying to stop Kroger & Albertsons, the
12:32
grocery stores from merging. And there's an
12:35
argument there also that this would harm
12:37
workers because there'd be fewer employers,
12:39
you know, try not hire them, so
12:42
they won't have to compete as much
12:44
on wages anymore. Isn't this an
12:46
argument that applies to literally every
12:49
merger? Like, how does this
12:51
not apply to every single
12:53
merger? In the sense that every
12:56
single merger reduces the number of
12:58
employers who are competing for workers,
13:00
and therefore it's bad for workers?
13:03
That's a good question. And one thing, I don't know how
13:05
to answer it, but I can
13:08
tell you that unions, which we
13:10
think of as, you know, organizations
13:12
that have workers' interests, you know,
13:15
forefront, right? They don't always mergers.
13:18
They sometimes support mergers because they
13:20
think if their employer is bigger
13:22
and on more
13:25
solid financial footing, then they're
13:27
better off. So there
13:29
are people who think that mergers are
13:32
good for workers, actually. Or
13:34
can be. Yeah, as an employee of Axios,
13:36
I can say, I am happy that we
13:38
were acquired by Cox, and Cox has lots
13:41
of money. And I feel like that places
13:43
Axios on a stronger financial footing, and it's
13:45
probably good for us as employees. Yeah.
13:47
Or I mean, there was a JetBlue
13:50
Spirit merger that did not happen. And
13:52
I think the Spirit employees wanted the
13:55
merger to happen because
13:57
they were like, if it doesn't, we will lose
13:59
our jobs. So it's good for us. Just
14:02
to go back to the non-compete issue,
14:04
though, the FTC does
14:06
have a good business case for
14:08
eliminating non-competes. And they've tried to
14:11
quantify it by noting that elimination
14:13
of non-competes would increase
14:15
new business formation. And
14:17
I don't know if that
14:20
would happen in such an explosive
14:22
way that it would satisfy
14:24
the conservative opponents of
14:26
abolishing non-competes. But it is a good
14:29
other side of the coin, where
14:31
not everything about abolishing non-competes is
14:33
just about preserving
14:36
what's good for workers. It's
14:39
also good for more competition in
14:42
the economy in general. Another argument
14:44
against the broadband is that
14:46
it's too broad. I've
14:48
seen some people say, even one of the
14:50
FTC commissioners who voted against was like, I'm
14:52
not against. I'm all for restricting the use
14:54
of non-competes. But this goes too far. There
14:56
are some cases where we need them. This
14:59
doesn't give us any flexibility for higher-paid employees
15:01
and things like that. What do you say
15:03
to that? I think that there are other
15:05
ways to thread that needle. What
15:08
are the concerns there? If it's
15:10
people leaking trade secrets, that can
15:12
be enforced by things that are
15:14
not non-competes. What would
15:17
be the argument for non-competes
15:19
as opposed to narrower instruments?
15:22
I don't know. I feel
15:24
like non-competes, they're not that
15:26
common globally. And
15:29
it's entirely possible to have
15:31
a vibrant capitalist economy without
15:33
them. So I'm not
15:35
super worried. I do understand that it's natural
15:38
to me that the Chamber of Commerce and
15:40
people like that will oppose it because it's
15:44
a way that they keep wages down. But I think
15:46
that's really, ultimately,
15:49
the fight here is that employers
15:52
like it because it's down
15:54
with pressure on wages, and the FTC doesn't
15:56
like them because it's down with pressure on
15:58
wages. Yeah. Yeah,
16:00
Betty Stevenson had a good com and Bloomberg
16:02
and she's basically like. The. Reason companies
16:04
want non computers that they give them.
16:07
More bargaining power and without them have less
16:09
park and power. So.
16:18
Before it gets the break I want
16:20
to tell you about Sleep Plus Today
16:22
or sleepless segment is really good. We're
16:24
talking about the tic toc ban that
16:26
looks like it's actually happening that bad
16:29
and signed into law this week. So.
16:31
If you're sleepless member, you'll get to hear that at
16:33
the end of the shell. If you're not a sleepless
16:36
member, And you want your
16:38
that you should sign up. Also, you
16:40
won't have to your ads and you'll
16:42
have access to a lot of other
16:45
great plus stuff like unlimited access to
16:47
all sleep.com Clinton members only newsletter and
16:49
they also already mentioned the ad free
16:51
part on the podcast that's truly amazing.
16:54
Unless you like my ad rates then.
16:56
By. All means don't sign
16:58
up. But I think you
17:01
said so, sign up at
17:03
slate.com/money Plus that sleep.com/money Plus.
17:07
When. It comes your finances. Go for the
17:09
credit card that's always there for you. Will
17:11
Twenty Four seven Us Based Life Customer Service
17:14
from Discover. Everyone has the option to talk
17:16
to a real person any time, day or
17:18
night. Yep, that means no more waiting for
17:20
quote normal business hours just to get a
17:23
hold of someone. We're talking real service from
17:25
real people whenever you need at. Get.
17:27
The customer service you deserve with
17:29
discover limitations apply. See. Terms
17:32
of discover.com/credit Card. this
17:35
episode of flee money is brought
17:37
to you by wondering which is
17:39
a pogo of company and it
17:41
makes about go school to best
17:43
one yet and it is a
17:45
the podcast hosted by nick and
17:47
jack to serve up three of
17:49
the most interesting business news stories
17:51
every day of waves know them
17:53
and just twenty minutes your the
17:55
hear about that hundred dollar wedding
17:57
dress that saves abercrombie or which
18:00
real tech acquisitions like Game of Thrones
18:02
or the one financial equation that can
18:04
finally solve climate change. That's the kind
18:06
of stuff you find on the best
18:08
one yet. So be in the know
18:10
this year by starting your morning with
18:12
the best one yet every weekday. Follow
18:15
the best one yet on the Wondery app or
18:17
wherever you get your podcasts. You
18:19
can listen as free right now on Wondery
18:22
Plus. And for more
18:24
deep dive and daily business content,
18:26
listen on Wondery, the destination for
18:28
business podcasts with shows like the
18:31
best one yet, how I built
18:33
this, business wars and many more,
18:35
Wondery means business. Guys,
18:39
enough policy wonkery. I want to
18:42
talk about restaurants. I
18:44
want to talk about this wonderful New
18:46
Yorker article about the
18:48
secondary market in restaurant reservations
18:51
and specifically I want to talk about one
18:53
number which I was going to have in a numbers round
18:55
and I was like, no, we have to make an entire
18:57
segment about this. Which
19:01
is $1,050 which is
19:03
the amount that a
19:05
restaurant reservation at Carbone in
19:07
Greenwich Village in New York traded
19:10
hands for recently and this is quite normal.
19:12
This happens all the time and
19:14
just to be clear, this is just the reservation. This
19:17
is just so you can get in and sit down
19:19
at the table. Then
19:21
once you're there, you then pay however many
19:23
hundred dollars for your meal. Tell
19:26
people what Carbone serves. It's not
19:28
like some exotic cuisine. It's
19:30
like lasagna. It's a high end
19:33
red sauce restaurant. Unbelievable. It's
19:35
an Italian restaurant serving good
19:38
Italian food. I think we
19:40
have to explain here for people
19:43
who don't live in New York that Carbone
19:45
is also a very seany place. They have
19:47
turned away Justin Bieber and Haley
19:49
Bieber because they didn't have a reservation and
19:52
it's a place where I think of it
19:54
as sort of junior investment maker of land
19:56
where people with a lot of money
19:58
and a late night social. life like
20:01
to go. And it's really, the food is
20:03
good, but it's not about the food really.
20:06
I just, it adds to the
20:08
ridiculousness. The first thing we need to
20:10
do is really underscore, especially in the case
20:12
of carbon, I think other ones I'm not
20:14
sure, certainly in the case of carbon, it's
20:17
not about the food. It's not about the food
20:19
at Rao's where, you know, it's another place that's
20:21
famously impossible to get into. Like, I'm sure the
20:23
food is good, but that is not the reason
20:25
you go there. There are plenty of incredibly good
20:28
Italian restaurants in New York
20:30
where you can go, you can get a reservation,
20:32
they are no problem, have a delicious meal, probably
20:34
spend a lot of money, but at least you
20:36
don't need to worry about, can I get the
20:38
table? And this is
20:41
the fundamental reason why I
20:43
think ultimately this
20:45
whole secondary market and this whole meshogas is
20:47
good. I think that if
20:50
there's a whole scene around
20:52
a place like carbon, fine. Like, let the
20:54
people who want to be in the scene
20:56
buy and sell their reservations and play a
20:59
game like that. And then the people
21:01
who have no interest in that scene and just want
21:03
to have a decent meal, they can
21:05
still get a decent meal at any number of
21:07
places without any problem. And this is a great
21:09
way of separating the two and
21:11
then the people who really care about
21:14
being part of the scene are the ones who become
21:16
part of the scene and it
21:18
works. Like, I think it's all good. I
21:20
don't know. I think it's kind of
21:22
not great because should
21:25
we explain how it kind of works? Basically,
21:27
there are these reservation sites
21:30
where sites that are quote
21:32
democratic like open table and
21:34
rezi and you can go there and get
21:36
reservations. But what happens is people
21:40
basically like hack those sites. So as soon
21:42
as reservations become available for a restaurant, a
21:44
trendy restaurant like carbon, they swoop
21:46
in and book all the tables and
21:49
then sell them on the secondary market for
21:51
like what Felix said for like a thousand
21:54
dollars, hundreds of dollars. That just seems like,
21:57
is that a good market? Is that a
21:59
productive market? I think you've got a
22:01
little bit of a discomfort with it because it's kind of like
22:03
scalping, you know? And we
22:05
think of like ticket scalping as being unethical.
22:08
It's exactly what's happened in the concert
22:10
ticket space, right? Or what's happened there for
22:12
years and years. Right, right.
22:15
So Emily, the answer to your question is like, yeah,
22:17
no, this is a really suboptimal way of doing things.
22:20
There are much better ways of doing
22:22
this. And the first is by using
22:24
the price mechanism, which is to... It
22:27
is undeniable that a
22:29
reservation for two people
22:31
at 8 p.m. on a Saturday is a
22:34
more valuable thing than a reservation
22:37
for two people at 5 p.m. on
22:39
a Monday, right? And yet both
22:42
are priced at exactly the same price on
22:44
Resi or OpenTable, which is zero. So
22:47
what we should do, and I know that Resi
22:49
tried to do this when it launched, and then
22:51
there was a bunch of sort of blowback, and
22:53
they wound up not doing it after a while.
22:56
But like what we should do for
22:58
restaurants which are regularly
23:00
selling out their reservations and
23:02
have no problem filling up
23:05
is just embrace reality and say, look,
23:07
the reservations at hard times you have
23:10
to pay for. Like there's no
23:12
shame in that. Yeah, and then the
23:14
money would at least go to the restaurants
23:16
who presumably are operating
23:18
at pretty thin margins, right? I mean,
23:20
instead of going to these kind of
23:23
these scalpers and this whole roundabout, would
23:25
you do Wajidi system? There
23:27
was one restaurateur who argued that it helped
23:29
them turn over tables faster. Their
23:32
argument was that it cut down on
23:34
time between turning tables because people were
23:36
willing to pay more for
23:38
reservations and they were less likely to bail
23:40
on them or something like that. Well,
23:43
no, so wait, Elizabeth,
23:45
you're saying that, yes, we should be
23:47
selling reservations. Restaurants should be selling
23:49
reservations. I'm saying there's a, it's
23:52
not totally disadvantageous to the restaurants
23:55
for this to happen. Even if they're not getting
23:57
the money for the reservations, they're still benefiting After
24:00
turn over in the tales. Know,
24:02
I think I think that's wrong. I
24:04
think I think the if the restaurant
24:06
selling reservations directly than that's absolutely right.
24:08
You know it cuts down on notice
24:10
is that if the restaurant reservations are
24:12
being sniped up and then sold on
24:14
the residue on the second be market.
24:16
that's bad because if they don't sell
24:18
on the secondary market then that is
24:21
a reservation that his maiden no one's
24:23
hands up and that's bad for that.
24:25
That's really bad for the restaurants you
24:27
want. To make sure that
24:29
the. Reservation. Gets used
24:31
in if people are making free reservations
24:33
and expire be I don't. I get
24:35
your argument. I think the that it
24:37
is the article at least was really
24:39
focusing on places like Carbone where the
24:41
demand is so enormous. That. That
24:43
scenario of people you know making reservations,
24:46
not showing up the it's more. That's
24:48
kind of thing that happens at a normal
24:51
restaurant the doesn't have that kind of demand
24:53
and and then it happens to stay. People
24:55
are making reservations over open table or whatever
24:57
it would broadly in the line when he
24:59
had that. selling reservations is a good thing
25:01
because if you have paid for your reservation.
25:04
Then. You. Are more likely to
25:06
turn up and so than the only question
25:08
becomes. Who. Should be selling the
25:11
reservations. And the obvious answer to Emily's point
25:13
is the restaurant. They need the revenue of
25:15
the great new revenue source of them. So
25:17
or any restaurant that finds itself. Pushing.
25:20
Out. Of. Certain times of day
25:22
on certain days of the week. Yeah,
25:25
charged for the reservation. Go for
25:27
a people. And the other downside
25:29
as that restaurant not. Making
25:32
reservations anymore because they're. Getting hijacked by
25:34
these third party is is that an unknown
25:36
else does hold up. For. A restaurant
25:38
My carbone that the author of the New
25:40
Yorker piece was pointing out like back in
25:42
the day when used as the color as
25:44
trying to get a reservation. And and restaurants.
25:47
had regulars that did this they keep like
25:49
a little file about their regulars you know
25:51
and then they'd be like they like this
25:53
why are they like they are a lot
25:55
of this this thing or whatever and the
25:57
kind of like cater to them you know
26:00
But if you're selling reservations under like
26:02
dummy names to random people all that
26:04
kind of service is sort of out
26:06
the window exactly a high-end restaurant really want
26:08
to know who's coming to dinner so they can
26:11
prepare for that person and you can't
26:13
do that if those people are buying. On
26:15
the second market but if they buy the reservation on the
26:18
primary market it's fine and
26:20
the other way to do it by the way you don't need to
26:23
sell the reservation directly the other way
26:25
you can do it is what talk
26:27
does. Which is you sell tickets
26:29
basically and you pay for the meal in advance
26:33
and a meal at. It's
26:35
not gonna Saturday is gonna cost more than the
26:37
same meal at five o'clock on a Monday
26:39
and that also works you just need to know
26:42
who's coming when they need to pay gonna
26:44
say what about the Wendy's methodology you know
26:46
where you do search pricing for the meals
26:48
what when we see more of that i
26:50
mean i guess we see that with like
26:52
happy hours and yeah. That's exactly it
26:54
is that it's a pricing and
26:57
people hate so pricing and but that's exactly
26:59
what it is. One of
27:01
the more fascinating things about this piece to me
27:03
was the sort of vein of
27:05
entrepreneurship of people who were just sort of
27:08
in their spare time. Nothing
27:10
up these reservations and then reselling them
27:12
yes there's a guy who is and i refuse
27:14
to believe that this is not a totally made
27:16
up name because it sounds just a little too
27:19
new yorky the magic
27:21
who otherwise in his day job owns
27:23
a waste management company with like forty
27:26
garbage truck and he apparently just makes
27:28
tons of money now. Getting
27:30
reservations for you know dealer celebrities
27:32
and rich people so
27:34
it actually encourages new business formation. But
27:41
yes support your local restaurants folks and
27:43
if there's a restaurant that's constantly booked
27:45
out by a bunch of overpaid.
27:49
27 year olds just support somewhere else
27:51
that serves better food and that needs
27:53
your customer don't pay a thousand dollars
27:55
just for the privilege of eating lasagna
27:57
us just bananas you
27:59
know cheap it is. to make lasagna. This
28:01
is called the Olive Garden. It's a
28:03
new Italian restaurant and it is so popular that they
28:05
have had 45 minute wait for
28:07
lunch and dinner. Are
28:19
you selling a little? A
28:22
lot? Shopify
28:25
helps you sell basically anything. It is
28:27
the global commerce platform that helps you
28:29
sell at every stage of your business.
28:32
From launching your online shop to opening
28:34
up a real life store to, oh
28:36
my god I just hit a million
28:39
orders. Shopify is there every
28:41
step of the way. It will help you
28:43
grow. It doesn't matter whether you're selling scented
28:45
soap or outdoor outfits. They help
28:47
you sell everywhere. Name the country you want
28:49
to sell. They will help you sell on
28:52
it. They are Canadian themselves. They understand this
28:54
is a whole big world. They're not just
28:56
America people. Sell your stuff from
28:58
an all in one e-commerce platform that
29:00
even has an in person point of
29:03
sale system. Wherever whatever you're
29:05
selling, Shopify has got you covered. They
29:07
even now have this thing called Shopify
29:09
Magic which is an AI powered all-star
29:12
which will help you sell even more
29:14
with less effort and they have award
29:16
winning help to support your
29:18
success every step of the way. Sign
29:21
up for a $1 per month trial
29:24
period at shopify.com/money
29:26
or lowercase. Go
29:29
to shopify.com/money now
29:32
to grow your business no matter what stage
29:34
you're in. shopify.com/money.
29:40
Apple Card is the perfect cash back
29:43
rewards credit card. You earn up to
29:45
3% daily cash on every purchase every
29:47
day. That's 3% on your favorite
29:49
products at Apple, 2% on
29:52
all other Apple Card with Apple Pay
29:54
purchases and 1% on
29:56
anything you buy with your titanium Apple
29:58
Card or versus Apple Pay card
30:00
number. Visit apple.co.cardcalculator to
30:02
see how much you can
30:05
earn. Apple Card issued
30:07
by Goldman Sachs Bank USA, Salt Lake
30:09
City branch. Subject to credit
30:11
approval, terms apply. Your
30:13
pet is one-of-a-kind and so is their
30:15
journey. While every playful moment is a
30:17
memory in the making, sometimes cats and
30:20
dogs are a little too good at
30:22
getting into trouble. That's why you should
30:24
check out ASPCA Pet Health Insurance. The
30:26
ASPCA Pet Health Insurance Program offers customizable
30:28
accident and illness plans, making
30:31
it easier for pet parents like you to help your
30:33
pet get the care they may need. The
30:35
ASPCA Pet Health Insurance Program has been around
30:37
for over 18 years and they've helped more
30:39
than 600,000 pets during
30:41
that time. They allow you to
30:43
customize your plan, helping ensure your pet's plan
30:46
is as unique as they are. Because
30:48
vet bills can really add up, especially
30:50
when you're least expecting it. It's simple.
30:52
Use their app to submit a claim
30:54
and you'll receive reimbursement for eligible vet
30:56
bills directly into your bank account. To
30:59
explore coverage, visit aspcapetinsurance.com
31:02
slash SlateMoney. That's
31:05
aspcapetinsurance.com/SlateMoney. Again,
31:08
that's aspcapetinsurance.com
31:10
slash SlateMoney. This is a
31:13
paid advertisement. Insurance is underwritten by
31:15
either Independence American Insurance Company or
31:17
United States Fire Insurance Company and
31:20
produced by PTV Insurance Agency Limited.
31:23
The ASPCA is not an insurer and is
31:25
not engaged in the business of insurance. Let's
31:31
talk about airlines. We
31:34
now have a new rule, not from the
31:36
FTC but from the Department of Transport saying
31:39
basically that, well what does it do?
31:41
Elizabeth, bring me up to speed. So
31:43
it basically ensures that airlines have to
31:46
give cash rebates or cash
31:48
refunds for flights that are delayed
31:51
over three hours if they're domestic, over
31:53
six hours if they're international, and
31:56
for cancellation. And they also
31:58
have to disclose things like change for fees up
32:00
front. And, you know, this is, this
32:02
feels like a very smart policy move, because if
32:05
you think about something that's
32:07
maybe bipartisan and universally popular,
32:09
it's not having to
32:11
deal with hidden fees from companies.
32:14
So and airlines are not, you
32:16
know, generally not people's favorite kind
32:19
of customer facing business to begin
32:21
with. So yeah, this is broadly
32:24
popular with everyone, except the
32:26
airlines. And the thing that I like about
32:28
it is the refunds have
32:30
to come automatically, you don't need to
32:33
ask for it. And that's even better
32:36
than the European law. The European rules
32:38
are relatively strict about you have to
32:40
give refunds if this happens, and that
32:42
happens. But the customers still have to
32:45
know about that and ask the airlines
32:47
for the refund. In this case, the
32:50
refund just has to automatically appear on your
32:52
credit card, you know, whether you ask for
32:54
it or not. And I really like that
32:56
because it's, you basically lose the ignorance
32:59
tax for people who don't know about the rule.
33:01
Yeah, it seems like a real no brainer. The
33:04
only thing I would say to Elizabeth's
33:06
point about it's good politics is that
33:09
it's the kind of thing that people won't even really
33:12
notice or credit to
33:14
the administration, because it's kind
33:16
of small ball, right? Yeah, this is right.
33:18
I mean, Democrats should like just run
33:21
a whole ad on it, but they won't.
33:23
There's a lot of assumption that when
33:25
the administration does stuff like this, that
33:27
people just know. And I
33:29
think it's something that people kind of notice
33:32
in the background, but not really think too
33:34
hard about, you know, why it's happening or
33:36
who gets credit for it or anything like
33:39
that. So is
33:41
this one also going to face legal
33:43
challenge in Texas? Probably.
33:46
Really? I mean, a lot of
33:48
the Republican strategy right now is
33:51
just obstructing everything that Democrats do
33:53
that might be popular. I
33:56
don't think that there's a lot of political
33:58
capital for people to obstruct it. in
34:00
order to publicly demonstrate that they
34:02
are, but there is a
34:04
strategic reason to do it. It's
34:07
harder to confuse people about this.
34:09
There is a new rule from
34:11
the Consumer Financial Protection Bureau that
34:13
would limit credit card late fees,
34:15
limit them to $8 from
34:17
what they are now, which is around $31. And
34:20
the financial industry is fighting it
34:23
tooth and nail. And they
34:25
did file suit in Texas, I believe, on that.
34:27
And they're trying to argue that
34:29
it's worse for consumers somehow to have the
34:31
lower late fees. And I feel like just
34:33
the way these financial
34:35
regulation battles work is
34:38
that they will convince some people that
34:40
it is somehow better to have higher
34:42
late fees. But on the airline
34:44
junk fees, I think because
34:46
people are so familiar with just the
34:48
whole regular rule of fees and flying,
34:50
that it would be harder to sort
34:52
of confuse the issue, right? I think
34:54
also people are so frustrated with
34:56
customer service, with airlines and
34:59
telecoms and so on. Just
35:01
not having to call anyone when these
35:03
things happen, I think, is
35:05
a big relief for a lot of
35:07
people. But it's going to cause inflation,
35:09
right? The whole point is that we're
35:11
now going to, we're going to be
35:13
more likely to be bundling the fees
35:15
into the price of the ticket since
35:17
it's all, since it's
35:20
all for its official airline
35:22
price inflation does not
35:24
include fees and only includes the price,
35:26
then suddenly it's going to look
35:28
like airline tickets cost
35:31
more. And yeah, insofar as airlines
35:33
have to start paying significant cash
35:35
refunds to thousands of passengers who
35:37
are delayed that they never used
35:39
to pay anymore, that too
35:42
is going to increase their costs. And
35:44
that is probably going to increase ticket
35:46
prices. So I think it is intuitive
35:48
to me that this rule will make
35:51
it more expensive to fly. It will just
35:53
be more transparent and less
35:55
annoying. Well, in theory, it
35:58
ought to make it more reliable to fly. because
36:00
that heavily incentivizes the is
36:19
five hours delayed that winds
36:21
up costing them a huge amount of money
36:23
in like labor and in the planes being
36:25
in the wrong place and to them and
36:27
the efficient airlines try to save money by
36:29
not doing that and yeah at the margin
36:31
it will make this will make it even
36:33
more expensive and so they'll still have they'll
36:35
have even more of an incentive not to
36:38
do it but yeah
36:40
like delays happen and and yeah they
36:42
just wind up getting built
36:44
into the price now because they are going to
36:46
be even more expensive for the airlines. So would
36:49
you guys rather see ticket prices just
36:51
go up and fees go away? Yeah
36:54
we've had this discussion on the pod
36:56
when when we were talking about Danny
36:58
Mayer and his move to
37:00
all-inclusive pricing in restaurants and
37:03
it seemed like a great idea and then
37:05
everyone complained about it and he rolled it
37:07
back and he said oh never mind. In
37:10
principle like that's not good you want to
37:12
be able to know how much something costs
37:15
before you pay for it
37:17
but as you know but we live
37:19
in a country where the
37:22
convention very much in almost everything
37:24
is that everything winds up not
37:27
everything airlines don't generally but most things
37:29
in in like stores show a pre-tax
37:31
price and then the price you actually
37:34
pay is more than the price that
37:36
is on the sticker and
37:38
that whole sort of weird bait and
37:40
switch is so internalized in the American
37:43
psyche that I think people I like
37:45
to think that it's cheaper than it
37:47
actually is because then it feels cheaper
37:49
or something. I also think people
37:51
are pretty infuriated when they look at their
37:53
you know cable or cell phone bill
37:55
and see fees tacked on or like
37:57
20 bucks for something that is in.
38:00
inexplicable. And I do think they
38:02
sort of do think
38:05
about the cost of these things, even if
38:07
they're not explicated in the
38:09
total price. The Biden administration
38:11
is also going after the resort fees. I don't
38:13
know if they've passed any rules around that yet,
38:15
but I know that last year
38:18
there was talk of not only restricting
38:20
the airline junk fees, but also the hotel
38:22
junk fees. The
38:24
hotels pushed back and they said resort fees are
38:27
meaningful. Yeah, the resort fees at
38:29
hotels, people really hate those. So
38:32
I do think there's a distinction to be made
38:34
between fees, taxes, and
38:36
tips. And the Biden
38:39
administration seems to be going after
38:41
the fees and not like the
38:43
taxes and the tips. But in
38:46
my mind, they're all similar, but
38:49
convention is, yeah, we will
38:51
pay the tip separately, we'll pay the tax separately,
38:53
but just don't do fees. But if what you were
38:56
saying earlier, that we say we don't like
38:58
fees, but we also don't like when the
39:00
prices are higher and kind of prefer to
39:02
live in this illusion fantasy
39:04
world where we think the prices are lower
39:07
so that when the fees get tacked on,
39:09
it's like a whole different mental thing. That
39:11
sounds a lot like the girl math that
39:14
was like a thing a few months ago.
39:16
You say like, oh, I just returned these
39:18
pants that I didn't want. Now I have
39:20
an extra hundred dollars. It's like a bonus,
39:23
you know, stuff, stuff like that girl math
39:25
it was called. It kind of feels
39:27
like the whole economy runs on girl math. When you think
39:29
about it, really does. I was, I was just looking
39:31
for a hotel room in San Francisco on a
39:34
website, which does a pretty good job of showing like
39:36
the all in cost, but it also shows the headline
39:38
cost in all of these hotel rooms. They're like $117
39:41
after tax and fee is 290. What? We should have
39:49
a numbers round. Elizabeth, what's your number?
39:52
My number is five and that's the number
39:54
of euros that it's going to cost you
39:56
to visit Venice for the day now because
39:59
Venice is dealing over,
40:02
I think somebody referred to it as
40:04
over-touristing. There were 20 million
40:06
tourists in Venice last year and
40:08
there's just not, I guess,
40:10
infrastructure or the capacity
40:13
to deal with that kind of influence
40:15
influx. So now they're charging a
40:17
fee to visit. And I guess this
40:19
is kind of like congestion pricing
40:21
in Manhattan where the idea
40:23
is that maybe people will not
40:25
just show up spontaneously so they know they have to
40:28
pay something for it. This is like experiences
40:30
in person are just becoming more and
40:32
more expensive because the demand is so
40:34
high like concert tickets, cool
40:37
restaurants, going to Venice, surge
40:39
pricing. I mean, Manhattan's doing
40:41
it now, right? With charging
40:43
cars, higher fees to
40:45
come into Manhattan during rush hour. Everything
40:47
surge pricing. It's crazy. Well,
40:50
yeah, and I'm in favor
40:52
of this. Yeah, use the
40:54
price mechanism to reduce the
40:56
overcrowding. Venice does a
40:58
relatively good job of limiting the number of hotel
41:01
rooms, but yeah, a whole bunch of people just
41:03
come in from out of town for
41:05
the day, often on cruise ships, although they're
41:07
also doing a pretty good job of reducing
41:10
the number of cruise ships. And it's
41:13
those people who aren't staying in the Venice hotels
41:15
who are causing most of the crowding and then
41:17
asking them to pay five euros. And if that
41:19
helps to pay for
41:22
the very expensive project
41:24
of keeping Venice above
41:26
water and defraying some of the costs with
41:28
all of the tourism, yeah, I'm all in favor.
41:31
Yeah, but if you keep using the price
41:33
mechanism for everything, I feel like you're
41:35
creating a world that's
41:37
really geared, I mean, it is already, but
41:40
really, really geared to the higher income people.
41:42
And it's just making things more unequal. If
41:44
we're really looking to surge price like
41:47
a city or parks or, you know,
41:49
where does it end feeling? Where does
41:51
it end? It's
41:54
a slippery slope. People are
41:56
saying that more and more people. My number
41:59
is... 1.6%
42:03
which was first quarter GDP
42:06
growth, which was way lower
42:08
than we've been seeing in the past couple
42:10
of quarters. In Q3 it was 4.9, in Q4 it was 3.4, and
42:12
now it's 1.6. Like,
42:18
I don't know, maybe all of these rate
42:21
hikes are finally having an effect? Could
42:23
be. Neil Irwin of Axios says
42:25
under the hood it's not as bad as it seems.
42:28
I will trust Neil on this one, he knows much more about
42:31
such things than I do. Emily, what's your
42:33
number? Okay,
42:35
this might be unconventional, but
42:38
my number is 1906L. Is
42:41
that a license plate? Is that an Elon
42:43
Musk kid? Alright, that's a good guess.
42:45
It's the name of a new, new
42:48
balance shoe coming out in August
42:50
that has gone viral, and
42:53
that is because it looks
42:55
like a penny loafer crossed with a
42:57
sneaker. Jacob Gallagher in
42:59
the Wall Street Journal calls it a snow fur. A
43:02
snow fur. A snow fur. GQ
43:04
calls it deceptively normal, and
43:07
it is, I guess, the latest
43:09
example of two trends, ugly
43:11
sneakers, which are popular, and
43:14
work appropriate sneakers, which
43:16
is a thing. I don't think we've talked about, but
43:19
how it's okay now to wear sneakers to
43:21
work, right? So, anyways, it's
43:23
kind of ugly. People can go
43:25
look at it online and tell me what they think about the snow
43:28
fur. How much is it? That's what I want
43:30
to know. It's unclear, doesn't say. None of the
43:32
marketing materials seem to tell me
43:34
the price, so I don't know. There's
43:37
a similar suede loafer from LoroPiana that
43:39
costs like $7, but knowing new balance
43:42
it's probably cost a lot less. The
43:45
new balance one looks so much like a sneaker
43:47
in terms of the materials. It just looks like
43:49
a sneaker mated with a boat shoe and
43:52
then mutated into something. I can't imagine wearing
43:54
it with a really nice work outfit or
43:56
a suit or something like that. It's
43:58
very dadshoe. Is what the people are
44:01
saying. But I think that's pretty insulting to dads. I don't
44:03
know. Some of them dress well.
44:05
I just looked this up on the internet on
44:07
a site called kicksonfire.com and
44:09
I have no idea whether
44:12
they're reliable but they reckon
44:14
it's gonna have a retail price of $150. Very
44:18
reasonable for a snowflake. I mean, can
44:20
you find a snowflake for less than 150 bucks? No,
44:23
you can't. I
44:25
doubt it. Okay,
44:27
on that note, I think we're gonna wrap
44:29
it up for this week. Many thanks to
44:31
Jared Downing and Shana
44:34
Roth for producing. Many thanks
44:36
for sending us your emails
44:38
on sleepmoneyatsleep.com. And
44:40
we will be back on Tuesday with
44:42
a Money Talks with Emily. Tell me
44:44
who. I talked to Jen
44:46
Murphy. She's a long-time columnist for
44:48
the Wall Street Journal who writes
44:50
about people's
44:53
workouts. So she has been, for
44:55
20 years, she's had this column for the journal
44:57
where she talks to executives and
44:59
all kinds of people about how they
45:01
fit exercise into their daily lives and
45:03
it's a really good conversation for anyone
45:06
who loves to work
45:08
out or wishes they love to work
45:10
out. Jen is awesome and you
45:12
should listen. Well, I'm looking
45:14
forward.
Podchaser is the ultimate destination for podcast data, search, and discovery. Learn More