November 7, 2025 • 47 mins
Matt Yglesias, author of the Slow Boring newsletter, sits down with Max and Stacey to discuss the recent string of Democratic victories in US elections. The most remarkable happened in New York City, where Democratic socialist Mayor-Elect Zohran Mamdani will soon be in charge of one of the global capitals of capitalism. Will Mamdani be able to go through with his ambitious agenda or will he soon realize - like many before him - that being a mayor is more about garbage collection than transforming the transit system and launching city-run grocery stores?The duo also talk to The Atlantic’s Ellen Cushing about her recent story on food delivery apps and how they are impacting US food culture and social life.Also, for this week’s underrated story, Max presents a surprising attempt for a government bailout.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:13):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Manx
Smith and.
Speaker 3 (00:17):
I'm Max Chafkin Stacy.
Speaker 4 (00:19):
Capitalism Deathwatch twenty twenty five. New York City has elected
a socialist mayor.
Speaker 3 (00:25):
We are going to talk about it. We're going to
talk about all the people who are happy, who are mad,
and where things are going.
Speaker 2 (00:30):
I think capitalism for what it's worth is going to
pull through. We will also be talking about the meteoric
rise of the delivery business, how it's changing restaurants, how
it's changing the way we eat, and how they solved
the last mile problem.
Speaker 3 (00:45):
Yeah, and our underrated story.
Speaker 4 (00:47):
The AI industry has created a clever new fundraising mechanism. Stacy,
I'll give you a hand. It involves the two of us.
Speaker 2 (00:56):
Did they need.
Speaker 4 (01:01):
First, Let's just talk about a couple of quick things
that have happened in the last couple of days. So
you and I have been talking offline. So many layoffs
going on, you know, basically, it's been crazy.
Speaker 2 (01:13):
It's interesting because for so long, for like a year now,
the labor market's been kind of frozen, and no one's
known what to make of it. Hiring is, you know,
near decades like lows, but also layoffs are at like
the lowest level in decades. Also, it was sort of
like this frozen thing, and now we're hearing a lot
about layoffs, which is kind of scary. It seems like
(01:35):
maybe the scale is tipping, although definitely remains to be seen.
We did get some good news out of the job
market this week too. All eyes are on jobs right now.
Speaker 4 (01:43):
Yeah, I mean you're seeing just a bunch of headlines
if you're reading the news. So like Amazon tens of
thousands of people ups laying people off. Challenger Gray and Christmas,
which is like a private company that tracks this stuff,
said that in October companies announced one hundred fifty three
thousand worth of job cuts. That's the biggest number, I
(02:05):
believe in twenty years. So like this is something that's
really going on. I mean, it's not clear what it
means though.
Speaker 2 (02:15):
And the unemployment level is still quite low, and of
course we're not getting government data right now, which is
because of the shutdown. But at the same time, there
was a report out from ADP, which is a big
data gathering firm too, and it said we added forty
thousand jobs in October. So it's just the job mark is.
Speaker 4 (02:34):
So confusing now, Stacey, like, the sort of conventional wisdom
is that this is AI related a lot of these companies.
One of the things you can do when you're letting
people off to make people feel better about it is
make Wall Street feel better is say this is something
to do with AI, because Wall Street loves that. But
there's another theory, which is that basically companies just over
hired during the pandemic. They basically just staffed up way
(02:56):
too much because they were too worried about employees quitting,
and that this is like that.
Speaker 3 (03:01):
Part of the labor market sort of shaking out.
Speaker 2 (03:04):
Also, there was so much growth happening during the later
part of the pandemic, especially for tech companies, that I
think a lot of companies really expected that kind of
level of growth to keep going. But also I think
you're right, because it was so hard for companies to
hire people for so long, letting people go maybe feels
a little different than it would have felt five years ago,
(03:27):
you know, where it's oh, we can just find people
if we need them again, And there's so much uncertainty
in this economy right now, it's really hard to say
which way things are going to go.
Speaker 3 (03:34):
Yeah, labor hoarding, that's the technical labor hoarding.
Speaker 2 (03:37):
Yeah, yeah, it's real. I mean in a lot of
ways though, it is really a feast or famine job market.
You know, for a lot of a lot of industries,
this is a time of layoffs, of fear. For other
industries like healthcare industry, like, this is a time of
major growth. And in some companies too, this is a
time of major expansion. We just saw that Elon Musk
(03:59):
got offered a record breaking pay package if I think
a trillion dollars.
Speaker 3 (04:04):
Yeah, yeah, Elon Musk.
Speaker 4 (04:06):
So so actually today we're recording this on Thursday the sixth.
Later today, Tesla's shareholders are going to vote on this
pay package that you mentioned, enormous, biggest pay package in history.
Remember a couple years ago when he got like a
fifty billion dollar pay package, or we were talking about
this fifty billion dollar pay package and everyone was like wow,
like how could a CEO ever get fifty billion dollars
(04:28):
in pay? Well, the Tesla board said hold my beer
to the other members of the Tesla board and are
now trying to give him a trillion dollars and the
crazy thing Stacey is I would be shocked if this
thing doesn't pass. Like he is going to get this
pay package. There's a little bit of nuance. It's not
like they're going to hand a trillion dollars to him tomorrow.
(04:48):
I think it's almost certain that shareholders are going to
agree to this.
Speaker 2 (04:51):
So why is this like an important moment in the economy?
Me like, why are people who don't like necessarily track you?
Why is this interesting?
Speaker 4 (05:02):
I mean, I don't know that it's an important moment
in economy. I think it's incredibly like you're kind you're
kind of hinting at it, like it's kind of almost
weirdly divorced from the real economy.
Speaker 2 (05:12):
Does seem like it?
Speaker 4 (05:13):
I do think, you know, we're in this moment where
like parts of Wall Street are doing very well, where
certain stocks, especially any stock connected to the to artificial
intelligence or can somehow claim that is is basically killing it.
And Tesla, you know, the company that Elon Musk runs
where he's CEO, that primarily makes cars but also is
(05:36):
kind of pitching itself as an AI company. Their stock
has been doing really well. The idea here is basically
Musk is threatening to leave unless they give him a
huge chunk of equity. He has about I think it's
about twelve percent of the company. He wants twenty five percent,
and he says he wants that because if not, he's
going to start a different AI company someplace else. Board
(05:57):
is essentially saying, hey, like we had no choice, got
to give him the money.
Speaker 2 (06:01):
Okay, But like Max, can he possibly be worth a
trillion dollars?
Speaker 4 (06:05):
I mean, Stacy on one Hymn answers probably no, like
no one is worth a trillion dollars. On the other hand,
Elon Musk, as part of his media tour, went on
the Joe Rogan podcast and he started talking about Tesla's
future product portfolio.
Speaker 3 (06:20):
Let's give a listen.
Speaker 5 (06:21):
Are you actively considering making an electric flying car? Is
this like a real thing?
Speaker 6 (06:26):
Well, they have to see in the.
Speaker 5 (06:28):
In the devil, So when you do this, like are
you going to have a retractable wing? Like, what is
the idea behind this? Doby sly, come on.
Speaker 3 (06:41):
I can't.
Speaker 6 (06:41):
I can't do the unveiled before the unbail, but tell
me off air then it look, I think it has
a shot at being the most memorable product unveil ever
that has a shot.
Speaker 5 (07:03):
And when you plan on doing this, what's the goal?
Speaker 6 (07:07):
Uh, hopefully before the end of the year.
Speaker 4 (07:11):
All right, so you know, maybe Stacy, maybe by the
end of the year we'll be in a flying car
and we'll feel if we're Tesla shareholders, will feel really
good about this gigantic pay package.
Speaker 2 (07:22):
I mean, if Elon must produces flying cars by the
end of the year, then I will agree he should
get a trillion dollars. Max Schafkin, we both live in
New York and we both have as of this week,
a new mayor.
Speaker 4 (07:39):
Yeah, I mean it's the last day we get to
live with the billionaires, right on the first day after
they leave.
Speaker 3 (07:46):
I don't know.
Speaker 2 (07:47):
Well, it is an interesting thing, right, so Zoran Mom,
Donnie is our new mayor, or will be our mayor
as soon as he is sworn into office, and he
is a democratic socialist. This has caused a lot of stress,
I guess, among like business owners, billionaires, a lot of catastrophizing,
(08:07):
a lot of people swearing they will leave the city.
Speaker 3 (08:10):
Many lengthy tweets composed so many tweet threats.
Speaker 4 (08:14):
Bye Bill Ackman, hard to kill the you know hedge
fund billionaire who was very engaged in the race. You know,
there were a bunch of other really interesting elections on Tuesday.
I mean, the top line is it was a great
day from the Democrats, but we kind of wanted to
talk about what the upshot is for business and kind
of the interplay between politics and business has been going
(08:38):
on with this election and then going forward.
Speaker 2 (08:40):
Yes, absolutely, and so we are very lucky to have
with us Matt Iglesias, who writes the Slow Boring Substack,
which is awesome. You should subscribe, and he is also
a contributor to Bloomberg Opinion. Welcome Matt.
Speaker 3 (08:53):
Hi.
Speaker 2 (08:54):
Okay, you wrote a great piece about the election of
Mom Donnie. So before we get into kind of specifics,
give us some sort of high level takeaways. As you
saw this election go down in one of the big
financial capitals of the world.
Speaker 7 (09:08):
Yeah, I mean, I think this is like less noteworthy
than it's being made out to be. If you go
back in time twelve years to when Build A. Blasio
was elected, you had this exact same discourse. You had
left wing people who were thrilled, who were like, he
said he was going to end this tale of two cities,
put inequality at the center of everything he does. He's
(09:31):
teaching Barack Obama how it's done, like this is amazing,
this is the future of Democrats. And you had a
lot of wealthy people who felt targeted by that rhetoric,
who were saying, this is going to be the end
of the city, We're going to flee on mass etc.
You know what actually happened across his first term was
he had meetings with business people, like basically every mayor
(09:53):
of every city everywhere. He doesn't like actually want businesses
to close or rich people to flee. He raised taxes
a little bit, he expanded pre k offerings. But you know,
it was so unremarkable in retrospect that people almost forget
it happened and are now acting like this is the
(10:13):
first time we've ever seen a progressive guy get elected
mayor of a very heavily democratic city.
Speaker 4 (10:20):
I mean, one takeaway I think, and I got this
out of Mats piece, and I've certainly been feeling it
is the sort of business class took a big l
on this election. You know, they the Billy, a bunch
of very very wealthy people, through huge sums of money
behind Cuomo and not only managed to get a candidate
(10:43):
that they did not like winning the Democratic primary, and
now they have a you know, socialist mayor democratic socialist mayor.
And it definitely feels like that is interesting, especially at
a time when you know, you've seen this kind of
alliance between especially like tech CEOs, but like the business
world in general and Donald Trump, like where you have
(11:04):
on one hand, a bunch of these very wealthy guys
suddenly feeling like wow, like the White House is kind
of open to us, like I've heard this from from
CEO types. And at the same time, you have Zoron
Mandami getting up giving this victory speech where he's you know,
explicitly attacking that class. Let's actually listen to that quickly.
Speaker 1 (11:23):
As has so often occurred, the billionaire class has sought
to convince those making thirty dollars an hour that their
enemies are those earning twenty dollars an hour. They want
the people to fight amongst ourselves so that we remain
distracted from the work of remaking a long broken system.
(11:46):
We refuse to let them dictate the rules of the
game anymore. They can play by the same rules as
the rest.
Speaker 4 (11:55):
Of us, and the way you know that like Bill
Ackman and so on took a loss. Here is that
Ackman did like the shortest tweet he's ever done in
the history of his time on X. Because he's known
for doing these like five thousand word galaxy braids.
Speaker 7 (12:15):
And congratulations on the wind. Call me if I can
do anything to.
Speaker 3 (12:18):
Exactly like full capitulation.
Speaker 4 (12:21):
Not only is he not saying he's leaving New York,
you know, not only is he offering to help. Not
only is he being conciliatory, but he's doing it in
a very very short number of words.
Speaker 2 (12:33):
Now, I did want to ask you about one of
the points that you make in your piece. I remember
Bill Deblasia's campaign. I mean, it was a different moment
in times, certainly, but it seemed more measured than this one.
Like mom, Donnie's got a lot of fire, and like
definitely his rhetoric seems stronger and leftier to me. But
(12:54):
you made this point in your piece that actually, when
you down to passing things and making the city work
and collecting the garbage and things like that, that in
the end, all the extremism kind of ends up becoming
more of a job. Will you talk about that a
little bit.
Speaker 8 (13:12):
Yeah, I mean what does the mayor do? Right? What
is the mayor?
Speaker 7 (13:16):
Actually, the mayor appoints a school's chancellor, the mayor appoints
a sanitation commissioner, a police commissioner.
Speaker 8 (13:25):
And I could see I mean that that mom bammy speech.
Speaker 7 (13:28):
You know, if I was a billionaire, which I'm not,
but you know I would I would take a little
offense at that.
Speaker 8 (13:35):
Like you think, like, what are the problems in New
York City? Right?
Speaker 7 (13:39):
Like why isn't the subway more reliable? Why is it
that New York has the highest per pupil spending in
the country on its K twelve schools but below average results?
Why is there like garbage on the streets all the time?
Like it's not billionaire's fault, you know. Like there's many
things you could say about like America or the world
(14:01):
in which you might want to characterize billionairess somehow being
the enemy. But New York City is a place that
already has very high levels of taxes and very high
levels of spending, and it's a place that people love.
But what people love about New York is the cultural amenities, restaurants,
the nightlife. Nobody is like, what's amazing about New York
(14:22):
is the mix of tax revenues and public services. We've
really got it nailed here, so to an extent. I mean,
I think the l for the billionaire class here is
how did they end up rallying behind Cuomo? Who you know,
this is a guy who was driven from office by
(14:42):
sex scandals.
Speaker 8 (14:43):
Right.
Speaker 7 (14:44):
If you look at the video that he launched his
campaign with, he's talking about a sense that the city
is out of control, and he's appealing to people's concerns
about subway crime and other stuff like that. But if
you talk to like the real tough on crime guys,
you know, the people people from Manhattan Institute, people in
the NYPD, the person who they blame for that is
(15:04):
Andrew Cuomo, who signed these bail reform and discovery reform laws.
So he just seems like a really bad champion of
sort of the forces of reform. But again, if you
think about, like what are the authorities of city government,
you can't, like, I don't know, you're not going to
restructure the American economy. You can make things a little
(15:27):
bit better or a little bit worse around the margin
in certain very specific ways. You can maybe change housing
in the city you know, he wants to cut bus fares,
but like cow that's not a city agency. He doesn't
have any revenue to work with. He's going to find
himself negotiating with the council over really painful, annoying physical
trade offs. And I think that if he does a
(15:49):
halfway responsible job, the people who are really enthusiastic about
him are going to end up being a little disappointed
by this sort of grubby, boring reality of being a mayor.
Speaker 4 (16:01):
In certain ways, like the New Jersey governor's race was
a more surprising result, like Mickey Cheryl winning by something
like thirteen points, a race that a lot of Republicans
thought was going to be more competitive, you know, Virginia,
not close even the attorney General's race in Virginia, which
again that was another one where it looked like maybe
the Republican could win, like not that close. I'm just
(16:23):
kind of curious what you think the takeaways are from
this from this election as a whole. Well, you know,
like a lot of Democrats were going ahead and have
sort of you know, trauma from polling misses in the past,
and so they were looking at Cheryl up five and
Spamberger up nine, and they were like, oh my god,
(16:43):
you know what if the polls are off by five
and we lose in New Jersey and it turns out
the polls were off by five and it was just
off by five in the other direction.
Speaker 7 (16:51):
So these errors happen, you know, all the time. They
are actually roughly symmetrical. And you see that Trump is
performing about how you would expect an unpopular incumbent president
to perform. There was a lot of worry about inflation
a year ago. People voted for him because they wanted
(17:11):
him to bring down the cost of living. He's done
a lot of stuff in office, but he hasn't done that.
He's renovating a ballroom, he's you know, tweeting odd memes.
He's doing a lot of stuff with AI that is
of incredible interest to the stock market. But like, regular
people aren't seeing the kind of relief that they hoped for.
(17:33):
So democrats can can ride that backlash, you know, pretty far.
Speaker 2 (17:38):
So, seeing as how this seems to be a little
bit of a national thing happening right now. And like
you say, Matt, this could change. But if you're running
a business, if you're one of the billionaires running a business,
or just a person running a business. What does this
mean for people running businesses? Is this good news bad news?
Speaker 4 (17:57):
You know?
Speaker 8 (17:57):
I mean, it's not. The rising.
Speaker 7 (18:01):
Interest in socialism is obviously not something that business people
are going to love. And you know, I think that
the cost of housing in big coastal cities is a
huge pain point for lots of people, for lots of jurisdictions.
I think that business people would tell you that this
is not the excesses of capitalism, that it's regulatory constraints
(18:26):
on housing supply. But one way or another, it's making
people very upset and is causing a lot of people
in these these blue cities to embrace sort of far
left kind of ideas and trying to work with people
to develop constructive solutions. There were these housing supply ballot
initiatives that passed yesterday in New York and interestingly they
(18:49):
passed with Mamdami's support and against Cuomo's opposition. And a
lot of times the practical sort of conservative political coalition
in New York City has been these outer borough nimbi's
plus Upper East Side billionaires plus like cops.
Speaker 2 (19:08):
It's but a city, It's I mean, you know, it's
a it's.
Speaker 8 (19:13):
A beautiful tapestry.
Speaker 7 (19:14):
I think that the billionaires may want to think about
how that coalition works for them.
Speaker 4 (19:21):
I think what everyone wants to know who's listening to
this is a is Bill Ackman or or the like?
Is anyone going to actually leave? And then the other
kind of question I have is which is a related one?
Is basically like, at what point do you think some
of these results scare sort of the business community enough
(19:43):
that we start to see some defections from Trump, you know,
like where it becomes right like right now, like.
Speaker 2 (19:49):
You know me if I can help there?
Speaker 4 (19:51):
Yeah, well more, I mean more than call me if
I can help. I mean, like, there are a lot
of big companies putting huge amounts of money, huge but
but significant money into this east Wing ballroom project. And meanwhile,
in MSNBC and in kind of left wing media every
single day, people are really upset about this east Wing demolition.
(20:14):
And like, I assume at some point we will start
to see like movement and we'll start to see a
handful of you know, a handful of billionaires.
Speaker 3 (20:23):
Maybe it's Benning Off, I don't know who say.
Speaker 4 (20:25):
Oh, you know, actually, as it turns out, free bussing
sounds pretty good or whatever it is, you know, tries
to get because like a lot of these guys, like
as much as they are ideological, they just want to
be on the team that's you know, that's in power,
and they want to be able to Yeah, so I'm
kind of curious how you see that playing out.
Speaker 7 (20:44):
I mean, there was a fascinating Politico story about this
litigation about the Trump tariffs, and they were saying that
the people who were litigating this, at first, they were like,
they thought, all these giant companies are going to support
our position because the tariffs are bad, but they didn't
want to do it because they were afraid of angering
(21:05):
Trump by joining an anti tariff lawsuit. So they wound
up having a bunch of really small and medium sized
companies being their kind of go to corporate plaintiffs.
Speaker 8 (21:15):
And you know, I think corporate.
Speaker 7 (21:17):
America should reconsider that kind of attitude. If you look
at these election results, I mean, Hakeem Jeffreys is clearly
favored to be the next Speaker of the House. They
are going to be hearings about who donated to the
West Wing, who bought the Trump crypto fund, Like what
is going on?
Speaker 8 (21:37):
And you want to be able to say, even.
Speaker 7 (21:39):
If you're not going to talk about you know, state
owned grocery stores or free buses or globalizing the Intofada,
like you want to be able to say, look, I'm
running my business here. When Trump does stuff that's good
for business, of course, we're for that. But when Trump
does stuff that's bad for business, we're against that. And
when Trump shakes us down for bride. You know, we
(22:01):
believe in the rule of law and the persistence of
American liberalism, and a lot of companies seem to me
to have bought in on this idea that Trump was
going to be like Trump forever, right, But we're seeing
the laws of political gravity, just like I think they
will bring down the mom Dammi hype among you know
(22:21):
socialists in Brooklyn. The Trump bubble is popping now too.
Politics keeps happening with backlash, alternation of power, overreach limits.
If you're a committed ideologue, then sure you sign up
with your team and you fight for it. If you're
someone who's just trying to navigate these waters, like you
want to navigate prudently, Akaman deciding after all these long
(22:45):
tweets that he wants to say something nice, and I think,
you know, Mom, Dammy would be wise to invite some
Wall Street titans to come have lunch with him, and
they would be wise to say yes, right, everybody ultimately
benefits from having business growth in the city that they
are the mayor of.
Speaker 8 (23:05):
Like, that's just the reality.
Speaker 4 (23:06):
I absolutely think if the Democrats have a good mid term,
we are going to have the like Mark Zuckerberg free
bus conversion, like he's gonna go on, He's gonna go
on Hassan Piker's Twitch stream and proclaim that, you know, actually,
on third thought, democratic socialism.
Speaker 2 (23:23):
Sought to you meta like.
Speaker 8 (23:26):
Way Mo will.
Speaker 3 (23:30):
See, we've worked it out already. Synergies Waymo.
Speaker 4 (23:33):
Lobbyists call us Matt Iglesias, thank you for being here.
Speaker 3 (23:37):
Check out his newsletter. Uh slow boring, thanks a lot,
Thank you, Thanks Matt.
Speaker 4 (23:45):
All Right, Stacey, you know that one of my favorite
topics is the things that Silicon Valley is ruining.
Speaker 2 (23:53):
Right, Yes, I do know that.
Speaker 3 (23:54):
Okay, So we got one.
Speaker 4 (23:55):
To talk about today, and it's one that it's come
up in my mind a couple of times, but it
really crystallized as I was reading this wonderful story in
the Atlantic by Ellen Cushing, staff writer. There the story
is about restaurants and the way that food delivery is
changing food culture and the restaurant business, and Ellen is
here to talk about it.
Speaker 2 (24:15):
Hey, Ellen, Hi, thanks for having me.
Speaker 4 (24:17):
All Right, So I feel like this is a thing.
And I said ruined because that is kind of how
I feel. I think they are different points of view.
But why don't you just talk us through the premise
of this story, like what you were trying to do,
and like when we're talking about, like how has food
delivery changed the restaurant business, what are we actually talking about.
Speaker 9 (24:37):
Yeah, so most people have probably noticed that delivery is
more popular than it used to be. They have probably
had the experience of being in a restaurant and it's
like half empty, but there's fifteen Uber Eats drivers like
clustered in the front waiting for their orders. You've seen
the plastic bags on people's doorsteps. If you live in
(24:59):
New York like I do, you see the e bikes everywhere,
you kind of know this is happening, but you may
not know.
Speaker 2 (25:06):
In twenty twenty.
Speaker 9 (25:07):
Four, three out of every four restaurant orders was not
eaten in a restaurant. Wow, this statistic just kind of
like bounces around in my brain nationwide or yeah, wow,
like that includes McDonald's, you know, that includes drive throughs,
But it is a huge number. Thirty percent of full
service restaurants, which are like restaurants where you sit down
(25:29):
and you have a waiter a waitress and you have
a napkin and a menu that you look at that
kind of restaurant, thirty percent of their orders are beaten
off premises now. So this is a huge change, and
it has all of these downstream effects for restaurants, for eating,
for cities, for traffic, for the environment. So I just
(25:50):
got kind of obsessed with it and decided to figure
out what I could figure out.
Speaker 2 (25:54):
I mean, I knew it's definitely an issue in New York,
which started during the pandemic. New York's always been a
very food delivery oriented place. But I guess the thing
that kind of blows my mind about it is that
these orders are so expensive. Like I feel like, I
order a burrito and the brito's like twelve dollars, and
then somehow by the time I am paying for the burrito,
(26:16):
it is forty dollars. I mean, I'm lazy enough that
I do that math and it maths out for me.
But I can't believe that this is a common thing.
Speaker 3 (26:26):
I can't either.
Speaker 9 (26:26):
I talked to a driver in South Carolina who told
me that he recently chauffeured like a single cup of
ice cream to someone's house, like twenty miles away, and
he estimates that this person spent I think it was
like twenty dollars on this ice cream, you know, and
he got paid like three dollars.
Speaker 4 (26:47):
Let's just talk a little bit about the history here,
which is I guess partly tied into the Internet and
like that. One of the really cool things about your
story is you spend time talking to one of the
pioneers in the kind of internet base food delivery world,
a guy who created a company that was sold to
grub Hub, who basically built some of the delivery infrastructure.
(27:08):
These apps started to take off, what like in twenty thirteen,
twenty fourteen, you had Uber Eats, you had door Dash.
Speaker 3 (27:15):
Talk a little bit about.
Speaker 4 (27:16):
Those businesses, like where did those businesses like find an opportunity.
Speaker 9 (27:21):
I mean, the thing about delivery is that everyone eats,
so it is a huge potential market. So, like you
were saying, late twenty's early twenty tens, all of these
companies started, you know, figuring out that they could do this.
The Internet was becoming something that people had more access
(27:42):
to phones, et cetera. Restaurants in the beginning didn't want
to facilitate delivery because it's annoying. But what happened in
this moment is that restaurants like turned over a core
part of their business to Silicon Valley and they just
never got it back. So these businesses kind of swooped
(28:02):
in were the middleman, and it was you know peak
like zup era, you know, like huge subsidies. Every venture
capitalist in California wanted to be the guy who funded
the company that was like the leader in delivery, and
so they were all massively discounting, you know, fighting with
(28:26):
each other. This was an era where you could open
your phone and you know just be like barraged with
offers for like fifty percent off whatever you wanted. And
so what happened is that basically Silicon Valley like created
a market that did not previously exist for you know,
delivery everything, and then they created the expectation that it
(28:49):
would be really cheap.
Speaker 4 (28:50):
Yeah, because they basically used you said zero interest rate policy.
There was tons of venture capital money flowing to these
businesses and they basically like subsidized your food delivery order,
which was awesome back in the day, right, it did
rock cause you talked about Stacy just brought up like
her burrito, it's like a twelve dollar burrito. You end
up paying like what Stacy, like thirty bucks, forty bucks
(29:12):
whatever it is, but like, yeah, in twenty thirteen, it
was thirteen dollars. Like basically all of the cost the
driver got paid via the startup. The startup totally swallowed
all of the technical costs and basically just passed on
the full fare to the restaurant.
Speaker 3 (29:30):
Like it was awesome back then.
Speaker 9 (29:31):
Yeah, were the basically those were the days. They lasted
about five or six years. And then the other big
inflection point is the pandemic. And this is a moment
obviously we all remember where like ordering delivery kind of
almost overnight became like something really virtuous, like the way
(29:52):
you could help your local small businesses. And if there
were any restaurants that weren't already signed up with Uber
Eats or grub hub or whatever, they signed up during
the pandemic because they had to, you know, stay open.
And so then you have this second wave of every
restaurant going delivery, and you have people who had previously
(30:13):
been holding out, you know, or ordering delivery, getting used
to eating restaurant food at home, and you don't go
back from that. Like once you have the experience of
eating like a wogu steak, like in your bed watching TV,
it's very hard to you know, train yourself to think
(30:34):
that's not possible anymore, you know what I mean.
Speaker 2 (30:37):
I feel that very deeply. And to me, I think
the other real appeal of these sites like grub Hub
and seamless and things like that is that it was
like a centralized place. It could help you find restaurants,
it would offer you deals. But one of the things
that I understood from the early days, and I don't know,
it seems like this is shifted and I'm curious to
(30:58):
know why is that for some reason, and even though
my burrito costs thirty dollars, like nobody along the way
for a long time was making any money, Like somehow
everybody was losing money on my thirty dollars burrito for
a long time, the restaurant, the delivery person, and so
what happened there because the business model was always such
(31:18):
a problematic thing.
Speaker 9 (31:20):
Yeah, I mean, delivery doesn't make sense. Delivery is really expensive.
You're introducing a middleman to a process and that costs money.
You know, a cost labor, packaging, server space. You know,
you order pad tie from the place around the corner
and a company in California is facilitating all of this.
Speaker 2 (31:43):
That's kind of nuts.
Speaker 9 (31:45):
So it has always been really expensive, it's just that
the cost of it was sort of obscured. And now
some of the delivery companies are profitable. They've also really consolidated,
so basically two companies controlled like ninety percent of the
delivery market. They are making some money, but basically nobody else.
Speaker 4 (32:03):
I want to talk about all the ways this is
terrible and all the ways it has ruined food culture
and restaurants, and like I were a delivery one of
these delivery apps, and I were sitting here, like I
might tell a slightly different story. I think I would
say that you're saying we addicted people to convenience, But
actually what happened is people just decided they don't like
(32:25):
restaurants as much as they thought they did, and that
it isn't that we isn't that we tricked anyone. It's
that people decided actually being at home is awesome.
Speaker 9 (32:35):
Yeah, they would certainly amount that argument. You often hear
the argument also that delivery is really good for people
with young children or people who have mobility issues. Like
delivery itself is not like pure evil, you know, like
delivery really serves a purpose. But I think the problem
(32:56):
is that we haven't really figured out a way as
a society to account for all of the externality that
it causes in the world, produces in the world.
Speaker 4 (33:08):
Ellen, can you talk about like the way that restaurants
have changed because of this, Like how the dining experience,
Like even if you decide to go into a restaurant,
you might be paying more because they have to charge
more to make up for the door dash tacks. But
what about what are some of the other ways that
this has changed how it actually is to like operate
a restaurant or dine in a restaurant.
Speaker 9 (33:28):
The two main things that are changing are the food itself.
Restauranteurs told me that they're doing more raises, more dressings.
On the side. You know, you have this sort of
like fundamental physical problem with delivery, which is that if
you put hot food in a plastic box, it starts
to steam in its own heat and like immediately get soggy.
(33:52):
And so restauranteurs like want their food to be good
for delivery, and so they're trying to develop dishes that
can sort of with.
Speaker 3 (33:59):
Stick and that French fries out mashed potatoes in.
Speaker 9 (34:02):
A round exactly, or like this is kind of one
of the many reasons why everything is a bowl now,
you know, like that kind of food travels quite well.
The other way that restaurants are changing is the physical
space is changing. A lot of restaurants have redesigned their
interiors to account for deliveries. So a lot of them
are hiring, you know, design firms to put in cubbies
(34:25):
or create a special place for drivers to stand so
they're not just clogging the door. You know, you're basically
trying to like cram two experiences into one right now.
Where it's like many restaurants in this country are both
a place for people to sit down Dad's fiftieth birthday
and have a nice meal with their family and also
(34:46):
like a vending machine, and those two things don't like
actually work that well together. Like, I've certainly had the
experience of being in a restaurant and there's an Uber
Eats driver like one.
Speaker 3 (34:57):
Inch behind me right bumping you with exactly.
Speaker 9 (35:01):
I don't blame that guy at all, but it's not
that nice as an experience.
Speaker 2 (35:07):
Is there any way that this is a win for restaurants?
Are they seeing more orders? Is there an upside?
Speaker 9 (35:13):
Not every restaurant hates delivery, though almost everyone I cold
called was really happy to talk about how delivery.
Speaker 3 (35:20):
Has been a problem for them.
Speaker 9 (35:22):
You know, the argument for restaurants is that it gets
your food in front of more people. You know, we
don't know totally the counterfactual version of this. If delivery
didn't exist tomorrow, would people go out to restaurants or
would they just sit in their house and eat like
frozen pizza.
Speaker 2 (35:42):
We don't know.
Speaker 9 (35:42):
It is possible that more people are eating restaurant food
as a result of delivery than they would before, but no,
I mean, generally speaking, restaurants like the restaurant tours I
talked to, basically feel like they have to do delivery
because if they don't, they're leaving money on the table.
But if they do delivery, they're forking over like thirty
(36:06):
percent of their profits to another company.
Speaker 3 (36:10):
Have either of you all been to Wonder? Do you
know what that is?
Speaker 9 (36:14):
I know what that is. I've not been because I
find it pretty sinister.
Speaker 4 (36:19):
It's like the final, the natural conclusion of all of
these trends. It's like just a counter and it's basically
like airplane food. It's like food that's pre prepared in
a factory or a central catering kitchen. Then it's warmed
up and you have a lot of choices and they're
all like branded, like really seems like airplane food.
Speaker 3 (36:39):
You can have a.
Speaker 4 (36:39):
Wolfgang Pumps Puck something and it's like entirely about the
either pickup or delivery. And it's a restaurant that's created
specifically for door Dash.
Speaker 2 (36:53):
Is it like a dark store? You know, like the
dark stores that are just made as like distribution points
for Amazon, or like can regular people go in and
just order something directly? Like could I go in to
Wonder and order a burger?
Speaker 9 (37:06):
And if you kind of wanted to a chaos on
a business, he could walk into a Wonder. Most of
them have some seating and most of them you can
order at the counter, but they're designed for delivery.
Speaker 3 (37:18):
It's so funny. The guy who started at MARKLRII.
Speaker 4 (37:20):
His previous company was jet, which is like the Walmart
dot com. And I sometimes just feel like he is
on a mission to destroy every small business in America.
Like he's like, we got Walmart and we brought it
to the Internet, and now I'm going to do the
same thing to restaurants. You really like, something profound, like
(37:40):
culturally profound is lost when you take away restaurants. Like
it's not just sad for the business owners who are
struggling to deal with it's sad for us.
Speaker 2 (37:49):
I was gonna say, you know, this reminds me of
back in the fifties they used to have those diners
where the food would be, you know, like in a
little locker and you put like an automative slot, an
automatic Yes, an automat, thank you. Although it feels dissociative
and dystopian, I definitely agree. I don't know, like it
doesn't seem that different from an automat to me, it's not.
Speaker 9 (38:12):
I think the problem is the scale. Like the thing
that freaks me out here is not that delivery is
available to people. It's that delivery is how America eats
and the thing I love restaurants. It's a cliche, but
restaurants bring people together and delivery doesn't do that. And
(38:32):
the thing I worry about is, like what happened to
movie theaters happening? They still exist, You can still go
see a movie in a theater, but they're you know, struggling.
You're always worried your favorite one's gonna close. It's no
longer kind of a community gathering space.
Speaker 4 (38:50):
Any sign of a backlash. Sometimes these trends seem more certain.
I don't know, like some of the stuff we're talking about.
It seems the same way that like young people are
shunning Facebook or whatever, any chance that they might shun
door dash or get more into that physical experience basically
(39:10):
not go to the wonders of the world and instead
offer something, you know, that feels more like a conventional restaurant.
Speaker 3 (39:17):
Or are we just old?
Speaker 9 (39:18):
I mean, I will say that thirteen percent of people
under forty five US delivery once a day.
Speaker 2 (39:25):
So once a day food delivery.
Speaker 9 (39:30):
So I'm not like totally optimistic about this though. I mean,
I think consumers are starting to a understand the dynamics
a little bit better and be you know, experiencing some
sticker shock when they get their burrito or whatever. I'm
really curious what happens if we like enter a recession
(39:52):
and people become even more price sensitive, and you know,
does paying like forty dollars for some like kind of
tepid pasta feel like a good deal then I don't know.
Speaker 2 (40:05):
So people may turn away from.
Speaker 9 (40:06):
Delivery, but I don't think it will be ideological.
Speaker 3 (40:08):
I think it will be practical.
Speaker 4 (40:10):
All right, Ellen, that was great stick around. We're gonna
do our underrated segment in one second.
Speaker 3 (40:14):
I can't wait.
Speaker 2 (40:22):
So we've now come to the part of the show
where we talk about something that is underrated, a piece
of news that maybe did not get the attention it
should have. And this has been kind of an intense week,
so a lot to choose from. But Max, this one's yours.
Speaker 3 (40:35):
Yeah.
Speaker 2 (40:35):
I don't actually know what it is.
Speaker 4 (40:37):
And I wanted Ellen to stick around for this because
it has a tech angle.
Speaker 3 (40:40):
But what I want to do is earlier this week,
the Wall.
Speaker 4 (40:44):
Street Journal has their tech event going on in California,
and the chief financial officer of open Ai, the big
chatboc company, she gave a talk and she said something
that has a lot of people very angry, and I
want to play the clip for both of you, and
you guys can try to tell me what exactly people
are angry about. Sarah Fryar open AI Chief financial Officer.
Speaker 10 (41:07):
But even in areas like open source, we're attempting to
put the state of the art model always out into
the world, and in order to do that, we always
want to be on the frontier chip. So the question
is how long does a chip remain in the frontier,
So three years, four years, five years, or even longer. Now,
in a world where we have no compute or compute constrained,
we are absolutely using chips that have like a one
(41:33):
hundred equivalents that have been around like maybe six seven
years at this point in time. If that's the case,
financing chips gets a lot easier. If the timeline on
the chip stays short, that gets harder. And so this
is where we're looking for an ecosystem of banks, private equity,
maybe even governmental the ways governments can come to bear.
Speaker 3 (41:56):
Okay, what are people mad about, Allen?
Speaker 2 (42:01):
What's your guess? I have an idea, but it's it's
a little out there.
Speaker 9 (42:04):
They're mad that this person's trying to get the government
to pay for her chips.
Speaker 3 (42:08):
Yes, do you think that's it?
Speaker 4 (42:10):
That is it? The hottest company in the world, the
most valuable private company I think of all time, a
company that is supposedly on the verge of creating machine
gods that will be worth many trillions of dollars. The
CFO got up and basically suggested that they need the
government to create a backstop, effectively an open AI bailout.
Speaker 9 (42:35):
Right right right, and open a AI bailout like at
the same time as I'm sure they're fighting back against
all kind of like actual regulation.
Speaker 4 (42:43):
So first of all, everyone is very mad about this.
As I said, Ron DeSantis has been tweeting up a storm.
Speaker 2 (42:49):
Not Ron DeSantis, he is very unhappy.
Speaker 4 (42:52):
Let me find some of the DeSantis material that I
can read to you, just so you're fully up to
speed on this. The rush to secure and unpresent number
of policy favors, from regulatory moratoriums to abrogation of intellectual property,
a lot of big words. For Ron here was always
about using too big to fail as the industry's risk
mitigation strategy.
Speaker 3 (43:11):
Now it's out in the open.
Speaker 4 (43:12):
Open AI kind of backed off of this and said well,
we didn't actually mean we need.
Speaker 3 (43:18):
A government bailout.
Speaker 4 (43:19):
We were actually just talking about you know, policies and
industrial capacity and kind of trying to vague things up
a little bit to say that we weren't specifically asking
for money. But I think a lot of people who
are following this space closely, as well as people on
Wall Street, are sort of worried about this, just because
so much money has gone into these data centers. They're
(43:43):
all these circular deals, and there's the risk that if
it starts to fall apart, it could spill over and
we might all need to become investors in open AI right.
Speaker 9 (43:53):
Like they can kind of hold the whole world like
sort of hostage because this industry is so big.
Speaker 2 (44:00):
What's interesting to me is that, like the whole banking
industry has sort of operated in this way ever since
the financial crisis, which is like the companies are private
when times are good, and they're public when times are bad,
and that has its own set of problems. What I
find interesting now is like, for AI, times are really
good right now. So the idea of like somehow getting
(44:22):
all the upside of being a private company while all
the upside of being a government entity is I mean
that's the dream for companies. I mean, I don't see
anything wrong with you know, a company wanting that, but
I see something wrong with us doing it. I hope
we don't because it gets us into like suddenly this
stuff gets priced in and then the whole economy is
(44:44):
depending on But in a lot of ways, the whole
economy is depending on AI right now. So if the
AI bubble pops, it is such a systemic risk that
maybe it's not an unrealistic ask. They're just leveraging. It's
like any job interview, they're anchoring expectations.
Speaker 3 (45:00):
Yeah.
Speaker 4 (45:00):
The other thing is maybe they're just like trying to
see like carpe DM, you've got Donald Trump in office,
he's very close to many of these companies. Maybe they
just see, essentially there's a political opportunity to get some
policy concessions that they won't be able to get from
like even JD Vance maybe, but or obviously Ron DeSantis
(45:21):
he's not on board with this.
Speaker 9 (45:22):
Sounds like she's kind of saying, you know, like we
don't we don't need your money, but if you wanted
to give it to us, like we be, like that
might be an interesting idea. You know, it's like this
is a test balloon, right same.
Speaker 4 (45:34):
By the way, Yeah sure, Ellen Cushing, thank you for
being here. You're gonna have to come back and do
this again some other times.
Speaker 3 (45:40):
I can't wait.
Speaker 2 (45:41):
Sounds good next time bringing a cup of ice cream? Yeah,
ice cream?
Speaker 3 (45:48):
We could order it right now?
Speaker 2 (45:49):
Yeah yeah yeah, So.
Speaker 4 (45:58):
Stacy, before we go, I just got to I don't
apologize to you and to our listeners.
Speaker 2 (46:04):
Okay, correction.
Speaker 4 (46:06):
During the intro last week, to the segment on the
movie business, I called Superman a flop. Now there are
articles that you can find on the internet describing it
this way. But during the conversation with Sean Fantasy, and
this did not make it into the final cut of
the show, he sort of explained why I was wrong,
(46:27):
and I just wanted to kind of pass that along
just in case there are any Superman heads who heard
that episode and were mad. Now here's the thing. It
was not a flop. It did actually quite well in
the United States. The problem for Superman is it has
it did not do well in other countries, particularly in China. Now,
some of that has to do with US China relations,
(46:48):
and maybe some of it just has to do.
Speaker 3 (46:49):
With Superman because it's like truth.
Speaker 4 (46:51):
Justice in the American way, it's seen as overly US
centric or something like that.
Speaker 3 (46:55):
So just I am sorry. I regret the error. Superman
not a flop. Good job, Superman.
Speaker 2 (47:08):
This show is produced by Stacy Wong. Magnus Hendrickson is
our supervising producer, and Amy Kean is our executive producer.
Sam Rogan Chandele's engineering, and Dave Purcelf factchecks, Sage Bauman
heads Bloomberg Podcasts special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show. It means a lot to us.
And if you have a story that should be our business,
(47:29):
email us at Everybody's at Bloomberg dot net. That is
Everybody's with an s at Bloomberg dot ne.
Speaker 4 (47:34):
Or if you have something to complain about, send us
the errors and we'll correct them.
Speaker 2 (47:39):
Yes, indeed, if we happen to incorrectly say that a
movie did not make money when it did, definitely send
us that email. Thank you for listening and see you
next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:13):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Manx
Smith and.
Speaker 3 (00:17):
I'm Max Chafkin Stacy.
Speaker 4 (00:19):
Capitalism Deathwatch twenty twenty five. New York City has elected
a socialist mayor.
Speaker 3 (00:25):
We are going to talk about it. We're going to
talk about all the people who are happy, who are mad,
and where things are going.
Speaker 2 (00:30):
I think capitalism for what it's worth is going to
pull through. We will also be talking about the meteoric
rise of the delivery business, how it's changing restaurants, how
it's changing the way we eat, and how they solved
the last mile problem.
Speaker 3 (00:45):
Yeah, and our underrated story.
Speaker 4 (00:47):
The AI industry has created a clever new fundraising mechanism. Stacy,
I'll give you a hand. It involves the two of us.
Speaker 2 (00:56):
Did they need.
Speaker 4 (01:01):
First, Let's just talk about a couple of quick things
that have happened in the last couple of days. So
you and I have been talking offline. So many layoffs
going on, you know, basically, it's been crazy.
Speaker 2 (01:13):
It's interesting because for so long, for like a year now,
the labor market's been kind of frozen, and no one's
known what to make of it. Hiring is, you know,
near decades like lows, but also layoffs are at like
the lowest level in decades. Also, it was sort of
like this frozen thing, and now we're hearing a lot
about layoffs, which is kind of scary. It seems like
(01:35):
maybe the scale is tipping, although definitely remains to be seen.
We did get some good news out of the job
market this week too. All eyes are on jobs right now.
Speaker 4 (01:43):
Yeah, I mean you're seeing just a bunch of headlines
if you're reading the news. So like Amazon tens of
thousands of people ups laying people off. Challenger Gray and Christmas,
which is like a private company that tracks this stuff,
said that in October companies announced one hundred fifty three
thousand worth of job cuts. That's the biggest number, I
(02:05):
believe in twenty years. So like this is something that's
really going on. I mean, it's not clear what it
means though.
Speaker 2 (02:15):
And the unemployment level is still quite low, and of
course we're not getting government data right now, which is
because of the shutdown. But at the same time, there
was a report out from ADP, which is a big
data gathering firm too, and it said we added forty
thousand jobs in October. So it's just the job mark is.
Speaker 4 (02:34):
So confusing now, Stacey, like, the sort of conventional wisdom
is that this is AI related a lot of these companies.
One of the things you can do when you're letting
people off to make people feel better about it is
make Wall Street feel better is say this is something
to do with AI, because Wall Street loves that. But
there's another theory, which is that basically companies just over
hired during the pandemic. They basically just staffed up way
(02:56):
too much because they were too worried about employees quitting,
and that this is like that.
Speaker 3 (03:01):
Part of the labor market sort of shaking out.
Speaker 2 (03:04):
Also, there was so much growth happening during the later
part of the pandemic, especially for tech companies, that I
think a lot of companies really expected that kind of
level of growth to keep going. But also I think
you're right, because it was so hard for companies to
hire people for so long, letting people go maybe feels
a little different than it would have felt five years ago,
(03:27):
you know, where it's oh, we can just find people
if we need them again, And there's so much uncertainty
in this economy right now, it's really hard to say
which way things are going to go.
Speaker 3 (03:34):
Yeah, labor hoarding, that's the technical labor hoarding.
Speaker 2 (03:37):
Yeah, yeah, it's real. I mean in a lot of
ways though, it is really a feast or famine job market.
You know, for a lot of a lot of industries,
this is a time of layoffs, of fear. For other
industries like healthcare industry, like, this is a time of
major growth. And in some companies too, this is a
time of major expansion. We just saw that Elon Musk
(03:59):
got offered a record breaking pay package if I think
a trillion dollars.
Speaker 3 (04:04):
Yeah, yeah, Elon Musk.
Speaker 4 (04:06):
So so actually today we're recording this on Thursday the sixth.
Later today, Tesla's shareholders are going to vote on this
pay package that you mentioned, enormous, biggest pay package in history.
Remember a couple years ago when he got like a
fifty billion dollar pay package, or we were talking about
this fifty billion dollar pay package and everyone was like wow,
like how could a CEO ever get fifty billion dollars
(04:28):
in pay? Well, the Tesla board said hold my beer
to the other members of the Tesla board and are
now trying to give him a trillion dollars and the
crazy thing Stacey is I would be shocked if this
thing doesn't pass. Like he is going to get this
pay package. There's a little bit of nuance. It's not
like they're going to hand a trillion dollars to him tomorrow.
(04:48):
I think it's almost certain that shareholders are going to
agree to this.
Speaker 2 (04:51):
So why is this like an important moment in the economy?
Me like, why are people who don't like necessarily track you?
Why is this interesting?
Speaker 4 (05:02):
I mean, I don't know that it's an important moment
in economy. I think it's incredibly like you're kind you're
kind of hinting at it, like it's kind of almost
weirdly divorced from the real economy.
Speaker 2 (05:12):
Does seem like it?
Speaker 4 (05:13):
I do think, you know, we're in this moment where
like parts of Wall Street are doing very well, where
certain stocks, especially any stock connected to the to artificial
intelligence or can somehow claim that is is basically killing it.
And Tesla, you know, the company that Elon Musk runs
where he's CEO, that primarily makes cars but also is
(05:36):
kind of pitching itself as an AI company. Their stock
has been doing really well. The idea here is basically
Musk is threatening to leave unless they give him a
huge chunk of equity. He has about I think it's
about twelve percent of the company. He wants twenty five percent,
and he says he wants that because if not, he's
going to start a different AI company someplace else. Board
(05:57):
is essentially saying, hey, like we had no choice, got
to give him the money.
Speaker 2 (06:01):
Okay, But like Max, can he possibly be worth a
trillion dollars?
Speaker 4 (06:05):
I mean, Stacy on one Hymn answers probably no, like
no one is worth a trillion dollars. On the other hand,
Elon Musk, as part of his media tour, went on
the Joe Rogan podcast and he started talking about Tesla's
future product portfolio.
Speaker 3 (06:20):
Let's give a listen.
Speaker 5 (06:21):
Are you actively considering making an electric flying car? Is
this like a real thing?
Speaker 6 (06:26):
Well, they have to see in the.
Speaker 5 (06:28):
In the devil, So when you do this, like are
you going to have a retractable wing? Like, what is
the idea behind this? Doby sly, come on.
Speaker 3 (06:41):
I can't.
Speaker 6 (06:41):
I can't do the unveiled before the unbail, but tell
me off air then it look, I think it has
a shot at being the most memorable product unveil ever
that has a shot.
Speaker 5 (07:03):
And when you plan on doing this, what's the goal?
Speaker 6 (07:07):
Uh, hopefully before the end of the year.
Speaker 4 (07:11):
All right, so you know, maybe Stacy, maybe by the
end of the year we'll be in a flying car
and we'll feel if we're Tesla shareholders, will feel really
good about this gigantic pay package.
Speaker 2 (07:22):
I mean, if Elon must produces flying cars by the
end of the year, then I will agree he should
get a trillion dollars. Max Schafkin, we both live in
New York and we both have as of this week,
a new mayor.
Speaker 4 (07:39):
Yeah, I mean it's the last day we get to
live with the billionaires, right on the first day after
they leave.
Speaker 3 (07:46):
I don't know.
Speaker 2 (07:47):
Well, it is an interesting thing, right, so Zoran Mom,
Donnie is our new mayor, or will be our mayor
as soon as he is sworn into office, and he
is a democratic socialist. This has caused a lot of stress,
I guess, among like business owners, billionaires, a lot of catastrophizing,
(08:07):
a lot of people swearing they will leave the city.
Speaker 3 (08:10):
Many lengthy tweets composed so many tweet threats.
Speaker 4 (08:14):
Bye Bill Ackman, hard to kill the you know hedge
fund billionaire who was very engaged in the race. You know,
there were a bunch of other really interesting elections on Tuesday.
I mean, the top line is it was a great
day from the Democrats, but we kind of wanted to
talk about what the upshot is for business and kind
of the interplay between politics and business has been going
(08:38):
on with this election and then going forward.
Speaker 2 (08:40):
Yes, absolutely, and so we are very lucky to have
with us Matt Iglesias, who writes the Slow Boring Substack,
which is awesome. You should subscribe, and he is also
a contributor to Bloomberg Opinion. Welcome Matt.
Speaker 3 (08:53):
Hi.
Speaker 2 (08:54):
Okay, you wrote a great piece about the election of
Mom Donnie. So before we get into kind of specifics,
give us some sort of high level takeaways. As you
saw this election go down in one of the big
financial capitals of the world.
Speaker 7 (09:08):
Yeah, I mean, I think this is like less noteworthy
than it's being made out to be. If you go
back in time twelve years to when Build A. Blasio
was elected, you had this exact same discourse. You had
left wing people who were thrilled, who were like, he
said he was going to end this tale of two cities,
put inequality at the center of everything he does. He's
(09:31):
teaching Barack Obama how it's done, like this is amazing,
this is the future of Democrats. And you had a
lot of wealthy people who felt targeted by that rhetoric,
who were saying, this is going to be the end
of the city, We're going to flee on mass etc.
You know what actually happened across his first term was
he had meetings with business people, like basically every mayor
(09:53):
of every city everywhere. He doesn't like actually want businesses
to close or rich people to flee. He raised taxes
a little bit, he expanded pre k offerings. But you know,
it was so unremarkable in retrospect that people almost forget
it happened and are now acting like this is the
(10:13):
first time we've ever seen a progressive guy get elected
mayor of a very heavily democratic city.
Speaker 4 (10:20):
I mean, one takeaway I think, and I got this
out of Mats piece, and I've certainly been feeling it
is the sort of business class took a big l
on this election. You know, they the Billy, a bunch
of very very wealthy people, through huge sums of money
behind Cuomo and not only managed to get a candidate
(10:43):
that they did not like winning the Democratic primary, and
now they have a you know, socialist mayor democratic socialist mayor.
And it definitely feels like that is interesting, especially at
a time when you know, you've seen this kind of
alliance between especially like tech CEOs, but like the business
world in general and Donald Trump, like where you have
(11:04):
on one hand, a bunch of these very wealthy guys
suddenly feeling like wow, like the White House is kind
of open to us, like I've heard this from from
CEO types. And at the same time, you have Zoron
Mandami getting up giving this victory speech where he's you know,
explicitly attacking that class. Let's actually listen to that quickly.
Speaker 1 (11:23):
As has so often occurred, the billionaire class has sought
to convince those making thirty dollars an hour that their
enemies are those earning twenty dollars an hour. They want
the people to fight amongst ourselves so that we remain
distracted from the work of remaking a long broken system.
(11:46):
We refuse to let them dictate the rules of the
game anymore. They can play by the same rules as
the rest.
Speaker 4 (11:55):
Of us, and the way you know that like Bill
Ackman and so on took a loss. Here is that
Ackman did like the shortest tweet he's ever done in
the history of his time on X. Because he's known
for doing these like five thousand word galaxy braids.
Speaker 7 (12:15):
And congratulations on the wind. Call me if I can
do anything to.
Speaker 3 (12:18):
Exactly like full capitulation.
Speaker 4 (12:21):
Not only is he not saying he's leaving New York,
you know, not only is he offering to help. Not
only is he being conciliatory, but he's doing it in
a very very short number of words.
Speaker 2 (12:33):
Now, I did want to ask you about one of
the points that you make in your piece. I remember
Bill Deblasia's campaign. I mean, it was a different moment
in times, certainly, but it seemed more measured than this one.
Like mom, Donnie's got a lot of fire, and like
definitely his rhetoric seems stronger and leftier to me. But
(12:54):
you made this point in your piece that actually, when
you down to passing things and making the city work
and collecting the garbage and things like that, that in
the end, all the extremism kind of ends up becoming
more of a job. Will you talk about that a
little bit.
Speaker 8 (13:12):
Yeah, I mean what does the mayor do? Right? What
is the mayor?
Speaker 7 (13:16):
Actually, the mayor appoints a school's chancellor, the mayor appoints
a sanitation commissioner, a police commissioner.
Speaker 8 (13:25):
And I could see I mean that that mom bammy speech.
Speaker 7 (13:28):
You know, if I was a billionaire, which I'm not,
but you know I would I would take a little
offense at that.
Speaker 8 (13:35):
Like you think, like, what are the problems in New
York City? Right?
Speaker 7 (13:39):
Like why isn't the subway more reliable? Why is it
that New York has the highest per pupil spending in
the country on its K twelve schools but below average results?
Why is there like garbage on the streets all the time?
Like it's not billionaire's fault, you know. Like there's many
things you could say about like America or the world
(14:01):
in which you might want to characterize billionairess somehow being
the enemy. But New York City is a place that
already has very high levels of taxes and very high
levels of spending, and it's a place that people love.
But what people love about New York is the cultural amenities, restaurants,
the nightlife. Nobody is like, what's amazing about New York
(14:22):
is the mix of tax revenues and public services. We've
really got it nailed here, so to an extent. I mean,
I think the l for the billionaire class here is
how did they end up rallying behind Cuomo? Who you know,
this is a guy who was driven from office by
(14:42):
sex scandals.
Speaker 8 (14:43):
Right.
Speaker 7 (14:44):
If you look at the video that he launched his
campaign with, he's talking about a sense that the city
is out of control, and he's appealing to people's concerns
about subway crime and other stuff like that. But if
you talk to like the real tough on crime guys,
you know, the people people from Manhattan Institute, people in
the NYPD, the person who they blame for that is
(15:04):
Andrew Cuomo, who signed these bail reform and discovery reform laws.
So he just seems like a really bad champion of
sort of the forces of reform. But again, if you
think about, like what are the authorities of city government,
you can't, like, I don't know, you're not going to
restructure the American economy. You can make things a little
(15:27):
bit better or a little bit worse around the margin
in certain very specific ways. You can maybe change housing
in the city you know, he wants to cut bus fares,
but like cow that's not a city agency. He doesn't
have any revenue to work with. He's going to find
himself negotiating with the council over really painful, annoying physical
trade offs. And I think that if he does a
(15:49):
halfway responsible job, the people who are really enthusiastic about
him are going to end up being a little disappointed
by this sort of grubby, boring reality of being a mayor.
Speaker 4 (16:01):
In certain ways, like the New Jersey governor's race was
a more surprising result, like Mickey Cheryl winning by something
like thirteen points, a race that a lot of Republicans
thought was going to be more competitive, you know, Virginia,
not close even the attorney General's race in Virginia, which
again that was another one where it looked like maybe
the Republican could win, like not that close. I'm just
(16:23):
kind of curious what you think the takeaways are from
this from this election as a whole. Well, you know,
like a lot of Democrats were going ahead and have
sort of you know, trauma from polling misses in the past,
and so they were looking at Cheryl up five and
Spamberger up nine, and they were like, oh my god,
(16:43):
you know what if the polls are off by five
and we lose in New Jersey and it turns out
the polls were off by five and it was just
off by five in the other direction.
Speaker 7 (16:51):
So these errors happen, you know, all the time. They
are actually roughly symmetrical. And you see that Trump is
performing about how you would expect an unpopular incumbent president
to perform. There was a lot of worry about inflation
a year ago. People voted for him because they wanted
(17:11):
him to bring down the cost of living. He's done
a lot of stuff in office, but he hasn't done that.
He's renovating a ballroom, he's you know, tweeting odd memes.
He's doing a lot of stuff with AI that is
of incredible interest to the stock market. But like, regular
people aren't seeing the kind of relief that they hoped for.
(17:33):
So democrats can can ride that backlash, you know, pretty far.
Speaker 2 (17:38):
So, seeing as how this seems to be a little
bit of a national thing happening right now. And like
you say, Matt, this could change. But if you're running
a business, if you're one of the billionaires running a business,
or just a person running a business. What does this
mean for people running businesses? Is this good news bad news?
Speaker 4 (17:57):
You know?
Speaker 8 (17:57):
I mean, it's not. The rising.
Speaker 7 (18:01):
Interest in socialism is obviously not something that business people
are going to love. And you know, I think that
the cost of housing in big coastal cities is a
huge pain point for lots of people, for lots of jurisdictions.
I think that business people would tell you that this
is not the excesses of capitalism, that it's regulatory constraints
(18:26):
on housing supply. But one way or another, it's making
people very upset and is causing a lot of people
in these these blue cities to embrace sort of far
left kind of ideas and trying to work with people
to develop constructive solutions. There were these housing supply ballot
initiatives that passed yesterday in New York and interestingly they
(18:49):
passed with Mamdami's support and against Cuomo's opposition. And a
lot of times the practical sort of conservative political coalition
in New York City has been these outer borough nimbi's
plus Upper East Side billionaires plus like cops.
Speaker 2 (19:08):
It's but a city, It's I mean, you know, it's
a it's.
Speaker 8 (19:13):
A beautiful tapestry.
Speaker 7 (19:14):
I think that the billionaires may want to think about
how that coalition works for them.
Speaker 4 (19:21):
I think what everyone wants to know who's listening to
this is a is Bill Ackman or or the like?
Is anyone going to actually leave? And then the other
kind of question I have is which is a related one?
Is basically like, at what point do you think some
of these results scare sort of the business community enough
(19:43):
that we start to see some defections from Trump, you know,
like where it becomes right like right now, like.
Speaker 2 (19:49):
You know me if I can help there?
Speaker 4 (19:51):
Yeah, well more, I mean more than call me if
I can help. I mean, like, there are a lot
of big companies putting huge amounts of money, huge but
but significant money into this east Wing ballroom project. And meanwhile,
in MSNBC and in kind of left wing media every
single day, people are really upset about this east Wing demolition.
(20:14):
And like, I assume at some point we will start
to see like movement and we'll start to see a
handful of you know, a handful of billionaires.
Speaker 3 (20:23):
Maybe it's Benning Off, I don't know who say.
Speaker 4 (20:25):
Oh, you know, actually, as it turns out, free bussing
sounds pretty good or whatever it is, you know, tries
to get because like a lot of these guys, like
as much as they are ideological, they just want to
be on the team that's you know, that's in power,
and they want to be able to Yeah, so I'm
kind of curious how you see that playing out.
Speaker 7 (20:44):
I mean, there was a fascinating Politico story about this
litigation about the Trump tariffs, and they were saying that
the people who were litigating this, at first, they were like,
they thought, all these giant companies are going to support
our position because the tariffs are bad, but they didn't
want to do it because they were afraid of angering
(21:05):
Trump by joining an anti tariff lawsuit. So they wound
up having a bunch of really small and medium sized
companies being their kind of go to corporate plaintiffs.
Speaker 8 (21:15):
And you know, I think corporate.
Speaker 7 (21:17):
America should reconsider that kind of attitude. If you look
at these election results, I mean, Hakeem Jeffreys is clearly
favored to be the next Speaker of the House. They
are going to be hearings about who donated to the
West Wing, who bought the Trump crypto fund, Like what
is going on?
Speaker 8 (21:37):
And you want to be able to say, even.
Speaker 7 (21:39):
If you're not going to talk about you know, state
owned grocery stores or free buses or globalizing the Intofada,
like you want to be able to say, look, I'm
running my business here. When Trump does stuff that's good
for business, of course, we're for that. But when Trump
does stuff that's bad for business, we're against that. And
when Trump shakes us down for bride. You know, we
(22:01):
believe in the rule of law and the persistence of
American liberalism, and a lot of companies seem to me
to have bought in on this idea that Trump was
going to be like Trump forever, right, But we're seeing
the laws of political gravity, just like I think they
will bring down the mom Dammi hype among you know
(22:21):
socialists in Brooklyn. The Trump bubble is popping now too.
Politics keeps happening with backlash, alternation of power, overreach limits.
If you're a committed ideologue, then sure you sign up
with your team and you fight for it. If you're
someone who's just trying to navigate these waters, like you
want to navigate prudently, Akaman deciding after all these long
(22:45):
tweets that he wants to say something nice, and I think,
you know, Mom, Dammy would be wise to invite some
Wall Street titans to come have lunch with him, and
they would be wise to say yes, right, everybody ultimately
benefits from having business growth in the city that they
are the mayor of.
Speaker 8 (23:05):
Like, that's just the reality.
Speaker 4 (23:06):
I absolutely think if the Democrats have a good mid term,
we are going to have the like Mark Zuckerberg free
bus conversion, like he's gonna go on, He's gonna go
on Hassan Piker's Twitch stream and proclaim that, you know, actually,
on third thought, democratic socialism.
Speaker 2 (23:23):
Sought to you meta like.
Speaker 8 (23:26):
Way Mo will.
Speaker 3 (23:30):
See, we've worked it out already. Synergies Waymo.
Speaker 4 (23:33):
Lobbyists call us Matt Iglesias, thank you for being here.
Speaker 3 (23:37):
Check out his newsletter. Uh slow boring, thanks a lot,
Thank you, Thanks Matt.
Speaker 4 (23:45):
All Right, Stacey, you know that one of my favorite
topics is the things that Silicon Valley is ruining.
Speaker 2 (23:53):
Right, Yes, I do know that.
Speaker 3 (23:54):
Okay, So we got one.
Speaker 4 (23:55):
To talk about today, and it's one that it's come
up in my mind a couple of times, but it
really crystallized as I was reading this wonderful story in
the Atlantic by Ellen Cushing, staff writer. There the story
is about restaurants and the way that food delivery is
changing food culture and the restaurant business, and Ellen is
here to talk about it.
Speaker 2 (24:15):
Hey, Ellen, Hi, thanks for having me.
Speaker 4 (24:17):
All Right, So I feel like this is a thing.
And I said ruined because that is kind of how
I feel. I think they are different points of view.
But why don't you just talk us through the premise
of this story, like what you were trying to do,
and like when we're talking about, like how has food
delivery changed the restaurant business, what are we actually talking about.
Speaker 9 (24:37):
Yeah, so most people have probably noticed that delivery is
more popular than it used to be. They have probably
had the experience of being in a restaurant and it's
like half empty, but there's fifteen Uber Eats drivers like
clustered in the front waiting for their orders. You've seen
the plastic bags on people's doorsteps. If you live in
(24:59):
New York like I do, you see the e bikes everywhere,
you kind of know this is happening, but you may
not know.
Speaker 2 (25:06):
In twenty twenty.
Speaker 9 (25:07):
Four, three out of every four restaurant orders was not
eaten in a restaurant. Wow, this statistic just kind of
like bounces around in my brain nationwide or yeah, wow,
like that includes McDonald's, you know, that includes drive throughs,
But it is a huge number. Thirty percent of full
service restaurants, which are like restaurants where you sit down
(25:29):
and you have a waiter a waitress and you have
a napkin and a menu that you look at that
kind of restaurant, thirty percent of their orders are beaten
off premises now. So this is a huge change, and
it has all of these downstream effects for restaurants, for eating,
for cities, for traffic, for the environment. So I just
(25:50):
got kind of obsessed with it and decided to figure
out what I could figure out.
Speaker 2 (25:54):
I mean, I knew it's definitely an issue in New York,
which started during the pandemic. New York's always been a
very food delivery oriented place. But I guess the thing
that kind of blows my mind about it is that
these orders are so expensive. Like I feel like, I
order a burrito and the brito's like twelve dollars, and
then somehow by the time I am paying for the burrito,
(26:16):
it is forty dollars. I mean, I'm lazy enough that
I do that math and it maths out for me.
But I can't believe that this is a common thing.
Speaker 3 (26:26):
I can't either.
Speaker 9 (26:26):
I talked to a driver in South Carolina who told
me that he recently chauffeured like a single cup of
ice cream to someone's house, like twenty miles away, and
he estimates that this person spent I think it was
like twenty dollars on this ice cream, you know, and
he got paid like three dollars.
Speaker 4 (26:47):
Let's just talk a little bit about the history here,
which is I guess partly tied into the Internet and
like that. One of the really cool things about your
story is you spend time talking to one of the
pioneers in the kind of internet base food delivery world,
a guy who created a company that was sold to
grub Hub, who basically built some of the delivery infrastructure.
(27:08):
These apps started to take off, what like in twenty thirteen,
twenty fourteen, you had Uber Eats, you had door Dash.
Speaker 3 (27:15):
Talk a little bit about.
Speaker 4 (27:16):
Those businesses, like where did those businesses like find an opportunity.
Speaker 9 (27:21):
I mean, the thing about delivery is that everyone eats,
so it is a huge potential market. So, like you
were saying, late twenty's early twenty tens, all of these
companies started, you know, figuring out that they could do this.
The Internet was becoming something that people had more access
(27:42):
to phones, et cetera. Restaurants in the beginning didn't want
to facilitate delivery because it's annoying. But what happened in
this moment is that restaurants like turned over a core
part of their business to Silicon Valley and they just
never got it back. So these businesses kind of swooped
(28:02):
in were the middleman, and it was you know peak
like zup era, you know, like huge subsidies. Every venture
capitalist in California wanted to be the guy who funded
the company that was like the leader in delivery, and
so they were all massively discounting, you know, fighting with
(28:26):
each other. This was an era where you could open
your phone and you know just be like barraged with
offers for like fifty percent off whatever you wanted. And
so what happened is that basically Silicon Valley like created
a market that did not previously exist for you know,
delivery everything, and then they created the expectation that it
(28:49):
would be really cheap.
Speaker 4 (28:50):
Yeah, because they basically used you said zero interest rate policy.
There was tons of venture capital money flowing to these
businesses and they basically like subsidized your food delivery order,
which was awesome back in the day, right, it did
rock cause you talked about Stacy just brought up like
her burrito, it's like a twelve dollar burrito. You end
up paying like what Stacy, like thirty bucks, forty bucks
(29:12):
whatever it is, but like, yeah, in twenty thirteen, it
was thirteen dollars. Like basically all of the cost the
driver got paid via the startup. The startup totally swallowed
all of the technical costs and basically just passed on
the full fare to the restaurant.
Speaker 3 (29:30):
Like it was awesome back then.
Speaker 9 (29:31):
Yeah, were the basically those were the days. They lasted
about five or six years. And then the other big
inflection point is the pandemic. And this is a moment
obviously we all remember where like ordering delivery kind of
almost overnight became like something really virtuous, like the way
(29:52):
you could help your local small businesses. And if there
were any restaurants that weren't already signed up with Uber
Eats or grub hub or whatever, they signed up during
the pandemic because they had to, you know, stay open.
And so then you have this second wave of every
restaurant going delivery, and you have people who had previously
(30:13):
been holding out, you know, or ordering delivery, getting used
to eating restaurant food at home, and you don't go
back from that. Like once you have the experience of
eating like a wogu steak, like in your bed watching TV,
it's very hard to you know, train yourself to think
(30:34):
that's not possible anymore, you know what I mean.
Speaker 2 (30:37):
I feel that very deeply. And to me, I think
the other real appeal of these sites like grub Hub
and seamless and things like that is that it was
like a centralized place. It could help you find restaurants,
it would offer you deals. But one of the things
that I understood from the early days, and I don't know,
it seems like this is shifted and I'm curious to
(30:58):
know why is that for some reason, and even though
my burrito costs thirty dollars, like nobody along the way
for a long time was making any money, Like somehow
everybody was losing money on my thirty dollars burrito for
a long time, the restaurant, the delivery person, and so
what happened there because the business model was always such
(31:18):
a problematic thing.
Speaker 9 (31:20):
Yeah, I mean, delivery doesn't make sense. Delivery is really expensive.
You're introducing a middleman to a process and that costs money.
You know, a cost labor, packaging, server space. You know,
you order pad tie from the place around the corner
and a company in California is facilitating all of this.
Speaker 2 (31:43):
That's kind of nuts.
Speaker 9 (31:45):
So it has always been really expensive, it's just that
the cost of it was sort of obscured. And now
some of the delivery companies are profitable. They've also really consolidated,
so basically two companies controlled like ninety percent of the
delivery market. They are making some money, but basically nobody else.
Speaker 4 (32:03):
I want to talk about all the ways this is
terrible and all the ways it has ruined food culture
and restaurants, and like I were a delivery one of
these delivery apps, and I were sitting here, like I
might tell a slightly different story. I think I would
say that you're saying we addicted people to convenience, But
actually what happened is people just decided they don't like
(32:25):
restaurants as much as they thought they did, and that
it isn't that we isn't that we tricked anyone. It's
that people decided actually being at home is awesome.
Speaker 9 (32:35):
Yeah, they would certainly amount that argument. You often hear
the argument also that delivery is really good for people
with young children or people who have mobility issues. Like
delivery itself is not like pure evil, you know, like
delivery really serves a purpose. But I think the problem
(32:56):
is that we haven't really figured out a way as
a society to account for all of the externality that
it causes in the world, produces in the world.
Speaker 4 (33:08):
Ellen, can you talk about like the way that restaurants
have changed because of this, Like how the dining experience,
Like even if you decide to go into a restaurant,
you might be paying more because they have to charge
more to make up for the door dash tacks. But
what about what are some of the other ways that
this has changed how it actually is to like operate
a restaurant or dine in a restaurant.
Speaker 9 (33:28):
The two main things that are changing are the food itself.
Restauranteurs told me that they're doing more raises, more dressings.
On the side. You know, you have this sort of
like fundamental physical problem with delivery, which is that if
you put hot food in a plastic box, it starts
to steam in its own heat and like immediately get soggy.
(33:52):
And so restauranteurs like want their food to be good
for delivery, and so they're trying to develop dishes that
can sort of with.
Speaker 3 (33:59):
Stick and that French fries out mashed potatoes in.
Speaker 9 (34:02):
A round exactly, or like this is kind of one
of the many reasons why everything is a bowl now,
you know, like that kind of food travels quite well.
The other way that restaurants are changing is the physical
space is changing. A lot of restaurants have redesigned their
interiors to account for deliveries. So a lot of them
are hiring, you know, design firms to put in cubbies
(34:25):
or create a special place for drivers to stand so
they're not just clogging the door. You know, you're basically
trying to like cram two experiences into one right now.
Where it's like many restaurants in this country are both
a place for people to sit down Dad's fiftieth birthday
and have a nice meal with their family and also
(34:46):
like a vending machine, and those two things don't like
actually work that well together. Like, I've certainly had the
experience of being in a restaurant and there's an Uber
Eats driver like one.
Speaker 3 (34:57):
Inch behind me right bumping you with exactly.
Speaker 9 (35:01):
I don't blame that guy at all, but it's not
that nice as an experience.
Speaker 2 (35:07):
Is there any way that this is a win for restaurants?
Are they seeing more orders? Is there an upside?
Speaker 9 (35:13):
Not every restaurant hates delivery, though almost everyone I cold
called was really happy to talk about how delivery.
Speaker 3 (35:20):
Has been a problem for them.
Speaker 9 (35:22):
You know, the argument for restaurants is that it gets
your food in front of more people. You know, we
don't know totally the counterfactual version of this. If delivery
didn't exist tomorrow, would people go out to restaurants or
would they just sit in their house and eat like
frozen pizza.
Speaker 2 (35:42):
We don't know.
Speaker 9 (35:42):
It is possible that more people are eating restaurant food
as a result of delivery than they would before, but no,
I mean, generally speaking, restaurants like the restaurant tours I
talked to, basically feel like they have to do delivery
because if they don't, they're leaving money on the table.
But if they do delivery, they're forking over like thirty
(36:06):
percent of their profits to another company.
Speaker 3 (36:10):
Have either of you all been to Wonder? Do you
know what that is?
Speaker 9 (36:14):
I know what that is. I've not been because I
find it pretty sinister.
Speaker 4 (36:19):
It's like the final, the natural conclusion of all of
these trends. It's like just a counter and it's basically
like airplane food. It's like food that's pre prepared in
a factory or a central catering kitchen. Then it's warmed
up and you have a lot of choices and they're
all like branded, like really seems like airplane food.
Speaker 3 (36:39):
You can have a.
Speaker 4 (36:39):
Wolfgang Pumps Puck something and it's like entirely about the
either pickup or delivery. And it's a restaurant that's created
specifically for door Dash.
Speaker 2 (36:53):
Is it like a dark store? You know, like the
dark stores that are just made as like distribution points
for Amazon, or like can regular people go in and
just order something directly? Like could I go in to
Wonder and order a burger?
Speaker 9 (37:06):
And if you kind of wanted to a chaos on
a business, he could walk into a Wonder. Most of
them have some seating and most of them you can
order at the counter, but they're designed for delivery.
Speaker 3 (37:18):
It's so funny. The guy who started at MARKLRII.
Speaker 4 (37:20):
His previous company was jet, which is like the Walmart
dot com. And I sometimes just feel like he is
on a mission to destroy every small business in America.
Like he's like, we got Walmart and we brought it
to the Internet, and now I'm going to do the
same thing to restaurants. You really like, something profound, like
(37:40):
culturally profound is lost when you take away restaurants. Like
it's not just sad for the business owners who are
struggling to deal with it's sad for us.
Speaker 2 (37:49):
I was gonna say, you know, this reminds me of
back in the fifties they used to have those diners
where the food would be, you know, like in a
little locker and you put like an automative slot, an
automatic Yes, an automat, thank you. Although it feels dissociative
and dystopian, I definitely agree. I don't know, like it
doesn't seem that different from an automat to me, it's not.
Speaker 9 (38:12):
I think the problem is the scale. Like the thing
that freaks me out here is not that delivery is
available to people. It's that delivery is how America eats
and the thing I love restaurants. It's a cliche, but
restaurants bring people together and delivery doesn't do that. And
(38:32):
the thing I worry about is, like what happened to
movie theaters happening? They still exist, You can still go
see a movie in a theater, but they're you know, struggling.
You're always worried your favorite one's gonna close. It's no
longer kind of a community gathering space.
Speaker 4 (38:50):
Any sign of a backlash. Sometimes these trends seem more certain.
I don't know, like some of the stuff we're talking about.
It seems the same way that like young people are
shunning Facebook or whatever, any chance that they might shun
door dash or get more into that physical experience basically
(39:10):
not go to the wonders of the world and instead
offer something, you know, that feels more like a conventional restaurant.
Speaker 3 (39:17):
Or are we just old?
Speaker 9 (39:18):
I mean, I will say that thirteen percent of people
under forty five US delivery once a day.
Speaker 2 (39:25):
So once a day food delivery.
Speaker 9 (39:30):
So I'm not like totally optimistic about this though. I mean,
I think consumers are starting to a understand the dynamics
a little bit better and be you know, experiencing some
sticker shock when they get their burrito or whatever. I'm
really curious what happens if we like enter a recession
(39:52):
and people become even more price sensitive, and you know,
does paying like forty dollars for some like kind of
tepid pasta feel like a good deal then I don't know.
Speaker 2 (40:05):
So people may turn away from.
Speaker 9 (40:06):
Delivery, but I don't think it will be ideological.
Speaker 3 (40:08):
I think it will be practical.
Speaker 4 (40:10):
All right, Ellen, that was great stick around. We're gonna
do our underrated segment in one second.
Speaker 3 (40:14):
I can't wait.
Speaker 2 (40:22):
So we've now come to the part of the show
where we talk about something that is underrated, a piece
of news that maybe did not get the attention it
should have. And this has been kind of an intense week,
so a lot to choose from. But Max, this one's yours.
Speaker 3 (40:35):
Yeah.
Speaker 2 (40:35):
I don't actually know what it is.
Speaker 4 (40:37):
And I wanted Ellen to stick around for this because
it has a tech angle.
Speaker 3 (40:40):
But what I want to do is earlier this week,
the Wall.
Speaker 4 (40:44):
Street Journal has their tech event going on in California,
and the chief financial officer of open Ai, the big
chatboc company, she gave a talk and she said something
that has a lot of people very angry, and I
want to play the clip for both of you, and
you guys can try to tell me what exactly people
are angry about. Sarah Fryar open AI Chief financial Officer.
Speaker 10 (41:07):
But even in areas like open source, we're attempting to
put the state of the art model always out into
the world, and in order to do that, we always
want to be on the frontier chip. So the question
is how long does a chip remain in the frontier,
So three years, four years, five years, or even longer. Now,
in a world where we have no compute or compute constrained,
we are absolutely using chips that have like a one
(41:33):
hundred equivalents that have been around like maybe six seven
years at this point in time. If that's the case,
financing chips gets a lot easier. If the timeline on
the chip stays short, that gets harder. And so this
is where we're looking for an ecosystem of banks, private equity,
maybe even governmental the ways governments can come to bear.
Speaker 3 (41:56):
Okay, what are people mad about, Allen?
Speaker 2 (42:01):
What's your guess? I have an idea, but it's it's
a little out there.
Speaker 9 (42:04):
They're mad that this person's trying to get the government
to pay for her chips.
Speaker 3 (42:08):
Yes, do you think that's it?
Speaker 4 (42:10):
That is it? The hottest company in the world, the
most valuable private company I think of all time, a
company that is supposedly on the verge of creating machine
gods that will be worth many trillions of dollars. The
CFO got up and basically suggested that they need the
government to create a backstop, effectively an open AI bailout.
Speaker 9 (42:35):
Right right right, and open a AI bailout like at
the same time as I'm sure they're fighting back against
all kind of like actual regulation.
Speaker 4 (42:43):
So first of all, everyone is very mad about this.
As I said, Ron DeSantis has been tweeting up a storm.
Speaker 2 (42:49):
Not Ron DeSantis, he is very unhappy.
Speaker 4 (42:52):
Let me find some of the DeSantis material that I
can read to you, just so you're fully up to
speed on this. The rush to secure and unpresent number
of policy favors, from regulatory moratoriums to abrogation of intellectual property,
a lot of big words. For Ron here was always
about using too big to fail as the industry's risk
mitigation strategy.
Speaker 3 (43:11):
Now it's out in the open.
Speaker 4 (43:12):
Open AI kind of backed off of this and said well,
we didn't actually mean we need.
Speaker 3 (43:18):
A government bailout.
Speaker 4 (43:19):
We were actually just talking about you know, policies and
industrial capacity and kind of trying to vague things up
a little bit to say that we weren't specifically asking
for money. But I think a lot of people who
are following this space closely, as well as people on
Wall Street, are sort of worried about this, just because
so much money has gone into these data centers. They're
(43:43):
all these circular deals, and there's the risk that if
it starts to fall apart, it could spill over and
we might all need to become investors in open AI right.
Speaker 9 (43:53):
Like they can kind of hold the whole world like
sort of hostage because this industry is so big.
Speaker 2 (44:00):
What's interesting to me is that, like the whole banking
industry has sort of operated in this way ever since
the financial crisis, which is like the companies are private
when times are good, and they're public when times are bad,
and that has its own set of problems. What I
find interesting now is like, for AI, times are really
good right now. So the idea of like somehow getting
(44:22):
all the upside of being a private company while all
the upside of being a government entity is I mean
that's the dream for companies. I mean, I don't see
anything wrong with you know, a company wanting that, but
I see something wrong with us doing it. I hope
we don't because it gets us into like suddenly this
stuff gets priced in and then the whole economy is
(44:44):
depending on But in a lot of ways, the whole
economy is depending on AI right now. So if the
AI bubble pops, it is such a systemic risk that
maybe it's not an unrealistic ask. They're just leveraging. It's
like any job interview, they're anchoring expectations.
Speaker 3 (45:00):
Yeah.
Speaker 4 (45:00):
The other thing is maybe they're just like trying to
see like carpe DM, you've got Donald Trump in office,
he's very close to many of these companies. Maybe they
just see, essentially there's a political opportunity to get some
policy concessions that they won't be able to get from
like even JD Vance maybe, but or obviously Ron DeSantis
(45:21):
he's not on board with this.
Speaker 9 (45:22):
Sounds like she's kind of saying, you know, like we
don't we don't need your money, but if you wanted
to give it to us, like we be, like that
might be an interesting idea. You know, it's like this
is a test balloon, right same.
Speaker 4 (45:34):
By the way, Yeah sure, Ellen Cushing, thank you for
being here. You're gonna have to come back and do
this again some other times.
Speaker 3 (45:40):
I can't wait.
Speaker 2 (45:41):
Sounds good next time bringing a cup of ice cream? Yeah,
ice cream?
Speaker 3 (45:48):
We could order it right now?
Speaker 2 (45:49):
Yeah yeah yeah, So.
Speaker 4 (45:58):
Stacy, before we go, I just got to I don't
apologize to you and to our listeners.
Speaker 2 (46:04):
Okay, correction.
Speaker 4 (46:06):
During the intro last week, to the segment on the
movie business, I called Superman a flop. Now there are
articles that you can find on the internet describing it
this way. But during the conversation with Sean Fantasy, and
this did not make it into the final cut of
the show, he sort of explained why I was wrong,
(46:27):
and I just wanted to kind of pass that along
just in case there are any Superman heads who heard
that episode and were mad. Now here's the thing. It
was not a flop. It did actually quite well in
the United States. The problem for Superman is it has
it did not do well in other countries, particularly in China. Now,
some of that has to do with US China relations,
(46:48):
and maybe some of it just has to do.
Speaker 3 (46:49):
With Superman because it's like truth.
Speaker 4 (46:51):
Justice in the American way, it's seen as overly US
centric or something like that.
Speaker 3 (46:55):
So just I am sorry. I regret the error. Superman
not a flop. Good job, Superman.
Speaker 2 (47:08):
This show is produced by Stacy Wong. Magnus Hendrickson is
our supervising producer, and Amy Kean is our executive producer.
Sam Rogan Chandele's engineering, and Dave Purcelf factchecks, Sage Bauman
heads Bloomberg Podcasts special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show. It means a lot to us.
And if you have a story that should be our business,
(47:29):
email us at Everybody's at Bloomberg dot net. That is
Everybody's with an s at Bloomberg dot ne.
Speaker 4 (47:34):
Or if you have something to complain about, send us
the errors and we'll correct them.
Speaker 2 (47:39):
Yes, indeed, if we happen to incorrectly say that a
movie did not make money when it did, definitely send
us that email. Thank you for listening and see you
next week.
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