The Best One Yet - “Amazon is turning your palmprint into a credit card” — Amazon’s new payment method. Uber’s “name your own price.” PetMed Express’ aging dogs.

Episode Date: January 22, 2020

Amazon is pursuing a new feature to sell to retail stores to take on Apple Pay — We’re talking “pay by hand” (and we’re calling it “Amazon Hand”). Uber’s whipping up a “name your own price” idea for drivers so it can prove to regulators it’s just an app, not a ride company. And PetMed Express shares fell 6% even though it’s sitting on top of 2 trends. Also, we’re flying over to London for the Robinhood launch across the pond — you can sign up to attend our live pod recording on Jan 28th or Jan 29th at rbnhd.co/uksnacks.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Wednesday, January 22nd. Good date. Nick, have you heard about this coronavirus? Can you talk me about this thing? What's going on?

Markets didn't have a good day, but I got a feeling this is still the best one day. Snackers, Jack's getting so hungry. You got to keep your hands away from this guy. He's going to bite off an index finger pretty soon. Nick, we got three great stories. I'm kicking it off with Uber, which is pulling the old name your own price deal with its ride. Except it's drivers who get to name their price. not rides. And it's actually a strategic legal move by Uber to pretend that it's not a ride

company. Yeah, it's lawyers claim. It's just an app. It's just an app. Don't ask any questions. It's just an app. Just an app. Just an app. It's just an app. Second story, Amazon hand. Is that what we're calling this? If that kind of sounds awkward, let's go with that. It sounds awkward. Amazon hand, if that sounds awkward, it's because it is, this is new Amazon technology that lets you pay with the wave of your palm. It's the coolest thing to happen to the word palm. since the Palm Pilot. Palm oil? Third and final story.

PetMed Express. This is your Schnauzer's online medicine cabinet, and the stock surprisingly fell 6% yesterday. They're trying to disrupt your vet stranglehold on the front line anti-flea market. You know what we're talking about.

It's a front-line collar, right? The dogs were flea collars. Now, Snackers, before we jump into that wonderful mix, you've heard about Brexit. Rough story. You've heard about Megxit. Sad story.

We're looking at this, and Jack, I'm like, you know what, we've got to get over to Buckingham Palace chat with QE2. We're bringing snacks across the pond. We're actually going to be over there a few days before the Brexit deadline for the first UK snacks live event. Now, we know, this is extremely short notice, Jack. Can you whip up the dates for us? Tuesday and Wednesday next week, January 28th and 29th.

If you're in London, we would love to see you. Now, Robin Hood is launching in the UK, so Jack and I are going to go across the pond, record part of our podcast live for our UK Snackers. We're going to meet a lot of Snackers there. We're also interviewing Robin Hood's Head of International to talk about the launch of Robin Hood across the pond. Now, this is all going down in Canary Wharf, which is a neighborhood in London that sounds a lot cooler than it actually is. I think it's either pronounced Canary Wharf or it's pronounced Schedule. I can't say.

It either has to do something with like the bird or like actually canning things to then sell from groceries. Again, Snacker, sorry about the late notice. This is basically like, what do you do in tomorrow's situation? But we would love to see you. Now, to get details, you need to RSVP for free on Eventbrite. And we got a tiny little URL here that you can type in your browser. It's so cute. It's like a baby Yoda.

RBNhd.co slash UK snacks. Let me hit that again. RBNh.cd.c.c.com slash UK snacks. Jack and I threw it up in the description of the pod along with some chips and some fish. Jack, should we hit these three stories? One more time. RBNhd.com slash UK snacks. Let's hit our three stories.

You're tuned in the snacks daily. We spoke to the lawyers. It snacks about the hair ain't food. It's air candy. They don't reflect the views of the Robahood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice.

Not an offer or sale of a security. Snacks is digestible. Business news for you. Robahood Financial, LLC. Member Fenrow. For our first story, Amazon is looking into turning your hand into a wallet. We're calling this Amazon hand, or we're hoping Amazon Mexico calls this Amazono Mano. You're welcome, Bezos.

Just run with it. By the way, QR codes, so 2010s. Yeah, paying by body is the new Venmo. Now, this story that Jack and I found is thanks to our five favorite words, beginning with PFWTM. PFWTM according to people familiar with the matter. We don't know who these people are, but they always deliver. It's incredible. Look, when Wall Street Journal has a PFWTM lead, it's usually true. It's usually a fun thing, too. So here exactly is what Amazon is allegedly building,

according to the PFWTMs. It's making these tiny terminals that have a hand span of about eight inches. You put it on the counter at brick and mortar stores. Boom. After this goes nationwide, Palm payments are going to become a thing. It's targeting fast food restaurants and coffee shops. And there's a very strategic reason for this. Those are locations with a high, high rate of hangarism.

It's testing this with Visa. It's chatting with MasterCard, and it's talking to JP Morgan Chase, which makes a lot of the cards that you swipe with. Right, because when you're waiting in line for coffee and you're hungry and you're angry, you're not going to want to wait. You're just going to pay by hand and move out of there. Here's how this will go down. You'll go to a terminal at a blue bottle coffee. And after you pay the first time, you stick in your credit card, you pay for it the old-fashioned way.

Then it's going to be like, would you like to give us your hand identity so you'd never need to pull out that credit card again? And then, boom, you're going to click yes, potentially. And from then on, whenever you go to a blue bottle and feel like you're getting overcharged for a simple cup of coffee, that's like $12 in San Francisco, you can just pay for it with your hand. Well, let me back you up, Nick. First, if you say yes, I want to give you my hand, you place your hand over this little terminal that sits on the counter and it scans. It takes a picture of your hand, which it will remember forever, and link back to that credit card that you just used. Jack, the way you described it was almost romantic there. I kind of like this vision.

Now, Snackers, we know what you're thinking. You're like, Nick, Jack, you're coming up with crazy terms here, like palm payments. How do you have any evidence of this? And who are these PFWTMs? It's not just the PFWTMs. According to the Wall Street Journal, Amazon has filed a patent for the non-c-sart. Sorry, this is the product. It's called a quote-unquote non-concouncing.

contact biometric identification system with a hand scanner that generates images of a user's palm. Ipso facto, you're paying with your hand. While Jack's getting a drink of water to recover from that whole line, Jack, can you whip up the takeaway for us over on Amazon? If you can win payments, then you can win retail. Snackers, last year, Apple launched a credit card and Google announced checking accounts. PayPal, which is the OG electronic payment provider from way back in like 1999, thanks

a balding Elon Musk who founded that company, the stock's up 3x in the last five years. And here is the key. If you know what people are paying for, then you know what they actually want before they may even know it. We're thinking Amazon will use the data it collects from palm payments to drive its core business. All right, picture this.

If you're splurging on those oat milk lattes over at Blue Bottle Coffee Shop, then Amazon can target you for lactose-free products back on Amazon.com. Because you're drinking the oat milk. In fact, Amazon could come out with its own Amazon basics version of oat milk because so many people are using Palm Pilot to pay for their oatmeal lattes and then make more money on Amazon selling that stuff. The Palm Payments data could be driving Amazon's future. Data. It's what's for dinner. By the way, this is Jack.

I own stock of Amazon. For our second story, old school PetMed Express just dropped after another poor quarter. But it reminds us of two newer, sexier companies. Now, when you're thinking Padman Express, you're probably not thinking of their headquarters, which happened to be in Del Rey Beach, Florida, since 1996. Del Rey Beach, home of the Palm Beach Poetry Festival, where my wife is currently doing workshops with Major Jackson and Joy Harjo. The rest of the time, though, it's pretty much a spring break has today.

Yeah, it really is. Beautiful spot of the Atlanta. By the way, they own the coveted, coveted ticker symbol. Jack, can you lay it up for us? P-E-T-S, pets, pets, pets. Amazingly, they snagged that one. They're also valued at $500 million, which is categorized as a small-cap company. It's about a 26th of a lift.

Small bark, big bite, they are America's largest pet pharmacy, but you may know them by their other name, which dates them significantly, 1-800 pet meds. Yeah, not a good sign to have 1-800 in your company name. Throw in the dot-com, make it official, and just act like you're 25 years old. Now, this company started out with human medical prescription delivery. Kind of creepy. But then they pivoted to animals with pet medications. Kind of disturbing, but we're impressed that they were able to pull this up.

First thing I'm thinking of here is that Seinfeld episode where Cosmo Kramer goes to the vet because the dog has the same cough as him. And the vet's like, too much drinking out of the toilet. It gets all offended. It's a classic. It's a classic. Now, the average email response time for this company is 10 minutes, which we test. un-officially. Well, they got back to us 29 minutes later, which is ironic because we also tested

chewy.com, which is kind of a competitor to PetMeds. They promised to answer the phone within, I think, six seconds. And guess what? They did. Live on the pot. They answered the phone before we even called. Now, PetMeds has a history of a bunch of awkward lawsuits that occurred in the 2000s. Yeah, when you're looking at these things, it's kind of a freaky situation.

They marketed pet drugs to humans, allegedly, and, you know, And some of their doses were like accidentally in the metric system. While other ones were the imperial system. It's like, is this 10 square pounds or is this a teaspoon? I don't know. Just throw it in Sparky's bowl. He'll be fine. Now, remember how Smile Direct Club competes with orthodontists going direct to consumers with lower-cost braces?

Well, PetMed Express surprisingly competes with veterinarians. Get this. Just 6% of the pet market is controlled by PetMed Express. But 58% of the pet medications market is dominated by veterinarians. Veterinarians get a lot of income selling drugs for your pets directly to you. Oh, and by the way, as millennials jump into more pets instead of having babies, Jack and I are wondering, aren't these pets going to age? We mentioned yesterday Proctor the Schnauzer.

I think dogs are living longer these days. Yeah, they're going to need their arthritis medications, and that's why PetMed Express is trying to take over what veterinarians are doing. Hoosier, great playlist. So, Jack, what's the takeaway for our buddies over at PetMed Express? There's only one thing, more loyal than a dog. And it's a PetMed customer. Strategic move by PetMed to get you in and get you back and back and back again.

Here's what it is. Let's break down the costs that you're about to take on if you get that puppy that you've been talking about getting for like three years. The number one cost is the pet food. And that's why Chewy.com, which is PetMed's rival, focuses on. pet food. The number two biggest cost of taking on a dog is that pets medications because they're living longer. And that's why PetMed Express is devoted to medications. They offer low prices on common over-the-counter flea-tick blood pressure medications. And guess what? Those things aren't

one and done. You're buying them and then you're re-upping pretty much until the animal passed. So PetMed's specially selected products are meant to drive repeat business. For our third and final story. Uber keeps dodging the new California gig law and changes to the app have come to California. We're just an app. We are not a ride company. Nothing to see here. We're just an app. Rides are not our core business. We are just an app. No joke. Snackers, if you got a buddy who works at Uber right now, ask them how work is going. They're going to go, oh, it's just an app. It's just an app. All we're doing is app-y things. We're just doing apps over here. The reason Uber is so paranoid is AB5. That is the new law in California.

that requires Uber, Lyft, and other gig companies to treat their drivers like employees with benefits, aka humans. That means vacation days, sick days, overtime, other benefits. And that can make Uber more expensive for us customers. Yeah, because it's expected to increase the cost for Uber by 30%. Now, to take on this AB5 law, Uber's trying to show the world that it's just an app. It's definitely not a ride help company. It's also trying to show that the drivers and employees, they're not employees at all.

They're actually independent contractors. They're basically entrepreneurs. They're not taking any orders from Uber. Therefore, they should not be treated like employees. And they're hoping a judge will agree with that and that drivers will then just be considered independent workers. Now, to strengthen their case for the eventual lawsuit, that's definitely coming, they have made two changes to the app in California. Both of them are about the prices, aka the fares of your Uber ride. Now, if you're in San Francisco right now and you're a snacker,

you've probably used Uber, open up the app to be like, oh, I want to go 12 blocks, just get home. And you'll notice the fare says between $7 and $43. The range is not that big. It's not that big. No, but remember back in the day, you would only get estimated prices before you executed an Uber. And there'd be like a single price.

Now you've got to like your brain's got to calculate it. It's going to fall in the middle of somewhere. I don't know. It feels like you're gambling. Well, eventually that ended and we got predetermined prices we knew it were paying for before we requested the ride. Now it's going back to the estimated versions. The second thing that Uber is doing is they are letting drivers set their own fares. This one's kind of crazy.

Now, usually when an Uber driver sees a potential ride that they can take, they need to accept or reject the ride without knowing where the destination is. I have this vision that every time an Uber driver gets a ride, the first thing they're thinking is, please don't be Calgary, please don't be Calgary, please don't be a ride to Calgary. No matter where they are in the continental United States. It's like a terrifying blind date every single ride. They're like, am I going to have to put my car on like a boat to go across the ocean on this thing? But with this new change, which is only happening in California, because the law AB5 only happens in California, drivers will be able to know where they're going and then bid their own price on how much they're willing to pay for this ride.

Yeah, if they're going to pick you up from the Santa Barbara Airport, they could say, hey, to get home, it'll cost you $200 or $100. It's up to their choice within a certain range. The reason Uber's doing this, they're like, look, they're entrepreneurs. They're setting their own prices. Oh, and by the way, we're just an app. We're just an app. We are not a ride company. Don't ask any questions.

Those people are not our employees. We're just an app. So, Jack, what's the takeaway for our buddies over at Uber, which is just an app? Uber's pricing algorithm is all about efficiency. and this change ruins that. Snackers, if you've taken an economics class, you've definitely heard a professor scratch up on the board. Markets are efficient.

This is gospel. Lazy fare politicians love this, and it's econ gospel. Now, Uber's pricing model is actually a perfect supply and demand concoction. And its supply and demand is equalized through surge pricing. You kind of hate it,

but it sort of makes the system perfect. When demand for rides is low, the prices are low. And drivers see that nobody is looking for a ride. So if they log into their app, they're not going to get paid much. So guess what? They're not going to log into the app because prices are low. That's good.

But when demand increases for rides, prices increase. And then a driver who's like watching Netflix sees that there is a price spike on Uber. He might get up and get behind the wheel and start driving, which is good because there's high demand for rides. That surge pricing balances out supply and demand. and it is a secret sauce of Uber. Now there's this clunky auction situation where the guy spinning laps around Santa Barbara Airport

claims like out of the blue how much he's willing to drive someone. That is much less efficient. But Uber is not, it's just an app. It's just an app. It's just an app. And this new change might change the product for the worse. It's just an app.

Jack, can you whip up the takeaways for us today? Amazon filed a patent to turn your handprint into a credit card. It'll let you pay you pay. faster and fill your belly quick. And feed Amazon's belly with more data. PetMed's Express is supplying prescription medicine online for a lot of dog ears. It competes against your vet for dog prescription refills on refills on refills. It's all about the refills.

Third and final story. In California, Uber is changing the product so that its drivers won't be classified as employees. It's just an app. It's just an app. I don't know what you guys are looking at. Nothing to see here for just an app. Now Snackers, time for a snack.

fact of the day, and I figured because it was my birthday, I would lay a few surprises on Jack with this one. Nicholas Andrew Martel. Full name. You don't look at day over 43. You're like the third person. I told me that today. Now Snackers, I thought about going with the classic that New York City was the capital of the United States, the first one in 1789. Thought that was Philadelphia. I thought about going with the one about New York having more languages in the city than any other city on earth. It's 800. Is that the one you went with? It was not the one I wanted. The one I decided to go with is a wild one.

In New York City, my hometown, up until World War II, May 1st was moving day throughout the city. All leases for all apartments expired at 9 a.m. on May 1st every year. Okay. Talk about surge pricing. Can you imagine the movers? They're like sitting idle 365 days a year, and then one day, May day. Our old roommate, Timmy, he would have freaked out. He always got stressed on moving day. All right. Two takeaways here.

Excelsior, the best slogan of any state in the nation. And second, New Yorkers are clearly very humble people. Thank you, Nick. Jack, it's a fantastic crew. Snackers, loved being with you today. Incredible to get back at it. Let me remind you, Snackers. We have a live event in Monday, Tuesday and Wednesday next week, January 28th, January 29th.

We would love to see you. You'll see a live recording of the podcast. and an interview about Robin Hood's international ambitions. RBNHD.com slash UK Snacks. And we'll catch on snacks daily tomorrow. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC

and does not reflect the views of Robin Hood Markets, Inc. Or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.