The Best One Yet - Ford-Amazon-VW fix electric “range anxiety,” Venmo launches credit card, and Airbnb’s unprofitability

Episode Date: October 18, 2019

Airbnb’s financial info was leaked, revealing that it’s splurging big on marketing. Ford just teamed up with Amazon and Volkswagen on its “Team Edison” for a nationwide electric car charging network. And Venmo launches a credit card because it’s owner PayPal really wants it to make money.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. This is Snacks Daily. It is Friday, October 18th, 1018. Are you think what I'm thinking? Is that when William the Conqueror did that thing way back when? I think so. Now, in case you're wondering, yesterday's snacks was pretty good. This is the best snacks we've ever done.

First story is Venmo, which just launched a credit card. It's trying to figure out what it is. Yeah, Venmo has never made a prop. It's a self-reflected moment. We're curious. We're getting into it. Second story is mostly about Ford Motor Company, but also about Amazon and Volkswagen.

They just teamed up to fix the Achilles heel of electric cars. Jack, we're diagnosing this. Range anxiety. That is the Achilles heel. Third and final story. Unicorn of the day is Airbnb. Very nice. I've heard of it.

You've probably heard of it. The financial information just hit yesterday about the company, even though it's still private. And the numbers reveal its core focus rate. Marketing, marketing, and not making profits yet. But also marketing and then there's some marketing. But before you get into that, Nick, I'm going to be the operator and you be the human being, okay? Okay. Press one if you'd like to speak to another operator.

Press two, if you'd like these options, repeat it again. You can always press three to go back to the previous. Representative, representative, representative. Did you say, wait on hold? Snackers, you've been there. You're probably waiting on hold right now for something. There is actually an app for that so that you don't need to talk to these automated machines ever again. Jack and I thought this was wild.

We're always curious about stuff like this that's going on. It's called Do Not Pay app, and they've got a new feature that's very to the point. Well, do not pay is prime thing. like don't pay for parking tickets. Right. That's their main thing. But now they've got something called skip waiting on hold, which helps you skip waiting on hold. Basically, you tell a app what number you'd like to call, like Delta customer service or whatever.

Don't want to wait 20 minutes. And then it calls Delta for you, and only when it finally talks to a human being will it put you on. That's all they do. It's great. It's free, which makes us wonder, you know, time is money. This is kind of like you're getting money. Well, it's funny because companies like Delta spend tons of money to limit the amount of time you actually spend talking. to a human. Now you can spend tons of effort

using an app that tries to get you to a human as soon as possible. Yeah, companies don't want you talking to humans. You don't want to talk to robots. It's like a war. For the record, we don't endorse this app because it immediately asked Nick for his credit card information. Which is why we're just going to go right into our three stories. You're tuned in the snacks daily. We spoke to the lawyers

and we got to get something legal out the way. It's snacks about the here ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, we not recommending any securities. Nope. It's not a research report or investment advice.

Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Venmo just treated itself to a credit card. Venmo, I love you, Venmo. You're the first app, like, financial thing I ever used.

The only time you use it, a whole lot of slices of pizza have been transacted through it. Really interesting history there when you analyze what Jack's been after. I like to just follow Jack to be like, oh, interesting. Margarita, it's a Tuesday. You stock by a Venmo account? Let's just leave it to that. Now, the founding story is not your typical founding story. No, it was a couple of Penn students who had an idea while watching a local jazz show.

Wasn't a garage, wasn't a paper napkin, wasn't a bar. Also, only at Penn do the undergrads watch local jazz. Meanwhile, they were growing Venmo, and it got bought by a company called Braintree in 2012 for a mere 26 million. But then that company got bought by PayPal for $800 million. So now Venmo is part of PayPal, which is publicly traded. I'm so facto, and I think a couple transit of properties in there, Jack. Now, a new credit card is coming for Venmo, but it's pretty light on the details. Right.

Now, technically, PayPal is not a bank. It's not a bank. No. So what they did is they partner up with a bank that goes by the name Synchrani. Right. And Synchronic is kind of behind the scenes in charge of a lot of the credit cards that you might have in your while. They're like, we're doing some motions here. They're like moving the wheel.

getting all the things mixed moving around. That Banana Republic card you got right after college. You thought you closed, but you better double check and make sure you closed it. A lot of great T-shirts with that thing. I bet you that's really a synchrony card, and they just slapped a Banana Republic logo. They're doing everything on the back end. And then on the front end, what you see is Venmo's nice branding and the ability to make all your monthly payments in the Venmo app.

It actually seems like you can only do your transactions through the Venmo app, which is the same as the new Apple card. You can only do it on the app. But here's the thing. Since the launch, Venmo has not released. you know, what the benefits, what the cashback, what the rewards are going to be. Right. Do you get like free Uber rides? Right. You can be using this thing like to basically close up to your accounts after every bachelor

party. Right. But do you get like 2% off, 2% cash back when you dine out? Right. Jack's getting a lot of pizza pizza cash back is Jack getting. Yeah. I mean, know your customer with Venmo, the cashback rewards better go to brunch, taxis, and bachelor parties. So here's the thing though about Venmo. It's got 40 million users. It's going to bring in $300 million in revenue this year, but it's got one issue for

PayPal. It's never been profitable. Never. And it's making money in three pretty interesting ways. It's kind of a shocker. It's never been profitable. But that's what CNBC said today in the article. All right. So you've got your Venmo account. You just finished brunch. You open it up and everyone's paying you back because Susie just had to get three of those eggs. You got like $91 in your account. And that account, it's actually making money for Venmo. Just like Schwab we covered earlier in the week. Right. What Venmo's doing is they're taking that cash. They're actually investing it elsewhere. They're buying something like treasuries and getting a little bit of money back. So Venmo makes money off your money. Also, it has a debit card in addition to the credit card. Right.

So you go, you use it, you swipe it, you buy the coffee. And that money, some of the transaction is going back to Venmo. It's called an interchange fee. It's like 2%. And then finally, they have a fairly new feature here in case you were in a rush, because we've all had this feeling with Venmo. If you want to cash out Venmo and send the money to your bank account, it takes two days. Yeah, you're looking this thing. You're like 48 hours.

What is the money like walking to me? I think you can pay a certain fee to get it in your account instantly. Venmo, I need the money right now. So Jack, can you pay me $5 and please whip up the takeaway for our buddies ever back? Venmo reminds me personally a lot of number 15 on the University of Florida. Starting quarterback Tim Tebow. People love Venmo, but it's not conventionally successful. We're talking about the quarterback here who was a Heisman trophy winner in college,

but then in the pros, he kind of was playing on one team, and then he tried playing baseball and went back to football, and then tried commentating. He did punt protection once for the New York Jets. He worked on the NFL network, the college network. I think the Florida Congressional Republican Exploratory Committee took a look at him. PayPal's in the exact same boat as Tim Tevo. They're trying to do everything with Venmo's raw talent, but they can't quite figure out where he fits in.

Just like Tebow, Venmo looks really good. People love it. Got a lot of power, but not making the money. That's why PayPal tried making Venmo launch a debit card. Made it launch the merchant payments. You can pay for Tripoli Bowls through the Venmo app. Now they're trying this new credit card idea. I hope it finds conventional success, and I hope Tim Tebow does too.

For our second story, Ford Motor Company just announced an electric charging network where they're teamed up with a German and a Amazon dream team. Ford, where have you been? What's been going on? Okay, General Motors are Cross Town Rival. They don't return our phone calls. They don't answer our emails. They've been invisible. What's going on?

GM's like Biven and self-driving car company. Yep. Unvailing a ridiculous Corvette got a month-long labor strike. Right. That's what's going on across the street. over at GM, but Ford, they've had nothing in the headlines. They've been missing for just like three years. They're like Daniel Day-Lewis, don't do anything for six years, and then boom, show up with

an Oscar. Yes, and this is an Oscar-worthy news situation today. We're talking about Project, oh, I'm sorry, Team Edison. Team Edison is named after Thomas Edison, is the electric vehicle project at Ford, and it's making big moves. They spent probably three months choosing that name, by the way. One, it's investing $11 billion to have a majority of their sales be electric vehicle, by 2022. Jack and I heard this number. We checked two. Majority means over 50%. Yeah, I'm pretty sure

like 95 or more percent of Ford is like the F-150. Yeah, we don't know how they're going to do this, but we're impressed with the ambitiousness. In two years, over 50 percent electric? Not too shabby. Okay, second, an electric SUV inspired by the Ford Mustang muscle car? Yeah, is it not going to have the room. We don't know what's happening here. But it's coming out in two weeks, and I'm intrigued. Ford is doing that. What's the third thing of Project Edison? I'm calling it Hertz across America. It's just got like the perfect ring to it. This is the biggest electric charging station

network in American history. And we thought this was fascinating because this network focuses on the core Achilles heel of electric car driving. Range anxiety. Range anxiety. Charge anxiety. Charge stress. You're on your way to prom and just basically

car slows down. Basically the concern that your battery is going to run out and there's no charging station and you're stuck. I'd love to take you out in that date. However, I need six more hours to We're not going to make it. That is a major thing that's holding back electric vehicles in America. So here's what Ford's going to build. They're going to build 12,000 charging stations and 35,000 charge plugs.

I actually got to correct you there. They're not building it, but we'll get to that in a second. Very true. They have something that's going to be called Ford Pass, and you get two years free on this thing. Ford Pass is an app, and you can also plug it into your car. And while you're driving along, it'll be like, there's a station, there's a station, there's a station, there's a station. And you can easily find one on your GPS. So we know what you're thinking right now.

Where are these stations going to be? Am I going to access them? And how big is 12,000? Okay, 12,000 charging stations and 35,000 charge plugs. How many McDonald's are there in the United States? This is good content. This is a great trivia night question. There are 14,000 McDonald's in the United States.

How many post offices are there in the U.S.? 31,000 post offices? How many zip codes are there in the U.S.? 42,000? How many of those, like, postal blue boxes are there? This is all on USPS.com. We spent a lot of time on that way. website. 143 of those

blue mailboxes you can drop envelopes into. So when you hear there are 12,000 charging stations for Ford, it's a big number. It's not an insanely big number, but it's a pretty big number. Yeah, it's McDonald's status. But then don't forget those 35,000 charge plugs. Very true. So Jack, what's the takeaway for our buddies over Ford?

Ford is one modern family of companies. Jack's doing the air quotes there, because we're kind of thinking about the TV show. Ford is not doing this thing alone. No, they're setting up those charging states across the country with the help of Volkswagen. Actually, Volkswagen's just doing it. Just jumping in like a good friend. There's going to be a whole bunch of superchargers that can give you 47 miles of range after being plugged in for just 10 minutes. And remember those

charges we mentioned that'll be on the walls of homes just like any other kind of like outland? In the garage. Yeah. That's being done by Amazon. Ford is partnering with Amazon to do all of the home installations. So this ambitious project, Project Edison, I'm sorry, Team Edison. Ford. It involves Ford. Volkswagen. Amazon. American, German, Amazonian. We're doing three annunciations at a time. For our third final story, Airbnb, we just got its financial numbers when we kind of weren't supposed to. My smile just turned into a frown when you mentioned Airbnb.

I know. All right, we can get into this. You want to share your story? Yeah, I got evicted in New York City. Jack's arms are crossed right now. I had an Airbnb and the super knocked on my door and he's like, this is an illegal place. You got to get out of here.

No joke. I was evicted. Jack was evicted from an Airbnb, and then you want to share your trauma story? Yeah, I had to tweet shame that. to get my refund. Jack's brow is furrowed. Yes, it was tough. I'm moving out.

Let's move on. That's not why we're doing this story. We are doing this story, though, because the tech website, the information just got a hold of Airbnb's financials. Airbnb is a private company. Okay, so once it IPOs and becomes public, it will have to disclose its financials every quarter, every three months. That's the quarterly earnings season.

But right now, we need to rely on, like, leaks, which fortunately, the information just got its hands off. In the meantime, that's what we discovered, that its revenues rose 31 percent. And Airbnb's costs rose 47% more than the revenues. And its losses more than doubled. Not a good look, Airbnb. Not a good look at all, especially because last year they indicated they were really close to profitability. There were rumors it was already profitable.

So hearing yesterday that the losses more than doubled, not a good sign. So Jack and I jumped into the snacks down. We were curious about one specific number in particular, the number with the biggest jump. Yeah, what drove these increased losses? it was the marketing cost. A 58% surge in how much Airbnb was spending on marketing. Talking about like advertisements and so on and so forth. Right.

A few reasons why. First, the travel industry in general is very seasonal. Right. Like, they got to spend more because like in the first quarter of the year, there's always a drop in travel. I mean, what are you doing in January in February? Staying home. You're staying home. Staying home.

Staying more. Driving maybe to ski. You're kind of scared. You're kind of in tight. It's cold. It's dark. Harry Potter marathon. It's dark at like 3 p.m.

In half the country. So, funny thing about the travel industry, it always has to. remind you to take vacations. Yeah, think about it. Anytime you booked that last trip, did you do it because you'd planned it a year before? No, you were like, oh yeah, I got to do this thing. Yeah, you saw a commercial of some lovely beach in Mexico. There we go. I know where you're thinking Jack. Now I actually do want to book this thing. So, booking.com and Expedia are huge spenders in advertising, and they compete with Airbnb. Yeah, they've dropped $10 billion. But how much money has Airbnb dropped when it comes to advertising? It dropped a billion dollars

last year, and this year it could hit $2 billion in spending. So it's in the same. So it's in the same. ballpark is Expedia. Right, which are each spending about $5 billion each. And this is a big moment for Airbnb. It's getting ready to IPO. And before you IPO, you want to make your numbers look as good as possible. So what do you do? It's like if you're trying to sell your house. You're going to pay extra money

to make it look fantastic. That is marketing. Now, when it comes to marketing, Airbnb is not just doing any kind of marketing. No, it's got a huge TV advertising campaign. There's definitely an Airbnb marketing person. Listening to Snacks Daily right now is like, we don't just do, we don't just do TV ads. We do a lot more. It also has

a movie about traveling into the south, like road trip style. Yeah, Airbnb is doing documentaries as a form of marketing and a print magazine to stay on your coffee table to remind you of all the places you should travel to. Very true. A creative thing. And remember, they're not just marketing to people who are going to travel. They're also marketing people who are going to host. Yeah, a couple of years ago, they actually hosted like a concerti event with Lady Gaga for all their hosts. They hosted for hosts. That's how they're marketing to the host and to you. So, Jack, what's the takeaway for our buddies over at Airbnb? Airbnb is the Obi-Wan Kenobi of unicorns.

It's unicorns only hope. Airbnb, you're our only hope. 2019 was IPO loser. Now it's turned into like IPO loser kind of a situation. Uber, Lyft, Peloton, Slack. They all IPOed, and they've all had very rough starts. Reworks IPO? Not happening right now.

So Airbnb has announced publicly that it will IPO in 2020. Now everyone else is rooting for this to be the one unicorn that can make it a successful IPO season. They need to convince public investors that unicorns like Airbnb are good investments, not just profit losing ones. You're the last hope, Airbnb. The last hope. Jack, can you whip up the takeaways

for us before the weekend? PayPal is launching a Venmo branded credit card, but you've got to do everything in the Venmo app. It's still trying to find conventional success, aka profits for Venmo like Temtebo. Ford is forming a three-way power couple with Amazon and Volkswagen for electric cars. They're trying to kill

range anxiety. And Airbnb is spending a ton of money to drive growth pre-IPO, which is scheduled for next year. Airbnb, start putting up some OB-1 posters across your office. Please, that would be perfect. Snackers. Time for our snack fact of the day. This one sent in by Brendan Hall in lovely New York City. Love the New York City.

I got a trivia question for you. Hit me with it. I think I may know the answer to this, but... I jeopardied this thing. I took Brandon's fact and put it in the form of a question. Oh, okay. Talk to me, talk to me. What company is originally called Back Rub?

Let our Snackers kind of think on this one. Should I answer in the form of a question? What is Google? That is correct. Google's original tech analyzed the web's backlinks, which is how it comes up with such good Google results. Yeah, apparently Larry Page decided to jump and just call it back rub as a result. And then they made a good decision and called it Google instead.

That was a great decision, probably the best decision they made. Snackers, happy Friday. Have a great weekend. Love spending this morning with you. What are you doing, by the way? Staying in. Okay. We're going to prepare for Snackers.

daily on Monday. Staying in. Let's do that. We'll see you tomorrow. Talk to that. Actually, we'll see you Monday. This is Jack. I own stock of Amazon and Volkswagen, and Ford was the first company I ever bought stock in. 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.