The Best One Yet - Lyft launches car rental — Disney didn’t tell Hasbro about Baby Yoda — Delta is really a credit card

Episode Date: December 13, 2019

If you noticed that Avis shares plunged, that’s because Lyft just whipped up a car rental service. The hero of Disney+ has been Baby Yoda, but toy-maker Hasbro didn’t get the memo and missed out on millions of potential holiday toy sales. Delta’s Investor Day lets us get to know the airline better — and it’s basically a credit car company.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 Snags Daily. It is Friday, December 13. Let's start with politics. Britain's general election happened yesterday. Looks like Boris Johnson's Conservative Party won, which means Brexit is probably happening soon. And then we heard that the U.S. and China are getting closer like a general trade deal idea outline kind of a thing. We've heard of these rumors before. We'll let you know when it's official.

But Snackers, Jack and I sat down before this pot and we thought, you know what? These are the best three stories we have ever covered. Our first story is Lyft, which is valued at 1. One Lyft. Lift is launching a car rental service. Tough day to be Ava Stock or Hertz. Second story, Disney Plus caused quite a sensation with Baby Yoda in the Mandalorian. Adorable. And guess who Disney Plus didn't give a heads up about Baby Yoda?

They did mention this to their core toy partner, Hasbro. And now there's no Baby Yoda Hasbro toy. Kind of awkward. Jack, third and final story. Delta invited all of its investors over to their house for a once-per-year presentation. A lot of charcuttery, good cheese. They brought out the finest linens and brought out. their finest slide deck, so we got a sneak peek at the airline. Correction there, not an airline.

This is a credit card company. But Snackers, before we get into those three stores, Nick and I lived for about three years after college on East 14th Street in New York City. Right, between second and third, you got the beauty bar. You can get your nails done while you're getting a drink. We were right above it. Guess what's next to the beauty bar? IHOP.

IHOP. We were next to one of the only IHOPs in New York City. Now, here's what they're doing right now at IHOP. They're launching a fast, casual restaurant. It's basically a spinoff of the original IHOP business model. It's called Flipped. Made us realize you really need to change the name of the concept fast casual. Right, because a fast casual restaurant by definition is not casual.

It's actually more upscale than a regular fast food restaurant. The term should be fast upscale. Chipotle defined the category. Now, the way that IHOP is trying to make this thing fast casual is so cliche. They're using the fast casual playbook over here. So first, they drop the vowel in the title. So it's not flipped. with two peas and an E.

They dropped the E and dropped the P and threw an apostrophe in there. They're not just going to serve pancakes. No. They're going to do pancake bowls. Right, because bowls are so in right now. They're not going to sell generic coffee. They're going to sell fanciest espresso. No cup of coffee over here.

And then I don't want a 95% concentrate water down with two gallons of water. Orange juice. No. They're selling fresh, squeezed Florida OJ. You got some guy in the back just pumping on these things. Honestly, though, I hop. Putting your pancake in a bowl instead of a plate doesn't make it upscale. No, if you want to get really.

Still here, get fast casual, get upscale. We got to see some real maple syrup, the kind of stuff you could bathe in. The ingredients in fake maple syrup are appalling. If you're going to go even more fast casual, IHOP, go with an organic farm-raised crape and then call us back. This place is fast casual with an ass. Jack, favorite carb, three, two, one. Bagel. Boom, everything bagel.

Snackers, what do you think? Let's at our three store. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks are about to hear rain food. It's air candy. They don't reflect the views of the Robin Hood family. It's all informational just so.

You know, 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. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Lyft already disrupted taxis, now it's disrupting rental cars. To start the story, we're going to talk about Lyft's three types of target.

By the way, Snackers, if you're in a lift right now, have them put on this podcast. Yes. Wait, one second. Wait, one second. Yeah, tell the driver, Snacks Dale. You can find it on Spotify, Apple Podcasts. Listen in your lift and then take a photo of it. We'd love to see this happen.

All right, here we go. Tweets of three types of target customers that take lifts. First, people who live in a city and don't have a car. Like we used to be in New York City. Whoever's listening, it's probably you. Yeah. Second, business travelers, because wherever you're traveling, you probably don't have a car. And you want to, like, just expense something.

easily get the receipt. It's a piece of cake. Third, people going out who are planning on drinking. And don't want to drive. And you shouldn't be driving. Don't do that. Now, key customer group number one is the people who live in cities but don't have cars. Guess what? They like taking day trips on the weekends. Yeah, maybe you want to wind crawl up Sonoma and you're not going to splurge on like a random expedition with the driver.

Or maybe you and your brother, Tuck, are trying to play golf at Beth Page Black way out on Long Island. Must be nice. And you don't want to take like three subways to Long Island Railroad and transfer to a local taxi cab. invite. Thanks for the invite. Or maybe just going to bed bath and beyond. What doesn't matter, it could just be any random Saturday if you have enough time. Up until today, you've had to use an old school rental car company or maybe one of these Airbnb for car things you've heard of.

Behold, Lyft rental car. It just launched in San Francisco and Los Angeles. They're offering rental cars for as low as $35 for the entire day. We jumped in snack style on this. And here's how it goes down. Fortunately, we're near San Francisco. So I updated my app and it's right there. I simulated like an actual car trip that I might want to take. He's like, oh, I could go golf in a couple weekends. You know, I'll leave on Friday at 5 o'clock after work. Come back Sunday at 5 o'clock. Just enough time to go to Lake Tahoe for skiing.

Jack, what kind of cars you've seen? They offered me $52 a day for Volkswagen Passa. Or $74 a day for a VW SUV called the Atlas. So $35 a day, yes, but they have some surge pricing on the weekend. So Snackers, we're looking at this and we're thinking, let's compare this to the offerings over at Hertz, Enterprise, and Budget, where people are like still in line. Well, it's better because they offer it down to 22 years old.

You don't have to wait until you're 25. Remember when you're in college, you're trying to rent a car and you're like, you're jacking somebody's ID. Yeah, it's ridiculous. Second, there's no penalty for not filling up the gas tank, which is so enough. Everyone's, you return the car and they're like, yeah, that'll be $58 a gallon, and you're going to need to give us your right arm. Right.

Lyft is just going to fill up the tank for you and charge you the fair amount based on whatever the local prices. It'll take your first point child just to, like, fill the tank. Now, you might be thinking to yourself, I've watched TV before, so I've seen those Enterprise rental cars will pick you up. And we know what you think. That is creepy, but I guess it kind of works. Lyft will pick you up too. Well, not really.

They're going to give you $20 to get to the rental car and then $20 in Lyft credits to get home. So they basically will pick you up. All right. So we've definitely got some snackers right now in Silicon Valley who are like, well, what about get around and tour the Airbnb for cars? Right. So when you don't need your car for the weekend, you can tarot it. Well, touche. Lyft's got a couple advantages on those, too.

First, with Lyft, you're driving like a nice, clean, Lyft rental car. It's not somebody else's car with somebody else's body. This isn't like a thing where you feel like you got to shower ASAP twice right afterwards, not a car share. Second, Lyft is shockingly price competitive. I mean, $35 a day is very low. And then third, you already have Lyft downloaded most likely. That's the key one. You trust Lyft. You're not downloading a new app. You're not nervous whether this transaction's even going to work or not. So Jack, what's the takeaway for our buddies over at Lyft? Well, you got to ask, what's the catch? Oh, we found one. Probably profitability for Lyft. We're talking unlimited miles, cover, 22-year-olds can do this, and a $40 credit for pickup and drop-off, that's not

profitable. It can't be profitable. Someone's paying for that, and it's Lyft. Our guess is this is Lyft's tried and true strategy of subsidizing a new product at an unprofitable price with plans to increase the price in the long term. Cheap today, they get you hooked, and then they'll probably jack up the price in five years if Avis goes out of business. For our second story, Hasbro is launching a baby Yoda toy for Disney. And that baby Yoda toy is coming way too late. All right, Snackers, We got to set the scene here. We're at the home of a Hasbro executive. The CEO.

The CEO. The CEO. All played the CEO of Hasbro, the toy company. I'm the CEO's daughter in this case. Nick's the CEO's daughter. Here we go. Here we go. Here we go.

Nicole, sweet peevee. How was your day at school? Oh, it was good. Johnny's doing well, and Julie's being a total baby Yoda. Baby what? A total baby Yoda. There's no baby Yoda, Nicole. Dad, Google it.

Baby Yoda. Where did you see Baby Yoda? Disney Plus. Mandolorean. Baby Yoda. Disney did what? Disney did exactly that. Disney Plus came out last month,

and the most watch show has been The Mandalorian, a Star Wars show. And the star of the Mandalorian is technically a bounty hunter, but it's really Baby Yoda, which has... There's like 75 million memes of Baby Yoda on the internet. This thing is everywhere. Baby Yoda is actually not the Yoda used to seeing an old Star Wars movie. It's not Luke Skywalker's Jedi trainer.

It is like from the same species, so it looks the same just more adorable. Baby Yoda, I think. Spoiler is 50 years old, but is still a baby because these things live to be a million. Here's the funny thing about Baby Yoda. It's become a major business situation problem for Disney and Hasbro. Disney decided when they launched the Mandalorian not to give their toy partner, Hasbro, a heads up that they were about to introduce the world to Baby Yoda, which is adorable. They made a creative decision. They were like, we would rather have the surprise and excitement of people seeing it than let our core toy partner know that this incredible potential toy is coming out. To Disney's credit, it worked.

I mean, it's been the most buzzy thing of the holiday season. Baby Yoda searches on Amazon to, like, buy a toy related to it, hit $90,000 in the last month. Just on Amazon, and I'm sure it was a whole bunch more on Google, Toys R Us, Target, Walmart. Everybody wants a Baby Yoda toy. To the point where 100,000 fake, unofficial Baby Yoda toys have already been sold on Amazon. Hasbro, which has the exclusive, like, contract to actually make the toy of Baby Yoda, hasn't made a single penny. No, but now has... Hasbro said they're going to come out with the baby Yoda toys.

Everyone's like, okay, finally. They're fixing the problem. There's going to be one where baby Yoda is sipping this warm bowl of bone broth soup, which is a key scene in the show. Disturbing but adorable. In other words, eating a frog, which is like Smeagle style. Now, here's the catch. This toy's going to come out May 2020. A little too late.

A little early Christmas. You're going to miss the entire holiday shopping season. That's a lot of millions of dollars of potential revenue that is lost, vanished for Hasbro. Now, all the baby boomer parents listening to this box, I hope there's a lot of you. We hope they're in the lifts right now. You're going to remember 1996 when I was an eight-year-old boy and I was looking for Tickle Me Elmo under the Christmas tree.

That thing brought in hundreds of millions of dollars for who made it. Toy Tyco. Tickle Me Elmo was the holiday item of 1996. Baby Yoda could have been the holiday gift of 2019. So, Jack, what's the takeaway for our buddies over at Hasbro? Hasbro has become basically Disney's toy store. Mattel, its arch rival, it relies on its own core

toy franchises. Which include Barbie and Hot Wheels. They're about to come out with a movie with Margot Robbie featuring Barbie. But Hasbro has a master license with like most Disney brands and that's been both a benefit and a bird. Hasbro basically sits back. Let's Disney make these incredible movies. Let's us fall in love with the Disney characters and then just sits back and finally makes a toy and sells a bunch of products. As a result, nearly one third of Hasbro sales come from like partner Disney related products like Marvel, Frozen, Star Wars. And when there's no Disney movie that's causing a sensation. Like in the first quarter of 2019 earlier this year?

Sales suffer. There was no Star Wars movie, no Frozen movie. First quarter is kind of a cold season. Big problem for Hasbro. For our third and final story, Delta is a credit card company. That also runs an airline. Now, Delta, before we jump into it. And Jack and I are loyal Skymiles members.

Am I the only one who misses the protein pack for breakfast? Can we talk about this? They've replaced them with like a cheese pack. Snackers, cross-country flight from San Francisco to New York, which Nick and I do quite a bit. We do frequently. They used to have a protein pack, which was the perfect nutritional breakfast. Do you remember they had like the sunflower butter?

You can't get sunflower butter anywhere. They got rid of it, and both breakfast options now are dominated by this Tillameneuk cheese. We don't know what it is. It's hard to pronounce. What cheese for breakfast? Delta, if you could get on that, that would be great. In the meantime, congratulations on Delta's Investor Day. This is the presentation slash conference where everybody who owns a single Delta share isn't invited.

This is like the point where the flight attendant gets something says, All remaining seats may now board the plane. Everyone just starts walking out. Everybody who owns Delta stock is invited to come see Delta's presentation. And what happens is Delta puts together a fancy little deck with all their like bragworthy numbers. It's like when your parents visit you at college, you clean up the place, you throw away all the trash, you put on your nicest clothes and try to show off. Jack and I jumped into this deck snack style and a few things stood out. First, they're like bragging about things like 549 destinations.

That's a lot of destinations. It's impressive. Then they brag that the average seats per aircraft have increased from 97 seats on each plane in 2009 to 1, to 120. to 127 seats per plane today. And snackers, you know what that means. Less Leger. Classic. Less Legro.

They've also kind of bragged that they are producing 11% less CO2 emissions than they did back in 2005. Because the planes they're flying these days are 25% more fuel efficient. But the highlight for us at Snacks was Slide 24. Because that's where they introduced Amex card. There were some crazy stats about the Delta American Express cards profitability for Delta. First of all, get this. 8% of all Amex spending is on Delta flights. 8% of all American Express spending.

We don't know if that's Delta flights or with the Delta branded credit card. Right. They weren't clear about that. Either way, that's a significant number. The amount of money that Delta gets from American Express for doing the branded credit card was $1.4 billion in 2010. This year, it hit $4 billion. And by 2023, it's expected to increase to $7 billion.

And, Nick, all of those revenues are like pure, profit. Profit, poppy. And Snackers, get this. MX is expected to make up 35% of Delta's profits. It's a credit card company that also does 65% of its business as an airline. So, Jack, what's the takeaway for our buddies over at Delta, which is really a credit card. Delta is a perfect credit card candidate because its customers spend so much on Delta. If you're spending a bunch on Delta flights, it's nice to have a card that's given you points for all that spending you got to do because flights are expensive. When I go to the grocery store, I use my credit card that has 6%

cash back on groceries. That's why we looked at a bunch of credit cards that have successful brand partnerships as part of the card. We did some number crunching, actually. Costco, which has one of the most famous credit cards there is. It's currently done by Visa. The average Costco customer spends $1,500 a year at Costco. Some back of the envelope math we did show that Delta card members are spending $247 a year on Delta flights. Number of revenues divided by number of passengers, $247 per year. Not as much as Costco, still a pretty big number. Delta owns a big chunk of people's

wallets, and it makes money off it through the branded credit card. Jack, can you whip up the takeaways before the weekend? Lyft is launching rental cars. It's big advantage. You've already downloaded the app. If you're 22 years old in LA, you don't have to ask for mom's car at Coachella.

Everybody loves the new Baby Yoda in Disney Plus's Mandalorian. Except Hasbro, the one company that should have been loving it the most and was awkwardly loved out. Delta showed off its fancy credit card partnership at Investor Presentation Day yesterday. Snackers, this says it all. 35% of its profits from credit cards, 65% from flying year-round. Now, time for our snack fact of the day.

This one sent in by four names, one man, Andres, Eduardo Aala, Espinel from Ecuador. Fantastic Snacker. Tiffany's, the jewelry company based on Fifth Avenue in New York City, supplied the Union Army with swords way back in 1862. Incredible history fact. Love New York City history. It should be its own thing. Well, did you know that Central Park was designed so that the Union Army could practice on real grass?

With Tiffany Jewelry slash swords. Fantastic. The last part, by the way, Seinfeld joke, Kramer fans. Hopefully you know that. Snackers, before we leave for the weekend, Jack and I have one request because we want to hear from you. Hashtag T-Boy Tuesday is coming on Tuesday.

We are gathering this weekend. We're harvesting ideas from the Snackers. What is the toy that should have been the holiday toy of this year? It could have been the Baby Yoda, but apparently someone missed them, Emma. What toy should be the holiday toy of this holiday season? Think about it. Tweet us at Robin Hood Snacks, and we want to see your answers. Have a fantastic weekend.

We'll see you on the day. Can't wait. 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.