The Best One Yet - McDonald’s 2nd investment in a week, Uber’s and NYC’s traffic tax, and Ikea’s new furniture rental service

Episode Date: April 4, 2019

McDonald’s stock hit a record high after its 2nd investment in a week to make its food more tech. Uber’s IPO is coming up, but it’s been busy making NYC’s new congestion tax happen. And Ikea pulls a Rent-The-Runway and announces a furniture subscription service.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 Thursday, April 4th. And this is the best Snacks Daily yet ever. Markets rose. Very nice. Just as U.S. and China trade negotiations begin.

Get those things kicked off. But we got three great stories for you. Wonderful mix. Jack, what's first? First is McDonald's. It just made its second big investment slash acquisition in a week. Ronald is pounding the soylent and becoming a tech engineer. And that's after 20 years of no acquisitions at McDonald's.

Unreal McDee's. Second story, Uber. It's planning to go back. public soon, but first, it's creating traffic taxes in New York City. If you live in a city, know of a city, plan to see a city anytime soon, then you should know this. Third and final story, IKEA, it's launching a furniture subscription service in 30 different countries. Ikea pulling the old Netflix for Futons. The rent, the runway for couches. We love it. Now, before we jump into all this wonderful stuff, we got to talk to our pet lovers out there. If you've got a dog, first of all,

incredible. Second of all, know this. Petco is opening a New York City fast casual restaurant for pets. Basically, they're going to be pumping out 2,000 pounds of fresh pet food every day. Guys, we have hit peak, puppy, posh. You're going to walk in there with your like Shiba Inu. What are you going to request? Like more quinoa? You're going to get like a seven grain quinole with fresh kale and avocado. Fido's like, can you hold the farm roasted carrots? So they're making 2,000 pounds of fresh pet food every day for pet owners who think their pets like deserve something not in a can. Sweet green. You're on notice. The funny thing is veterinarians don't even think this is a good idea. No, they're like, there's no need for this. But people are crazy. Before we move on to the real

stuff, listen to this important one. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. It's snacks about to hear ain't food. It's air candy. They don't reflect the views of the rob of her family. It's all informational just so. You know, we're 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 Fenra slash SIPC. For our first story, McDonald's, just made it second big tech investment in a week. Yeah. Very busy. Yeah.

You know that buddy of yours who, like, creates a nickname for himself? Oh, totally. It's the worst, right? Guess what McDonald's called itself in the press release announcing this most recent acquisition? A quick service restaurant. I'm just trying to call myself Nick and my mom will still say Nicholas. It's not fast food. The service is fast, not the food.

Now, to give you this story, serve it up right. Jack and I are going to go in a little time machine. We got to take you back to 1999. That was the last time up until this week that McDonald's made an acquisition. It acquired Boston Market. You remember that place? They had that gravy and potatoes. Remember is a good way to put it.

Because it kind of was a failure, they ended up selling the company in 2007. 20 years later. As in last week. McDonald's has finally got over its acquisition scars from Boston Market. And it's acquired Dynamic Yield for $300 million. Exactly. Did that last Tuesday. And basically, this was a very different type of acquisition.

Wasn't a restaurant chain. This was a Israeli tech firm. Dynamic Yield optimizes drive-thru orders because it's an upselling machine. It's incredible. Now, 70% of McDonald's total sales are through drive-fills. Let that sink in. 70%. Huge number.

And what this company dynamic yield does is, let's say it's a hot day, temperatures getting into the 80s. It changes the drive-thru menu to suddenly start showing you McFlurries. Or if you're 86 chicken nuggets, it'll take chicken nuggets off the menu. A little insider restaurant link there. I like that. Now, who did McDonald's end up investing in yesterday? New Zealand company.

Yes, it's called Plexer. Plecture. It makes ordering faster and easier. Now, this was interesting. It was actually just a very small investment. Yeah. It was a drop in the pale for McDonald's. It was $4 million, and that acquires 10% of this New Zealand-based company, but it has big ramifications.

Huge ramifications. Because first, and there are two reasons why, this improves the McDonald's app experience, because McDonald's app hasn't been perfect. It was late to the app game. Starbucks had one first, and they're still kind of figuring out the apps. But the 10% investment actually gets McDonald's an exclusivity deal. with Plecture. Which is huge. Plexure won't service itself to any other competing restaurants. Also, this is basically just McDonald's acquiring an app division. Right. To make its app better.

Because what Plexure does is it takes everything you'd want in a food app like really quick, you know, pricing, really quick transactions and makes that happen. It's a tech happy meal. It's beautiful. So Jack, what's the takeaway for our buddies over at McDonald's? McDonald's. You are the most innovative you've ever been. To back this up, shares just hit a record high this week. I could not believe it when I saw it. We're talking about a fast food company. In the age of La Croy, kombucha, and fresh pet food, which is a beautiful thing. McDonald's, a fast food restaurant. And it's doing this despite vicious dollar menu war competition. McDonald's is facing Taco Bell breakfast on one end, sweet green on the other end,

but it's investing in technology. It's acquiring technology, and that's given it like new kiosks. It's got Plexure, the new app company. And then it's got the new drive-in situation. It's just acquired. So all of these features, make you a little bit more likely to stop it, Mickey D's on your road trip. And when you do, you're going to spend a little bit more. A little bit. For our second story, Uber loves the new New York City traffic tax so much, it spent $2 million to make it happen. Snackers, one thing you got to know about my partner here, Nick Martell, he's a proud New Yorker. So focused on it. The 4-5 train are like second family to me. I knew he was going to talk about the subway.

It's the oldest subway in the country. Jack likes to call them the green lines. It's the 4-5 train, So the proceeds of this new traffic tax actually go to the subway, which is key. Which is 115 years old. Give it a break. Now, this is important to Uber because New York City is its largest market in the U.S. And according to the financial times, Uber was the number one supporter of this new traffic tax by spending $2 million. Which is serious. And if you're wondering how it affected the share price of Uber, we don't know. You're going to have to wait. Uber's shares are still private, but it's expected to IPO this summer.

So if you're listening to this, whether or not you've been to New York recently or a native New Yorker, cities nationwide are going to be watching. So let's talk about how this breaks down in New York in particular. We called it a traffic tax, but it's technically a congestion tax. It just passed in the city of New York. It will be implemented in two years, and it targets car drivers. It's basically, think of this as like a bridge toll, but for any driver in Manhattan who's south of 60th Street, which is the middle of the city. Now, drivers, they actually cause a lot of damage. They're like soft damages, though.

We love drivers. There's a good people, a lot of damage. Economic damages that if you add across like a million people, it's a lot. We're talking like traffic, noisiness, like just pollution. And just making the city a less pleasant place to live and walk and bike. And if you're Uber, here's the thing. Traffic really gets in the way of your business model. Remember, New York is its number one market.

And sometimes in New York, traffic is so bad that people take the subway. Here's a number for you. You want to know how slow things get? During rush hour, the average speed for cars on the roads hits 4.7 miles per hour. Jack, repeat that number. That is a New York City snail's pace, 4.7 miles per hour. In the city that never sleeps. You're taking the subway instead.

And that's bad for Uber. Bad for Uber. Although we're not judging. We love the subway. And that's a big reason why Uber supported this congestion tax. So Jack, what's the takeaway for our buddies over at Uber with this new New York City traffic tax? It's already doing what public companies do, which is, lobby. Right. In the past, Uber didn't lobby very much. It had a pretty simple strategy, which was

go into cities, hope that it doesn't get, you know, attacked by the local laws, and then wait until it's beloved by everyone, so local laws change. Ignore local laws. And now it's doing it the old-fashioned way. It's following laws, and it's influencing them. By spending money. By hiring a bunch of lawyers and telling those lawyers to talk to lawmakers and change the laws. And spending a lot of money. For our third and final story, IKEA. just launched a furniture rental business in 30 countries. By the way, every IKEA product name is like named after a Swedish town. By the way, that little guy in the instruction manual, I love him.

He looks like a hairless, jolly caveman. In a great way. He makes me happy when I'm putting together the Aplaro chair. Yes, he does. Now, here's the news. IKEA launched a few months ago a new test, which is a rental business for the furniture. And by 2021, 30 countries will have access to this rental model. And they're pretty confident about it because they did a survey.

of IKEA users and like 90% of them are willing to quote unquote change their behavior in order to like save money or get better furniture just drives a little different so this new service is targeting two very different types of customers and we got a good sense of it so the first is your class your college student you're young in their 20s they're testing this out in the netherlands where for a bed a desk a table and chairs you only have to pay $33 a month that's clutch in the Netherlands, because unlike in the U.S. where you get all your dorm furniture provided in the Netherlands, you don't know. You need this.

The second target is business customers. So if you start a startup, you don't necessarily want to spend all that money you got from your friends and family on furniture. You don't need designer stuff. So for $33 a month, you get basically a full living set. Now, this is not just a financing plan. True. IKEA has to redesign and restructure their furniture to make it able to be assembled and then

disassembled and then moved and then really. assembled somewhere else. That Mosthelman bed is going to have a very different structure when it comes to the rental version. Also, you know IKEA needs to clean and disinfect this stuff. When it comes back from the college dorm, I hope IKEA knows this. You better be cleaning this stuff. I'm glad, and I assume they're listening. And it must be doing it because it's going to reuse that furniture or recycle it for the next customer. Now, here's what's key about this story, is that this is very similar to the subscription models we've been seeing. And that's because it's driven by like four key trends with our generation. First big one is we're transient.

We live in multiple cities. I mean, somebody just complained that my driver's license address doesn't match where I currently live. That was like five addresses ago. You have like 12 different addresses. I don't even remember what zip code on it. Yeah, so you don't want to buy furniture every place you live. The second is budget, you know, our generation is not getting paid enough. Third is environmental.

We feel guilty when we're buying things that are unsustainable. If I don't recycle like a cupcake raptor, I feel guilty. The worst feeling is putting a used couch on the stoop and just letting someone take. And then finally convenience. If you're schlepping like one-year-old furniture out of, you know, your roommate situation to studio number two, it's brutal. That's awful. And that's why IKEA is actually using TaskRabbit. The company had acquired a couple years ago to assemble this furniture. So Jack, what's the takeaway for our buddies over at IKEA? This is another sign that the ownership model is almost over. We just saw this the other day. William Sonoma's Westome

partnered up with rent the runway to start doing exactly this rental, furniture on like a monthly basis. Very similar to IKEA's deal, but we're seeing subscriptions like this one in every product category you can imagine. Hit me with a few. Top of your head. Men's razors. Tampons, toothpaste, women's razors. Cars. Lots of different things. People are not buying DVDs. They're subscribing to Netflix. It's everywhere. And it's all with those same four themes we mentioned earlier. And it's testing the limits of ownership. Jack, why do you whip up the takeaways for us? McDonald's is the most innovative today. it's ever been. And its tech loves

feeding you more McFlurries. Second story was Uber. It's already doing what public companies do. Lobby. Third and final story was IKEA. It is testing the limits of the subscription model with furniture. Please tweet at us what you think should be subscriptionified

next. Don't say podcast. Time for a snack fact of the day. This one hasn't happened yet, but we're really into it. The European Union introduced as a law. It requirement to put a breathalyzer in every single car built in. I think that's smart. It could reduce drunk driving. It's fantastic. I can't see what the downside is. Except that your car has more

stuff in it. All right, a couple other awesome stories we're covering in the Snacks newsletter. T-Mobile is hooking up its mobile subscribers with Comedy Central and other shows from Viaccar. And then total surprise, IHeart Radio is going to IPO and just release the documents all about that. By the way, IHeart Radio, that's just old school radio. Yeah, it's pretty straightforward. Great pod. We loved spending it with you today. We'll be back tomorrow.

We 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 online. 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.