The Best One Yet - 🍟 “Supersize my AI Fries” — Google’s Drive-Thru robots. Planet Fitness’ high schoolers. Airlines’ Apology Fee.

Episode Date: May 10, 2023

Wendy’s just got hooked up with a Google AI robot that will take your order at the drive-thru window — and it’s programmed to upsell you. Planet Fitness is letting high schoolers workout for free this summer, because the free sample will lead to $72M/year in actual sales. And the White House is proposing new rules to force airlines to compensate you when they cancel a flight  — aka “The Apology Fee” — Because this summer will be the riskiest travel season ever.$GOOG $PLNT $DAL $UAL $JBLU $WENWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeLearn 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. It's Wednesday, May 10th, and today's pod is just the best one yet. Oh, boy. What's going on. Nick, we're wearing the same hat. What a faux pie. This is so embarrassing.

We're on the runway. We're wearing the same thing. What's going on, man? Yeties, Nick and I are both flashing our T-boy hats. Check it out on YouTube or Spotify. You can see what we're rocking. Jack, you look fantastic. Thank you, Nick.

You do, too. First story, what are we got for the show, man? Google's newest artificial intelligence product is the AI driver. through. Yetis, would you like some AI with those French fries? Or sorry, would you like some French fries with that AI? For our second story, if your flight has been canceled, like any time in the past several years, you're going to love this new potential rule of the sky. Get this, airlines may owe you an apology fee. And our third and final story is Planet Fitness. They just launched the biggest free sample we've ever seen. Planet Fitness? They are not UNICEF. They're not

Unisaph, remember. No, they are not. But Yeties, before we hit that wonderful mix of stories. What a mix of stories for a midweek Wednesday, Jack? Love the mix. Hold the overnight outs. Pause the Pop-Tarts, people. Yeties, everyone complained that the millennial killed cereal. Yeah, they said, we millennials, we were serial killers, the worst insults. But cereal turns out, it's back, baby. Serial sales are surgeons, sweetheart. After decades of declining cereal sales, they actually rose during the pandemic. And now that big cereal has their mojo back. They're doing what they do best. And what is that, Jack? Big cereal is turning breakfast food into a dessert. One part cereal, one part milk, and six parts glucose. Here's the news,

Yetis. Nestle just launched the first ever Kit Kat cereal. We repeat, candy bars are now a bowl of cereal. That's a Kit Kat in your breakfast. Kit Kat, the chocolate wafer sugar bar has a breakfast manifestation you can buy. Break me off a piece of that whole oats and fiber? Yeties, you know who approves with this new cereal. Oh, I think you know who approves of this. Gauky Cris. But yet, it's not just cookie crisp and Kit Kat that's in on this cereal crate. Jack and I jumped in T-Boy style, and we noticed that General Mills is also going deep on

indulgent breakfast. General Mills just launched Cheerios Vanilla Spiced Flavored. General Mills just launched Cinnamon Toast Crunch, a dulce deletche flavor. These are the most blatant sweetenings of breakfast we've seen since the Reese's puffed cereal. I know you wanted to drop another cookie crisp, but we'll hold off. So yet he's now the first meal of the day. Kind of looks like the last meal of the day. Yeah, it does, doesn't it?

So, Jack, what's the takeaway for our buddies over in the Kit Kat Breakfast aisle? We didn't kill cereal. But now cereal is trying to kill up. Oh, boy. Jack, let's hit our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is an norm.

They need to practice. 50% that's a fact. Tip. Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more. So just start the show. Start the show. For our first story, Yetis, the first place that you're going to chat with artificial intelligence, it's at the drive-thru. It's the drive-thru because Google and Wendy want to double dip your double quarter-pounder with cheese. Jack dear, remember when we jumped in T-Bois-Dy. We covered the drive-thru surge across America last year. This is drive-through country.

Over 50% of fast food sales in this country are now ordered through the drive-thru. Get this. 80% of Wendy's customers prefer the drive-thru. Sit down, stand up, and just stay seated, Jack. But we should also point out that the American fast food drive-thru experience is one of the worst experiences in all of retail. The only retail experience where you have to scream through a microphone that's filled with enough lint to cover your sweater. Sir, I said frosty, not fresco. Did you say Jack or Sam?

Leader of Cola? Do we have leader of cola? Extra pickles or extra sprinkles? I ordered the fish filet. Why does that matter, man? Yet is that's why Google's newest artificial intelligence product is a drive-through waiter. It's a drive-through waiter. They're launching it with Wendy's in Ohio. Next month, you can jump in T-Boy style yourself and check it out.

And here's the key. They taught this artificial intelligence the nuance of restaurant orders. Yeah, it's a large language learning. model. So this thing, it knows how to grow and like learn the language of ordering from Wendy's. So when you go up and test this thing and you order a junior bacon cheese, they know that's a

junior bacon cheeseburger. They're translating lingo into Wendy's language. Like how else would this go down? If you order a milkshake, they know you're talking about a frost. Like we mentioned, this is some real save the world kind of stuff, isn't it? It's cutting edge technology. But yet is here's why investors are actually

excited about this technology. They programmed this artificial intelligence to upsell you. What Jack and I are saying here is that this Wendy's female voiced artificial intelligence is always going to ask you, would you like fries with that? Yes, the engineers coded into this robot to get you to order more. What do I got to do to get you into these nuggets, Jack? The AI will like make you say no three times before they finally let you finish the order. It's expected to enhance Wendy's revenues by upping your order every time you order. They're always going to ask you, would you like to make that large Coke a super-sized

coat? And then they're going to think, hey, wait a second here. Would you like a baked apple pie with that? Because desserts are profit puppies. We know you ordered a McFurray. How about you get the top shelf Oreo McFurray double stuffed? Which is like the profit puppy or the profit puppy? Not too shabby, Jack. Now, yet is this artificial intelligence, it may hallucinate, which means like it'll get confused and not know what to do and it might scare you with what it says. worst case scenario when it's trying to upsell you on the double large fries when you already ordered double large fries you can request a human being you can ask for a human to ask the robot to step aside now we just said wall street was excited about the upsell but here's why wall street

is really excited about the upsell take me do your french fries so jack can we please got a takeaway can we get a takeaway over here please uh one takeaway yet he's the real value of artificial intelligence is in the double dip. The double dip. Yet he's the real value of AI. It's the double dip because the double dip is when you both increase revenues and decrease costs. This AI drive-thru isn't just going to increase revenues for Wendy's with the robot upside. It's also going to cut costs. And it does that by replacing the human who used to do the drive-thru. And that is the true power potential of artificial intelligence. We call it the double dip. Because yet his most tech advancements, they either improve revenues or they cut costs. But typically, they don't do both.

But this AI drive-thru captures the unique business opportunity of artificial intelligence. The old double dip, or I'm sorry, one double dip. One double dip. For our second story, the White House just announced plans to implement what Jack and I are calling the airplane apology fee. Because we're about to face the worst summer of travel in the air ever. Do you remember what happened over the holidays? Can we talk about this? Remember this was a thing? Southwest Airlines did its very best to destroy Christmas. Southwest destroyed Christmas. Sounds like a Christmas movie featuring like Chevy Chase. One bad winter storm paralyzed Southwest Airlines like a broken lavatory in row 34B.

You're supposed to be in Atlanta. You end up in Edmonton. Nothing wrong with Edmonton, but it's not Atlanta. Nearly 17,000 flights were canceled over a 10-day holiday space. And honestly, after that debacle, that was the straw that broke the camel's tarmac. The White House just ordered the Transportation Department to write new rules for canceled flights in the United States. Yadies, here's the deal. If airlines F up, then you get paid in cash. It sounds like an injury attorney, doesn't it?

I call J.G. Wentworth, and he's going to make JetBlue come on down. And that's why we call this the apology fee. It's the apology fee. And Jack, can we break down why it is that when airplanes mess up? mess up, it's worse than any other industry. Well, if HBO Max doesn't work for you one night, you just change the channel. But if Southwest Airlines doesn't work, then you can't see Nana for Thanksgiving. If Southwest Airlines doesn't work, you're stuck in Toledo all day.

Again, nothing wrong with Toledo, but Nana isn't in Toledo. But there's another reason. These proposed airline fees are a unique situation. Yeah, here's what Jack and I found fascinating. For the first time, the government is placing a value on our time. Yeties, here's the status quo that gets us so frustrated about airlines. Honestly, I might pause the pod right now. If an airline cancels a flight and doesn't tell you why, which is how they always cancel

flights, they're only obligated to refund you the ticket price. They refund just the ticket. Last we checked, they're not refunding you for the taxi to the airport or the taxi from the airport or the half day you took off from work. So President Biden wants to compensate you for the time inconvenience of the airlines canceled flights. For example, if you took a taxi to the airport, then took a taxi. taxi home, Delta's going to pay you back in cash. And if you get stuck in Detroit overnight and need to book a hotel, the airline should pay you

cash for it. And if you get really bored at the airport while they delayed you and eat a whole lot of popcorn, we don't know if this is the case, but maybe they will pay you in cash. Yeah, the fine print of these rules haven't been written yet. It's a little TBD. But as the Biden administration put it, your time matters. Impact on your life matters. They're valuing your time for the first time.

So Yeti's Jack and I are looking at this situation and we're thinking about it and we're like, hey, wait a second. This is kind of a fee, right? This is a fee. But a fee on the airlines, not an airline fee on us. So this is kind of an apology fee, isn't it, Jack? It's kind of an airline F up fee. It's an airline F up fee. So Jack, what's the takeaway for our buddies over in the airline industry? This summer will be the riskiest flying season ever.

Now, yeties, before you like buckle the seatbelts, we're not talking risky for safety. We're talking risky for time. Like you could waste a whole weekend in the airport. Last year, a record one out of four flights was late in the United States, but this summer is looking to be even worse than that. Yeah, because Delta just announced last month record bookings for travel this summer. United Airlines is hiring 15,000 new workers to handle the onslaught of travelers, but United says that's not even enough. And that's why JetBlue expects delays to be 45% worse this summer. On top of all that, the FAA is short on staffing, which is going to cause even more delay.

Now look, maybe these new rules will eventually scare the airlines into more conservative scheduling. But these rules could take a year or more to go into effect. So yet is this summer travel season, pack an extra air mattress for that overnight and terminal two. The number one thing in your luggage should be patience. Because this summer will be the riskiest flying season ever. For our third and final story, Planet Fitness is letting high schoolers, Workout for free. It's the most lucrative, free sample we've ever seen.

So Jack and I just got to see the numbers on this thing. Yeties, it's mid-May now. Final exams are done. Yeah, prom was a blast. You looked great, Gretchen. Your hand is sore from signing all those yearbooks, but those are done too now. Yeah, but now it's summer break. You can start mowing lawns for the parks department.

Life is good. You grab a Capri Sun. It's a nice gig. You get some fresh air. You're working outside. Well, Planet Fitness just launched something. thing that gives you something else to do, a workout, but for free. For the third time, this $6 billion fitness chain called Planet Fitness is doing what they call

the high school summer pass. We're talking 2,400 gyms across North America, free to use if you are between 14 and 18 years old. It's the high school summer pass. You see Stu, he's over there on the squat rack. Debbie double major is doing dumbbells over here. Rachel from Russian class is doing a Russian twist. You're getting like spotted by Mick and Lovin.

And the whole cast of dazed and confused is in the weight room. I mean, it's a fantastic time. Great vibes. And it's all free. Planet Fitness is just letting the whole high school come into the gym. But Yetis, Jack and I recently covered Planet Fitness' earnings reports. So we were wondering, is this the biggest free sample we've ever seen? They're giving three and a half months of their core product for free.

Jack and I got to ask, what's the conversion rate on this thing, Planet Fitness? We should first point out that the summertime is Planet Fitness' slowest quarter. It's the slowest quarter for gyms in general. Yeah, because you can run outdoors. Basically, the gym's competition is mother nature. That's what happens this time of year. So it's not a big deal that they're letting the whole high school come to the gym. It doesn't bother members because there's barely anybody in there.

Ferris Bueller can use the elliptical because no one else is on the elliptical. But they did this last year, and they told this in their latest earnings call, how it performed for them last year. And Jack, what were the numbers for Planet Fitness' summer deal? Last year, three and a half million teens registered for this pass, and they swiped in 17 million times. for a workout. Plus, 2.3 million of their parents stopped by Planet Fitness 2 added all up, and you got 6 million new bodies in their gyms. This 3.5 month free sample got 6 million people

into their gyms. But then, Jack, on August 31st, the program expired. And how many of those who signed up continued to use Planet Fitness? Of the 6 million last summer, 600,000 of them said, hey, I like this. I'm going to become a full-time paying member. I'm sorry, Jack, that is a 10% conversion rate, not too shabby. That's right. 10% of the people who got a three and a half month-long free sample decided to actually buy that. Take that, Costco. And we crunch the numbers.

Those 600,000 new members are going to bring in $72 million in membership revenue for Planet Fitness at like no marginal cost. Repeat, this costless free sample just gave Planet Fitness $72 million in revenue. basically pure profits. So Jack, what's the takeaway for our buddies over at Planet Fitness? In capitalism, there's no such thing as altruism. Now, Yeti's Planet Fitness, they launched this program during Mental Health Awareness Month because workouts have been shown to boost mental health. So Planet Fitness is giving away free gym passes to boost teens mental health. That's so good. Here's the funny thing. Planet Fitness isn't UNICE. Mother Teresa isn't on their treadmill. Last time we checked, Planet Fitness is a for-profit

corporation. They're not giving away the free stuff for the good vibes. It's also nice that six million grateful people will spread free marketing love about Planet Fitness through word of mouth. On top of the 72 million dollars worth of teens and parents who converted to become paying members. Planet Fitness, we commend you for letting broke teenagers release endorphins for free over summer break. Honestly, Planet Fitness, we wished we had this when we were younger. It's a fantastic program. We love it. But in capitalism, there's no such thing as altruism. Jack, can you whip up the takeaways for us over that? Wendy's AI drive-thru won't just boost revenues, it will cut costs too.

And that is the unique business opportunity of AI, the double dip. For our second story, the Biden administration is ordering rules to compensate travelers when airlines cancel their flights. But this summer is still the riskiest flying season ever. You're going to want that airline apology fee. And our third and final story is Planet Fitness. They're letting all U.S. teens work out for. for free this summer. Here's the deal.

In capitalism, there's no such thing as pure altruism. Now, time for the best fact yet. This one sent in by Yeti Dominic Pataffy from lovely Jamestown, North Carolina. Push and play. Here we go. John Priest was a fireman on board the Titanic when it sank in 1912. He ended up surviving, and he had already survived two shipwrecks before. One in 1907 and one in 1911.

Yeties, you better sit down, stand up, grab a little. your life preserver and sit right back down again because four years after the Titanic sank in 1916 John Priest survived two more shipwrecks in the same year after the second he retired from sailing and is quoted as saying no one wished to sail with me anymore after these disasters yet he's I wouldn't want to sail with him either so go john you're on this you're on this boat I'm going to take the next Titanic why don't you go ahead oh hey titanic can you reimburse me for the trip back on the iceberg. John Priestley was a cursed wayfar.

Yetis, you look fantastic today. And remember, the next time you go up to a drive-through, ask them for the Kit Kat cereal. Millennials failed to kill cereal. Now cereal's trying to kill us. If you know, you know. Jack and I, we'll see you tomorrow. And before we go, congratulations to Entrepreneurial Yeti, Elizabeth Rizzo, who just launched her zero-waste skincare brand of Vec Earth.

And good luck to Ali Ingris, who's doing a half-ironman race in Majorca, Spain. And Jason and Tabitha Mud, they met in a dorm room 25 years ago, and they are now celebrating a 25th anniversary. Congratulations to Juan Barros, who just got a new job in real estate over in Philadelphia. And Vinnie Savatino also got a new job, also in real estate.

Congratulations, Vinnie. And congratulations to the Temple University Fox School of Business, graduates. And St. Mary's Bizad, congratulations on that graduation. Happy birthday to Michael Nelson in East Lansing, Michigan. And Jack, Chase Arnold is loving T-Boy so much, he's been listening for three years in Kampala, Uganda. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. Nick and I don't own any stocks of companies mentioned today. And it's going to translate the rest of your lingo into like Wendy's menu language. If you order a milkshake, they know you're talking about it.

frost. Yeah. It is some pretty clever. It's some pretty clever. Real safe. So, Jack.