The Best One Yet - 🥔 “Surge Potato Pricing” — Instacart’s personalized pricing. Utah’s for-profit football. Australia’s teen insta-ban. +In-N-Out’s 67.

Starting point is 00:00:00 This is Nick. This is Jack. It's Thursday, the new Friday, December 11th, and today's pod is the best one yet. This is a T-boy. The top three pop business news stories you need to know today. Yeties yesterday, Jerry Powell of the Fed gave us the interest rate cut we all asked for for Christmas. Although our central bank said it only plans one additional cut next year for all of 2026. Come on, Jerry. We need a Hanukkah gift, too, man. But you want mortgage rates to come down? It was mixed news yesterday. Well, stock surprise. surprisingly went up, and this pod is our best one yet. Jack, three stories for today's T-Boy. What we got on the show? For our first story, Instacart got caught doing personalized pricing. Real thing. Different prices for different customers at the same grocery store. Basties, are you paying $1 for bananas, but your buddy is getting charged $2? We have an explanation for it.

Starting point is 00:00:52 For our second story, for the first time ever, a big university sold a piece of its athletic department to Wall Street investors. The University of Utah Uts Athletics is officially a for-profit corporation. College Sports is the new pro sports. And our third and final story. Yesterday, Australia became the first country to ban social media for kids under 16. Is Instagram the new cigarette will dive in tea boy style? Speaking of banning, Nick, before we hit those wonderful three stories.

Starting point is 00:01:22 What a mix of stories for the new Friday. In-N-Out Burger has banned the number 67 at all of its restaurants. story yeties will explain. Six-seven. Two consecutive numbers that Gen Z has turned into secret code. What's it mean? We don't really know. And you know what? Neither do they either. And whatever Urban

Starting point is 00:01:41 Dictionary says, that's not right either. Nobody really knows. But the new viral trend is to gather at an in-and-out burger and wait for order number 67 to be announced. And when order number 67 is announced, the kids go crazy. Push and play. Let's hit the tape.

Starting point is 00:01:56 Get six-seven! In and out doesn't want their restaurants becoming mosh pits. Whatever that was. So now they're skipping order 67. 67 has been 86th. But it's not the only business in history that has banned a particular number, is it, Nick? That's right, Jack. For years, Apple's weather app wouldn't show you the number 69.

Starting point is 00:02:22 It was really bizarre. We covered it on this pot. True. They would skip straight from 68 to 70. They'd never show 69. If you live down in Tampa, never turn 69 degrees Fahrenheit. Now, tech companies have also dropped the number nine in a case of Roundup marketing. Yeah, there was never an iPhone 9 or a Windows 9 operating system, in fact.

Starting point is 00:02:41 Apple and Microsoft skipped straight from version 8 to version 10 to signal faster innovation. Sorry, besties. If you own an iPhone 9 Max Plus, that's not a real thing. It's basically a folkly, but an iPhone. But Jack, we can't forget about the earliest number banned of all, the elevator. Your building skipped the 13. floor. We're just like airlines skip the 13th row.

Starting point is 00:03:02 Except in East Asian, 13's not unlucky. The number four is unlucky. So, besties, if you found another number that's banned in business, but we didn't mention here, drop it in the comments. Or don't drop it because we don't want

Starting point is 00:03:14 an unlucky result from like the Spotify outgous. In the meantime, Jack, let's hit our six, seven stories. Oh my God! Fifteen years before this song, two boys from the Northeast met in the dorm that had an idea to cause a cultural storm. one yet, but the best is an norm.

Starting point is 00:03:31 Jack Nick Tis. 50% that's a fat 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. First, a quick word from our sponsor. Our first story. Instacart just got caught using AI to charge different prices for different people,

Starting point is 00:04:07 a.k.a. personalized pricing. How much does a dozen eggs cost on Instacart? Well, that depends on what their AI thinks of you. Are you an investment banker or an intern? You're going to be a different for those eggs. Yeah, yetis, let's just kick it off. T-boy style bombshell headline from Consumer Reports published this week is like Wall Street Journal meets page 6 of the New York Post. Here's the headline. Instacart's AI-enabled pricing experiments may be inflating your grocery bill. Get this, nine reporters at Consumer Reports and a nonprofit news organization and a think tank

Starting point is 00:04:39 outed Instacart. With this investigation, do grocery prices change depending on who's using the app? getting charged $5 for Doritos, but my buddy Timmy's getting charged $6? Maybe, Nick. Maybe. Because in this investigation, consumer reports got 437 volunteers and asked them to buy the same 20 things on Instacart at the same time from the same grocery store. Now, Jack, you think everyone would pay the same price for those same things, right? Everyone had different prices for the same 20 items.

Starting point is 00:05:08 Yeah. The prices varied by as much as 23%. Basties, imagine if a cashier said, yeah, that pack of gum, that's $1 for you. you, but that's $1.23 for you. That's the analog equivalent of what just happened on the Instacart app. And we're not calling this search pricing. We're calling it personalized potato pricing. Now, Instacard acknowledged that this report is true.

Starting point is 00:05:30 They do show different customers, different prices. But it wasn't exactly an admission of guilt from Instacart. Yeah, what we found fascinating is they framed it kind of like a techie flex, right, Jack? Instacart said that these price differences are actually all experiments. You see, they're using AI to help grocery stores test higher prices in the Instacart app. Basically, Safeway is wondering, if I charge a buck more for this box of oatmeal, will customers buy it? This lets them test that theory. As an experiment that does make sense, you could see a tech company doing it.

Starting point is 00:06:01 However, the report also said Instacart's being dishonest about original prices. The prices they strike out to show you that you're getting a good deal with their price. Jack, let's whip up an example here. Let's look at the same $4 saltine crackers that are making me thirsty. One person in the study sees that the original price was $5. The other person sees that the original price is $6. Only one of those can be true, Nick. That doesn't feel like an experiment, Jack.

Starting point is 00:06:26 It kind of feels like an experiment in dishonesty. But, Nick, things could get even worse. Not surge pricing. AI surveillance pricing. Because besties beyond Instacart, AI knows exactly how much you're willing to pay. They could charge each person a maximum price. Because the AI knows,

Starting point is 00:06:42 if you're an investment banker type who has lots of money, or if you're an intern type who's living paycheck to paycheck. Now, again, Yaddies, Instacart says that's not what's happening here. They say these are randomized tests, only at 10 grocery chains, and only on non-essential grocery items. But the state of New York just passed a law to make AI-optimized rip-off pricing illegal. It's the first state to do so, but probably not the last. Now, Basties, Uber and Lyft, they charge different prices depending on the person.

Starting point is 00:07:08 You already know that. Airlines and car dealerships do the same thing. But we got to ask, personalized prices on pickles? Grocery stores might love this idea, but everyone who buys groceries, which is literally everyone, hates this idea. So Instacart stock dropped 6% yesterday on this PR problem. So Jack, what's the takeaway for our buddies over at Instacart and beyond? This is the wrong headline at the wrong time in the wrong industry. Yeah, Yeti's Instacart is using AI to help grocery stores raise prices, but obviously a bad head.

Starting point is 00:07:41 but you know what? The timing is bad too. Because the prices of everything are too high. That is the only thing Americans are united about is the inflation situation is out of control. But you know what? This is also the wrong industry to be caught messing around with prices. Yeah, grocery. What's Walmart slogan, Nick? What is it again, Jack? Always lowest prices, always. Oh, and Amazon and Costco, their number one rules that nobody offers a lower price. Nobody. The CEO of Costco would breaky box of eggs over somebody's head if he heard that the competition was offering lower prices. Yeti's grocery is a cutthroat industry. Thin margins, minimal profits, permanent price wars.

Starting point is 00:08:19 Learning that a tech company is helping grocery stores raise prices, that's the wrong headline, at the wrong time, in the wrong industry. Hey, how much do you get for these pickles? For our second story, the University of Utah is finalizing a first of its kind deal, selling a piece of the athletic department for $500 million. Gordon Gecko is the new sophomore quarterback. Wall Street is tackling the Fighting Utes football program, and this will not be the last of these deals.

Starting point is 00:08:49 Yet he's back in business school. Jack and I had a bunch of buddies who went into private equity, right, Jack? What's the playbook here? You buy a company with a bunch of debt. You find ways to boost profits, and then you sell the company seven years later for a game. Some of our buddies bought factories. Some of them bought shoe brands.

Starting point is 00:09:03 One of our friends' private equity firms bought a chain of funeral homes. But for the first time ever, a private equity firm is about to buy a college football program. To quote John Madden's Stockbroker, are you ready for some finance ball? Here's the news. The University of Utah is about to sign a deal with OTRO Capital, which is a New York-based private equity firm. And here are the details. OTRO is giving the university 500 million bucks for a minority ownership stake in the athletic department. $500 million investment? That values the Utah. youths athletic program at over a billion dollars. Jack, I hate to say it, but that is more than some NHL hockey teams. That is big money. Oh, $1 billion. That's more than half of the university's

Starting point is 00:09:47 entire endowment. Besties, Wall Streeters are willing to pay so much because it's a bunch of ex-athletes who just want to get back in the game. Yeah, put me in, coach. Yeah, I'm your new boss. So, yeah, put me in. Give me an E! Give me an X. Give me an I. Give me a T. Exit? Oh, nice B-E term. Jack, pause the pod for a second. You happen to be a backup starting former varsity D3 college quarterback who also worked for a Wall Street bank. Yeah. So can you please sprinkle on some context for us? Yes, coach. This deal actually creates an entirely new corporation at the University of Utah. That's right, a for-profit corporation. It's called the Utah Brands and Entertainment Company, which kind of sounds like a Salt Lake City casino. Utah Brands and Entertainment

Starting point is 00:10:34 will take ownership of the University of Utah's athletic department, which will remain majority owned by the university. Basically, private equity gets a minority ownership in exchange for $500 million cash and operating the business. The school keeps majority ownership, though, so it keeps decision-making power for everything in the athletics department. Now, Jack, that's the structure of the deal, but what's the playbook of the deal?

Starting point is 00:10:58 The same as any PE business. Boost revenue, cut costs to widen the profit margin. So you're going to see this. new company invest in facilities for the athletic department. Make sure that Star Software doesn't transfer to Michigan. You're going to see them raise some prices on you if you're a fan. Parking? You're going to need a new student loan for that prime tailgating spot. Jack, they're also going to find and create some new revenue streams.

Starting point is 00:11:20 Strike 2. That strike is brought to you by CrowdStrike. Protect your home online security. And of course, private equity is going to find a way to cut some costs. Do we really need to paint their helmets after every game, Nick? Yeah, sorry, Notre Dame. But what this new corporation is going to do, biggest of all maybe, is manage the largest expense in the NCAA. Player salaries. That's right.

Starting point is 00:11:42 Because this season, the University of Utah paid student athletes $21 million. That is one-fifth of the department's $110 million in annual revenue. Jack, as a former backup lacrosse face-off guy, I feel like someone owes me some money here, Jack. Hey, we made the team, dude. We made the team. We made the team. So, Jack, what's the team? Anyway, for our buddies over in the NCAA.

Starting point is 00:12:07 The only difference between pro and D1 college sports is mission statements. Yeties, Utah is the first, but we don't think the last to get a Wall Street money in exchange for part ownership of their athletic department. Kentucky and Clemson have deals in the works. So does the Big Ten and Big 12 conferences. You see, when college players started getting paid a few years ago, college sports became pro sports by legal definition. Coaches are getting millions. Players are getting millions now. are in the billions. The only difference, though, is in those pesky Latin words, the university's mission statements. What we're really interested in is what happens when Veritas, Lux, Scientia, and Virtus clash with Draft Kings, who's offering $100 million to put billboards all over campus.

Starting point is 00:12:52 Besties in athletic departments have Wall Street investors who demand profits and returns. Will they continue funding sports that don't generate revenue, like track, swimming, and fencing? What happens when university sports? becomes a for-profit business. The only difference between pro and D-1 college sports, it's the mission statements. It's the Latin mission statements. Now a quick word from our sponsor.

Starting point is 00:13:21 For our third and final story, yesterday, Australia became the first country in the world to ban social media completely for teens. Zuckerberg tried to stop it, but Australia did it anyway. So what happens next in the United States? Yeties, look, we're all going to. guilty of it. We all use social media too much, and nobody's debating that. Unless you have the

Starting point is 00:13:41 impulse control of that toddler who passed the marshmallow test. I know you're talking about. Then you wish you're on Instagram, lass. Still, this headline is going to shock you. A Gallup poll published on Tuesday found that 20% of American teens are on social media, and I quote, almost constantly. Basties cigarettes are chemically addictive. Social media apps are psychologically addictive. Most countries ban cigarettes for kids, but only one country banned social media. media for kids, Australia. Here's the news. Effective yesterday, Ozzy's under 16 years old

Starting point is 00:14:13 are forbidden from using social media apps. Now, all Australia's schools already banned phones. And true. But now those phones are banned from having social media apps on them. Besties add it all up and we're calling this the kangaroo TikTok kid block. It's a good one.

Starting point is 00:14:29 It rolls off the tongue. And the news, but the news raises a bunch of questions you're probably asking. Mainly, Jack, how are the Aussies going to to enforce this. With their e-safety commission, a real thing in Australia that decides what apps are considered social media and therefore are banned for teens. So let's whip up the whiteboard here, Facebook, Instagram, Reddit, Snapchat, threads, TikTok, Twitch, X, YouTube, and Kik, that's what's currently banned in Australia. But Roblox and YouTube kids, those are not banned for teens. At least not now,

Starting point is 00:14:59 the list will change in the future. Which leads to the next question, Jack, who's checking the IDs to get into these apps? The law in Australia requires the apps themselves to verify IDs. And they can verify in various ways, not just with a government ID. It basically zucks the bouncer here. Just like that bar in your hometown, the apps face big fines if they're caught allowing underage people inside. Now, can kids view tweets or watch videos on YouTube when they're not logged in? The answer, interestingly, yes, they can. That's right. The non-logged in experiences are actually okay for kids in Australia. Because it's only once you log into a social media app that the algorithms begin to a

Starting point is 00:15:36 you. Exactly. After you input your username and password, that's when you're hit with the endless scrolling, the suggested videos, the push notifications, and the DMs from the creepy dudes. So will other countries follow Australia's precedent? It depends. The whole world is watching Australia to see how this social media teen ban works out. Or as we call it, the kangaroo TikTok kid block. If you're a 12-year-old and you try getting on YouTube right now, you will get punched by a kangaroo. So Jack, what's the takeaway for our buddies down under in Australia? In America, We don't have regulation. We have What Aboutism. Yiddies, you know what

Starting point is 00:16:11 critics of this law in Australia are asking? They're asking, what about the VPNs? Yeah, kids can get around a social media ban by tricking the apps into thinking that they're logged in from somewhere else. And Jack, what about the app stores? Meta says that Apple and Google should be responsible for checking IDs, not Instagram and Facebook.

Starting point is 00:16:29 But Jack, what about the rest of the internet? If social media apps are banned, kids will spend their time in even worse places, like dangerous websites and dark corners of the web. Jack, what about privacy? If the apps get hacked, hackers are going to have IDs now that we have ID verification. Besties, all these what-abouts, they are valid points that lobbyists raise to stop social media regulation from happening here in the United States.

Starting point is 00:16:53 But there's always a what-about. Always. That doesn't mean we should do nothing. Interestingly, the force of popular demand overcame those what-abouts in Australia where 77% support the ban. A majority in America support a teen social social. media ban too, but the reason it's been blocked so far, what aboutism? It's the what-about. Jack, could you whip up the takeaways for us for the new Friday? Instacart stock fell 7% yesterday

Starting point is 00:17:19 on a consumer report's investigation that showed different prices for different people. That's the personalized potato pricing. Wrong headline, wrong time, wrong industry. For our second story, the University of Utah Athletics will be part owned by a New York private equity firm. At this point, the only thing separated in pro from D1 college sports is the university. University's Latin mission statement. And our third and final story. In Australia, teens under 16 are banned from using cigarettes and from using social media. For something similar to happen here, though, we're going to need to overcome the what-abouts.

Starting point is 00:17:52 But besties, this pod's not over yet. Here's what else you need to know today. Yeah, it's we mentioned it before, but let's dive in T-boy style. The Federal Reserve announced an interest rate cut yesterday. The one rate to rule them all fell by 0.25%, which is what Wall Street explains. But the Fed indicated only one more cut will come next year in 2026, so this is being described as a hawkish cut. Our central bank continues to balance, fighting inflation on the one side and lowering mortgage interest rates on the other side. And second, the founder and CEO of Hinge,

Starting point is 00:18:24 the dating app, just quit Hinge to launch a competitor to Hinge. It's a new AI dating app he launched with big seed money coming for Match, the company he sold Hinge 2. All right, so Jack, I'm looking at the situation here, and it's like Hinge Match and this new AI dating app, we're in some kind of a love triangle right now. It's a situation ship. And finally, the newest AI company is apparently Rivian. Yeah, Rivian, the electric vehicle brand is building its very own AI assistant. To make up for slowing EV sales, Rivian is hosting autonomy and AI day today, actually. Reminder, Rivian is in launch mode these days because they also released an electric Rivian bicycle just a couple months ago. And you literally can't spell Rivian without AIM.

Starting point is 00:19:06 Now before we go, it is time for the best fact yet. This one, a voicemail sent in by Richard Blythe from lovely Tulsa, Oklahoma. Push and play. Here we go. Hey, guys, ever wonder where Nick's famous Chiching sound originated from? Well, it actually dates back to the 1800s when an Ohio pub owner named James Ritty was having issues with his employees helping themselves to the company cash. So him and his brother John actually built the first machine.

Starting point is 00:19:36 that they called Riddie's incorruptible cashier. So this machine literally would record or register each cash transaction. So that famous Chiching sound has become our universal soundtrack of money officially hitting the book. Tough to steal money from a cashier. Yeah. When you open it, it says... Oh. By the way, Richard, your voice sounds like.

Starting point is 00:20:03 Yeah, it is. You're looking fantastic today. And if you like today's show, share it with a buddy. And make sure to subscribe, because only 82% of you are, according to Spotify. It feels like you're calling people out right now, Jeff. Hey, if you're one of those 18%, you better push that subscribe button. And don't say, what about? Just press subscribe.

Starting point is 00:20:21 You'll be happy you did, and you'll get T-Boy every single day. Nick and I will be back with you tomorrow. Can't wait. Well, happy birthday to Yeti, David Lillard, turning 66 years old, up in Shepherds town, West Virginia. Congratulations, David. Happy birthday to Andrew Roberson. Turning 33 years old in Memphis, Tennessee, this man is slaying those runescape demons. And a shout out to Samir Cutta in Glenwood, Maryland, 26 years old and listening since 2020,

Starting point is 00:20:51 fantastic to have you with us, Samir. And a big shout out to the Yeti, Amanda Widdlem, one of the all-time great Yettys who actually met our Federal Reserve chairman, Jerome Powell. Just outside Boston. And a special shout out to Andrew and the whole standard metrics team in lovely San Francisco. They've got a fantastic office, incredible team, just had lunch with them. a CFO out there, you gotta call the guys at Standard Metrics. This is Jack. I own stock of Instagram, Reddit, and Nick and I both on stock of Apple and Spotify.

The Best One Yet - 🥔 “Surge Potato Pricing” — Instacart’s personalized pricing. Utah’s for-profit football. Australia’s teen insta-ban. +In-N-Out’s 67.

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