The Best One Yet - Uber’s Prime-ish membership, Apple’s chip acquisition, and GoPuff is our “Unicorn of the Day”

Episode Date: July 23, 2019

Uber is launching a pilot in SF and Chicago for a membership program that combines all its services for one price. Apple is reportedly buying Intel’s smartphone chip-making business, and that dropped Qualcomm’s stock. And GoPuff is our “Unicorn of the Day” because it’s about to get a major investment from SoftBank as it brings convenience stores to college students nationwide.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 Tuesday, July 23rd. Markets trickled higher today, relatively slow day. Lots of tech earnings coming up. Hardly anything else happening. But this is the best one yet.

This is actually the best snacks day. I am very excited for this. We're kicking it off with prime time. Uber is testing its own version of Amazon Prime. 25 bucks a month, discounted rides, bikes, scoots, delivery food. Doesn't matter what your rating is. Bundling is back. Second story, Apple is reportedly acquiring the smartphone chip

division from Intel because it hates being dependent on Qualcomm. Qualcomm was like the only bar in town, so Apple's building a second bar. Yes, they are. Third and final story is GoPuff. It's the unicorn of the day. Very nice. We're probably about to trigger a lot of app downloads because this is super late night munchies and booze delivery.

It's redefining the concept of convenience. Now, before we get into all that, full disclosure, extremely sore right now. We told you yesterday we were mountain biking over the weekend. Yeah, it was like 72 hours ago. A nice little Sunday between Nick and me. Charming. We actually haven't sat down since that. No, let me sum up mountain biking for anyone who hasn't mountain bike before.

It's a series of incredibly close calls. Every time we pause to take a break, Nick is huffing and puffing, like calling his mom, letting him know he's okay. I never wanted a participation trophy more than I did this weekend. It's ridiculous. You're next to a cliff the entire time. Now, mountain biking is a great sport, but those butt-padded pants that you say everyone wearing, they exist for a reason. Right, which brings up a great question. And bikers, why don't you just make the seats more comfortable?

I don't know. We either need any more comfortable seats or we need to wear those shots. Jack and I are actually recording this at a standing desk right now because I have not sat down since Sunday morning. All right. Let's hit these important words before this book. Can't wait. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are about to hear 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're not recommending any securities. Nope. It's not a research report. or investment advice. Not an offer or sale about security.

Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, can I turn up the AC for you, Jack? Uber just primed itself with like a mega membership service. It's Amazon Prime style and Uber's doing it. Before we get into this, can I vent for a minute? Please.

Has anyone else had this issue where you call the Uber, you call the lift, and they say three minutes, and it's 15 minutes and no one's shown up? Damn, day. It's ridiculous. There's plenty of room for a third competitor beyond Uber and Lyft. Just call it honest ETA. That should be the app. All we need is accuracy on that thing.

If it says it'll be there in five minutes, it's actually there in five minutes. So, all right, maybe we should actually get to the story on this one. Pilot? Uber is testing a monthly membership. It's a pass that combines rides, eats, bikes, and scooters. Now, you're wondering if this is going to hit you only if you're in San Francisco or Chicago right now. So probably not. And it's going to cost you about $24.99 a month, give or take.

Now, for $24.99 in a month, you get something called a pass, which gives you you a fixed discount of like 15% off any ride you take. Plus, you're going to get free delivery on Uber Eats when you order food. You got to pay for the food, but they're going to waive the delivery charge. Key distinction there. Thank you for that. And you get unlimited jump bike rides up to 30 minutes a day and unlimited scooter rides as well. Now, for Uber, this really spoke to us that it's got a competitive advantage that it's using against Lyft in this situation. It's variety. So critical. Uber has a gigantic menu of transportation like transit-e options. Plus, it's got a menu of options for your other bodily needs, like not just getting around.

Food. Like hunger. So Lyft offers a similar monthly unlimited pass. It's actually called All Access. But this is different because there's just more options. Now, we notice in the press release for Uber, the way they described this, they said, quote unquote, we're always looking for ways to make Uber the go-to option for everyday needs. The key here is everyday needs.

They're offering services, two different types. Transportation of human bodies and indulgence of the mouth. Transportation of bodies, transportation of food. Into your mouth. I like it. So Uber is multimodal. It has different modes of transportation, and it's flexing that with this monthly pass. So, Jack, what's the takeaway for our buddies over at Uber?

We are about to see the primification of everything. We're talking memberships with lots of benefits. Yes. Once you commit to, like, paying $25 a month, you are a sticky customer. Now, if you're thinking, let's say you're walking through this, all right? It's a morning. You notice you've got to get to work. You're going to call the lift because it's $3 less than the Uber.

But then you're like, wait a second. I already paid for the Uber monthly subscription. Yes. Guilt is a powerful customer stickiness tool. And investors love seeing this kind of model because it's recurring revenues, it's consistent revenues, and it's revenues from loyal-slash-guilty customers.

So the big snacks question for us, what is going to get primified next? What will get primified next? Let us know. Tweet us at Robin Hood Snacks. We're looking for the good ones. For our second story, Apple's reportedly acquiring Intel's failed smartphone chip business

for cool $1 billion. Jack's tracking up because I need. nailed that line. That was a mouthful of the headline. There's actually three, Sussetame. There's three companies involved in it. I need a defibrillator after the beginning of this one. So, so does Qualcomm. Its stock is down 4% on this news, even though they weren't even mentioned in that headline. No, there was a Wall Street Journal scoop that Apple might buy this chipmaking unit that's owned by Intel. Now, Apple would be getting a whole bunch of patents and a whole bunch of like Intel tech engineers. Yes. And they'd get like basically 10 years worth of research. A whole lot of

spreadsheets. A whole lot of spreadsheets. Maybe some Google Docs. Ten years worth of trying to make 5G chips for like the next generation of smartphones. They're also going to get a bunch of files and some specific specifications. Now, we look at that scoop by the Wall Street General yesterday. And we also look at a scoop back in March. We're connecting some dots here. Yes, we are. Apple is opening a new office in San Diego with 1,200 employees. Funny thing about San Diego, great views, great Water, great location for Qualcomm. Yes, it's the headquarters of Qualcomm, which is the biggest chip company and Intel's main competitor in modems for smartphones. So that means Apple's basically got an office next door to Qualcomm making the same thing. It's not exactly subtle. No dips,

just chips. So let's talk about how his smartphone is made. I love that. It's like a creation story. We're going to look at the value chain here from Genesis to whatever the last book is. So it basically begins with raw material. In the beginning, there were raw materials. Right. Which really literally like mine from the earth. And then you got like some tech developers in Cupertino, California, who are planning how a smartphone is going to be put together. Then the chips actually get made. And that's a key component.

The chips are like the brains. They're the things that make the thing go. Then then all the materials, all the chips, all that ends up in a factory, which is going to start pumping them out. Right. An assembly for iPhones happens in China currently. And finally, you got a whole bunch of retail stores that are going to sell the thing. Now, if you look at this entire creation story and pinpoint one point that may be the most

important, that point is where the chips are made. Yes, and actually, if you look at all the other points, Apple has a whole bunch of options of who can do it. But the chips, it only has one option. So the chip point is actually a bottleneck that could slow the entire process down to get you your smartphone. It's the most critical component, and there is only one company that does it, and that one company is Qualcomm. Now, there used to be a second competitor that was Intel, except they didn't exactly prepare themselves. They totally blew it. They missed it.

They were perfectly positioned to be the iPhone provider of 5G chips, which is. the critical new network that's going to run like the internet of things, your dog's collar speaks to your fridge and order something from chewy. But in April, Apple announced that it begrudgingly had to sign a deal with Qualcomm. Ending a two-year legal dispute because Intel just couldn't get it done. So, Jen, had to go to Qualcomm. What? I feel like we're hitting a momentous point here. What is the takeaway for our buddies over at Apple? This is about busting the Qualcomm bottleneck. 5G, that new network we just talked about, it's going to become critical for Apple devices. It is the future of the internet.

And Apple is completely dependent on Qualcomm for that future right now. And that means Qualcomm can charge any price at once for those chips, which we told you are the critical part of the chain. Apple is dependent on Qualcomm. It's a big problem. So just the existence of another competitor will keep Qualcomm honest. Intel couldn't do it. Apple might do it in-house. For our third and final story, this one's a wild one. It's our Unicorn of the Day go-puff. It's Go-Puff. It's the convenience store app. It might get a huge fundraise of hundreds of million from SoftBank, which is the biggest tech investor in the world. Ironically, which is invested in a bunch of other delivery apps.

Now, GoPuff on the other hand. Oh, my God. To get into this story, what do we do? I showered with a solo cup, a red one. If you haven't heard of Goopuff, you're probably like far more wholesome than a gopuff customer. No, if you're a gopuff customer, you've got Sean Paul in the background and you're running low on the slim gyms. You're looking for a two-liter and a frozen pizza delivered stat.

We're talking like your buddy who can open a beer with their. elbow. So this is a late-night convenience store app. Here's the sales pitch. You're parting. Your party has run out of booze. You've run out of pizza. You don't want to be that guy after run out. You don't want to go to bed yet. So you order stuff through GoPuff and you can get anything in the convenience store. And then they're saying, all right, maybe we're talking about a younger demographic here. We're only going to charge a dollar 95 cents as a feat. And we're going to deliver, I don't know, 24 hours out of the day. And they're going to deliver in as quickly as a half hour. So sales doubled for GoPuff last year. They've clearly found an audience. Founded by a couple

Drexel students over in Philadelphia in 2013, and they focused on like hookah delivery at first, and then they realized, you know what, we kind of have to expand beyond whoca. They're expanding to the party crowd. They're expanding to the party crowd. We jumped in snack style. Jack and I started, you know, getting into this. I downloaded the app. The first thing you see is condoms, then candy, beer, OTC medications. We got some starbursts, some medello, you're going to get some white claw hard seltzer. Doritos. You got anything that's in high demand, late night in college towns. wondering where this is going down. We're talking Madison, Wisconsin, Athens, Georgia, Columbus, Ohio, Providence, Rhode Island, the greatest of the mall. South Bend, Indiana. These are in college towns.

It's the only app that requires you to be under 21. Are you sure you want to order all those Doritos, sir? Now, this company is private. We can't invest in it. But if it had a ticker symbol and did an IPO, what are you thinking? I'm thinking stat. Get me some Pringles. Stat. I'm thinking, mm. Now, this company's business model reveals a divide between the deliourable. delivery ecosystem. Now, this is key, and you've got to keep this in mind, because you're probably wondering yourself, sounds a lot like Postmates or DoorDash. Or Uber Eats, which we mentioned a little while ago. Right. Now, the difference here is that those companies we just mentioned, their platforms. Right. And by platforms, we mean essentially a middleman, but an app style middleman. Right.

It connects gig workers with people who need things. Exactly. And the stores, random stores, are supplying the product. Now, GoPuff, on the other hand, it actually owns warehouses full of all this late night stuff that you might want and it hires delivery people. And so it's like a regular company that you just work with. So this is a very big distinction within the delivery space. So there are a couple benefits to this for gopuff. Well, it controls the supply because it has a little warehouse. It can brand everything. So it has a nice little go puff bags. They're durable. Pretty. That is like free advertising. It's a tote. Use it. Bring to the farmer's market. Yeah, free advertising in the dorm. It's faster and there's no surge prices. Right. Because they don't need to use search prices to attract gig economy workers to deliver

your stuff. Right. And this isn't some task. but going to CVS. It's somebody sitting in the warehouse ready to go, just waiting for an hour. On the other hand, there are a few problems with this model. It's more expensive. You got to build the warehouse. Yeah, and you have to pay workers an hourly wage, no matter what, even if nobody's asking for stuff.

And when people want something, it's kind of limited to what you have in that warehouse. You just spend a lot of money to build. So, Jack, what's the takeaway for our buddies over at GoDef? Convenience isn't a store. It's a lifestyle. That's literally what they say on the website. And we just thought it was too good to not make the takeaway. Now, GoPuff doesn't see, you know, DoorDash or Postmates as its competitors.

It sees its competitors as convenient stores. When you go to download the app, it says, because the store is lame, you're busy, and who has time to stand in line anyway? GoPuff just summed it up. Jack, can you whip up the takeaways for us over there? Uber is priming itself with a $25 a month access to free or discounted rides and deliveries. If anyone's got any other primified or primifiable things, tweet us at our Robin Hood Snacks. is trying to end its reliance on Qualcomm by reportedly buying Intel's failed chip division. Kind of a case of like if you can't beat them, buy him, but the other guy.

GoPuff is trying to replace convenience stores starting with late night partiers in college towns. I'd like your ticker on this one, stat. I think we should roll with that. Now, time for our snack fact of the day. This one's sent in by Matt Dwyer, who's from Long Island slash Boston slash Nantucket slash New Hampshire. Very New England plus long hour. Technically, he's my father-in-law. He would have wanted me to name all five or four, so I'm going to do that.

Now, the fact itself. You get the big piece of Turkey at Thanksgiving. That's exactly what I'm going for. Now, only 9% of the world's plastic gets recycled. Now, if that didn't depress you, this one is a little bit more of a kicker, too. Plastic that's not recycled and just sits in a landfill, takes 400 years to degrade. Now, kudos to our colleague Abby, who has made a big commitment. Her pledge is to never use single-use plastic.

We don't know how she's doing on this. We do know it requires a ridiculous amount of plastic. It does because if she buys plastic, she has to either reuse it or not use it. You're going through that TSA thing. I think you've got to bring your own knives and forks. But no matter what TSA says, another key story you got to know today. Equifax had like, you know, back in 2017, a giant data breach. I was there.

Like 150 million users got their privacy. A big money is like pretty much ever. Well, they're settling by paying victims, $650 million in competition. So a lot of people could get actually a few dollars back. Maybe. Now, Snackers, loved having you with us. Yes, we'll be back tomorrow. But before we go, last week, I mentioned that Joe Montana won a Heism.

Again, I remember this far away. My brothers are going to kill me. He actually didn't win a Heism. But he did win three Super Bowl MVP. Is this a correction? This is technically a connection. Are you 100% sure in this? So we don't have to issue a second correction?

Yeah, we're getting here. Let's roll with that. Snackers love being with you on second day of the week. We'll be back tomorrow. 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.