0:10

Hello! Welcome

0:13

to Slate Money, your guide to the

0:15

business and finance news of the week.

0:17

I'm Felix Hamlin of Axios with Emily

0:19

Peck of Axios. Hey, Felix. I'm

0:22

here with Elizabeth Spires, who writes The

0:24

New York Times, and it's amazing. Hello.

0:27

We're going to talk about the FTC, run

0:29

by Lena Kahn, who has come out

0:32

with a sweeping ban

0:35

nationwide on non-compete clauses. We are

0:37

going to talk about restaurant reservations

0:39

and whether we should start having

0:41

to pay for them. We

0:43

are going to talk about the Biden

0:46

administration's crackdown on airline

0:49

fees and forcing airlines

0:52

to give refunds. It's a good one. It's

0:54

coming up. It's late money.

1:04

Emily, we had massive news this week. What is

1:06

it? So, this week, after

1:08

more than a year of saying it

1:10

would do this, the

1:12

Federal Trade Commission announced a rule

1:15

banning non-compete agreements in employment contracts.

1:17

Those are the agreements that you

1:19

have to sign, or some people

1:21

have to sign, 30 million estimated

1:24

workers have signed, that

1:26

say if you leave your job at your

1:29

current employer, you can't go work for a

1:31

competitor for a certain amount of time, or

1:33

you can't go work for a competitor within

1:36

a 50-mile radius. They used

1:38

to be used mostly for executives,

1:40

but in more recent years, employers

1:43

have really gotten into non-competes using

1:45

them famously for the sandwich

1:48

maker Jimmy John's. Use

1:51

them. A lot of doctors

1:53

are subject to non-competes and nurses and

1:55

other kinds of healthcare workers. As

1:58

the years have gone by, people have really started

2:00

to complain about them. And the

2:02

FTC is saying, you know, they

2:04

make it harder for, you know,

2:07

workers to take new jobs, to

2:09

get raises, they blunt competition between

2:11

firms for workers, and that helps

2:13

keep wages low. So yeah,

2:15

this week, they put out this rule, banning

2:18

them, it's supposed to take effect in 120

2:20

days, which would be in about August. And

2:22

at that time, if you

2:24

have signed one of these agreements, it would be voided,

2:27

unless you are a senior executive making more than things

2:29

$151,000 a year, then you still have to abide by

2:31

your non-compute. But

2:35

going forward, even those executives can't

2:37

be subject to them anymore under

2:40

this rule. And the senior executives who

2:42

are still bound, do they need to

2:44

be executives or do they

2:46

just need to be paid more than $150,000

2:48

a year? Really good question.

2:51

Yeah, they not only do they

2:53

need to be paid more than

2:55

$151,000. They also need to have

2:57

policymaking responsibilities at the company they

2:59

work at. So if I'm

3:01

like a hedge fund trader, or

3:04

a bank trader or something like that,

3:06

banks famously have this thing

3:08

called gardening leave, where you can't start a

3:10

new job for a certain amount of time,

3:12

that all basically goes away if

3:15

those people weren't actual

3:17

executives, which most of the time they're not.

3:20

Yeah, according to this rule, although there's

3:22

a whole separate conversation in the

3:24

finance industry about whether or not this

3:26

rule applies to them because of other

3:28

rules and regulations in the finance industry.

3:31

I'm absolutely it's wild to me

3:33

that like doctors have

3:35

this, you would think that in

3:38

the healthcare industry and among doctors,

3:40

at least normally they pretend that

3:42

they're not competing with each other. But

3:45

they're like, oh, you can't compete. Yeah, it's really

3:47

wild. I mean, I have spoken

3:49

to some doctors and they're basically

3:52

stuck a lot of times because in

3:54

a lot of places in the country, it's maybe one or two

3:56

big companies That own. One

4:00

in the hospitals in an area and

4:02

nice doctors really get stuck. Some of

4:04

them wind up moving cars that noncompete

4:06

some restrict you to. You know you

4:08

can work for a competitor within. Fifty.

4:11

Miles or something of here says a

4:13

lot of people wind up moving for

4:15

new jobs that the doctor use Case

4:17

really exposes the extent to which Nine

4:19

can be tough. Really just been used

4:21

to walk workers in the jobs. In.

4:23

On theory they exist to keep people

4:26

from walking off with trade secrets, but.

4:28

That's. It just doesn't apply to doctors and

4:31

think he has. You don't want doctors to

4:33

have any secrets of the the counter. Argument

4:35

All this is that. The

4:38

assertive as free market conservatives

4:40

like to argue that the

4:42

nine competes are somehow. Good

4:45

for workers in a roundabout

4:47

way because they you know

4:49

incentivize am. Companies.

4:52

To invest more in training in

4:54

educating workers. Which. As not

4:56

an argument I buy at all. There

4:58

is a conservative commentator and Forbes you

5:01

be. Read a whole column about why

5:03

nine to be. It's good. For

5:05

workers and also good for

5:07

corporations, obviously. But he made

5:09

an argument. partly. Around

5:11

this idea of training and

5:13

suggested. That people who were trained by

5:16

company and and last were free riding.

5:18

On the know the companies. That.

5:21

I guess is sort of educational

5:23

services that they were providing ah

5:26

which which completely contradicts my understanding

5:28

of was three writing means because

5:30

there's I in theory that the

5:32

company is getting a higher quality

5:34

of workers, more sophisticated quality of

5:37

work. Sensibly. Without.

5:39

Paying more for. The.

5:41

Labour right, Companies can also keep

5:43

those well trained employees by offering them

5:45

more. Money in out to stay. With.

5:48

With them and it just will cost a lot more

5:50

I think. That's. Why I'm players don't

5:52

like. The scenes because it it will

5:55

cost them more to retain. Workers

5:57

that sort of the bottom line the more

5:59

right. national defense is that companies don't

6:01

want workers running off with

6:04

trade secrets to competitors. But

6:06

I'm not even sure that holds up because running

6:08

off with a trade sequence to competitors is still

6:11

a problem even in the

6:13

absence of non-competes and there's still recourse

6:15

for it. Non-competes know.

6:17

Right. It's still illegal to run

6:20

off with the trade secrets. That's

6:22

why trade secrets and IP

6:24

law exists. And you can also have employees

6:27

sign non-disclosure agreements if there are particular

6:29

things you want them to keep quiet

6:31

about. You can also incentivize people

6:33

to stay with different kinds of compensation

6:36

plans and benefits that

6:38

could also work. There definitely

6:40

are workarounds. The obvious thing to

6:43

note here is that California has

6:45

made non-competes unenforceable forever

6:49

now and it's basically

6:51

the most economically vibrant state

6:53

in the union. So we've

6:56

tried it. We've seen it in California. It

6:58

seems to be fine. It doesn't seem to

7:00

be any problem in California with banning non-competes.

7:02

So in principle, it

7:04

should be fine. Although in practice,

7:06

Emily, there's going to be a

7:09

whole bunch of legal challenge to this. Oh,

7:11

yeah. So the day after, so the

7:14

FTC announced the finalized rule Tuesday. On

7:16

Wednesday, the

7:18

Chamber of Commerce and the Business

7:20

Roundtable filed a lawsuit against the

7:22

FTC in court in Texas, of

7:24

course, before this judge who has

7:26

already like batted down some other

7:28

Biden regulations and such.

7:31

And they are trying to keep

7:33

this rule from ever taking effect.

7:36

And I mean, I think

7:38

they have a shot. The judge, like

7:40

I said, who they're up against has

7:42

already batted down some other Biden stuff.

7:44

The eviction moratorium comes to

7:47

mind, CFPB in

7:49

another case. And even like

7:52

some former FTC people that I've

7:55

spoken to say that this was

7:57

like a really big swing from

7:59

the agency. And yeah, it's

8:02

not really clear. It's going to hold

8:04

up in court. There's this thing now

8:06

called the major questions doctrine, which says

8:08

like, if there's

8:10

like a major question that

8:12

a regulation involves, then Congress

8:15

has to be explicit

8:17

and has to be the one making the

8:19

new rule and that a regulator can't do

8:21

it if it's like a really big thing,

8:23

like the student loan relief that Biden tried

8:26

to pass at the Supreme Court knockdown. So

8:28

the term major questions is in the chamber's

8:30

lawsuit and in a lot of like the

8:33

quotes about this and yeah,

8:35

I don't, I don't know if it's going to make

8:37

it through these court challenges. Yeah, it's a very major

8:39

question. It's a very fuzzy legal concept though.

8:41

And there's a lot of gray area and

8:43

you know, the political impetus behind the agencies

8:45

of power and the executive of power, I don't

8:48

know how it really holds up in practice though. I mean,

8:50

there's not a lot of, I

8:52

think direct precedent for

8:55

something like this, you know, being reversed

8:58

on a major questions basis. Well,

9:01

I mean the major questions doctrine

9:03

is relatively new, but the principle

9:06

that legislation should come

9:09

from the legislature and

9:11

not from the executive branch is

9:14

I think relatively intuitive,

9:17

right? It's relatively intuitive. And in

9:19

places like California, when California wants

9:21

to ban non-competes, it passes legislation

9:23

to that effect. If

9:26

you want to ban evictions,

9:28

you can ban evictions, but you want a law to

9:30

that effect, getting the centers for disease

9:32

control to do it is

9:34

a little bit weird. And

9:37

I think what we're seeing is a

9:39

bunch of these things coming from the

9:41

executive branch because the legislative

9:43

branch is so completely OTOs and they

9:46

can't pass anything. I think this Congress

9:48

has passed fewer laws than any Congress

9:50

since, you know, the 18th century or

9:52

something. And that's, I think, a

9:55

big problem, you know, that we do have a

9:58

Congress that seems to be incapable of passing. anything.

10:01

And that is placing more

10:03

and more onus on the executive branch

10:06

to do stuff. And in an ideal

10:08

world, we would see

10:10

much a much more active legislature debating

10:12

laws and passing laws. And I do

10:14

feel like this solution is the second

10:16

best solution. I would personally prefer to

10:18

see this coming from Congress as well.

10:20

Yeah, all that said, the Federal

10:23

Trade Commission is supposed to regulate

10:25

competition. And when there's unfair competition,

10:27

it's supposed to combat it. And

10:29

literally, this thing is

10:31

called a non-compete, non-competition

10:34

clause. Like, it couldn't

10:36

be more squarely in the purview of

10:38

the FTC, right? But yeah, the Chamber

10:40

and the Business Roundtable are like, this

10:43

is too broad. This should be

10:46

lawmaking. But I mean, regulators have

10:48

long taken whatever their agenda

10:50

or mission is and created rules around

10:52

their agenda or mission. It's actually not

10:55

like outside the bounds. I think it's

10:57

just in this new environment, this new

10:59

very conservative environment, where there's

11:01

a lot of, you know, moaning about

11:03

regulatory overreach that we're now like, maybe

11:05

it is a regulatory overreach. Also,

11:08

Lina Kana has really used the

11:10

limits of the agency, you know,

11:12

to great effect. I think, yeah,

11:14

historically, the FTC has not been

11:16

this aggressive or, you know, in

11:18

some ways this powerful. Yeah,

11:21

it's been, I think, 50 years since

11:23

they've set any kind of, like, nationwide

11:25

rule in this proactive way, rather than

11:27

just, you know, going after individual

11:29

deals as anti-competitive. They have

11:31

taken action against companies for

11:33

abuse of non-compete clauses in

11:36

the past, but nothing this

11:38

broad, obviously. So this is very

11:40

much Lina Khan flexing her

11:42

muscles. Yeah, oh yeah, this is.

11:44

And I was just doing some reporting maybe for

11:46

a story next week,

11:48

looking at, you know, how the FTC

11:50

and the Department of Justice, both, and

11:52

we've talked about this before as part

11:54

of, you know, Lina Khan and Hipster

11:56

antitrust, they're looking at what

11:59

mergers happen. or anything

12:01

happens, they're not just looking for

12:03

what are the harms to consumers,

12:05

but how does this lack of

12:07

competition harm other kinds of classes

12:10

of people and things? How does

12:12

it harm specifically workers?

12:14

Because non-competes, I

12:16

mean, you could argue that they harm consumers,

12:18

but they definitely harm workers.

12:21

Or like we talked about the Penguin House,

12:23

Simon & Schuster deal that the

12:26

FTC sued to stop. And the argument

12:28

there was that it harmed authors, also

12:30

trying to stop Kroger & Albertsons, the

12:32

grocery stores from merging. And there's an

12:35

argument there also that this would harm

12:37

workers because there'd be fewer employers,

12:39

you know, try not hire them, so

12:42

they won't have to compete as much

12:44

on wages anymore. Isn't this an

12:46

argument that applies to literally every

12:49

merger? Like, how does this

12:51

not apply to every single

12:53

merger? In the sense that every

12:56

single merger reduces the number of

12:58

employers who are competing for workers,

13:00

and therefore it's bad for workers?

13:03

That's a good question. And one thing, I don't know how

13:05

to answer it, but I can

13:08

tell you that unions, which we

13:10

think of as, you know, organizations

13:12

that have workers' interests, you know,

13:15

forefront, right? They don't always mergers.

13:18

They sometimes support mergers because they

13:20

think if their employer is bigger

13:22

and on more

13:25

solid financial footing, then they're

13:27

better off. So there

13:29

are people who think that mergers are

13:32

good for workers, actually. Or

13:34

can be. Yeah, as an employee of Axios,

13:36

I can say, I am happy that we

13:38

were acquired by Cox, and Cox has lots

13:41

of money. And I feel like that places

13:43

Axios on a stronger financial footing, and it's

13:45

probably good for us as employees. Yeah.

13:47

Or I mean, there was a JetBlue

13:50

Spirit merger that did not happen. And

13:52

I think the Spirit employees wanted the

13:55

merger to happen because

13:57

they were like, if it doesn't, we will lose

13:59

our jobs. So it's good for us. Just

14:02

to go back to the non-compete issue,

14:04

though, the FTC does

14:06

have a good business case for

14:08

eliminating non-competes. And they've tried to

14:11

quantify it by noting that elimination

14:13

of non-competes would increase

14:15

new business formation. And

14:17

I don't know if that

14:20

would happen in such an explosive

14:22

way that it would satisfy

14:24

the conservative opponents of

14:26

abolishing non-competes. But it is a good

14:29

other side of the coin, where

14:31

not everything about abolishing non-competes is

14:33

just about preserving

14:36

what's good for workers. It's

14:39

also good for more competition in

14:42

the economy in general. Another argument

14:44

against the broadband is that

14:46

it's too broad. I've

14:48

seen some people say, even one of the

14:50

FTC commissioners who voted against was like, I'm

14:52

not against. I'm all for restricting the use

14:54

of non-competes. But this goes too far. There

14:56

are some cases where we need them. This

14:59

doesn't give us any flexibility for higher-paid employees

15:01

and things like that. What do you say

15:03

to that? I think that there are other

15:05

ways to thread that needle. What

15:08

are the concerns there? If it's

15:10

people leaking trade secrets, that can

15:12

be enforced by things that are

15:14

not non-competes. What would

15:17

be the argument for non-competes

15:19

as opposed to narrower instruments?

15:22

I don't know. I feel

15:24

like non-competes, they're not that

15:26

common globally. And

15:29

it's entirely possible to have

15:31

a vibrant capitalist economy without

15:33

them. So I'm not

15:35

super worried. I do understand that it's natural

15:38

to me that the Chamber of Commerce and

15:40

people like that will oppose it because it's

15:44

a way that they keep wages down. But I think

15:46

that's really, ultimately,

15:49

the fight here is that employers

15:52

like it because it's down

15:54

with pressure on wages, and the FTC doesn't

15:56

like them because it's down with pressure on

15:58

wages. Yeah. Yeah,

16:00

Betty Stevenson had a good com and Bloomberg

16:02

and she's basically like. The. Reason companies

16:04

want non computers that they give them.

16:07

More bargaining power and without them have less

16:09

park and power. So.

16:18

Before it gets the break I want

16:20

to tell you about Sleep Plus Today

16:22

or sleepless segment is really good. We're

16:24

talking about the tic toc ban that

16:26

looks like it's actually happening that bad

16:29

and signed into law this week. So.

16:31

If you're sleepless member, you'll get to hear that at

16:33

the end of the shell. If you're not a sleepless

16:36

member, And you want your

16:38

that you should sign up. Also, you

16:40

won't have to your ads and you'll

16:42

have access to a lot of other

16:45

great plus stuff like unlimited access to

16:47

all sleep.com Clinton members only newsletter and

16:49

they also already mentioned the ad free

16:51

part on the podcast that's truly amazing.

16:54

Unless you like my ad rates then.

16:56

By. All means don't sign

16:58

up. But I think you

17:01

said so, sign up at

17:03

slate.com/money Plus that sleep.com/money Plus.

17:07

When. It comes your finances. Go for the

17:09

credit card that's always there for you. Will

17:11

Twenty Four seven Us Based Life Customer Service

17:14

from Discover. Everyone has the option to talk

17:16

to a real person any time, day or

17:18

night. Yep, that means no more waiting for

17:20

quote normal business hours just to get a

17:23

hold of someone. We're talking real service from

17:25

real people whenever you need at. Get.

17:27

The customer service you deserve with

17:29

discover limitations apply. See. Terms

17:32

of discover.com/credit Card. this

17:35

episode of flee money is brought

17:37

to you by wondering which is

17:39

a pogo of company and it

17:41

makes about go school to best

17:43

one yet and it is a

17:45

the podcast hosted by nick and

17:47

jack to serve up three of

17:49

the most interesting business news stories

17:51

every day of waves know them

17:53

and just twenty minutes your the

17:55

hear about that hundred dollar wedding

17:57

dress that saves abercrombie or which

18:00

real tech acquisitions like Game of Thrones

18:02

or the one financial equation that can

18:04

finally solve climate change. That's the kind

18:06

of stuff you find on the best

18:08

one yet. So be in the know

18:10

this year by starting your morning with

18:12

the best one yet every weekday. Follow

18:15

the best one yet on the Wondery app or

18:17

wherever you get your podcasts. You

18:19

can listen as free right now on Wondery

18:22

Plus. And for more

18:24

deep dive and daily business content,

18:26

listen on Wondery, the destination for

18:28

business podcasts with shows like the

18:31

best one yet, how I built

18:33

this, business wars and many more,

18:35

Wondery means business. Guys,

18:39

enough policy wonkery. I want to

18:42

talk about restaurants. I

18:44

want to talk about this wonderful New

18:46

Yorker article about the

18:48

secondary market in restaurant reservations

18:51

and specifically I want to talk about one

18:53

number which I was going to have in a numbers round

18:55

and I was like, no, we have to make an entire

18:57

segment about this. Which

19:01

is $1,050 which is

19:03

the amount that a

19:05

restaurant reservation at Carbone in

19:07

Greenwich Village in New York traded

19:10

hands for recently and this is quite normal.

19:12

This happens all the time and

19:14

just to be clear, this is just the reservation. This

19:17

is just so you can get in and sit down

19:19

at the table. Then

19:21

once you're there, you then pay however many

19:23

hundred dollars for your meal. Tell

19:26

people what Carbone serves. It's not

19:28

like some exotic cuisine. It's

19:30

like lasagna. It's a high end

19:33

red sauce restaurant. Unbelievable. It's

19:35

an Italian restaurant serving good

19:38

Italian food. I think we

19:40

have to explain here for people

19:43

who don't live in New York that Carbone

19:45

is also a very seany place. They have

19:47

turned away Justin Bieber and Haley

19:49

Bieber because they didn't have a reservation and

19:52

it's a place where I think of it

19:54

as sort of junior investment maker of land

19:56

where people with a lot of money

19:58

and a late night social. life like

20:01

to go. And it's really, the food is

20:03

good, but it's not about the food really.

20:06

I just, it adds to the

20:08

ridiculousness. The first thing we need to

20:10

do is really underscore, especially in the case

20:12

of carbon, I think other ones I'm not

20:14

sure, certainly in the case of carbon, it's

20:17

not about the food. It's not about the food

20:19

at Rao's where, you know, it's another place that's

20:21

famously impossible to get into. Like, I'm sure the

20:23

food is good, but that is not the reason

20:25

you go there. There are plenty of incredibly good

20:28

Italian restaurants in New York

20:30

where you can go, you can get a reservation,

20:32

they are no problem, have a delicious meal, probably

20:34

spend a lot of money, but at least you

20:36

don't need to worry about, can I get the

20:38

table? And this is

20:41

the fundamental reason why I

20:43

think ultimately this

20:45

whole secondary market and this whole meshogas is

20:47

good. I think that if

20:50

there's a whole scene around

20:52

a place like carbon, fine. Like, let the

20:54

people who want to be in the scene

20:56

buy and sell their reservations and play a

20:59

game like that. And then the people

21:01

who have no interest in that scene and just want

21:03

to have a decent meal, they can

21:05

still get a decent meal at any number of

21:07

places without any problem. And this is a great

21:09

way of separating the two and

21:11

then the people who really care about

21:14

being part of the scene are the ones who become

21:16

part of the scene and it

21:18

works. Like, I think it's all good. I

21:20

don't know. I think it's kind of

21:22

not great because should

21:25

we explain how it kind of works? Basically,

21:27

there are these reservation sites

21:30

where sites that are quote

21:32

democratic like open table and

21:34

rezi and you can go there and get

21:36

reservations. But what happens is people

21:40

basically like hack those sites. So as soon

21:42

as reservations become available for a restaurant, a

21:44

trendy restaurant like carbon, they swoop

21:46

in and book all the tables and

21:49

then sell them on the secondary market for

21:51

like what Felix said for like a thousand

21:54

dollars, hundreds of dollars. That just seems like,

21:57

is that a good market? Is that a

21:59

productive market? I think you've got a

22:01

little bit of a discomfort with it because it's kind of like

22:03

scalping, you know? And we

22:05

think of like ticket scalping as being unethical.

22:08

It's exactly what's happened in the concert

22:10

ticket space, right? Or what's happened there for

22:12

years and years. Right, right.

22:15

So Emily, the answer to your question is like, yeah,

22:17

no, this is a really suboptimal way of doing things.

22:20

There are much better ways of doing

22:22

this. And the first is by using

22:24

the price mechanism, which is to... It

22:27

is undeniable that a

22:29

reservation for two people

22:31

at 8 p.m. on a Saturday is a

22:34

more valuable thing than a reservation

22:37

for two people at 5 p.m. on

22:39

a Monday, right? And yet both

22:42

are priced at exactly the same price on

22:44

Resi or OpenTable, which is zero. So

22:47

what we should do, and I know that Resi

22:49

tried to do this when it launched, and then

22:51

there was a bunch of sort of blowback, and

22:53

they wound up not doing it after a while.

22:56

But like what we should do for

22:58

restaurants which are regularly

23:00

selling out their reservations and

23:02

have no problem filling up

23:05

is just embrace reality and say, look,

23:07

the reservations at hard times you have

23:10

to pay for. Like there's no

23:12

shame in that. Yeah, and then the

23:14

money would at least go to the restaurants

23:16

who presumably are operating

23:18

at pretty thin margins, right? I mean,

23:20

instead of going to these kind of

23:23

these scalpers and this whole roundabout, would

23:25

you do Wajidi system? There

23:27

was one restaurateur who argued that it helped

23:29

them turn over tables faster. Their

23:32

argument was that it cut down on

23:34

time between turning tables because people were

23:36

willing to pay more for

23:38

reservations and they were less likely to bail

23:40

on them or something like that. Well,

23:43

no, so wait, Elizabeth,

23:45

you're saying that, yes, we should be

23:47

selling reservations. Restaurants should be selling

23:49

reservations. I'm saying there's a, it's

23:52

not totally disadvantageous to the restaurants

23:55

for this to happen. Even if they're not getting

23:57

the money for the reservations, they're still benefiting After

24:00

turn over in the tales. Know,

24:02

I think I think that's wrong. I

24:04

think I think the if the restaurant

24:06

selling reservations directly than that's absolutely right.

24:08

You know it cuts down on notice

24:10

is that if the restaurant reservations are

24:12

being sniped up and then sold on

24:14

the residue on the second be market.

24:16

that's bad because if they don't sell

24:18

on the secondary market then that is

24:21

a reservation that his maiden no one's

24:23

hands up and that's bad for that.

24:25

That's really bad for the restaurants you

24:27

want. To make sure that

24:29

the. Reservation. Gets used

24:31

in if people are making free reservations

24:33

and expire be I don't. I get

24:35

your argument. I think the that it

24:37

is the article at least was really

24:39

focusing on places like Carbone where the

24:41

demand is so enormous. That. That

24:43

scenario of people you know making reservations,

24:46

not showing up the it's more. That's

24:48

kind of thing that happens at a normal

24:51

restaurant the doesn't have that kind of demand

24:53

and and then it happens to stay. People

24:55

are making reservations over open table or whatever

24:57

it would broadly in the line when he

24:59

had that. selling reservations is a good thing

25:01

because if you have paid for your reservation.

25:04

Then. You. Are more likely to

25:06

turn up and so than the only question

25:08

becomes. Who. Should be selling the

25:11

reservations. And the obvious answer to Emily's point

25:13

is the restaurant. They need the revenue of

25:15

the great new revenue source of them. So

25:17

or any restaurant that finds itself. Pushing.

25:20

Out. Of. Certain times of day

25:22

on certain days of the week. Yeah,

25:25

charged for the reservation. Go for

25:27

a people. And the other downside

25:29

as that restaurant not. Making

25:32

reservations anymore because they're. Getting hijacked by

25:34

these third party is is that an unknown

25:36

else does hold up. For. A restaurant

25:38

My carbone that the author of the New

25:40

Yorker piece was pointing out like back in

25:42

the day when used as the color as

25:44

trying to get a reservation. And and restaurants.

25:47

had regulars that did this they keep like

25:49

a little file about their regulars you know

25:51

and then they'd be like they like this

25:53

why are they like they are a lot

25:55

of this this thing or whatever and the

25:57

kind of like cater to them you know

26:00

But if you're selling reservations under like

26:02

dummy names to random people all that

26:04

kind of service is sort of out

26:06

the window exactly a high-end restaurant really want

26:08

to know who's coming to dinner so they can

26:11

prepare for that person and you can't

26:13

do that if those people are buying. On

26:15

the second market but if they buy the reservation on the

26:18

primary market it's fine and

26:20

the other way to do it by the way you don't need to

26:23

sell the reservation directly the other way

26:25

you can do it is what talk

26:27

does. Which is you sell tickets

26:29

basically and you pay for the meal in advance

26:33

and a meal at. It's

26:35

not gonna Saturday is gonna cost more than the

26:37

same meal at five o'clock on a Monday

26:39

and that also works you just need to know

26:42

who's coming when they need to pay gonna

26:44

say what about the Wendy's methodology you know

26:46

where you do search pricing for the meals

26:48

what when we see more of that i

26:50

mean i guess we see that with like

26:52

happy hours and yeah. That's exactly it

26:54

is that it's a pricing and

26:57

people hate so pricing and but that's exactly

26:59

what it is. One of

27:01

the more fascinating things about this piece to me

27:03

was the sort of vein of

27:05

entrepreneurship of people who were just sort of

27:08

in their spare time. Nothing

27:10

up these reservations and then reselling them

27:12

yes there's a guy who is and i refuse

27:14

to believe that this is not a totally made

27:16

up name because it sounds just a little too

27:19

new yorky the magic

27:21

who otherwise in his day job owns

27:23

a waste management company with like forty

27:26

garbage truck and he apparently just makes

27:28

tons of money now. Getting

27:30

reservations for you know dealer celebrities

27:32

and rich people so

27:34

it actually encourages new business formation. But

27:41

yes support your local restaurants folks and

27:43

if there's a restaurant that's constantly booked

27:45

out by a bunch of overpaid.

27:49

27 year olds just support somewhere else

27:51

that serves better food and that needs

27:53

your customer don't pay a thousand dollars

27:55

just for the privilege of eating lasagna

27:57

us just bananas you

27:59

know cheap it is. to make lasagna. This

28:01

is called the Olive Garden. It's a

28:03

new Italian restaurant and it is so popular that they

28:05

have had 45 minute wait for

28:07

lunch and dinner. Are

28:19

you selling a little? A

28:22

lot? Shopify

28:25

helps you sell basically anything. It is

28:27

the global commerce platform that helps you

28:29

sell at every stage of your business.

28:32

From launching your online shop to opening

28:34

up a real life store to, oh

28:36

my god I just hit a million

28:39

orders. Shopify is there every

28:41

step of the way. It will help you

28:43

grow. It doesn't matter whether you're selling scented

28:45

soap or outdoor outfits. They help

28:47

you sell everywhere. Name the country you want

28:49

to sell. They will help you sell on

28:52

it. They are Canadian themselves. They understand this

28:54

is a whole big world. They're not just

28:56

America people. Sell your stuff from

28:58

an all in one e-commerce platform that

29:00

even has an in person point of

29:03

sale system. Wherever whatever you're

29:05

selling, Shopify has got you covered. They

29:07

even now have this thing called Shopify

29:09

Magic which is an AI powered all-star

29:12

which will help you sell even more

29:14

with less effort and they have award

29:16

winning help to support your

29:18

success every step of the way. Sign

29:21

up for a $1 per month trial

29:24

period at shopify.com/money

29:26

or lowercase. Go

29:29

to shopify.com/money now

29:32

to grow your business no matter what stage

29:34

you're in. shopify.com/money.

29:40

Apple Card is the perfect cash back

29:43

rewards credit card. You earn up to

29:45

3% daily cash on every purchase every

29:47

day. That's 3% on your favorite

29:49

products at Apple, 2% on

29:52

all other Apple Card with Apple Pay

29:54

purchases and 1% on

29:56

anything you buy with your titanium Apple

29:58

Card or versus Apple Pay card

30:00

number. Visit apple.co.cardcalculator to

30:02

see how much you can

30:05

earn. Apple Card issued

30:07

by Goldman Sachs Bank USA, Salt Lake

30:09

City branch. Subject to credit

30:11

approval, terms apply. Your

30:13

pet is one-of-a-kind and so is their

30:15

journey. While every playful moment is a

30:17

memory in the making, sometimes cats and

30:20

dogs are a little too good at

30:22

getting into trouble. That's why you should

30:24

check out ASPCA Pet Health Insurance. The

30:26

ASPCA Pet Health Insurance Program offers customizable

30:28

accident and illness plans, making

30:31

it easier for pet parents like you to help your

30:33

pet get the care they may need. The

30:35

ASPCA Pet Health Insurance Program has been around

30:37

for over 18 years and they've helped more

30:39

than 600,000 pets during

30:41

that time. They allow you to

30:43

customize your plan, helping ensure your pet's plan

30:46

is as unique as they are. Because

30:48

vet bills can really add up, especially

30:50

when you're least expecting it. It's simple.

30:52

Use their app to submit a claim

30:54

and you'll receive reimbursement for eligible vet

30:56

bills directly into your bank account. To

30:59

explore coverage, visit aspcapetinsurance.com

31:02

slash SlateMoney. That's

31:05

aspcapetinsurance.com/SlateMoney. Again,

31:08

that's aspcapetinsurance.com

31:10

slash SlateMoney. This is a

31:13

paid advertisement. Insurance is underwritten by

31:15

either Independence American Insurance Company or

31:17

United States Fire Insurance Company and

31:20

produced by PTV Insurance Agency Limited.

31:23

The ASPCA is not an insurer and is

31:25

not engaged in the business of insurance. Let's

31:31

talk about airlines. We

31:34

now have a new rule, not from the

31:36

FTC but from the Department of Transport saying

31:39

basically that, well what does it do?

31:41

Elizabeth, bring me up to speed. So

31:43

it basically ensures that airlines have to

31:46

give cash rebates or cash

31:48

refunds for flights that are delayed

31:51

over three hours if they're domestic, over

31:53

six hours if they're international, and

31:56

for cancellation. And they also

31:58

have to disclose things like change for fees up

32:00

front. And, you know, this is, this

32:02

feels like a very smart policy move, because if

32:05

you think about something that's

32:07

maybe bipartisan and universally popular,

32:09

it's not having to

32:11

deal with hidden fees from companies.

32:14

So and airlines are not, you

32:16

know, generally not people's favorite kind

32:19

of customer facing business to begin

32:21

with. So yeah, this is broadly

32:24

popular with everyone, except the

32:26

airlines. And the thing that I like about

32:28

it is the refunds have

32:30

to come automatically, you don't need to

32:33

ask for it. And that's even better

32:36

than the European law. The European rules

32:38

are relatively strict about you have to

32:40

give refunds if this happens, and that

32:42

happens. But the customers still have to

32:45

know about that and ask the airlines

32:47

for the refund. In this case, the

32:50

refund just has to automatically appear on your

32:52

credit card, you know, whether you ask for

32:54

it or not. And I really like that

32:56

because it's, you basically lose the ignorance

32:59

tax for people who don't know about the rule.

33:01

Yeah, it seems like a real no brainer. The

33:04

only thing I would say to Elizabeth's

33:06

point about it's good politics is that

33:09

it's the kind of thing that people won't even really

33:12

notice or credit to

33:14

the administration, because it's kind

33:16

of small ball, right? Yeah, this is right.

33:18

I mean, Democrats should like just run

33:21

a whole ad on it, but they won't.

33:23

There's a lot of assumption that when

33:25

the administration does stuff like this, that

33:27

people just know. And I

33:29

think it's something that people kind of notice

33:32

in the background, but not really think too

33:34

hard about, you know, why it's happening or

33:36

who gets credit for it or anything like

33:39

that. So is

33:41

this one also going to face legal

33:43

challenge in Texas? Probably.

33:46

Really? I mean, a lot of

33:48

the Republican strategy right now is

33:51

just obstructing everything that Democrats do

33:53

that might be popular. I

33:56

don't think that there's a lot of political

33:58

capital for people to obstruct it. in

34:00

order to publicly demonstrate that they

34:02

are, but there is a

34:04

strategic reason to do it. It's

34:07

harder to confuse people about this.

34:09

There is a new rule from

34:11

the Consumer Financial Protection Bureau that

34:13

would limit credit card late fees,

34:15

limit them to $8 from

34:17

what they are now, which is around $31. And

34:20

the financial industry is fighting it

34:23

tooth and nail. And they

34:25

did file suit in Texas, I believe, on that.

34:27

And they're trying to argue that

34:29

it's worse for consumers somehow to have the

34:31

lower late fees. And I feel like just

34:33

the way these financial

34:35

regulation battles work is

34:38

that they will convince some people that

34:40

it is somehow better to have higher

34:42

late fees. But on the airline

34:44

junk fees, I think because

34:46

people are so familiar with just the

34:48

whole regular rule of fees and flying,

34:50

that it would be harder to sort

34:52

of confuse the issue, right? I think

34:54

also people are so frustrated with

34:56

customer service, with airlines and

34:59

telecoms and so on. Just

35:01

not having to call anyone when these

35:03

things happen, I think, is

35:05

a big relief for a lot of

35:07

people. But it's going to cause inflation,

35:09

right? The whole point is that we're

35:11

now going to, we're going to be

35:13

more likely to be bundling the fees

35:15

into the price of the ticket since

35:17

it's all, since it's

35:20

all for its official airline

35:22

price inflation does not

35:24

include fees and only includes the price,

35:26

then suddenly it's going to look

35:28

like airline tickets cost

35:31

more. And yeah, insofar as airlines

35:33

have to start paying significant cash

35:35

refunds to thousands of passengers who

35:37

are delayed that they never used

35:39

to pay anymore, that too

35:42

is going to increase their costs. And

35:44

that is probably going to increase ticket

35:46

prices. So I think it is intuitive

35:48

to me that this rule will make

35:51

it more expensive to fly. It will just

35:53

be more transparent and less

35:55

annoying. Well, in theory, it

35:58

ought to make it more reliable to fly. because

36:00

that heavily incentivizes the is

36:19

five hours delayed that winds

36:21

up costing them a huge amount of money

36:23

in like labor and in the planes being

36:25

in the wrong place and to them and

36:27

the efficient airlines try to save money by

36:29

not doing that and yeah at the margin

36:31

it will make this will make it even

36:33

more expensive and so they'll still have they'll

36:35

have even more of an incentive not to

36:38

do it but yeah

36:40

like delays happen and and yeah they

36:42

just wind up getting built

36:44

into the price now because they are going to

36:46

be even more expensive for the airlines. So would

36:49

you guys rather see ticket prices just

36:51

go up and fees go away? Yeah

36:54

we've had this discussion on the pod

36:56

when when we were talking about Danny

36:58

Mayer and his move to

37:00

all-inclusive pricing in restaurants and

37:03

it seemed like a great idea and then

37:05

everyone complained about it and he rolled it

37:07

back and he said oh never mind. In

37:10

principle like that's not good you want to

37:12

be able to know how much something costs

37:15

before you pay for it

37:17

but as you know but we live

37:19

in a country where the

37:22

convention very much in almost everything

37:24

is that everything winds up not

37:27

everything airlines don't generally but most things

37:29

in in like stores show a pre-tax

37:31

price and then the price you actually

37:34

pay is more than the price that

37:36

is on the sticker and

37:38

that whole sort of weird bait and

37:40

switch is so internalized in the American

37:43

psyche that I think people I like

37:45

to think that it's cheaper than it

37:47

actually is because then it feels cheaper

37:49

or something. I also think people

37:51

are pretty infuriated when they look at their

37:53

you know cable or cell phone bill

37:55

and see fees tacked on or like

37:57

20 bucks for something that is in.

38:00

inexplicable. And I do think they

38:02

sort of do think

38:05

about the cost of these things, even if

38:07

they're not explicated in the

38:09

total price. The Biden administration

38:11

is also going after the resort fees. I don't

38:13

know if they've passed any rules around that yet,

38:15

but I know that last year

38:18

there was talk of not only restricting

38:20

the airline junk fees, but also the hotel

38:22

junk fees. The

38:24

hotels pushed back and they said resort fees are

38:27

meaningful. Yeah, the resort fees at

38:29

hotels, people really hate those. So

38:32

I do think there's a distinction to be made

38:34

between fees, taxes, and

38:36

tips. And the Biden

38:39

administration seems to be going after

38:41

the fees and not like the

38:43

taxes and the tips. But in

38:46

my mind, they're all similar, but

38:49

convention is, yeah, we will

38:51

pay the tip separately, we'll pay the tax separately,

38:53

but just don't do fees. But if what you were

38:56

saying earlier, that we say we don't like

38:58

fees, but we also don't like when the

39:00

prices are higher and kind of prefer to

39:02

live in this illusion fantasy

39:04

world where we think the prices are lower

39:07

so that when the fees get tacked on,

39:09

it's like a whole different mental thing. That

39:11

sounds a lot like the girl math that

39:14

was like a thing a few months ago.

39:16

You say like, oh, I just returned these

39:18

pants that I didn't want. Now I have

39:20

an extra hundred dollars. It's like a bonus,

39:23

you know, stuff, stuff like that girl math

39:25

it was called. It kind of feels

39:27

like the whole economy runs on girl math. When you think

39:29

about it, really does. I was, I was just looking

39:31

for a hotel room in San Francisco on a

39:34

website, which does a pretty good job of showing like

39:36

the all in cost, but it also shows the headline

39:38

cost in all of these hotel rooms. They're like $117

39:41

after tax and fee is 290. What? We should have

39:49

a numbers round. Elizabeth, what's your number?

39:52

My number is five and that's the number

39:54

of euros that it's going to cost you

39:56

to visit Venice for the day now because

39:59

Venice is dealing over,

40:02

I think somebody referred to it as

40:04

over-touristing. There were 20 million

40:06

tourists in Venice last year and

40:08

there's just not, I guess,

40:10

infrastructure or the capacity

40:13

to deal with that kind of influence

40:15

influx. So now they're charging a

40:17

fee to visit. And I guess this

40:19

is kind of like congestion pricing

40:21

in Manhattan where the idea

40:23

is that maybe people will not

40:25

just show up spontaneously so they know they have to

40:28

pay something for it. This is like experiences

40:30

in person are just becoming more and

40:32

more expensive because the demand is so

40:34

high like concert tickets, cool

40:37

restaurants, going to Venice, surge

40:39

pricing. I mean, Manhattan's doing

40:41

it now, right? With charging

40:43

cars, higher fees to

40:45

come into Manhattan during rush hour. Everything

40:47

surge pricing. It's crazy. Well,

40:50

yeah, and I'm in favor

40:52

of this. Yeah, use the

40:54

price mechanism to reduce the

40:56

overcrowding. Venice does a

40:58

relatively good job of limiting the number of hotel

41:01

rooms, but yeah, a whole bunch of people just

41:03

come in from out of town for

41:05

the day, often on cruise ships, although they're

41:07

also doing a pretty good job of reducing

41:10

the number of cruise ships. And it's

41:13

those people who aren't staying in the Venice hotels

41:15

who are causing most of the crowding and then

41:17

asking them to pay five euros. And if that

41:19

helps to pay for

41:22

the very expensive project

41:24

of keeping Venice above

41:26

water and defraying some of the costs with

41:28

all of the tourism, yeah, I'm all in favor.

41:31

Yeah, but if you keep using the price

41:33

mechanism for everything, I feel like you're

41:35

creating a world that's

41:37

really geared, I mean, it is already, but

41:40

really, really geared to the higher income people.

41:42

And it's just making things more unequal. If

41:44

we're really looking to surge price like

41:47

a city or parks or, you know,

41:49

where does it end feeling? Where does

41:51

it end? It's

41:54

a slippery slope. People are

41:56

saying that more and more people. My number

41:59

is... 1.6%

42:03

which was first quarter GDP

42:06

growth, which was way lower

42:08

than we've been seeing in the past couple

42:10

of quarters. In Q3 it was 4.9, in Q4 it was 3.4, and

42:12

now it's 1.6. Like,

42:18

I don't know, maybe all of these rate

42:21

hikes are finally having an effect? Could

42:23

be. Neil Irwin of Axios says

42:25

under the hood it's not as bad as it seems.

42:28

I will trust Neil on this one, he knows much more about

42:31

such things than I do. Emily, what's your

42:33

number? Okay,

42:35

this might be unconventional, but

42:38

my number is 1906L. Is

42:41

that a license plate? Is that an Elon

42:43

Musk kid? Alright, that's a good guess.

42:45

It's the name of a new, new

42:48

balance shoe coming out in August

42:50

that has gone viral, and

42:53

that is because it looks

42:55

like a penny loafer crossed with a

42:57

sneaker. Jacob Gallagher in

42:59

the Wall Street Journal calls it a snow fur. A

43:02

snow fur. A snow fur. GQ

43:04

calls it deceptively normal, and

43:07

it is, I guess, the latest

43:09

example of two trends, ugly

43:11

sneakers, which are popular, and

43:14

work appropriate sneakers, which

43:16

is a thing. I don't think we've talked about, but

43:19

how it's okay now to wear sneakers to

43:21

work, right? So, anyways, it's

43:23

kind of ugly. People can go

43:25

look at it online and tell me what they think about the snow

43:28

fur. How much is it? That's what I want

43:30

to know. It's unclear, doesn't say. None of the

43:32

marketing materials seem to tell me

43:34

the price, so I don't know. There's

43:37

a similar suede loafer from LoroPiana that

43:39

costs like $7, but knowing new balance

43:42

it's probably cost a lot less. The

43:45

new balance one looks so much like a sneaker

43:47

in terms of the materials. It just looks like

43:49

a sneaker mated with a boat shoe and

43:52

then mutated into something. I can't imagine wearing

43:54

it with a really nice work outfit or

43:56

a suit or something like that. It's

43:58

very dadshoe. Is what the people are

44:01

saying. But I think that's pretty insulting to dads. I don't

44:03

know. Some of them dress well.

44:05

I just looked this up on the internet on

44:07

a site called kicksonfire.com and

44:09

I have no idea whether

44:12

they're reliable but they reckon

44:14

it's gonna have a retail price of $150. Very

44:18

reasonable for a snowflake. I mean, can

44:20

you find a snowflake for less than 150 bucks? No,

44:23

you can't. I

44:25

doubt it. Okay,

44:27

on that note, I think we're gonna wrap

44:29

it up for this week. Many thanks to

44:31

Jared Downing and Shana

44:34

Roth for producing. Many thanks

44:36

for sending us your emails

44:38

on sleepmoneyatsleep.com. And

44:40

we will be back on Tuesday with

44:42

a Money Talks with Emily. Tell me

44:44

who. I talked to Jen

44:46

Murphy. She's a long-time columnist for

44:48

the Wall Street Journal who writes

44:50

about people's

44:53

workouts. So she has been, for

44:55

20 years, she's had this column for the journal

44:57

where she talks to executives and

44:59

all kinds of people about how they

45:01

fit exercise into their daily lives and

45:03

it's a really good conversation for anyone

45:06

who loves to work

45:08

out or wishes they love to work

45:10

out. Jen is awesome and you

45:12

should listen. Well, I'm looking

45:14

forward.