1 00:00:00,240 --> 00:00:02,800 Speaker 1: The fact that I can open up my phone, just 2 00:00:03,000 --> 00:00:05,560 Speaker 1: push a couple of buttons, and thirty minutes later have 3 00:00:05,680 --> 00:00:11,560 Speaker 1: restaurant quality food show up on my doorstep. It's pretty incredible, seriously, 4 00:00:11,920 --> 00:00:17,600 Speaker 1: the magic of our times. But it's also gotten painfully expensive. 5 00:00:17,800 --> 00:00:20,720 Speaker 1: That twenty eight dollar burrito isn't just a meme, it's 6 00:00:20,720 --> 00:00:23,440 Speaker 1: a reality. And so I want to ask, does it 7 00:00:23,680 --> 00:00:27,480 Speaker 1: really have to be this way? I mean, Amazon can 8 00:00:27,480 --> 00:00:31,400 Speaker 1: get almost anything in my house cheaply and quickly, but 9 00:00:31,520 --> 00:00:34,239 Speaker 1: that burrito, it's priced as if they're sending it here 10 00:00:34,240 --> 00:00:36,880 Speaker 1: in a Rolls Royce. So today I want to ask, 11 00:00:37,479 --> 00:00:48,680 Speaker 1: why is food delivery so damn expensive? I mean, sure, 12 00:00:48,880 --> 00:00:52,840 Speaker 1: it looks like a competitive market. There's lots of businesses 13 00:00:52,880 --> 00:00:55,800 Speaker 1: competing and they're all selling pretty much the same product. 14 00:00:55,800 --> 00:00:59,400 Speaker 1: Wouldn't economics tell us that competition drives prices down. But 15 00:00:59,480 --> 00:01:01,800 Speaker 1: this mark, it's not delivering the one thing that I 16 00:01:01,880 --> 00:01:06,560 Speaker 1: really want, which is low prices. So here's the big idea. 17 00:01:07,400 --> 00:01:09,920 Speaker 1: The whole point of competition. It's that you should be 18 00:01:10,000 --> 00:01:13,559 Speaker 1: able to easily compare prices and find the best deal. 19 00:01:13,959 --> 00:01:17,680 Speaker 1: But when it comes to food delivery, that's weirdly hard 20 00:01:17,760 --> 00:01:20,800 Speaker 1: to do. First of all the prices on the app, 21 00:01:20,959 --> 00:01:23,120 Speaker 1: they usually a whole lot higher than the price at 22 00:01:23,160 --> 00:01:25,160 Speaker 1: the restaurant, and they don't even tell you what the 23 00:01:25,160 --> 00:01:27,759 Speaker 1: markup is. That's a hidden fee right there. On top 24 00:01:27,800 --> 00:01:30,120 Speaker 1: of the hidden markup. They add in other fees which 25 00:01:30,160 --> 00:01:33,560 Speaker 1: come in different shapes and different sizes, and they vary 26 00:01:33,600 --> 00:01:36,520 Speaker 1: across platform. And honestly, those fees seem to vary by 27 00:01:36,560 --> 00:01:38,959 Speaker 1: the time of day, the order size, whether I have 28 00:01:39,000 --> 00:01:42,400 Speaker 1: a subscription, and whatever strange mood the algorithm woke up 29 00:01:42,440 --> 00:01:46,440 Speaker 1: in that morning. And perhaps the worst bit these fees, 30 00:01:46,840 --> 00:01:48,880 Speaker 1: you can't even see what they are until you get 31 00:01:49,200 --> 00:01:52,520 Speaker 1: to the very last screen. By that point, you're dreaming 32 00:01:52,520 --> 00:01:57,240 Speaker 1: of burritos or pizza or sushi. This is a story 33 00:01:57,240 --> 00:02:01,160 Speaker 1: about what happens when you have plenty of competitors, but 34 00:02:01,280 --> 00:02:06,520 Speaker 1: not much competition, because price comparison is painful. This is 35 00:02:06,560 --> 00:02:09,560 Speaker 1: going to be a story in five chapters. First, we'll 36 00:02:09,560 --> 00:02:11,800 Speaker 1: follow the money and we'll see what it takes to 37 00:02:11,840 --> 00:02:17,000 Speaker 1: compare one ordinary family dinner, my family's dinner, across three 38 00:02:17,040 --> 00:02:21,520 Speaker 1: of the biggest food delivery apps. Second, we'll explore why 39 00:02:21,560 --> 00:02:24,440 Speaker 1: these hassles matter and how these small frictions can add 40 00:02:24,520 --> 00:02:28,440 Speaker 1: up to very big inefficiencies. Third, I want to make 41 00:02:28,480 --> 00:02:31,200 Speaker 1: the case that this is not an accident of bad design. 42 00:02:31,720 --> 00:02:34,880 Speaker 1: It's an intentional strategy used by Uber Eats and door 43 00:02:34,960 --> 00:02:38,400 Speaker 1: dash and grub hub to boost their bottom line at 44 00:02:38,440 --> 00:02:42,000 Speaker 1: the expense of your back pocket. Fourth, I always like 45 00:02:42,080 --> 00:02:44,720 Speaker 1: to talk about solutions, and so I want us to 46 00:02:44,720 --> 00:02:46,640 Speaker 1: figure out what we can do about all of this, 47 00:02:46,760 --> 00:02:49,440 Speaker 1: how regulators might be able to finally fix this once 48 00:02:49,480 --> 00:02:54,240 Speaker 1: they eventually get around to figuring out the scam. Fifth 49 00:02:54,400 --> 00:02:57,799 Speaker 1: is the dessert course, you might think, and most of 50 00:02:57,840 --> 00:02:59,560 Speaker 1: the time we're going to talk as if this is 51 00:02:59,600 --> 00:03:03,359 Speaker 1: a video about food delivery, but really it's a metaphor 52 00:03:03,440 --> 00:03:07,240 Speaker 1: for a much larger story about capitalism, markets and how 53 00:03:07,280 --> 00:03:13,720 Speaker 1: economies can go right and wrong. Okay, let's begin competition. 54 00:03:14,320 --> 00:03:17,600 Speaker 1: It's the magical force that leads markets to deliver better 55 00:03:17,680 --> 00:03:21,520 Speaker 1: outcomes for consumers. One shop charges five bucks for a 56 00:03:21,560 --> 00:03:24,320 Speaker 1: coca and a candy bar, and another charger seven. You 57 00:03:24,440 --> 00:03:27,040 Speaker 1: end up going with the cheaper one. You, therefore are 58 00:03:27,080 --> 00:03:29,160 Speaker 1: going to provide a really sharp in setting for the 59 00:03:29,240 --> 00:03:31,639 Speaker 1: suppliers to keep their prices down and the quality of 60 00:03:31,639 --> 00:03:36,480 Speaker 1: their goods high. That is the magic of competition. As 61 00:03:36,480 --> 00:03:39,520 Speaker 1: suppliers try to win your business. They're going to each 62 00:03:39,560 --> 00:03:43,440 Speaker 1: try to outdo each other by offering a better deal. Hey, 63 00:03:43,760 --> 00:03:46,640 Speaker 1: that's how it works in theory, and at least that's 64 00:03:46,880 --> 00:03:48,880 Speaker 1: how it works in the sort of theory when I 65 00:03:49,000 --> 00:03:53,600 Speaker 1: teach economics one oh one. But in reality, I'm still 66 00:03:53,760 --> 00:03:56,720 Speaker 1: waiting for a food delivery company to offer me even 67 00:03:56,720 --> 00:03:59,960 Speaker 1: a halfway good deal. What's going on here is competition 68 00:04:00,080 --> 00:04:03,720 Speaker 1: and stumbles over one small problem. The price of that 69 00:04:03,760 --> 00:04:06,960 Speaker 1: delivered burrito. It's really hard to find. What you can 70 00:04:07,000 --> 00:04:09,520 Speaker 1: find is the price next to the burrito on the menu. 71 00:04:09,600 --> 00:04:11,360 Speaker 1: But that's not what you care about. What you care 72 00:04:11,400 --> 00:04:15,160 Speaker 1: about is the bottom line on actually getting that burrito delivered. 73 00:04:15,440 --> 00:04:17,520 Speaker 1: That's the price you care about. But to get there, 74 00:04:17,560 --> 00:04:20,240 Speaker 1: you're going have to log in, click all the way through, 75 00:04:20,400 --> 00:04:23,400 Speaker 1: search through different bits of long menus to find your favorites, 76 00:04:23,480 --> 00:04:26,159 Speaker 1: into your address, tell them whether to knock on the 77 00:04:26,200 --> 00:04:28,680 Speaker 1: door or ring the bell. Then enter your email and 78 00:04:28,760 --> 00:04:30,960 Speaker 1: a password, and it's definitely going to be a password 79 00:04:31,000 --> 00:04:34,479 Speaker 1: you've forgotten was it one exclamation point or two at 80 00:04:34,520 --> 00:04:37,200 Speaker 1: the end, And finally you've got to do twelve jumping Jackson. 81 00:04:37,279 --> 00:04:39,239 Speaker 1: Then they agree to show you the price and deliver 82 00:04:39,279 --> 00:04:42,440 Speaker 1: your burrito, which means if you want to compare prices, 83 00:04:42,440 --> 00:04:44,359 Speaker 1: you've got to do all of that all over again 84 00:04:44,440 --> 00:04:47,120 Speaker 1: on multiple apps, rebuilding the same cut over and over 85 00:04:47,360 --> 00:04:50,400 Speaker 1: with the same items that are somehow rearranged on every platform. 86 00:04:50,720 --> 00:04:55,039 Speaker 1: So yes, technically you can compare prices, but only if 87 00:04:55,080 --> 00:04:58,000 Speaker 1: you're willing to do what feels like hours of unpaid 88 00:04:58,040 --> 00:05:02,560 Speaker 1: clerical work. Before dinner, I wanted to make this more concrete, 89 00:05:02,600 --> 00:05:06,520 Speaker 1: so I took one ordinary family sushi order with five 90 00:05:06,600 --> 00:05:08,800 Speaker 1: pretty basic rolls, and I tried to figure out what 91 00:05:08,839 --> 00:05:11,440 Speaker 1: the price was in four different ways. I checked out 92 00:05:11,480 --> 00:05:14,080 Speaker 1: the restaurant's website, I went onto uber eat, so I 93 00:05:14,120 --> 00:05:16,479 Speaker 1: went onto door Dash, and then I went over to 94 00:05:16,480 --> 00:05:20,000 Speaker 1: grub hub as well. I remembered that what matters here 95 00:05:20,080 --> 00:05:23,799 Speaker 1: is not the different subtotals that were offered the bottom lines. 96 00:05:24,360 --> 00:05:27,039 Speaker 1: But along the way I noticed a few things, the 97 00:05:27,120 --> 00:05:30,040 Speaker 1: differences across these apps. It wasn't just one price that 98 00:05:30,200 --> 00:05:32,680 Speaker 1: was different. The difference has showed up in lots of 99 00:05:32,720 --> 00:05:36,000 Speaker 1: different ways, and that made wonder one comparison really difficult. So, 100 00:05:36,480 --> 00:05:38,640 Speaker 1: for instance, on the three different apps, the rolls were 101 00:05:38,640 --> 00:05:40,960 Speaker 1: about twenty percent more expensive than they were on the 102 00:05:41,000 --> 00:05:44,680 Speaker 1: restaurant's website, but there was a couple of exceptions, but 103 00:05:44,720 --> 00:05:46,640 Speaker 1: I couldn't figure out what drove those, and I honestly 104 00:05:46,680 --> 00:05:50,480 Speaker 1: don't know if they're typos. On grub Hub, the delivery fee, 105 00:05:50,520 --> 00:05:53,679 Speaker 1: the service fee, and tax are all displayed separately, while 106 00:05:53,680 --> 00:05:56,400 Speaker 1: on Uber Eats and door Dash, service fees and taxes 107 00:05:56,440 --> 00:05:58,160 Speaker 1: were combined, but then you could click them to get 108 00:05:58,200 --> 00:06:01,320 Speaker 1: more info For the tip. Uber reads and grub Hub 109 00:06:01,320 --> 00:06:04,359 Speaker 1: defaulted to a pretty generous twenty percent. Well, door Dash 110 00:06:04,440 --> 00:06:07,400 Speaker 1: suggested a flat six dollars. Now, then you've got to 111 00:06:07,400 --> 00:06:10,920 Speaker 1: think about promos and large order discounts and optional subscriptions. 112 00:06:10,920 --> 00:06:13,480 Speaker 1: You might have to which of these services that mutters 113 00:06:13,520 --> 00:06:15,480 Speaker 1: the water even further. So when I was trying to 114 00:06:15,480 --> 00:06:17,359 Speaker 1: find the best price, I ended up getting three different 115 00:06:17,440 --> 00:06:20,240 Speaker 1: answers depending on whether I was looking at the subtital, 116 00:06:20,320 --> 00:06:23,480 Speaker 1: the advertised delivery fee, or the bottom line. And that 117 00:06:23,560 --> 00:06:26,800 Speaker 1: was only shown on the very last page. And that's 118 00:06:27,080 --> 00:06:29,320 Speaker 1: a really important point for that might be the cracks 119 00:06:29,320 --> 00:06:31,040 Speaker 1: of the matter. Getting to the point where the prices 120 00:06:31,080 --> 00:06:36,040 Speaker 1: were genuinely comparable took time, a lot of time across 121 00:06:36,120 --> 00:06:39,400 Speaker 1: these three apps, plus the restaurant site. I lost half 122 00:06:39,440 --> 00:06:41,279 Speaker 1: an hour of my life. Hey, if I could earn 123 00:06:41,320 --> 00:06:44,239 Speaker 1: thirty bucks an hour driving an uber, then a half 124 00:06:44,279 --> 00:06:47,080 Speaker 1: hour of my price comparisons cost me fifteen dollars in 125 00:06:47,120 --> 00:06:51,120 Speaker 1: lost earnings. Perhaps I would have saved ten bucks. But 126 00:06:51,200 --> 00:06:54,800 Speaker 1: if I spend fifteen dollars to save ten, it's just 127 00:06:54,839 --> 00:06:59,760 Speaker 1: not worth it. So if competition's working properly, the price 128 00:06:59,760 --> 00:07:02,640 Speaker 1: of that family meals should be a straightforward process. In fact, 129 00:07:02,640 --> 00:07:06,880 Speaker 1: they've made it so the comparison shopping loses your money. 130 00:07:07,160 --> 00:07:10,040 Speaker 1: In economics, there's a fancy phrase we use to describe 131 00:07:10,080 --> 00:07:12,520 Speaker 1: what's going on here. We call it search costs. Search 132 00:07:12,560 --> 00:07:15,200 Speaker 1: costs are all the time attention and effort it takes 133 00:07:15,200 --> 00:07:18,760 Speaker 1: to compare what's something really costs and whether there's a 134 00:07:18,800 --> 00:07:23,320 Speaker 1: better alternative. And search costs matter because competition is not 135 00:07:23,840 --> 00:07:28,320 Speaker 1: just magic. It doesn't work merely because different firms exist 136 00:07:28,360 --> 00:07:31,760 Speaker 1: in a market. It works because consumers like you and 137 00:07:31,800 --> 00:07:34,440 Speaker 1: I can easily compare offers. And whereas we do that, 138 00:07:34,480 --> 00:07:37,840 Speaker 1: we end up punishing the expensive sellers by withholding our 139 00:07:37,880 --> 00:07:40,800 Speaker 1: business from them. But if comparison shopping becomes annoying or 140 00:07:40,800 --> 00:07:43,840 Speaker 1: slow or taxing, then fewer people do it, and when 141 00:07:43,840 --> 00:07:46,400 Speaker 1: the kids are hungry and everyone's naked, even fewer of 142 00:07:46,480 --> 00:07:49,600 Speaker 1: us do it, And as a result, the expensive sellers 143 00:07:50,240 --> 00:07:54,400 Speaker 1: not only persist, but they thrive. When fewer people search 144 00:07:54,440 --> 00:07:57,760 Speaker 1: for low prices, businesses feel less pressure to compete on 145 00:07:57,800 --> 00:08:00,360 Speaker 1: the true price, and therefore the true price does get 146 00:08:00,400 --> 00:08:04,640 Speaker 1: pushed down. It's not quite the absence of competition, but 147 00:08:04,680 --> 00:08:07,480 Speaker 1: it's a weaker, murkier version of it that ends up 148 00:08:07,480 --> 00:08:10,800 Speaker 1: explaining that twenty eight dollar burrito. Now you might think 149 00:08:10,920 --> 00:08:15,160 Speaker 1: these search costs are just really sloppy app design. You know, 150 00:08:15,200 --> 00:08:18,360 Speaker 1: there's a few messy interfaces, a few odd pricing choices. 151 00:08:19,640 --> 00:08:21,320 Speaker 1: But I don't think that's what's going on. I think 152 00:08:21,320 --> 00:08:23,360 Speaker 1: there's something a bit more structural here, Like do you 153 00:08:23,440 --> 00:08:26,240 Speaker 1: really believe it's just a coincidence that grub hub and 154 00:08:26,680 --> 00:08:31,400 Speaker 1: uber eats managed to get the worst app designers on earth? Obviously, 155 00:08:31,480 --> 00:08:35,240 Speaker 1: not think about it. These should be the easiest prices 156 00:08:35,280 --> 00:08:38,440 Speaker 1: to compare. These prices, they're digital, they're data. You're looking 157 00:08:38,480 --> 00:08:41,320 Speaker 1: at them on your computer. Computers know how to compare numbers. 158 00:08:41,360 --> 00:08:43,880 Speaker 1: It ought to be super easy to compare these numbers 159 00:08:44,120 --> 00:08:47,320 Speaker 1: that are floating out there in the Internet. Ether, but 160 00:08:47,360 --> 00:08:49,280 Speaker 1: the companies make it hard. In fact, they have very 161 00:08:49,280 --> 00:08:54,200 Speaker 1: skilled programmers making it more difficult for you. In fact, 162 00:08:54,280 --> 00:08:56,520 Speaker 1: you can see it directly Uber's terms of service so 163 00:08:56,640 --> 00:09:01,080 Speaker 1: that users may not aggregate Ubers data, that it's competitors data, 164 00:09:01,160 --> 00:09:07,200 Speaker 1: or use it in ways that support competitive price comparison. Similarly, 165 00:09:07,240 --> 00:09:10,840 Speaker 1: the terms for door Dash and grub hub. They prohibit 166 00:09:10,880 --> 00:09:13,960 Speaker 1: the scraping and systematic retrieval of its data, and grubhub 167 00:09:13,960 --> 00:09:18,040 Speaker 1: also forbids the creation of database bases from its platform 168 00:09:18,080 --> 00:09:22,959 Speaker 1: content which to say it's prices without asking them for authorization. Now, look, 169 00:09:23,000 --> 00:09:26,120 Speaker 1: you might say, in most businesses, this is fine. We 170 00:09:26,200 --> 00:09:29,240 Speaker 1: normally allow firms to just write their own terms of service. 171 00:09:29,480 --> 00:09:32,760 Speaker 1: But here they're writing their terms of service explicitly to 172 00:09:32,920 --> 00:09:38,199 Speaker 1: destroy your ability to comparison shop and therefore the forces 173 00:09:38,200 --> 00:09:41,800 Speaker 1: of competition. The tools that would make price comparison easier 174 00:09:41,840 --> 00:09:44,200 Speaker 1: for you and I, at one level, they're really simple. 175 00:09:44,200 --> 00:09:46,400 Speaker 1: If you have a shopped for airline tickets, you can 176 00:09:46,440 --> 00:09:50,080 Speaker 1: compare prices really easily. But in this case, the food 177 00:09:50,080 --> 00:09:53,080 Speaker 1: delivery companies have made them almost impossible to build. Honestly, 178 00:09:53,120 --> 00:09:54,800 Speaker 1: I tried, I spent an hour or to actually just 179 00:09:54,840 --> 00:09:57,480 Speaker 1: trying to write some code to scrape the data from 180 00:09:57,480 --> 00:09:59,720 Speaker 1: the different websites, and it was formatted in such odd 181 00:09:59,720 --> 00:10:02,360 Speaker 1: ways I couldn't figure it out. The only conclusion I 182 00:10:02,400 --> 00:10:06,880 Speaker 1: came to is their bad design is there by design, 183 00:10:08,800 --> 00:10:12,240 Speaker 1: they're trying to stop us comparison shopping. So what can 184 00:10:12,240 --> 00:10:15,640 Speaker 1: we do about it? Well, let me sound optimistic for 185 00:10:15,679 --> 00:10:18,520 Speaker 1: a moment. Regulators are starting to notice. I mean, I 186 00:10:18,600 --> 00:10:20,720 Speaker 1: noticed the twenty eight dollar Baruto years ago, so I 187 00:10:20,720 --> 00:10:22,960 Speaker 1: don't know what took them so long. But back in 188 00:10:23,040 --> 00:10:25,920 Speaker 1: December of twenty four, the Federal Trade Commission settled a 189 00:10:25,960 --> 00:10:28,920 Speaker 1: case with grub Hub over allegations that grub hub hid 190 00:10:28,960 --> 00:10:32,200 Speaker 1: the true cost of delivery and used what the FTC 191 00:10:32,360 --> 00:10:35,400 Speaker 1: described as a pricing shell game that's pretty harsh. Grub 192 00:10:35,440 --> 00:10:37,800 Speaker 1: Hub was ultimately forced to pay twenty five million dollars 193 00:10:37,920 --> 00:10:40,240 Speaker 1: to make several changes to the way it does business, 194 00:10:40,480 --> 00:10:43,240 Speaker 1: and this past April, the FTC opened a broader inkiry 195 00:10:43,320 --> 00:10:47,440 Speaker 1: into unfair and deceptive fee practices for online food and 196 00:10:47,440 --> 00:10:51,720 Speaker 1: grocery delivery. Basically, the regulators are asking do consumers actually 197 00:10:51,760 --> 00:10:54,640 Speaker 1: know what they're paying and why? Which seems like a 198 00:10:54,679 --> 00:10:57,720 Speaker 1: pretty fair set of questions. So the point here is 199 00:10:57,760 --> 00:11:00,599 Speaker 1: this is not just a story of one grumpy economists 200 00:11:00,600 --> 00:11:04,359 Speaker 1: getting annoyed with ordering his family sushi dinner. It's increasingly 201 00:11:04,360 --> 00:11:07,360 Speaker 1: a policy story about whether a market counts as competitive 202 00:11:08,160 --> 00:11:10,840 Speaker 1: if consumers can't easily see what the real price is, 203 00:11:12,280 --> 00:11:15,080 Speaker 1: So how might we fix this? Look, here's just a 204 00:11:15,080 --> 00:11:18,280 Speaker 1: few ideas about where to start. First, show the full 205 00:11:18,640 --> 00:11:22,600 Speaker 1: mandatory price earlier upfront, as soon as possible, not halfway 206 00:11:22,640 --> 00:11:25,320 Speaker 1: through the checkout, not after I've emotionally committed to the 207 00:11:25,320 --> 00:11:30,800 Speaker 1: spicy tuna. That's not price comparison, that's manipulation. Second, if 208 00:11:30,800 --> 00:11:32,880 Speaker 1: the app price is high in the restaurant's own price, 209 00:11:33,080 --> 00:11:38,520 Speaker 1: tell me clearly right there on the item. Third, standardize 210 00:11:38,559 --> 00:11:42,640 Speaker 1: the fees. If there are service and delivery fees, explain 211 00:11:42,720 --> 00:11:45,000 Speaker 1: what they are, whether they're mandatory, and who gets it. 212 00:11:45,520 --> 00:11:48,920 Speaker 1: Here's the frustrating thing. Every time I go, it appears 213 00:11:48,920 --> 00:11:51,520 Speaker 1: that the fees on grub hub have changed since last time, 214 00:11:51,600 --> 00:11:53,240 Speaker 1: and so of the fees on uber Eats, and as 215 00:11:53,280 --> 00:11:55,320 Speaker 1: a result, I have no indication of which is most 216 00:11:55,440 --> 00:11:58,880 Speaker 1: likely to be cheaper this time. These fees should follow 217 00:11:59,080 --> 00:12:02,200 Speaker 1: clear and simple rules that are consistent across orders and 218 00:12:02,240 --> 00:12:07,000 Speaker 1: customers in order to facilitate comparison shopping. Fourth, and this 219 00:12:07,200 --> 00:12:11,640 Speaker 1: is the bigger institutional point, don't make it impossible for 220 00:12:11,880 --> 00:12:16,440 Speaker 1: independent comparison tools to exist. It shouldn't be legal to 221 00:12:16,520 --> 00:12:20,880 Speaker 1: suppress competition and price comparison. Your price should be something 222 00:12:20,880 --> 00:12:23,200 Speaker 1: that you're proud of. Look, it's easy for some bright 223 00:12:23,240 --> 00:12:25,840 Speaker 1: spark to write nap that brings up the menu for 224 00:12:25,920 --> 00:12:28,240 Speaker 1: your favorite sushi restaurant, to show you the prices on 225 00:12:28,280 --> 00:12:30,920 Speaker 1: each of the main delivery sites. Well, it should be easy, 226 00:12:31,160 --> 00:12:34,000 Speaker 1: but at the moment the business is involved are actively 227 00:12:34,040 --> 00:12:38,040 Speaker 1: discouraging this. And that's the tell you see. If these 228 00:12:38,080 --> 00:12:41,079 Speaker 1: businesses actually believe they are offering the best deal, they 229 00:12:41,080 --> 00:12:45,280 Speaker 1: should welcome easy comparison, not fear it. A genuinely competitive 230 00:12:45,320 --> 00:12:49,080 Speaker 1: market should not require detective work from the customer. Look, 231 00:12:49,160 --> 00:12:52,480 Speaker 1: I get it for delivery is a real service. Delivery 232 00:12:52,559 --> 00:12:56,520 Speaker 1: does cost money. Convenience is worth something. Heck, I'm prepared 233 00:12:56,559 --> 00:12:58,680 Speaker 1: to pay for it. I'm not saying that my dinner 234 00:12:58,679 --> 00:13:02,640 Speaker 1: should just arrive on the wings of fairies. But if 235 00:13:02,640 --> 00:13:05,920 Speaker 1: you're offering convenience and you're charging for convenience, I'm saying 236 00:13:05,960 --> 00:13:08,080 Speaker 1: you should at least be honest about the price of 237 00:13:08,080 --> 00:13:12,160 Speaker 1: that convenience, okay, on a dessert I promise to are 238 00:13:12,160 --> 00:13:15,640 Speaker 1: actually talking about bigger themes here, And here's the big takeaway. Competition. 239 00:13:16,280 --> 00:13:18,160 Speaker 1: It's not just about where there's lots of businesses in 240 00:13:18,200 --> 00:13:20,240 Speaker 1: a market, or where there's lots of colorful apps on 241 00:13:20,240 --> 00:13:23,559 Speaker 1: your phone. And it's not about whether they're all selling 242 00:13:23,559 --> 00:13:25,719 Speaker 1: a similar or a different product and whether they're advertising. 243 00:13:25,800 --> 00:13:28,120 Speaker 1: It's about whether the market is structured in a way 244 00:13:28,160 --> 00:13:31,360 Speaker 1: so that ordinary people can make sensible choices. That means 245 00:13:31,400 --> 00:13:34,400 Speaker 1: offering clear enough prices that a busy family can actually 246 00:13:34,400 --> 00:13:37,240 Speaker 1: tell who's offering the better deal. And here's the point 247 00:13:37,280 --> 00:13:39,240 Speaker 1: I really want to broaden too. There's a much broader 248 00:13:39,280 --> 00:13:42,040 Speaker 1: story here that goes well beyond the twenty eight dollar barrito. 249 00:13:42,960 --> 00:13:47,679 Speaker 1: From your perspective as a consumer. From your perspective, competition, 250 00:13:48,200 --> 00:13:52,200 Speaker 1: competition is beautiful. Competition is what forces firms to compete 251 00:13:52,240 --> 00:13:54,200 Speaker 1: until each try to offer a better deal than the other. 252 00:13:55,000 --> 00:13:58,240 Speaker 1: But from the side of businesses, there so competition destroys 253 00:13:58,280 --> 00:14:01,320 Speaker 1: their pricing power. They might have to start selling burritos 254 00:14:01,320 --> 00:14:05,240 Speaker 1: at reasonable prices, their profit margins might fall. And so 255 00:14:05,360 --> 00:14:08,040 Speaker 1: even though competition is what makes markets work for you, 256 00:14:08,559 --> 00:14:13,360 Speaker 1: businesses fight to reduce or eliminate competition. In the food 257 00:14:13,400 --> 00:14:15,440 Speaker 1: delivery industry, they do this by making it hard to 258 00:14:15,440 --> 00:14:20,240 Speaker 1: compare prices. In other industries, they use other tricks, but 259 00:14:20,320 --> 00:14:24,680 Speaker 1: they're always looking to reduce the competition that benefits you. 260 00:14:25,240 --> 00:14:28,240 Speaker 1: And that's the inherent tension at the heart of capitalism. 261 00:14:28,600 --> 00:14:33,160 Speaker 1: It's a system that delivers extraordinary outcomes. It delivers extraordinary 262 00:14:33,200 --> 00:14:36,680 Speaker 1: outcomes because of competition, but the competitors are actually always 263 00:14:36,720 --> 00:14:39,760 Speaker 1: trying to destroy competition, and so capitalism can only work 264 00:14:39,760 --> 00:14:44,240 Speaker 1: if there are clear rules to keep competition truly competitive. 265 00:14:44,800 --> 00:14:46,520 Speaker 1: Step back and you'll see that there's a lot of 266 00:14:46,520 --> 00:14:48,800 Speaker 1: people who use the rhetoric of economics to say that 267 00:14:48,800 --> 00:14:51,680 Speaker 1: our policies ought to be pro business, that we should 268 00:14:51,680 --> 00:14:54,760 Speaker 1: get the government off the back of businesses. But if 269 00:14:54,760 --> 00:14:57,240 Speaker 1: we let businesses do what they want, they'll work to 270 00:14:57,280 --> 00:14:59,880 Speaker 1: destroy competition. The point here is that there's a much 271 00:15:00,040 --> 00:15:03,080 Speaker 1: dronk the case from being pro market or pro competition 272 00:15:03,400 --> 00:15:06,920 Speaker 1: than being pro business. So next time you tuck into 273 00:15:06,960 --> 00:15:09,680 Speaker 1: a burrito, I want you to realize that you're holding 274 00:15:09,680 --> 00:15:14,960 Speaker 1: a foot long lesson in economics that lesson competition is 275 00:15:15,040 --> 00:15:17,160 Speaker 1: your best chance at getting a good deal.