Can Threads Take Down Twitter?

Hello, welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios here with my colleague Emily Peck. Hi. We're here with Elizabeth Spires of the New York Times and other places. We are going to talk about threads, which is the new Twitter Killing app from Meta, a.k.a. Facebook. We are going to talk about US-China relations. Janet Yellen, the Treasury Secretary, is in China, so we're going to talk about what she's saying and what it means and what's happening to trade between these two countries. We are going to talk about tipping and service charges and whether it is all out of control. We have a Slate Plus segment on a new act that is protecting pregnant workers whenever it works. It's all coming up on Slate Money. Hey, drag fans. Please listen up. I'm Alaska. And my name is Willem. And we are the hosts of Race Chaser, the premier and preeminent RuPaul's Drag Race Recap podcast. And if you aren't listening to this podcasting behemothiad, start right now. Because it's 2023 and we have weekly coverage of the all new episodes from the season 15 of RuPaul's Drag Race. Every Wednesday we will discuss, dissect and disseminate all of the juiciest moments while dis-runway looks and the shadiest reality TV twists of the best show on television. Drag Race. Race Chaser with Alaska and Willem is the ultimate backstage pass for both drag obsessives and new fans alike. So don't wait. Find us on your podcast apps and listen. Check out new episodes of Race Chaser every Wednesday and Friday, wherever you get your podcast. Thank you. I'm Jonathan Braylock. I'm Dra. Milligan. And I'm James III. And we're those of Black Mink and Jump in Hollywood. It's a comedic podcast that reviews films with leading actors of color and analyze them in the context of race and Hollywood's diversity issues. Yeah. Listen to new episodes on Mondays. Find us wherever you get your podcast. I don't care where you get them. I just want you to listen. Don't threaten the people we need in the list. Oh, okay, okay, okay. Sorry, guys. Listen. Listen to us. Yeah. Yeah. Put on a happy voice. I think we need to start this week with what I am pretty sure is the fastest growing social network in the history of the planet in the space of basically 24 hours. Threads has managed to amass somewhere on the region of 50 million users. And that's just in the United States, I think European regulations are a bit stricter and so they haven't launched in Europe yet. This is an astonishing start to any social network. Emily, do you think it bespeaks a deep desire on the part of America to have a new social network that doesn't do something that the existing ones do? I think it bespeaks of how easy Instagram slash meta made it to sign up for this new social network. I mean, you just, if you have an Instagram account and so many, so many millions and millions of people do, it was basically a two-click process. Yeah. I think it speaks to the power of Instagram or the power that Instagram still had left and the dissatisfaction with Twitter and Elon Musk sort of on top, one on top of the other. A portion of those 45, 50 million users who joined within the first five minutes, what proportion of them do you think were on Twitter? That's a great question. I don't know the answer. I think Twitter itself has what 200 million users are there about. So there's lots of crossover. My feed was filled with people that I know from Twitter, but I don't know the specifics. Elizabeth, do you? I don't know exactly what the percentage is, but Twitter is much smaller than meta generally. When I blogged into Instagram yesterday, I got a prompt for a thread, so I get the sense that a lot of the people who are downloading the new app or using threads are not really even aware of the Musk shenanigans over on Twitter at all. I think it's primarily just people who are already part of meta's user base. It's like Instagram users being like, this is fun, this new thing. Pretty much. Yeah. Facebook has a long history of launching new products that go nowhere, but Instagram, interestingly, insofar as it's separate from Facebook, is actually batting a thousand pretty much. When it comes to new products, after it got acquired by Facebook, it then launched this amazing ad product, which is, as I've said on this show before, I think this single best new ad unit slash product that the world has ever seen, it really just transformed the advertising industry. It then launched stories and reels, both of which were incredibly popular and successful, and now it's launching threads. With the possible exception of the ad product, none of these are original, really. For it, they were copies of Snapchat and TikTok and Twitter, but Instagram in particular does seem to be very, very good at copying things and doing them very well and seamlessly and incorporating them into this massive social network that already exists. Well, I think Facebook did something smart when they acquired Instagram. Historically, they tend to incubate things in the house and then overload them with features that nobody asked for, and for the most part, Instagram hasn't changed that much. It's fairly, it's easier, it's more straightforward than a lot of the features that Meta has on the Facebook product. Threads kind of seamlessly integrates into all of that. Without the user, I think, being very aware that it's a separate service or it's being marketed as such. I think they just view it as an extension of the stuff that they're already using. It's pretty bland, though. Can we talk about that? It's not, I mean, everyone's saying it's a Twitter copycat and of course it is a Twitter copycat and that it's like a text-based social network, but the vibe there and this could just be like my social graph. I don't know. I don't really use Instagram very much. It's very, yeah, bland and generic Elizabeth passed around this great substack entry from Jason Gilbert that kind of, I mean, it's just so, it's so good, describes, describes threads as it feels like casual Friday on LinkedIn. It feels like if an entire social network were those posts that tell you what successful entrepreneurs do before 6 a.m. And the vibe is really cringy over there right now. It's very cringy. I think it's a little bit unfair to judge threads by, you know, it's first day. You know, if you judge Twitter by its first day, God knows what you would think. But you remember that whole thing about Twitter, where everyone through like a year or more kept on saying, I don't want to go on Twitter because I don't care what you had for breakfast. Yes, definitely. That was like a thing on Twitter that it was everyone thought it was just people posting what they had for breakfast. I think it will evolve into something and I'm pretty sure it won't evolve into, you know, whatever, how see an era of Twitter you think back to and think, oh, Twitter was great back when, you know, it is clearly very devoted to the algorithmic feed that Facebook and Instagram both are, you know, clear that they serve up and that Twitter has been trying to serve up, but everyone like pushes back and say, no, I just want to follow my followers and no one else. On Instagram, you don't even, on threads, you don't even have that option. You know, you're just going to view whatever the algorithm serves you and it might be people you follow and it might be someone completely different. And as we have learned from TikTok, that is a recipe for successful, successful networks even if it's also a recipe for alienating the Twitter faithful. So I'm pretty clear, at least in my mind, that this is not aimed at the Twitter faithful. This is really trying to create the product that Mark Zuckerberg had in his mind when he said that Twitter should have had a billion users by now and he's like, they just did everything wrong and I'm not going to do the things that they did wrong, which were mostly aimed at modifying the early adopters and the power users. Yeah, I mean, it just, it's so far and of course it could change as you point out Felix, as the personality of Instagram, which is a more polished, fake, kind of pretend social network where everything looks really good and everyone has great lives and is really happy. That's the vibe I'm getting. It's just not, Twitter was a real place to get real time news updates and commentary on the news. It was and there's no replacement for that yet. And this thread social network is not that. And I don't think it's designed to be. I think, I think Facebook in general is moving quite aggressively away from having news content. They realized that news content is just too much of a pain in the ass. They don't want it on Friday morning when the monthly jobs numbers came out. I was switching back and forth between Twitter and threads and Twitter had a million posts about non-farm payrolls and labor force participation rates and revisions to previous months and all of the nerdy stuff that we love to ingest at half past eights in the morning on the first Friday of every month. And threads had nothing, literally nothing. No one was posting about the jobs report at all. And I'm not sure that anyone particularly wants it to. Well, you also have to consider that threads is piggybacking off of the Instagram user base and Instagram is a visual medium. People who succeed really well on Twitter are right early types who can craft something either entertaining or informative, but it's not Twitter is not fundamentally a visual platform. And so it's totally different mechanisms to post or convey information on these two different platforms. When we say these two different platforms, I'm like a Twitter versus threads. But you see, I'm not sure about that. I mean, I will totally agree that Twitter versus Instagram are completely different platforms. But threads is very much a text-based platform and the algorithm rewards people who do good text-based things. Yeah. I'm not saying it doesn't. My point is that if the new threads audience is coming out of the Instagram user base, the people your power users on Instagram are not necessarily people who are likely to adapt to a platform where your primary benefit to the user is being able to read things. Sure. I just don't think that the people who are power users on Instagram are going to be the people who are power users on threads. Yeah. I don't think they have been up until now. So I think it's going to be interesting to see how this audience evolves. I do think that Jason was right that it's just going to be a very brand-safe place for brands to do brand things. And I also think that there's always a flush of excitement when we see something new. And inevitably, there is going to be a pretty heavy ad load on this thing, pretty quickly, given the number of users who are already signed up to it. And the minute that ad load starts becoming significant and visible, a lot of the excitement about it is going to fade because the ads are going to be terrible. Well, if there's one thing I have faith in, it's not the quality of the content on a meta-social network or the originality or the fun of it, which Twitter still does have a little bit of. It's the fact that they have really, really addictive ads. Someone said to me yesterday, I still use Instagram for the ads. That's amazing. Right. And this is really interesting, right? And as I've said, like the Instagram ad product is amazing. As Elizabeth has said, Instagram is a visual platform. And one of the things that makes the Instagram ad product so amazing is because it really leans into that. And you get these amazing, strong, striking visuals that take up basically your entire phone screen. And you're like, whoa, and then you click on it and buy it. My gut feeling is that if they try to port that over to Threads and have full screen, highly visual ads from brands that have clear sort of cool to actions of people saying shop now, then those ads will perform incredibly well, but also that will really hobble the social network part of it because that kind of thing seems antithetical to what you see much more often in Twitter ads, which is things that you scroll by and notice but don't necessarily click on. And that kind of like the importance of adjacency and having something natively in feed rather than having this more sort of like, it's weird, like in a weird sense, I think that Twitter ads are more brand advertising, whereas Instagram ads, you know, a lot, some, there's some brand advertising, but there's a lot of just, you know, basically direct mail, you know, cool to actions, using it very low down the sales funnel, click on this and buy something immediately. And I, you know, I'm not sure that's going to play well with the text based network. We will see. Yeah. Also, Twitter's just, they're, they're, they're, they're working with a much smaller set of data in terms of how they can use it for retargeting, which is part of what makes Instagram's ad, ad product so effective. It's a, you know, and if you're on Instagram a lot and you notice that you're being served ads that are just very minutely targeted to you, that's a function of the data that Facebook has or meta has with it, with an its whole system, not just an Instagram, because it's all the same ad product. Can you talk a little bit more about this Elizabeth, because I'm old enough to remember, you know, this time last year, basically, when everyone said that the new Apple iOS update had killed all of that and that Facebook had lost huge amounts of data about its users, and it was much less able to get that kind of data and serve up the right ads and its ad revenue started falling off a cliff and its share price went in the toilet. And now you're saying that's all back and they have all of that again? No, I'm saying that it's, it's the best option. If you're a digital marketer, it's still one of the largest platforms that you can do that kind of advertising on and you're still working with a lot more data than, you know, your alternatives, which are basically Google ads, other social networks, email retargeting. So even if you decimate Facebook's data, you're still dealing with one of the largest platforms available to you as a marketer. So, you know, all that stuff did happen, but it's still a pretty good option for digital marketers. One thing I will note is you guys should all just like, if you have a screen spare, just have a look at the Facebook slash meta share price. It is absolutely amazing the way it went all the way up and then all the way down and then spite all the way back up again. And I think there is at least a stock market does seem to be thinking, you know, there's life to this whole guy yet. And you know, some of it is the ads coming back, some of it is excitement around threads, a lot of it is connected to stuff we've talked about here before, which is like layoffs and losing a bunch of the labor costs. And most importantly, sort of pivoting away from the whole metaverse misadventure and basically saying we're not going to be spending $20 billion a year on horizons anymore. And that has, you know, it turns out that all they needed to do was stop being metaverse and Facebook is still a formidable company. Yeah, that's kind of my question actually because if you look at the reals product, it doesn't, there aren't not really ads there, that the ad money is coming still from Instagram and the photos. And if you look at Twitter, it's never really made that much money or turned a profit. So like, why would you want to do a new kind of text-based Twitter when you're not, you're not like, it wasn't a money maker, like you're ripping off something that wasn't a money maker. Is the rationale like, well, meta knows how to make money. Yeah, I think it does. I think it does. Remember. Then Twitter? Remember that when Facebook bought Instagram, it was pre-revenue. You know, there was zero ads on Instagram when they bought it and Facebook invented that ad product and it didn't amazingly well. Reals doesn't have ads yet, but if you look at the amount of money that TikTok makes in terms of ad revenue, the opportunity is clearly there and they're just waiting to pull the trigger. You know, and I'm pretty sure they're going to leave it a while before they start introducing ads on threads, right? They're going to let it really develop and build because they can afford to. And then, you know, when the time is right, they'll be like, okay, now is the time to, you know, inshitify the experience a little bit by adding ads or be very careful when they first do it and just start adding a few ads here and there and see what, see how it works. Because, you know, they do have such an amazing base of advertisers that they can afford to enter these markets slowly and they can afford, you know, whereas as you point out, Twitter can't, right? It's desperate for ad revenue, which is why if you go on Twitter these days, you just see the most terrible ads because they can't say no to anyone. Right. And I guess that's like the other question for me hanging over all of this is it seems like this is the slow demise of Twitter, which I mean, if you look, I'd say maybe as a naval gazing thing to worry about, but I think at its peak, you know, Twitter really was a place for news, a place to get commentary on the news, a place for activism. I mean, revolutions to form and that's not something that's coming back anywhere. That's not something meta is going to create on threads. It's just something that's going away. As a journalist, as a blogger, you know, I am terrified about this. I still deeply and painfully, it's been 10 years and it's still fresh, the wound of when Google shut down Google Reader. And that was where I got all of my news and all of my information, all my analysis. And I like, I miss it terribly, but the one thing we had left when Google shut down Google Reader was Twitter, you know, and Twitter effectively replaced Google Reader. And now that Twitter is, you know, on its last legs, I'm looking around the horizon and I don't see any real replacement. I don't think Reds is going to be the replacement. I certainly don't think Master Donald Blue Sky or Post or any of the other sort of Twitter clones is going to be the replacement. And that just is sad. It's very sad to me. And on some level, I think it's going to make my work product worse. I feel like there's space for a news company to do a real-time news product similar almost to Twitter, where you're getting like live news updates throughout the day, not full stories, but just text updates, like an old-fashioned wire or something, like there's room for that. Like, journalists are using Twitter like that. You need to be able to talk to people. And that's why Threads has taken off in a way that all of the other Twitter clones hasn't, right? It's because it has that critical mass of people being able to talk to each other. Yeah, I think, you know, Blue Sky feels a little bit like good Twitter to me, but they're growing so slowly, and this method of onboarding people via slow-dripping invites is just not going to... If they don't figure out a way to scale faster, I don't see how Threads doesn't just stomp them. Yeah. And the thing that really sort of gives Threads a massive leg up over Blue Sky is not only the fact that they have the tech infrastructure to be able to onboard 50 million people in a week, which, you know, Blue Sky could never, just doesn't have that much money, but also, it gives you a whole bunch of people that you know and you're automatically following just by importing your Instagram followers. On Blue Sky, building up a follow graph is incredibly laborious, different, and difficult. On Threads, it's painless. Okay, that's enough media-enabled gazing. We should talk about something important. How about Janet Ellen's trip to China? Is that important? We will find out after the ad break. 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Yeah, I think it is. I think there was some optimism that she was maybe the best ambassador for what we need to accomplish there and it seems like the trip overall went well. She met with Li Chong, the premier and articulated some of the US foreign policy establishments concerns about China cutting off materials that we need but I think the Chinese are still very concerned about the fact that Trump era tariffs have not been rolled back. And so her job was to go there and just sort of reestablish the fact that nobody has an interest in complete decoupling. I mean, what was your read on what the outcomes were? What did you think? It was really fascinating. If you read the New York Times headline, she was like flying into the mouth of the dragon and speaking harsh truths in person about how the problems the US has with China. Meanwhile, if you read the Financial Times headline, she was coming bearing a... What kind of leaf does it have? Olive branch. Olive branch. There you go. Olive branch. She comes bearing an olive branch and she's being very nice and friendly and my reading of it is closer to the FD than the New York Times. I think that she was very clear in her remarks that she wanted more trade between the two countries that whatever differences they have in terms of foreign policy should not necessarily just trickle over into trade policy and into trade and that we should keep the economic ties between the two countries that have been built up over the past 20 years. And the reason I say 20 years is because right now, trying these trade, there's a percentage of US GDP or US imports is at the lowest point it's been in 20 years. The relations between the two countries are worse than they have been at any point since there have been diplomatic relations since 1979. The number of things they disagree about and of fighting with each other is enormous. We are at a very, very low point and in some sense that gives me a little bit of hope that a little bit of hope that the only way from here is up but I don't really believe that. There was a very interesting article in China Daily which is part of the Chinese propaganda ministry about this new policy they have about gallium and some other metal that's necessary for building semiconductors and basically saying this is going to inflict pain on certain countries and by certain countries they clearly met in the United States and so they're still really fighting with each other. The Chinese are banning Chinese companies from buying chips from micron, the Americans are banning a bunch of chip designers from selling technology to the Chinese. Trade is going down, everyone is trying to circumnavigate the rules. There's lots of talk about human rights abuses and there are myriad issues including relations with Russia where the two countries suggest nowhere near each other and that feels to me like the relationship that's deteriorating and it's not going to get better and for all that Johnny Yellen who's definitely one of the more dovish members of the government when it comes to China for all that she would love to turn things around. I don't think she can. Yeah, but there are still constraints that we have that I think do prevent any serious decoupling. China has a trillion dollars of US debt. There are still our third largest trading partner. I mean I just don't see how much worse could it get in your opinion? Well trying to could invade Taiwan. That's a fear, right? I mean they could get a lot worse is the answer. It's interesting the dueling headlines. I feel like that is a sign of success of this mission. It's kind of like when you publish a story and like people on both sides of it, so New U.S. telling you how bad and biased it was, you're like, I have one. Like if the U.S. thinks Yellen is like talking tough and the FT or others think Yellen is there to make peace, that's sort of like the perfect balance. So maybe she's doing a good job, but it does seem like this is beyond a visit to fix. Yeah. And they're so high. Yeah. And there was a visit by Tony Blinken a few weeks ago as well. I think the government that the executive branch is trying to mend things, because I think everyone appreciates that things are really bad right now. But the thing that the executive branch can't do, no matter how friendly Blinken and Yellen are towards China, the one thing they can't have any effect on really is Congress. And Congress is in full on drag and slayer mode right now. And Congress is competing with each other to be as antagonistic towards China as they possibly can be. And as long as that's the case, I just, you know, I don't think relations between the two countries are going to improve anytime soon. Right. And I mean, gosh, we're heading to a presidential election, the 24 elections, and if a Republican goes in office, I think they tend to be more, even more anti-China, things really could get a lot worse. And it's like the Biden administration is trying to have it both ways here. If you look at the Trump tariff on Chinese imports, right? The Democrats at the time, certainly the moderate wing of the Democratic Party, the, you know, Bidenites for lack of a better word, all opposed them. They said, this is a bad policy, and you shouldn't do it, and it's just going to increase costs for U.S. companies, which was true, and it did. And then when Biden came into office, everyone kind of expected that if these were bad tariffs, then they would be rolled back, and they weren't. He kept them all. And then he added new ones, and he added even more export controls than Trump had. It turns out that Biden has out-trumped Trump when it comes to China tariffs. Yeah, it's a win, I think, to be, to look tough against China in the U.S. politically. And then business-wise and economically, it's not a win, and it's a really dicey situation. It's a bad dialectic, I don't know. I like that. Bad dialectic. You also have to consider that, you know, our relationship with China is, you know, evolving or devolving whatever you think along multiple levels, because there's a diplomatic conversation that's happening, and that's the point of sending Yellen, who is regarded as the friendliest person in the executive branch to China, as, you know, to have these talks in the first place. That's a kind of signaling to China that, you know, we do want to maintain the economic relationships we have that work for us and for them. But then here, you, to Felix's point, you have a lot of congressional hawks who are being very loud and using China as really a rhetorical device for political reasons. You know, Nikki Haley has been telling people that China is preparing for war, which is, you know, completely over the top. But there's no single factor that's going to determine what the relationship with China looks like. It's going to be a combination of these things. And I think the Treasury's decision to engage China on these issues indicates that the administration is not as antagonistic to China as, for instance, the sort of surface level analysis would lead people to believe, or just the fact that he kept front tariffs in place. Or the fact that we passed the CHIPS Act that we are aggressively encouraging American companies to ensure this play chains that we are rapidly increasing the number of exports that are banned to China, especially in technology and semiconductors, and, you know, and so on and so forth. I think it's, I think there is a rift actually within the executive branch. One last question for you, Felix, you mentioned imports are at a 20-year low from China. Why exactly is that? So a lot of it is those Trump tariffs, and a lot of it is also a bunch of weird things that aren't necessarily long-term sustainable things. So one thing about the Trump tariffs is they really singled out China. And so if you're a Chinese company and you want to export something to the United States and you don't want to pay massive, and you don't want your customers to have to pay massive import tariffs on it, basically what those customs, what you do is you send the components of that thing to Vietnam or Malaysia or somewhere like that, where it gets for final assembly, and then it gets exported from Vietnam or Malaysian and it doesn't face the tariffs, right? So they're still kind of sort of trying some imports, but they just don't register with stuff. As such, they register as Vietnamese imports or Malaysian imports or even Indian imports. We didn't talk about Xi and how they do their exporting to the US. Yeah. But since we're talking about Xi and these days, it seems to be like the hot topic. Get this. Xi and Temu, who is the other like Xi and clone, between them export 600 million packages per day or something completely insane like that to the United States. And all of those fall under the diminimists rule. Basically, they're all worth less than $800. So they don't count as imports for the purposes of national statistics. And Xi and Temu pay no, you know, there's no import tariffs on that because they're below that minimum value. And in a weird way, both of those companies are just creatures of regulatory arbitration probably wouldn't even exist at all where it's not for the Trump tariffs. So when you say imports are at a 20 year low, does that include those imports from Xi and Temu that are not exactly so you have to add in that, you have to add in the Vietnamese and Malaysian imports that are really Chinese. And you also have to take into account the 2022 was a particularly weird year because there was that big supply chain backlog in 2021 when all of the containerships were stuck off the coast of California. And so as that backlog eased in 2022, that meant that there was much more imports than normal in 2022 because it kind of included a bunch of those 2021 imports. And so year on year changes from 2022 to 2023 look bigger than they otherwise might. So there's a lot of reason to believe that the headline figures aren't quite as bad as they look, but clearly they're bad and they're getting worse. Yeah, clearly they're an indicator of a worsening of sentiment. Because if if China is doing all these or Chinese companies are doing all these like workarounds to get stuff to us, and that's the big reason the number drop, that's still very notable, you know, it still works as an indicator. Absolutely. Get a new Apple card account by July 25th and get 10% back on App Store purchases for your first six months up to $100 daily cash, terms apply. You can earn on games like Candy Crush Saga and Roblox, subscriptions like Apple TV Plus, in-app purchases and all the good stuff, apply now in the wallet app on iPhone. Subject to credit approval, 10% daily cash earned on up to a maximum of $1,000 in qualifying purchases is valid only for the first 180 days for new Apple card accounts open between July 11th and July 25th. To make a qualifying purchase, your new Apple card must be set as the default payment method for the Apple ID associated with your Apple account in the App Store. You must have a zero balance on all digital Apple accounts associated with your Apple ID. Visit apple.co slash App Store for more important and offered details. Hey, drag fans, please listen up. I'm Alaska. And my name is Willem. And we are the hosts of Race Chaser. The premiere and preeminent RuPaul's Drag Race recap podcast, and if you aren't listening to this podcasting behemothiad, start right now. Because it's 2023 and we have weekly coverage of the all new episodes from the season 15 of RuPaul's Drag Race. Every Wednesday we will discuss, dissect, and disseminate all of the juiciest moments while this runway looks and the shadiest reality TV twists of the best show on television. Drag Race. Race Chaser with Alaska and Willem is the ultimate backstage pass for both drag obsessives and new fans alike. So don't wait. Find us on your podcast apps and listen. Check out new episodes of Race Chaser every Wednesday and Friday wherever you get your podcast. Thank you. Okay, I think we should talk about tipping. Emily, you have opinions on this I know you do. Yeah, I really wanted to talk about it. There's been so many stories lately that I've been reading and just, you know, experiencing life as a consumer. The consensus take is that tipping and service fees, especially at restaurants or fast food outlets is out of control. There's too much tipping. It's gone too far. There's always an anecdote in these stories about someone at a self checkout who has asked to tip, which is obviously absurd. I really enjoyed a TikTok from a woman sitting in her car. They're always sitting in their cars in these TikToks where she's like, I was just at subway and they asked me to tip and y'all, are we supposed to tip at subway now? I don't understand, you know, because she bought a sandwich or something and then it was like, do you want to tip 10, 20, 30% for the sandwich. So I think there is a vibe among the customers that tipping is out of control. At the same time, I know it shouldn't bring up two topics at once. At the same time, there are these now service fees popping up at restaurants where in addition to being asked to leave a tip, you're told you're being charged a 20% service fee and it's not often clear why. So it's like bottom line tipping is out of control and people hate it. And so I don't know what to think. You have done a very good job of synthesizing the discourse here. I have synthesized, yes. But I love the way that you framed it. You're like, I have, you know, I've been seeing this, this is the discourse, right? Now, tell me how you view that discourse. Is this something that is a real thing that you broadly agree with or do you think you kind of seeing something now that is, do you want to push back on? I want to, I don't love stories where people are like tipping is so confusing and hard because I just feel like it's a little bit of like privileged customer whining, you know? Like it's been, it's become quite difficult, I think, for workers in the service industry over the past few years. So I don't really begrudge them asking for 30 or 20% and then at the end of the day, it is optional to hit the tips, the tip buttons and stuff. So it doesn't seem like a huge issue. So yeah, I think that's kind of where I land. I feel like, yes, this is something that's perhaps happening, but we don't need to freak out about it. They point to larger issues with the way restaurants and the service industry can charge people because if you read deeper into the stories, there are these restaurant owners that say like, we can't raise prices more on food because people will revolt. So this is how they are paying their workers. Well, what it is, it's a way to create variable prices for different people, right? This is something that airlines have been doing for decades, right? The amount you paid for your seat is going to be very different from the amount that the person sitting next to you paid for theirs. And the way the airlines do it is by very, very carefully trying to make sure that the people who can afford to pay more pay more and the people who can't afford to pay more pay less, right? And something similar is happening with tips for coffee, right, is that if you can't afford to pay more for your coffee, you don't, you don't need the tip. And if you can afford to pay more, you know, because of all of the sort of ease of leaving a tip now, it's just pressing a button and the social pressures of like someone flipping that screen to you and you're standing in front of them and you don't want to be the person who doesn't need the tip when you're standing in front of them, you know, you wind up leaving a tip. And I'm reminded of the time that the New York City taxi cabs switched over from being cash-based to all of them had to start accepting credit cards. And the taxi cab union was very opposed to this because, you know, when you get paid in cash, guess what? You don't always pay income tax on all of your cash earnings. Right. And they were worried basically that when all of the fares ended up getting, you know, tax, they would wind up taking home less money. And it turned out that the tips that people left on those credit card fares were so much bigger that it more than made up for the fact that, you know, some of the old cash fares they might have gotten tax-free under the table. And a lot of this, I think, is just technological, that the technology of flipping screens and the ease of tapping and paying with phones and credit cards and that kind of thing has allowed people to ask for tips in a myriad of different places where before it would never have occurred to them to ask for tips. And there wouldn't have even been a mechanism to leave a tip, you know, at a self-service checkout. You can't leave a cash tip if you're being with cash, but like with a card, it's been being being, and so, and so everyone's like, this is free money. If I ask for it, maybe they'll get a tip, in worst case scenario, so done. Also, just culturally, a lot of this started during the pandemic when people were concerned that service workers were putting themselves at risk and not making enough money, and so a lot of the service charges that Emily's talking about, especially at restaurants, were a function of that. And then in a lot of cases where the owners would spell that out, they would say, you know, here's an extra service charge because we're incurring extra costs and we need this money to stay open. And then, you know, as with any kind of inflation, it's very difficult to roll it back, you know, especially once those businesses start operating with those specific economics and expecting that those tips are going to come in, and that the service fees are going to stick. Yeah, no, then this has just been proved time and time again. Whenever a restaurant tries to do a service-included model where, you know, the service is included in the price of the dish, like you get across Europe and it's perfectly, you know, grown up and sensible, people just don't go to that restaurant anymore because, you know, because they take one look at the prices of the dishes and they're like, that's crazy expensive. I won't go there. And if you advertise an artificially low price for your dish, and then everyone winds up having to spend 20% on top of that at the end of the meal, that, you know, somehow, you don't get the same sticker shock. I did not do that. It's incredible psychology. It's incredible psychology, but it's here to stay. And the service charge is, in general, I think, broadly good in Sephiras, they go to, like, at least in restaurants in Sephiras, they go to all of the workers in the restaurant, including the, you know, back of house rather than just to the service, where they're terrible is when there's like a 20% service charge and they're like, and now we encourage you to tip on top of that. It's like, no. If I'm already paying 20% service fee, that's it. You're not getting a tip on top. Right. And that's the big problem with the service fees. A lot of servers, waiters and waitresses say, like if they're serving at a restaurant that has a service fee like that, they just don't get tips. And it's not necessarily true. Well, they do. They get part of the, they get part of that 20%. Part of it. Yeah. But a normal tip would be 20% so they don't get it good money. They have to share their tips with the people making the food and they're like that, you know, so they've paid, that's wind up going down. And some restaurants are using the service fees for other stuff. Like it's not necessarily clear and the laws are different state to state on what restaurants can do with the service fees and I would suspect a lot of them are not, you know, sharing the money benevolently with their workers and are using it for other stuff and it's going to, you know, it's just, it's a little more of an opaque way to pay, to pay your labor costs. The whole system to pay labor and restaurants is, is, is, is, is Uber. Yeah. And the good news is that we are in an incredibly tight labor market for, you know, in general and in the hospitality industry in general, in, in particular, I should say. And if you're a decent server, you will go to where you make the most money and if there's one restaurant that is dipping at servers by not paying them out on tips and service fees, that restaurant is going to lose service very quickly and in fact, that's why, you know, Danny Mayer ultimately ended up rolling back his policy of service included was that he just couldn't find the service anymore. They wouldn't work for him anymore. Yeah. The psychology of working for tips is, is also a thing, right? You go home with a lot of money in your pocket versus at the end of the week, you get a check that's like all tax to hell. So I mean, it's not just the customers in the restaurant industry who have a different kind of psychology. It's the workers too, I think. Also I wanted to ask if you folks, have we talked, if I asked you this already, I'm getting a deja vu feeling, but do you tip 20% when you buy a coffee and they turn the screen around? I generally tip a bag, but I don't buy fancy coffees. I just buy like a small black filter coffee. And you tip a dollar? And I'll tip a dollar on that, which is, if it's a four dollar coffee and I tip a dollar on that, that's 25%. Right? So like, you know, Elizabeth, yeah, I always tip. I mean, also I go to the same like two coffee places and particularly for locals where you know the staff, you know, to me, it's no different than going to a bar restaurant really. It really feels like socially unacceptable not to do it. It reminds me when I was like in my 20s, we would go to the Met and you could just pay like a penny if you wanted, because it's like a donation, recommended donation. And you know, it's like recommended donation, $15, but you're like, wait, actually I could just give you a dime and it's fine, but when you did it, when I did it, I always felt like a criminal, you know, there's a concept called positive surveillance, which means that, you know, if people are watching you, you're more likely to exhibit for social behavior. So some of it too is just what, what Felix alluded to, if somebody is standing there watching you press the button on the screen, if you decide not to tip or leave, you know, a crappy tip, they're watching you do that. And that's, that's a lot more pressure than, you know, when somebody drops the check at your table and you can scribble your tip in and then jet out, you know, yeah, yeah, it's intense. And but no one's watching at the self checkout, okay, I draw the line, I am not tipping at the self checkout. There's no one there. No one is helping me. I'll tip myself. Thank you very much. You should. Give yourself a decent tip. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Where those of Blackwink can't jump in Hollywood, it's a comedic podcast that reviews films with leading actors of color and analyze them in the context of race and Hollywood's diversity issues. Yeah. Listen to new episodes on Mondays. Find us wherever you get your podcasts. I don't care where you get them. I just want you to listen. Don't threaten the people we need them to listen. Okay, okay, okay. Sorry guys. Listen to us. Yeah. Yeah. Put on a happy voice. Yeah. Yeah. Yeah. Let's do it. Emily, what's your number? My number is related to our last conversation. It is $17.96. Do you know what that is? No. Oh, it is the minimum wage for app-based restaurant delivery workers in New York City that's set to take effect on July 12th, which is in just a few days. Does that include tips? No. That's just the minimum wage and the apps can work it out however they like. But if the apps are like, we guarantee you at least $17.96, once tips have been taken into account, that's not enough. They need to have a base pay of $17.96. Right. Awesome. But the apps just sued this week to enjoy this from going into effect. So TBD, whether it goes into effect or not. But if it does, it will even get better in 2025 when it rises to $19.96. That's exciting. My number is 3000, which is the number of students at Oak Park and River Forest High School in Illinois. And as we all know, everything is done on computers these days and every student at the high school had a Google account where they had all of their information. And the high school brought someone into fix something and they broke it and by instead of fixing it, and they wound up resetting every student's password to something that the student didn't know, which, you know, is a problem, but never mind the problem. Like there are a million ways to fixing this problem, but they managed to choose. I love this story so much. They managed to choose the absolute worst way of fixing the problem, which is they changed every single student's password to change me. And then said, you guys should just log into your account with this identical password that you all have and then change your password. And so of course, what they all did was they started logging into each other's accounts with the change me password, because now everyone knew everyone else's password and chaos ensued. This is the plan of like a YA novel. It totally is. It's just like, how, what, no? Sounds so fun though. Yeah. Can you imagine? I mean, seriously. And can you imagine like, like, we have, we have G Suite at work at Axios. Can you imagine if like suddenly all Axios employees had the same password for their Google accounts? Chaos. Chaos. We'd be, we'd be reading Jim Fender's email. Sounds fun. Elizabeth. My number is 54, and that's the average age of an incoming CEO in this year. And this is from a time story about GeneXor's running everything now, but also exosperating maybe counterintuitive attitudes toward remote work. There was a survey where I think that the people doing the survey just assumed that the people would be most in favor of remote work, would be the youngest part of the workforce. Because of course, we all have stereotyped younger people as being lazier and less inclined to work. But GeneXor exhibited the highest preference for flexible work time, as many as 50 percent of GeneXor's preferring remote work and partly because we're in the sandwich generation a lot of us have kids at home and are also caretaking for parents. I think that's more. Like more the reason than the slacker mentality. Yeah, it's not the slacker thing. It is this thing about having to deal, you know, look after parents and kids. But it's also that going into the office is really important when you're early on in your career, just to learn what the hell it is you're meant to do and to get better at your job. You know, being surrounded by people who are doing that job and learning from them by being in proximity to them is how people have learned to do their jobs for centuries. And I think the zoomers who are entering the workforce intuitively understand that, you know, that if they're going to have a career and if they're going to get better at what they do, they're going to have to learn from their peers and it's just so much easier to do that in an office than it is remotely. By the time you're 54, you can basically coast along on what you've already learned and you don't need to go in the office to get better at what you do so much. Do you think we'll ever have a Gen X president? I mean, no, we will not. It is not going to happen. But you think the judge is going to be the, you know, or if we do, it's going to be Nikki Haley and it's just going to be like, oh my God. Yeah, Nikki Haley or Ron DeSantis, they're Gen X, right? They are. Yeah. Ted Cruz is Gen X as you can tell by the fact that he's constantly quoting the Princess Red. I think we're going to end it right there, Felix. Okay. We will end it. We will end it right there. Thank you for listening. Thank you for emailing us on sleepmoney at sleep.com. Thanks to Ben Richmond and Patrick Fort for putting this thing together and we will be back next week with even more sleep money. Hey, drag fans, please listen up. I'm Alaska. And my name is Willem. And we are the hosts of Race Chaser, the premiere and preeminent RuPaul's Drag Race recap podcast. And if you aren't listening to this podcasting behemothiad, start right now. Because it's 2023 and we have weekly coverage of the all new episodes from the season 15 of RuPaul's Drag Race. Every Wednesday we will discuss, dissect, and disseminate all of the juiciest moments while this runway looks and the shadiest reality TV twists of the best show on television. Drag Race. Race Chaser with Alaska and Willem is the ultimate backstage pass for both drag obsessives and new fans alike. So don't wait. Find us on your podcast apps and listen. Check out new episodes of Race Chaser every Wednesday and Friday wherever you get your podcast. Thank you. I'm Jonathan Braylock. I'm Dra. Milligan. And I'm James III. And we're those of Blackwink and Jump in Hollywood. It's a comedic podcast that reviews films with leading actors of color and analyze them in the context of race and Hollywood's diversity issues. Yeah. Listen to new episodes on Mondays. Find us wherever you get your podcasts. I don't care where you get them. I just want you to listen. Don't threaten the people we need in the list. OK, OK, OK. Sorry, guys. Listen to us. Yeah. Yeah. Put on a happy voice. What more can I say? I know what it is. I mean, can't jump.