This is Nick. This is Jack. But today, in honor of hip-hop’s 50th birthday, you can call us The Notorious GDP and Busta Revenue. Because without DJ Kool Herc, who blessed us with the first-ever hip-hop remix 50 years ago at a party in the Bronx, we’d be nowhere. And Jay-Z wouldn’t be a bajillionaire (net worth = $2.5B). If ya don’t know, now ya know.

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1) Lyft Wants to Kill Surge Pricing

“Fares have increased to get more drivers on the road.” The 10 words you never want to see when you open the Lyft app. Surge pricing is up there with the most disliked technologies of the 21st century. Lyft claims it’s now trying to end it.

• Lyft’s CEO: “Riders hate it with a fiery passion.”

• Lyft’s humble brag: After 35% less surge pricing last quarter, Lyft’s revenue per rider fell 5%…but it also notched a 10% increase in active riders.

Surge pricing is actually an economist’s dream. 🤤 Lyft and Uber use surge pricing to get more drivers on the road when demand for rides spikes (you know Henry in his Honda hits the road to drive for Lyft when the ride to JFK hits $127). Riders hate surge pricing, but drivers love it—it helps balance supply and demand (that’s how Uber & Lyft disrupted taxis).

The Takeaway →

There’s one reason why Lyft can get away without surge pricing right now: Lyft’s driver supply is up 20% since last year, so there’s less need for surge pricing. But what will it do if driver supply goes down and it can’t entice drivers to the road by doubling prices? Lyft hasn’t said. One moment, please while we find you an available driver…

2) Disney+ Just Jacked Up the Price…Is Streaming Still Worth It?  

With news Disney is raising prices for both Disney+ and Hulu, we can’t help but wonder if the streaming genie is out of the bottle.

Pause Aladdin. This is important. It’s about your binging budget.

• Disney+’s no-ad tier jumps $3 in October, a 27% increase

• Hulu goes up 20%

• Netflix is now 2x its original price

So, are cord-cutters even saving money over cable anymore? We did the millennial math—turns out the average cable TV plan (with commercials, of course) is about $128/month (when you include the fees). The average ad-supported streaming service? $8/month.

The Takeaway →

Streaming is still a better deal than cable TV. Sorry Boomers, unless you have 16 streaming services (or 8 fancy-shmancy ad-free services), streaming still makes more money sense. But with streamers taking to price hikes as readily as they did reboots, we’re expecting subscription price pops in the future. #subscripturation

3) WeWork ‘Doubts’ it Can Survive

WeWork announced earlier this week that it has “substantial doubt” it can survive. Our MBA accounting skills are telling us this one’s worth a few dead succulents and some ergonomic office chairs at best.

Let’s let the numbers tell the story: 

• WeWork was once worth $47B but today it’s market value is just $200M.

• The stock costs less than a gumball at $0.18/share (down 99% since its 2021 IPO).

• The company has about $200M in cash and is considering bankruptcy.

Worst of all? Since WeWork is valued at $200M and it has $200M in cash, Wall Street basically thinks the company is worth $0…its only value is its cash.

The Takeaway →

WeWork shows us the importance of economies of scale. Compare its biz model to Microsoft’s—the tech giant hires developers who create software like Microsoft Office, which Microsoft can sell to a zilllion users without incurring extra costs. But every time WeWork wants to grow, it has to sign a new (and pricey) office lease. It doesn’t have economies of scale—the business model may have clocked out.

Here’s what else you need to know today—

🙏 Fires—and rescue efforts—continue across Hawaii. Our thoughts are with all Hawaiians.

🌮 Taco Bell’s “free taco” giveaway is going down in 49 states. The one holdout is NJ…because of the “Taco Tuesday” trademark.

📈 Inflation came in at 3.2% for July, which is a tad higher than last month (3%) but still down from last year.

⚡ Lucid, the Rolls Royce of EVs, missed the mark on its Q2 earnings—it delivered fewer cars and lost more money than Wall Street anticipated.

🚀 Virgin Galactic took the first mother-daughter duo to space on its first space tourism mission (one guy bought his ticket 18 years ago).

💊 Wegovy weight loss drugmaker Novo Nordisk’s market value ($423B) is now bigger than the GDP of its entire home country, Denmark ($400B).

🗽 The average Manhattan apartment rental just hit a record high of $5,588 a month—Tribeca is 30% more expensive than before the pandemic.

👛 On the pod today, we’re covering the biggest deal in fashion in years. Michael Kors parent company Capri Holdings just sold for $8.5B to Kate Spade and Coach owner Tapestry.

And one more thing. Your hip-hop handle—what is it? Try the name generator and tell us what you get.

—Nick & Jack