Hey, everyone. It's Mary. And it's also July 3rd, which is technically a holiday. So the folks here are taking a bit of a breather to celebrate America's birthday. But we did not want to leave you high and dry. So we're going to leave you in the hands of one of our favorite guests, Justin Wolfers. Justin is one of my favorite people to talk to about economics. He's pretty hilarious. He's got a great Australian accent. His diving in series makes economics accessible, entertaining, and actually understandable. This episode looks at delivery apps. We've all been there. You add your order and then there's a delivery fee and a service fee and a tax and a tip.

Justin asks, why and how much can these apps skim off the top before we just stop using them?

So here's Justin.

The fact that I can open up my phone, just push a couple of buttons, and 30 minutes later have restaurant quality food shut up on my doorstep, it's pretty incredible.

Seriously, the magic of our times.

But it's also gotten painfully expensive. That $28 burrito isn't just a meme.

It's a reality. And so I want to ask, does it really have to be this way? I mean, Amazon can get

almost anything in my house cheaply and quickly. But that burrito, it's priced as if they're sending it here in a Rolls-Royce.

So today I want to ask, why is food delivery so damn expensive? I mean, sure, it looks like a

competitive market.

There's lots of businesses competing, and they're all selling pretty much the same product.

Wouldn't economics tell us that competition drives prices down?

But this market, it's not delivering the one thing that I really want, which is low prices.

So here's the big idea.

The whole point of competition, it's that you should be able to easily compare prices and find the best deal. But when it comes to food delivery, that's weirdly

hard to do. First of all, the prices on the app, they're usually a whole lot higher than the

price at the restaurant.

And they don't even tell you what the markup is. That's a hidden fee right there. On top of

the hidden markup, they add in other fees, which come in different shapes and different sizes,

and they vary across platform. And honestly, those fees seem to vary by the time of day,

the order size, whether I have a subscription and whatever

strange mood, the algorithm woke up in that morning.

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