Comments on: Adventures with marginal pricing, auto edition

By: mikan

mikan — Sun, 15 Jul 2012 06:51:14 +0000

Well Uber drives Town Cars, not Escalades. And there’s a reason Town Cars (and Crown Victorias) are popular with fleets.. they take a beating, last forever and are actually *cheap* to maintain (cheap, old-fashioned parts, and easy to work on). It’s doubtful that a Prius is much cheaper than a Town Car to maintain if it’s running in commercial service on potholed San Francisco streets. So price discrimination it is… the $3.25 is getting awfully close to the regular taxi rate of $2.75 (+ flag drop, does Uber have that?)

By: AngryInCali

AngryInCali — Tue, 03 Jul 2012 14:28:26 +0000

Is it possible credit interchange fees are higher for gas stations? They are a major site for CC fraud, and I have one card which gives me 3% cash back at gas stations specifically, which implies they are getting at least that much from the vendor.

I am not sure if maintaining the CC infrastructure at the pumps factors in the expense; stations that give discounts for cash around here also give discounts for debit cards, but maybe they make you come into the station to run the card.

And I was under the impression that CC servicer agreements forbid charging different prices for CC and cash transactions. Is that not true anymore?

By: Setty

Setty — Tue, 03 Jul 2012 00:20:21 +0000

Sorry for double-posting that. I’m not sure what happened. Anyway the link I was pointing to, which didn’t come through, was: http://blogs.reuters.com/felix-salmon/20 12/03/29/the-stranglehold-of-payments-ne tworks/

By: Setty

Setty — Tue, 03 Jul 2012 00:14:36 +0000

Hey, your radical payments system looks a lot like mine! (See the comments here.) Anyway, you're free to take it and run with it...all I want is a way to do a free interbank cash transfer in the USA. If having your rather more distinguished name on the thing makes the policy change more likely, great.

By: Setty

Setty — Tue, 03 Jul 2012 00:14:33 +0000

By: KenG_CA

KenG_CA — Tue, 03 Jul 2012 00:13:30 +0000

The cost of owning and maintaining an Escalade is more than a Prius, so you can’t just use the cost of gasoline. I’d bet that an Escalade might cost as much as 2x the Prius to operate, so the Escalade is actually priced lower per mile relative to the cost of owning and operating it.

By: albertsun

albertsun — Mon, 02 Jul 2012 23:52:38 +0000

Seems like the much simpler explanation here is simple price discrimination. Some people don’t find a ride in a hybrid an inferior option to a sedan. Some people do and so Uber will find a way to segment the market and charge more to those willing to pay more even when the cost of providing that service is not that much higher.

Similarly on the labor side, some drivers will be willing to, at the margin, drive more trips to earn a little more money. Others will be less willing to do so. The drivers who are willing will choose to drive the hybrids.