Earlier this month, ShareNow announced a tiered pricing model where drives that left a car outside an inner “Zone A” would incur a $4.95 surcharge, and drives that brought cars back into Zone A would receive a credit of “up to” $4.95.
A spokesperson from ShareNow confirmed that the latter phrasing simply meant that the credit cannot exceed the actual cost of the trip. That is, a $3.00 ride from Zone B to Zone A would receive a credit of $3.
For many regular commuters between Zones A and B, then, this should turn out to be a wash. But the coarseness of this price signal has created some odd boundary conditions. A person that is a $3 ride away from a Link station in the boundary will continually incur $4.95 charges out and only $3 credits in.
These second-order details will get swamped by larger arguments about equity and economic sustainability, but I suspect they may also result in some unintended consequences. A simple tweak to the policy — limiting the surcharge to 100% of the cost of the trip — would remove this problem.
8 Replies to “ShareNow corner cases”
I have to consider this a straw man argument because, in practice, $3 with Car2Go doesn’t get you more than about half a mile or so – distance that is about a 10 minute walk. If there’s any kind of traffic or parking difficulties, going anywhere in a Car2Go for $3 is essentially impossible.
In practice, the number of people who be affected by this is negligible.
I agree. This seems like a very marginal case.
The uncertainty of having a vehicle near your origin further hurts the use case for short rides. Even a 1 block walk in the wrong direction is wasting even more time you could have used to walk to the Link station.
Clearly the surcharge is intended to eliminate a number of these trips. As ASDF2 points out the business model doesn’t promote $3 trips. And I suspect the reason for this is the company would never make any money if all people did was take low value trips. It probably costs them $3 is overhead every time there’s a trip of any length. So you want your assets (cars) to be making as many high dollar trips as possibly.
You also have the situation where people are choosing to use the car “one way”. Could be they carpool and get dropped off in the AM but use car share to get home. The asymmetrical surcharge would get people to consider driving the car back in the AM since cost would be substantially less, if not free.
I can’t only think of two cases where Car2Go would encounter a per-trip overhead, independent of the trip length. One is the credit card processing fees. With a $3 fare, the credit card companies’ minimum transaction fees of $0.50 or so becomes quite significant. The other is the opportunity cost of not having the car available for a more profitable trip during the period where the car is reserved, but the trip has not yet begun. They allow reservations up to 30 minutes in advance, so that can be significant if the car is in a prime location.
“Could be they carpool and get dropped off in the AM but use car share to get home.” This, I believe is very real, and the simple reason why is parking. It’s a lot easier to drive a carshare vehicle from somewhere where parking is difficult to somewhere where parking is easy than it is the other way around. Thus, Car2Go is easier to use for trips *from* the city center to your suburban home than the other way around. It also doesn’t even have to be a carpool going the other way. It could be Lyft/Uber, or even KC Metro buses. There are plenty of bus routes that are more reliable during the AM commute than the PM commute, which might encourage some people to ride the bus in the morning and take a carshare vehicle home in the afternoon.
Overhead is more than just your fixed out of pocket. Just recording the trip so that you can bill and pay taxes, etc. costs money. But there’s also the wear and tear on the automobile. Starting a cold engine is a create amount of it’s wear. Not driving long enough to warm up the car causes issues. Opening and closing the door causes just as much wear on a $3 trip as a $30 trip. But opportunity lost is probably the big one.
I hadn’t thought of the parking issue but most of the other reasons revolve around the AM commute tending to have a fixed schedule vs the PM which tends to be more variable. Maybe they should offer a discount say before 9AM?
Pendantic arguments around the pure mechanics of the policy should not be really concerned when the author himself can bring himself to state in the last paragraph what should be within the lead “second-order details will get swamped by larger arguments about equity and economic sustainability”. Why STB considers the point of this post when the author asserts the equity issues baffles me. I would rather have stb actively question Council members to what they will and do to curtail these inequities. In my mind the city should immediately attempt to suspend sharenow’s new cars until sharenow can demonstrate a equitable process. Maybe even cap free floats till further notice to show both companies that this is no acceptable.
How do you solve the original problem, people leaving the cars in single-family areas and they sit there overnight or for several days? That’s what will happen if you insist there can be no differentiation: the low-density areas will have a disproportionate benefit like they always do. Southeast and southwest Seattle have a lot of low-density areas, and some of them are well-to-do, so you may think you’re helping the poor but you’re actually helping the well-off enclaves.
In order to give customers best “break” possible- would this business lend itself to a member-owned cooperative?
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