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Center for Automotive Research at Stanford

By Christoph Meyer

Uber and Lyft may say otherwise, but ridehailing is inching closer to personalized pricing: the ability to charge the maximum price -- known in economics as the reservation price -- but enable that to be different for every customer, for an identical good or service. Considered one of the most elusive targets of consumer economics, personalized pricing is difficult to achieve. Even airlines, which have become savvy at price discrimination ( Nike Mens Lebron XI Basketball Shoe Parachute Gold / Arctic Greendark Lodenblack gxew2F1
) can’t compete with ridehailers. Here’s why: Uber and Lyft have far more data points (people take many more rides than flights) and do not have price aggregators (Google Flights, Expedia, etc.) that allow price comparisons.

As ride-hailing giants collect more and more data and perfect their algorithms, they will simultaneously enhance their ability to extract as much value from each user as possible.

Until now, Uber and Lyft have focused on riders’ locations and demand (e.g. time) to vary the price it charges and to trigger surge pricing when demand is high. But these companies have the ability to go far beyond that, testing and eventually mastering the ability to price rides based on numerous other factors that could be considered indicators of a given individual’s willingness to pay. Some of these may include:

What could this look like? Imagine a young professional with a San Francisco area code who hails a vehicle from her iPhone. It’s late at night and her phone charge is down to under 10%. Since she usually takes Uber or Lyft for her job, she has a selective AmEx on file for payment. She also has a tendency to accept surge pricing, since she often travels at rush hour and can expense travel to her client. The company has found a customer that shows signs of being more inclined to pay more and can shift its price accordingly.

But how is a company able to do this? There are two reasons:

1) Ridehailers know the upper limit of your pricing comfort

Uber and Lyft have an incredibly rich dataset for each individual rider. With riders taking an average of Huiyuzhi Womens Pointy Toe Side Cut Out Flat Shoes Ankle Bootie Please Buy One Size Down Taupe jf355T
(back in 2014), these companies have built up a detailed history of each rider that will only continue to grow. Particularly on trips with same starting and ending points, they can see how much a particular rider was willing to pay in the past. Having introduced upfront pricing, companies can even test rider’s willingness to pay in real time by seeing whether riders hail the ride or close the app and try again.

2) Ridehailers can charge different prices for the same service

Uber and Lyft provide a customized and personal service to each user. By having the price offered on an individual smartphone, the company can charge different prices to each rider without other riders knowing. Even if they would know, it would likely be irrelevant: few people have identical starting and ending locations. Ridehailing can not only know the reservation price of individuals but also charge them this exact price in private.

While companies have caused outrage in the past with surge/prime-time pricing, they hold even greater power going forward. Having moved to partially mask surge pricing and continuing to collect greater amounts of data on its customers, these transportation companies have the potential to achieve one of economics/business’ holy grails: perfect price discrimination.

The results of perfect price discrimination are mixed across parties. Uber and Lyft stand to gain by increasing prices and thus revenues. Drivers also stand to gain from higher fares from riders. Riders, on the other hand, are those that will be most negatively affected. As Uber and Lyft continue to take share of the market, riders will have fewer choices and thus fewer alternatives to paying these higher fares. Regulation may ultimately be needed to provide pricing transparency to riders and ensure that people are being fairly charged for similar services.

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than Android users, meaning companies could charge them a higher price

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Branding is vital to your nonprofit’s success. It’s what people think about when they think of your organization. It impacts everything including your ability to recruit board members and raise money.

Consider this:

Five considerations for distinguishing your nonprofit:

1. De-professionalize your fundraising: Say what? Last year, the Evelyn and Walter Haas Jr. Fund in collaboration with CompassPoint published SANBANG Men’s Running Sneakers Lightweight Knit Athletic Shoes For Gym Driving Walking Outdoor Indoor Red 9T8RY0lk0o
,” a report that shared success stories of how several nonprofits integrated their fundraising differently into the work of the organization. Fundraising wasn’t solely the purview of the development office; rather it was intimately associated with raising support for a common cause. It is a form of organizing and power building, not merely a strategy for financing the organization’s work.

Consider this: Our values of inclusion, fairness and equality are in jeopardy as never before. It’s an ‘all hands on deck’ moment in the nonprofit sector. There’s nothing like crisis to spark engagement, although, for vulnerable populations the situation is always at crisis and emergency levels. Whether you are a grassroots social justice organization, a hospital, or an arts organization; organize. Sharing fundraising among staff as part of a larger overall organizing strategy is effective. Early in my career with the YMCA, we enlisted over 25 of our staff to manage members and volunteers in fundraising for the Y’s community outreach programs. It was part of every full time staff person’s job description. They managed over 275 volunteers. As such, it was a social justice movement.

2. Your best marketing is word of mouth: Of course a small charitable organization lacks the marketing resources of a large one. However, at one time the large organization was small too. Building a reputation takes time. It requires consistency, Dawgs Mens Mossy Oak Flip Flops Breakup Infinity g9vlOhEg
and unabashed enthusiasm. Social media and electronic communications revolutionized the way word of mouth is spread. Board members should be the very best advocates, convening people to hear about the organization and doing everything to spread the word within their circles and beyond. If they don’t, discover why not.

Consider this: Find ways to simplify how you communicate about what you do. This is a coachable skill. You may find that your closest supporters are not completely comfortable with their level of knowledge about what you do. Many board members refrain from asking questions about things they ‘think’ they should know, such as the organization’s financials. There is more often than not an incongruity between the organization’s belief in how they communicate and what people actually know and understand about their programs and impact.

The Center for Children Families (CCF), part of the Health Policy Institute at the McCourt School of Public Policy at Georgetown University, is an independent, nonpartisan policy and research center with a mission to expand and improve high-quality, affordable health coverage. Founded in 2005, CCF is devoted to improving the health of America’s children and families, particularly those with low and moderate incomes. Contact Us

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