5 ms·

Easy solution. The company could give every employee a $300 raise and the charge $300 for parking. Those who want to keep the spot stay the same. Those who don'

by xapata 9y ago

Easy solution. The company could give every employee a $300 raise and the charge $300 for parking. Those who want to keep the spot stay the same. Those who don't, gain $300.

craftkiller 9y ago
That difference is just a psychological one. The end result is still people with a parking spot have $300 less than people without a parking spot. It doesn't matter which side you call the baseline.
- decker 9y ago
  Nope, people that choose the $300 are now earning an extra 3600 per year. Explain to me how that's just a psychological difference.
  - URSpider94 9y ago
    The psychological difference is that people react differently depending on whether the fee is seen as "not receiving a bonus that other people got", or "taking a pay cut when others didn't." If that doesn't make sense to you, I highly recommend that you pick up a copy of "The Paradox of Choice," a book that lays out neatly how the human brain can be manipulated by simple restatements like this.
- ncallaway 9y ago
  Yes, but psychologically it _does_ matter which side you call the baseline. Loss aversion is a real thing. People _hate_ losing a thing they have. So if you make parking a reservation system and then give a $300 credit to all employees who don't make a reservation you'll get much less blow-back than if you raise everyone's pay by $300, and then charge $300 to reserve parking. I think saying it's "just" a psychological difference really undervalues that aspect. After all, the goal is to create market efficiencies _without_ upsetting people. Solving the psychological problem is really the key to keeping people happy with the new system.
SilasX 9y ago
One kink is that the raise would only be ~$180 after tax at typical Lyft employee tax rates and they wouldn't be able to deduct commuting expenses (unless they were over a certain level).

5 ms·

Easy solution. The company could give every employee a $300 raise and the charge $300 for parking. Those who want to keep the spot stay the same. Those who don'

by xapata 9y ago

Easy solution. The company could give every employee a $300 raise and the charge $300 for parking. Those who want to keep the spot stay the same. Those who don't, gain $300.

craftkiller 9y ago
That difference is just a psychological one. The end result is still people with a parking spot have $300 less than people without a parking spot. It doesn't matter which side you call the baseline.
- decker 9y ago
  Nope, people that choose the $300 are now earning an extra 3600 per year. Explain to me how that's just a psychological difference.
  - URSpider94 9y ago
    The psychological difference is that people react differently depending on whether the fee is seen as "not receiving a bonus that other people got", or "taking a pay cut when others didn't." If that doesn't make sense to you, I highly recommend that you pick up a copy of "The Paradox of Choice," a book that lays out neatly how the human brain can be manipulated by simple restatements like this.
- ncallaway 9y ago
  Yes, but psychologically it _does_ matter which side you call the baseline. Loss aversion is a real thing. People _hate_ losing a thing they have. So if you make parking a reservation system and then give a $300 credit to all employees who don't make a reservation you'll get much less blow-back than if you raise everyone's pay by $300, and then charge $300 to reserve parking. I think saying it's "just" a psychological difference really undervalues that aspect. After all, the goal is to create market efficiencies _without_ upsetting people. Solving the psychological problem is really the key to keeping people happy with the new system.
SilasX 9y ago
One kink is that the raise would only be ~$180 after tax at typical Lyft employee tax rates and they wouldn't be able to deduct commuting expenses (unless they were over a certain level).