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If Lyft and Uber both raise their prices by say 50% around the same time. And they can get away with however that would be achieved then yeah I agree with you c
by skinnymuch 7y ago
If Lyft and Uber both raise their prices by say 50% around the same time. And they can get away with however that would be achieved then yeah I agree with you completely.
They’d def lose riders. But not close to 50% of rides. Not even half that. For myself, I’d ride a bit less. Probably not do 1 in 4 rides I’d normally do. But when I need a ride back from the train station or I’m late to something and public transit will take too long. I’m not gonna take a cab. I’m going to still use them.
They could also both increase or add loyalty programs. Uber’s currently is pretty crappy as a casual rider. Im guessing doubling the loyalty program payouts wouldn’t cut into the 50% increase too much but could stop some of the ridership decrease bleeding.
- jacques_chester 7y ago> If Lyft and Uber both raise their prices by say 50% around the same time. And there's the rub. They're playing investor-bonfire chicken. More strictly: it's prisoner's dilemma. Defection is the dominant strategy.
- cma 7y agoNo, it is the iterated prisoners dilemma. Tit-for-tat increases can result in a price climb.
- jacques_chester 7y agoTrue, but their current strategy is to maximise market share. That said, it would be interesting to see what their respective price charts look like over time. A typical strategy for signalling not-technically-a-cartel price rises is to announce price raise well in advance. If the others don't match, you quietly drop it.
- throwaway2048 7y agoto lose money on a 50% price raise they'd only need to lose more than 33% of rides (not customers), and least with a very naive calculation, a lot depends on their per ride and fixed overheads.