4 ms·

I think you mean: you can often get more users by charging less than what it currently costs to provide a service. I doubt managers forget this. It's just that

I think you mean: you can often get more users by charging less than what it currently costs to provide a service. I doubt managers forget this. It's just that you need backers with very deep pockets (the government in this case, VCs in Uber's case) to make it work.

baron816 3y ago
That’s not what I mean.
- qwytw 3y ago
  You can't imagine this could ever be profitable though?
  - baron816 3y ago
    I just mean that when you lower prices, more people will buy it, and they’ll buy more of it. That can more than offset the lower margin on a per item purchase. If your train has 200 seats, it’s better to sell 200 tickets at $65 per ticket than it is to sell 100 at $100 per ticket.
    - qwytw 3y ago
      Of course, but if operating a train costs you $10 per seat and you start charging $5 it will never break even.. And the article says: "€49 a month ‘Deutschlandticket’ has led to a 25 per cent rise in passengers on national railway company Deutsche Bahn's regional services" and a daily (regional) ticket costs about €20-50 depending on area. I mean obviously it might very well be worth doing this for other reasons but somebody will have to subsidize the lost revenue for various transport companies.
  - hyperhopper 3y ago
    Anybody that has ever taken a 101 economics class knows this is true. Look up elasticity of demand.
    - qwytw 3y ago
      > Anybody that has ever taken a 101 economics class knows this is true. The first 20 minutes of one? i.e. before arriving at concept of 'marginal cost' also I doubt demand for public transport is necessarily that elastic, short term anyway. As the article says traffic for regional trains only increased by 25% despite the price decreasing much more than that (e.g. a single day ticket previously cost 20-50 euros depending on area).
  - constantcrying 3y ago
    It can not be. Unless you think that transport agencies suddenly figured out how to make everything work for half the price. The government just subsidizes the losses. That is the explicit plan, profit is not intended to happen.
hef19898 3y ago
DB is not VC funded like all those food delivery shops so.
- fantyoon 3y ago
  Instead its owned by the Government which can borrow an infinite amount of money and does for all kinds of reasons. Right now they spend 1.5 billion Euro each year for the Deutschland Ticket[1]. I am super happy about the ticket and think its a good thing. But lets not pretend its financing would be possible without heavy government spending. [1] https://www.bundesregierung.de/breg-de/aktuelles/deutschlandticket-2134074 https://www.bundesregierung.de/breg-de/aktuelles/deutschland... (German)
  - Moldoteck 3y ago
    Just like financing road infrastructure

baron816 3y ago

That’s not what I mean.

qwytw 3y ago
You can't imagine this could ever be profitable though?
- baron816 3y ago
  I just mean that when you lower prices, more people will buy it, and they’ll buy more of it. That can more than offset the lower margin on a per item purchase. If your train has 200 seats, it’s better to sell 200 tickets at $65 per ticket than it is to sell 100 at $100 per ticket.
  - qwytw 3y ago
    Of course, but if operating a train costs you $10 per seat and you start charging $5 it will never break even.. And the article says: "€49 a month ‘Deutschlandticket’ has led to a 25 per cent rise in passengers on national railway company Deutsche Bahn's regional services" and a daily (regional) ticket costs about €20-50 depending on area. I mean obviously it might very well be worth doing this for other reasons but somebody will have to subsidize the lost revenue for various transport companies.
- hyperhopper 3y ago
  Anybody that has ever taken a 101 economics class knows this is true. Look up elasticity of demand.
  - qwytw 3y ago
    > Anybody that has ever taken a 101 economics class knows this is true. The first 20 minutes of one? i.e. before arriving at concept of 'marginal cost' also I doubt demand for public transport is necessarily that elastic, short term anyway. As the article says traffic for regional trains only increased by 25% despite the price decreasing much more than that (e.g. a single day ticket previously cost 20-50 euros depending on area).
- constantcrying 3y ago
  It can not be. Unless you think that transport agencies suddenly figured out how to make everything work for half the price. The government just subsidizes the losses. That is the explicit plan, profit is not intended to happen.

hef19898 3y ago

DB is not VC funded like all those food delivery shops so.

fantyoon 3y ago
Instead its owned by the Government which can borrow an infinite amount of money and does for all kinds of reasons. Right now they spend 1.5 billion Euro each year for the Deutschland Ticket[1]. I am super happy about the ticket and think its a good thing. But lets not pretend its financing would be possible without heavy government spending. [1] https://www.bundesregierung.de/breg-de/aktuelles/deutschlandticket-2134074 https://www.bundesregierung.de/breg-de/aktuelles/deutschland... (German)
- Moldoteck 3y ago
  Just like financing road infrastructure