4 ms·

If I understand TFA correctly, what is going on, is that the grocer is going * This person is wearing a suit, I'm going to charge double * This is a regular t

by jowea 1y ago

If I understand TFA correctly, what is going on, is that the grocer is going * This person is wearing a suit, I'm going to charge double * This is a regular that always buys the same thing every week, I can charge 30% more without breaking his routine * This one is buying the ingredients for a recipe to do tonight, I can charge double more on one product because she won't want to go to another grocer just for one missing item. Or in economic terms it is doing price discrimination to turn the consumer surplus into profit for itself. I think it's obvious why consumers wouldn't like that. Although they can also do "this one is a cheapstake with lots of free time, I have to offer a 20% discount to keep him coming"

netsharc 1y ago
Next: Cheapskate as a Service. Are you a cheapskate that can get discounts? Sign up on our app and use your "he gets great discounts" status to buy things for others, and earn a percentage of the savings!
- tcoff91 1y ago
  With the way things are going, this isn’t even far fetched.
  - garciasn 1y ago
    We literally target advertisements in lookalike audiences based on behavioral profiling from on-site and in-store actions. It's been like this for more than a decade in my job; it's literally what I do for a living. But this has been happening with RFM direct mail for DECADES. One major clothing retailer I worked with for 4+ years was big on promotions, particularly via direct mail. Those scratch-off coupons were not random; they were specifically targeted to individual customers based on their prior behavior. For example: - Customer A historically buys when they get a 30% coupon; test them with a 20% and see if they bite, but if not, give them the 30% and get some money. - Customer B will always buy with almost ANY discount but never without one; give them the lowest one most of the time, but occasionally give them a higher one because it keeps them interested. - Customer C will buy any time, but we need to keep them hooked so we send them the lowest one all the time. --- I just don't know why people are surprised that this is happening at a bigger scale in app; it's baffling to me.
    - 0xffff2 1y ago
      As someone who has no idea what a "scratch-off coupon" is, we could be surprised because we have no idea that this is going on at all at any level.
  - dmurray 1y ago
    Versions of this already exist with "this one lives in a low cost country, buys Steam games, Netflix subscriptions, (...) and shares them with family in high-cost country"
- i_k_k 1y ago
  Love it!
onlyrealcuzzo 1y ago
I think Uber sucks, but people keep using it, and seem to beg to differ. I don't see what the problem is. Presumably people are fine with getting "ripped off" by Uber, otherwise they wouldn't keep using Uber and paying for it. It's not like it's some free ad-supported product that's a scourge on society where all the costs are hidden. I avoid Uber at all costs, other people are happy to rely on it. To each their own. Fun fact, it's very easy for apps to see what apps you have installed on your phone. If you only have Uber installed on your phone, see what happens with future pricing when you install Lyft, Curb, Waymo, etc. You don't even need to ever use them. Just have them installed.
- UncleEntity 1y ago
  > I think Uber sucks, but people keep using it, and seem to beg to differ. This sort of thing happens when you reach de facto monopoly status...
- wiz21c 1y ago
  > I don't see what the problem is. The problem is most people don't know. In my country you can't change the price for a given person. So if you don't know it's done, you can't change your behaviour (like do legal actions).
  - theturtletalks 1y ago
    This is not the law in all places sadly. I read that restaurants in Japan give a different, cheaper menu to locals and more expensive menus to tourists. Most tourists don’t know and the restaurant doesn’t want to price out the locals.
    - mock-possum 1y ago
      That just sounds like racism though - how do they tell who qualifies for the ‘local discount’ versus the ‘tourist premium?’ Betting it’s based on stereotypical appearance and language, not checking IDs. A more charitable approach might be to charge an extra fee for foreign credit cards - that way you get to effectively upcharge tourists, while encouraging conversion to and payment by local currency, additionally saving yourself transaction fees in the process.
vjvjvjvjghv 1y ago
"* This is a regular that always buys the same thing every week, I can charge 30% more without breaking his routine" This one is getting to me more and more. When I grew up, you got the best deals as a regular customer. Nowadays it's the opposite. Loyalty is something that can be exploited. If you don't switch insurance regularly, you are paying way too much. If you stay at a job for longer, you get paid under market. If you use a service regularly, you get charged more. I think it's really corroding society when loyalty and trust are viewed as an exploitable weakness.
- pc86 1y ago
  I don't think its as much "corroding society" as it is a symptom of scale and corporate consolidation. The mom and pop store making $200k/yr revenue selling physical goods gives regulars a deal because if their $100/mo spend goes elsewhere it is a demonstrably negative business impact, and there are 2 or 3 other mom and pop stores close by. The owner's kids also probably go to school with the regular's kids or there's some similar relationship. Plus, even if they wanted to maximize profit - they probably don't based on the previous point - they simply don't have enough data points to figure out how exactly to do it. The multinational corporation has billions or tens of billions in revenue, tens or hundreds of thousands of locations, and so many data points they can test any price discrimination scheme they want and get data almost instantly. But this by itself isn't a problem (IMO, certainly some here would disagree). The root of the problem IMO is that there's no relationship. The manager of the location has no power, the district manager is in a city an hour away, the people making these pricing decisions live in another state or country, and they are judged on making the graph go up and to the right. Their bonuses depend on it, their livelihood depends on it. In the mom and pop scenario, the customer interacts with someone whose livelihood depends on them being happy and has the power to make sure they are. With the multinational, they interact with someone who doesn't give a shit if they're happy or not, and has no power whatsoever, and the lowest person with power doesn't have any idea who they are and is actively incentivized to screw them.
jagraff 1y ago
Groceries regularly do price discrimination (and have for a long time) via coupons. People mostly seem to be fine with it.
- rynohack 1y ago
  Anyone can use coupons. Even if they don't want to spend the time to do it, they could. Same with store brand products made by the name brand manufacturer the choice is up to the consumer. Uber's price discrimination is opaque. Even if they aren't doing dastardly things with it, people don't like feeling ripped off. We have no way of knowing when we are.
- Terr_ 1y ago
  Two huge differences: 1. The existence and mechanism of coupon programs is visible instead of secret. 2. They are not based on creepy individualized spy dossiers.
  - LeafItAlone 1y ago
    Coupons of yesteryear, maybe. But most big box stores have moved to digital coupons that are indeed customized based on their creepy individualized spy dossier on you. At our grocery store, my partner and I get different coupons or even different deals for the same items.
maxlybbert 1y ago
https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-... Hardly a new idea. And Uber didn’t create it, they just do it well.
- jowea 1y ago
  Yeah sure, but Joel Spolsky does point in this article how it pisses consumers off. And I think this sort of algorithm "pure" price discrimination based on mind reading how much the consumer is willing to pay is much more annoying than doing it by having cheaper and more expensive options.
- jowea 1y ago
  Actually I may have a theory on why this is so annoying. Most people in Western countries are used to not haggling, and hate dealing with haggling for the two B2C products that are frequently haggled for, cars and housing, and frequently come out of the transaction feeling ripped off. And now Uber is trying to apply a faceless unilateral "take it or leave it" haggling process.

by jowea 1y ago

netsharc 1y ago

Next: Cheapskate as a Service. Are you a cheapskate that can get discounts? Sign up on our app and use your "he gets great discounts" status to buy things for others, and earn a percentage of the savings!

tcoff91 1y ago
With the way things are going, this isn’t even far fetched.
- garciasn 1y ago
  We literally target advertisements in lookalike audiences based on behavioral profiling from on-site and in-store actions. It's been like this for more than a decade in my job; it's literally what I do for a living. But this has been happening with RFM direct mail for DECADES. One major clothing retailer I worked with for 4+ years was big on promotions, particularly via direct mail. Those scratch-off coupons were not random; they were specifically targeted to individual customers based on their prior behavior. For example: - Customer A historically buys when they get a 30% coupon; test them with a 20% and see if they bite, but if not, give them the 30% and get some money. - Customer B will always buy with almost ANY discount but never without one; give them the lowest one most of the time, but occasionally give them a higher one because it keeps them interested. - Customer C will buy any time, but we need to keep them hooked so we send them the lowest one all the time. --- I just don't know why people are surprised that this is happening at a bigger scale in app; it's baffling to me.
  - 0xffff2 1y ago
    As someone who has no idea what a "scratch-off coupon" is, we could be surprised because we have no idea that this is going on at all at any level.
- dmurray 1y ago
  Versions of this already exist with "this one lives in a low cost country, buys Steam games, Netflix subscriptions, (...) and shares them with family in high-cost country"
i_k_k 1y ago
Love it!

onlyrealcuzzo 1y ago

I think Uber sucks, but people keep using it, and seem to beg to differ. I don't see what the problem is. Presumably people are fine with getting "ripped off" by Uber, otherwise they wouldn't keep using Uber and paying for it. It's not like it's some free ad-supported product that's a scourge on society where all the costs are hidden. I avoid Uber at all costs, other people are happy to rely on it. To each their own. Fun fact, it's very easy for apps to see what apps you have installed on your phone. If you only have Uber installed on your phone, see what happens with future pricing when you install Lyft, Curb, Waymo, etc. You don't even need to ever use them. Just have them installed.

UncleEntity 1y ago
> I think Uber sucks, but people keep using it, and seem to beg to differ. This sort of thing happens when you reach de facto monopoly status...
wiz21c 1y ago
> I don't see what the problem is. The problem is most people don't know. In my country you can't change the price for a given person. So if you don't know it's done, you can't change your behaviour (like do legal actions).
- theturtletalks 1y ago
  This is not the law in all places sadly. I read that restaurants in Japan give a different, cheaper menu to locals and more expensive menus to tourists. Most tourists don’t know and the restaurant doesn’t want to price out the locals.
  - mock-possum 1y ago
    That just sounds like racism though - how do they tell who qualifies for the ‘local discount’ versus the ‘tourist premium?’ Betting it’s based on stereotypical appearance and language, not checking IDs. A more charitable approach might be to charge an extra fee for foreign credit cards - that way you get to effectively upcharge tourists, while encouraging conversion to and payment by local currency, additionally saving yourself transaction fees in the process.

vjvjvjvjghv 1y ago

"* This is a regular that always buys the same thing every week, I can charge 30% more without breaking his routine" This one is getting to me more and more. When I grew up, you got the best deals as a regular customer. Nowadays it's the opposite. Loyalty is something that can be exploited. If you don't switch insurance regularly, you are paying way too much. If you stay at a job for longer, you get paid under market. If you use a service regularly, you get charged more. I think it's really corroding society when loyalty and trust are viewed as an exploitable weakness.

pc86 1y ago
I don't think its as much "corroding society" as it is a symptom of scale and corporate consolidation. The mom and pop store making $200k/yr revenue selling physical goods gives regulars a deal because if their $100/mo spend goes elsewhere it is a demonstrably negative business impact, and there are 2 or 3 other mom and pop stores close by. The owner's kids also probably go to school with the regular's kids or there's some similar relationship. Plus, even if they wanted to maximize profit - they probably don't based on the previous point - they simply don't have enough data points to figure out how exactly to do it. The multinational corporation has billions or tens of billions in revenue, tens or hundreds of thousands of locations, and so many data points they can test any price discrimination scheme they want and get data almost instantly. But this by itself isn't a problem (IMO, certainly some here would disagree). The root of the problem IMO is that there's no relationship. The manager of the location has no power, the district manager is in a city an hour away, the people making these pricing decisions live in another state or country, and they are judged on making the graph go up and to the right. Their bonuses depend on it, their livelihood depends on it. In the mom and pop scenario, the customer interacts with someone whose livelihood depends on them being happy and has the power to make sure they are. With the multinational, they interact with someone who doesn't give a shit if they're happy or not, and has no power whatsoever, and the lowest person with power doesn't have any idea who they are and is actively incentivized to screw them.

jagraff 1y ago

Groceries regularly do price discrimination (and have for a long time) via coupons. People mostly seem to be fine with it.

rynohack 1y ago
Anyone can use coupons. Even if they don't want to spend the time to do it, they could. Same with store brand products made by the name brand manufacturer the choice is up to the consumer. Uber's price discrimination is opaque. Even if they aren't doing dastardly things with it, people don't like feeling ripped off. We have no way of knowing when we are.
Terr_ 1y ago
Two huge differences: 1. The existence and mechanism of coupon programs is visible instead of secret. 2. They are not based on creepy individualized spy dossiers.
- LeafItAlone 1y ago
  Coupons of yesteryear, maybe. But most big box stores have moved to digital coupons that are indeed customized based on their creepy individualized spy dossier on you. At our grocery store, my partner and I get different coupons or even different deals for the same items.

maxlybbert 1y ago

https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-... Hardly a new idea. And Uber didn’t create it, they just do it well.

jowea 1y ago
Yeah sure, but Joel Spolsky does point in this article how it pisses consumers off. And I think this sort of algorithm "pure" price discrimination based on mind reading how much the consumer is willing to pay is much more annoying than doing it by having cheaper and more expensive options.
jowea 1y ago
Actually I may have a theory on why this is so annoying. Most people in Western countries are used to not haggling, and hate dealing with haggling for the two B2C products that are frequently haggled for, cars and housing, and frequently come out of the transaction feeling ripped off. And now Uber is trying to apply a faceless unilateral "take it or leave it" haggling process.