The Marginal Cost of Email and Price discrimination at the Parking MeterPosted: 2012/01/25
Today I learned:
1. The marginal cost of an email is not always zero: Witty banter back and forth via email is a lot less fun when it’s a lawyer on the other end of the exchange and you know she bills you $20 every time she reads one of your messages.
This made me wonder, if I knew I was going to be invoiced $20 every time a recipient read one of my messages, how many emails would I actually send?
I am guessing a lot fewer.
So, should I build that into my decision-making criteria when determining whether or not to use email for certain types of communication?
I am guessing I should.
2. Perfect Price Discrimination for…Parking? The headline in today’s Vancouver Sun reads “Vancouver Parking rates could vary by block, month with new project.” Apparently 1500 of the city’s 10,000 meters can now have rates remotely changed.
The issue? Not enough people are using transit, resulting in drivers parking illegally or circling around looking for spots in busy locations.
The solution? Remotely altering parking prices will allow the city to control consumption patterns with the goal of ensuring there will always be one open spot on every block. According to Jerry Dobrovolny, Vancouver’s director of transportation, “the reason for getting the right price is that the wrong price does so much harm.”
To that, I call bullsh*t.
This has nothing to do with the environment and everything to do with revenue. In fact, the lesson I learned here is that the city is actually smart enough to notice the technology now exists to take aim at perfect price discrimination for parking spots. They understand that with a bit of effort and investment they quickly change the cost of a spot to find the right buyer and then reap the rewards. They will have a model where they can extract more of the consumer surplus available.
To be clear I have no real issue with the direction they are going with this. It is brilliant. The city deserves kudos for figuring this one out. As a resident of Vancouver I know just how many people will be coming in from the suburbs everyday to fill the meters and in turn add to the cities coffers. I just wish they were more honest about it.