Tesla is making it harder to order the 35K Model 3 vehicles. I have argued that such a low price should not have pursued by closing showrooms, in the first place. Shutting showrooms for 35K cars makes it appear as if Tesla needs those less loyal, price-sensitive customers at the cost of diluting the high-service expectation that its top-line customers have.
Leave a CommentTag: Pricing
In my earlier post on the Brief History of Amazon Prime, I had mentioned about the stickiness of Amazon Annual Prime Pricing. An issue with scaling revenues this way is stickiness of prices. It took a whole nine years for Amazon to go from $79 to a more profitable fee of $99. (I thought the fees would be raised to $108 at $9 a month – closer to NetFlix rates – but the fees were stickier than I had thought). Prime subscription prices vary quite a bit geographically around the world. For instance, the annual subscription is $99 in the U.S., £99 in the U.K. (equivalent to USD 115), $22 in Italy, and about $8 in India. However, within certain geography…
Leave a CommentIn late December 2017, continuing its string of legal setbacks, Uber lost a case in the European Court of Justice which ruled that Uber is a taxi company. Specifically, the courts rule that a company whose service is “to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys” must be considered “a service in the field of transport.” The news coverage of the case indicate that the ruling only impacts four markets (Poland, Czech Republic, Slovakia, and Romania), where Uber is yet to be regulated under the local or national laws. In fact, Uber is already regulated like a taxi company in many European nations. Proponents of…
Leave a CommentWired Magazine reports that San Francisco is planning to adjust parking spot prices based on demand, essentially moving to dynamic pricing of parking spots. Note that SF has been experimenting with the dynamic pricing of spots already. This proposal by San Francisco Municipal Transportation Agency (SFMTA) — which has not been voted by the City Council yet — expands the dynamic pricing spots from the current 7000 meters to 28,000 meters. I’ll make 4 salient points about the issue: (a) Success depends on operational transparency, (b) Roads utilization, not spots, is the main source of congestion, (c) Dynamic pricing may not improve utilization, and (d) Dynamic pricing may hurt consumer welfare. (In fact, I will discuss research evidence that SFPark…
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