Pricing markets in cabs and beer

Earlier this evening Udhay and I shared a cab back after beer and biryani. We don’t stay particularly close by (using the place we met as point of reference), but I think it was pareto optimal for us to share the cab rather than take two cabs. I got off first at my place and Udhay went on to his place. We used Uber’s fare splitting feature for the trip.

I just got the bill and saw that I’ve been charged exactly half of the total bill. Given the distance from our meeting point to my place and Udhay’s place it perhaps was pareto optimal but had we met any closer it may not have been a fair split – if the place we met was closer to my place than my place is to Udhay’s, then splitting the fare equally would have been unfair to me – for I would have paid more for sharing the ride than I would have had I taken a cab by myself! Can Uber do better?

Once we have enabled the ride sharing and splitting thing, Uber knows who all are travelling, and Uber knows where each of us gets off (if our phones are on, that is). Based on where we break off from the cab, can Uber estimate where each of us got off and split the fare accordingly? Given how good their app has been so far, I would expect them to tweak their ride splitting algorithm and introduce this measure soon.

Going a little back in the day, Udhay and I were at Punjabi By Nature in SuddgunTepALya. We were there during the restaurant’s “happy hours” where they have a buy-one-get-one-free offer on beer. However, it was after we had ordered a “tray” of samplers that we were told that the Bogof didn’t apply to the tray. We also ordered another glass of beer, which duly arrived with a “partner”.

There are two things about Punjabi By Nature’s pricing that I found interesting. The first bit was the non-applicability of “happy hours” to the tray. Is it a measure by them to reward their regular customers who know what to drink at the cost of first-timers who invariably ask for the sampler set? Any other explanation for happy hours not applying to the tray?

The second interesting bit is about the pricing of the drinks itself. A 500ml glass of beer was priced at Rs. 240 plus taxes, which is par for the course for a microbrewery in Bangalore. In most other microbreweries, the sampler trays are priced “reasonably”, approximately at the same per-ml price as the glasses of beer. Here, though, the tray (on which we didn’t get Bogof, remember) was prices at Rs. 625 per taxes! Of course, there were six beers that were sampled in the tray and the quantity was also significantly more than at other sampler trays (here it was at least 150ml per glass if I’m not wrong; in other microbreweries in Bangalore it’s more like 100ml), yet the premium in pricing for the samplers was significant!

I wonder what makes other microbreweries price their samplers at about the same per-ml cost as their glasses – given that the standard practice is to incentivise customers to buy in larger units. I also wonder what makes Punjabi By Nature impose a “penal” price (assuming it was 150ml per sample, it works out to about 70 paisa per ml. The glass of beer (not accounting for happy hours) costs 240/500 = 48 paisa per ml, so the sampler is 50% more expensive) on its samplers. For now that I know how it’s priced, the next time I go to Punjabi By Nature I’m going to order glasses of beer (hopefully in happy hours) and not the sampler!

Pricing is a funny game, I tell you!

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