How Pricing Changes Affect Electric Scooter Ride Length in Adriana’s Hometown

In Adriana's hometown, there's currently only one electric scooter company in operation. As of now, the company charges riders $0.20 per minute, with no fee to unlock a scooter. However, the company is contemplating a new pricing plan that introduces a $1 fee to unlock a scooter, while reducing the per-minute rate to $0.10.

If Adriana typically rides for more than 10 minutes, this pricing change could impact the average length of her rides significantly. Here's why:

1. Cost Dynamics

Under the current pricing, a 10-minute ride costs Adriana $2.00, as it's solely based on the per-minute charge. Under the new plan, a 10-minute ride would cost $2.00 as well ($1 unlock fee + $0.10 per minute). However, the financial implications shift noticeably the longer Adriana rides.

2. Longer Rides Become Economical

With the new pricing plan, longer rides become more economical per minute because the one-time $1 unlock fee gets distributed over the duration of the ride. For example, a 20-minute ride would now cost $3.00 ($1 unlock fee + $2.00 for riding). Previously, a 20-minute ride would have cost $4.00 ($0.20 per minute).

3. Incentivization of Longer Journeys

Given these cost dynamics, Adriana is likely to take longer rides under the new pricing plan to maximize the value of the $1 unlock fee. Essentially, the more minutes she accumulates, the cheaper the average per-minute cost becomes.

4. Convenience and Utility

Adriana might also weigh the importance of convenience. If she knows she can get more 'bang for her buck,' she might choose to run more errands or take more exploratory rides around town, since the additional time doesn't drastically increase the cost.

Conclusion

Switching to the new pricing plan, the average length of Adriana's rides would likely increase. The $1 unlock fee encourages longer trips, distributing the cost more effectively over extended durations. For riders like Adriana who seldom take short rides, this can result in a noticeable shift towards longer, more economical rides, ultimately increasing the average length of her scooter journeys.