Abstract Summary
In the past decade, shared mobility systems involving station-based, dockless and electric bikesharing, and electric scooter sharing (collectively branded as ‘micromobility’ services) have emerged as increasingly popular modes for short trips in urban transportation landscape worldwide. A robust revenue stream is a necessary element of economic sustainability of these services. Bikeshare fare products and pricing plans for casual users (temporary users with no long-term commitment) and members (or subscribers) vary from system to system and change over time. Known as 4Ps of the marketing mix in the marketing parlance, four basic elements of marketing plan, namely: product, price, place and promotion, help develop marketing strategies and tactics (McCarthy, Shapiro & Perrealt 1979). In this research, we conduct a closer scrutiny of reactions of casual users of bikeshare to products (or services) and their pricing. Value-based pricing, which considers customer perspective, increases the likelihood of maximizing revenues from the same set of customers simply by altering their product-selection from the given product mix (Hinterhuber 2008). We define value-based pricing as a strategy for setting the price of a product or service that offers economic value to consumers. The value may be absolute or relative to other products in the choice set and it may be real or perceived. We hypothesize that by introducing value-based pricing options into the fare product mix, micromobility service revenues can be increased thereby enhancing the economic sustainability of the system. We test the hypothesis by conducting a controlled experimental survey of 157 current and potential casual users of bikeshare across six cities in the United States. Respondents’ choices of fare products were registered in two groups – the binary choice set (CS-1) as a control group and the other choice set (CS-2) with an additional value-priced fare as an experimental group.
