Thursday, February 17, 2011

Parking meters run on an unethical business model

Imagine you find a great deal on a hotel so you stay the night. The checkout time on the room is 10:00 am. You actually checkout at 10:10 am, because you were running slightly behind. Now imagine if the hotel tells you that since you checked out late they are going to charge you the dollar equivalent of a months worth of room fees. When you confront them about it they tell you it is to teach you a lesson to always checkout on time. You then find out that they have structured their business plan on the assumption that a large percentage of people will not be able to checkout on time and they will then get this windfall and when you confront them about they say “well, we give people a good deal on the hotel room, but then make up for the loss with dummies like you who can't read the card on the door that says “Checkout at 10:00”. This would seem like a really immoral and ridiculous way to do the business model and the hotel would likely go out of business once the word spread of their unethical business practices. The ethical way to resolve this would be to charge for the extra time or at the most charge for another nights stay, but then at least give the party the option of staying another night since they paid for it it. Anything more would be excessive in most peoples eyes, and it certainly would be considered unethical if the hotel took steps towards making it difficult to know when checkout time was and being able to get to the checkout on time just so they could get more of these "late checkout time penalties".

Now if you have read this far, you probably agree that this would be a poor business model and that is why we don't see this model used in business. We do see this model model used in government however, namely this is exactly the way parking meters work. The more ethical way of dealing with parking would be to give the spots in front of houses/businesses to those owners and let them decide how they wish to deal with the parking spots. In lieu of that they would need to come up with some way of paying for the spot when you leave a spot instead of when you arrive so how long you actually stayed can be assessed instead of forcing you to try and guess how long your stay is going to be before hand.

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