Learn more about Peltz-Steele v. UMass Faculty Federation at Court Listener (complaint) and the Liberty Justice Center. The case is now on appeal in the First Circuit as no. 22-1466 (PACER paywall). Please direct media inquiries to Kristen Williamson.
Showing posts with label transportation. Show all posts
Showing posts with label transportation. Show all posts

Wednesday, September 28, 2022

Proposed Biden rule would try again to compel airline pricing transparency; it worked out so well last time

President Biden has his own plane.
(U.S. Mission photo by Eric Bridiers CC BY-SA 2.0 via Flickr)
The U.S. Department of Transportation (DOT) has proposed a rule to refresh pricing transparency in the airline industry.

According to a DOT press release: "Under the proposed rule, airlines and travel search websites would have to disclose upfront—the first time an airfare is displayed—any fees charged to sit with your child, for changing or cancelling your flight, and for checked or carry-on baggage." 

For me, the new rule can't happen soon enough. At the same time, I'm doubtful we'll see much change in the opacity of the airfare market.

I'm a libertarian. But in America, libertarianism is too often confused with a radically absolutist version of laissez-faire capitalism. Libertarianism rather is about the virtues of a free market. And free markets depend on conditions that don't naturally tend to exist in the real world, including a free flow of information between buyer and seller—that is, transparency. Free markets require regulation to ensure that they remain free.

The airline industry, especially since it moved to online sales, is case in point. In the online marketplace, customers are attracted by low upfront prices. Airlines found that sales improved when the upfront price was lowered by moving some of the fare, especially bag-check costs, to add-on fees later in the purchase transaction. Southwest famously resisted bag-check fees and has capitalized on its exceptionalism, though not without costs

In the usual purchase transaction, the low upfront price is too attractive to resist. And competitors' add-ons are not always apparent until the customer has sunken too much time and money into the booking to look back. Indeed, Delta does not even allow customers to prepay bag check, so fliers are not confronted with the bag-check add-on until the day of departure.

Dollars are not the only costs that airlines can conceal from customers doing online price comparison. Inconvenient routing with multiple and lengthy layovers can cost fliers time and money down the line. Early morning and late night flight departures and arrivals can significantly increase airport transfer costs, besides risking personal security and inducing exhaustion. Seat availability can be limited, making flying literally painful for someone six-foot-five or weak of bladder. 

Negotiating these options can be grueling for the consumer, and the market can seem ungoverned by logic. For me, it is not unusual to take days, at hours per day, sifting and testing the market to get the best deal on an air itinerary. In a recent search process, I found, not atypically, that I could fly from city A to city B to city C for less than it cost to fly from city A to city B, which was my actual destination, because direct service is more desirable. But buying the cheaper fare and leaving the airport at city B is called "skiplagging," or "hidden city ticketing," and airlines can be nasty about enforcing their prohibition on it.

On the one hand, I respect the airlines' free-market discretion to charge a higher price for a direct flight than for a less desired routing. On the other hand, there is a confounding absurdity to the idea that I would find myself at home in city B, yet be obligated to board a plane to carry on to someplace I don't want to go. Courts have been hostile to airlines' efforts to penalize skiplaggers financially. But they won't stop an airline from zeroing out a customer's frequent flier miles or even banning the flier from the line.

Like radar detector technologists with speeding enforcers, airlines have played cat and mouse with private and public regulators. Search engines have become more sophisticated in allowing customers to specify parameters, such as bag checks and connections. But the providers vary in options and their efficacy. Kayak tries to help with bag-check fees; Expedia not as much. And the mere act of online price comparison might introduce costs; despite industry denials, there is some evidence that consumers trigger price increases by repeating searches on Kayak and Google.

The search engines anyway can only sort data that the airlines provide, and they are not always forthcoming with details. Some airlines shun intermediary booking sites wholly. Airlines started gaming bag-check fees in 2008. Customer frustration finally precipitated disclosure regulation in 2011.

The regulation failed; bag-check fees are not easy to find. At Frontier and Spirit, the pricing is variable, so a shopper must enter data about a specific flight to get a number that allows price comparison. Meanwhile, bag-check fees have extended to an array of options. United is among airlines that now charge for a carry-on bag, and JetBlue charges for overhead bin space.

Add to the mix that JetBlue and Spirit announced their merger in 2022, even as JetBlue defends its partnership with behemoth American Airlines in litigation with the Justice Department (DOJ). Fewer carriers never results in improved transparency or lower prices for customers. Anti-competitive conglomeration is a natural market tendency, and healthy to a point, but it must be counterbalanced by thoughtful and vigorous antitrust regulation.

Even if DOJ is successful in the present antitrust litigation, the success will be a drop in the bucket of an industry that already is far too monopolized. The United States has nothing like the peanut airlines that blanket Europe. There are legitimate reasons for that deficiency, for example, our larger land mass. But there are plenty of illegitimate reasons, too, including monopoly by air carriers and monopoly in secondary markets, such as airports, baggage handling, and the transportation infrastructure that supports transfers.

The proposed rule announced by the Biden Administration is better than nothing, if it is promulgated intact. But the rule barely scratches the surface of what's needed to move the airline industry into a truly free market, in which consumers have a fighting chance. Extrapolating from past efforts to compel the disclosure of bag-check fees, it's safe to predict that the airlines already are one step ahead, and little will change for the consumer's experience.

A free market is a transparent market with manageable entry barriers. Consumers should be able to compare prices head to head for the same services. The internet should have facilitated the free market and leveled the playing field for buyers. Instead, weak regulation has let industry run amuck and obfuscate pricing. Absolutist laissez-faire capitalism is otherwise known as corporatocracy.

 —

Presently, I'm using two different modalities to try to pursue penalty fees from airlines for flight delays I experienced in the summer under European Union regulatory jurisdiction. When I have outcomes to report, I'll blog about it.

Wednesday, July 27, 2022

Chicago Transit Authority seeks to hire tort lawyers

The Chicago Transit Authority is looking for lawyers specifically to handle tort claims.

This job is unusually specific to tort work. Here is the position summary for "Senior Attorney," listing a salary of $95,544:

Under general supervision, performs a broad variety of legal duties in support of the Authority’s General Counsel. Works on the defense of personal injury lawsuits filed against the Authority, from minor to catastrophic injuries and subrogation and property damage defense and performs all litigation for assigned caseload.

And here is the position summary for "Associate Attorney," listing a salary of $83,372:

Under general supervision, functions as a junior level attorney responsible for litigating personal injury cases brought against the authority.  Works with senior attorneys on complex personal injury, subrogation, and property damage defense cases.

Both positions were posted July 22.

Monday, March 9, 2020

Poor development choices may bolster quality-of-life disparity on Tanzania's Msasani Peninsula

 Coco Beach, Msasani Peninsula, Dar es Salaam, Tanzania. All photos RJ Peltz-Steele CC BY-SA 4.0.


The short length of Coco Beach is the touristic gem of Tanzania's largest city, Dar es Salaam, which, for all its rugged charms, is not rich with touristic gems. Coco Beach sits on the eastern, Indian Ocean, coast of the ritzy Msasani Peninsula, just a few kilometers northwest of the CBD.

Msasani says a lot about wealth stratification in Africa. The worsening wealth gap is an issue that vexes me in the United States. But we've got nothing on many an African country. Where subsistence living is the norm, and social safety nets are nearly non-existent, the disparity between haves and have-nots gets closer at each end to all and nothing. And as on Msasani, the extremes are often abruptly juxtaposed. The peninsula is home to subsistence fishermen, and the polluted beaches of the slipway, in the west, and the luxury condominiums of posh Oyster Bay, in the east.

Luxury condo building on the road from Oyster Bay to Sea Cliff Village
I walked the peninsula from west to east and saw, in the span of just a few kilometers, ramshackle wood dwellings on potholed dirt trails without plumbing, in the west and center, and gated condo complexes with marble-esque, statued facades, in the east. While the former teemed with human life, the latter were eerily vacant, deserted of all but the occasional maintenance worker. I assume the condos are mostly second-home getaways and vacation rentals for the well-to-do in high season and on weekends. (I was reminded of the dark-windowed high rises that loom over Central Park West, New York.)

Qatar's is the most modest of the beachfront embassies.
At that, the most striking residences of the eastern Msasani are not luxury homes, but foreign embassies, including those of Qatar, Brazil, Canada, Ireland, the UAE, and Saudi Arabia. (The U.S. embassy and others are in Oyster Bay, but in the interior.) They line the main coastal road that runs between Oyster Bay and Coco Beach, which runs on northward to swank Sea Cliff Village and the Yacht Club.

Present service structures on Coco Beach, astride road construction.
At present, it isn't easy to cross this road, because a massive construction project runs all along the length of Coco Beach. I had hoped that this construction would improve the beach for touristic use that might fuel economic development to benefit the peninsula's have-nots. What passes for services on the beachfront now are wood shacks of dubious hygiene, selling drinks and snacks that might prove hazardous to foreign GI tracts. One municipal toilet building has seen better days and is now inaccessible anyway because of the construction. Alas, no, a local on the beach informed me: The purpose of the construction is to convert the shoulderless, two-lane, asphalt coast road into a four-lane highway, because, he said, the embassies want better and more secure access.

Nearly completed end of beachfront highway entering the CBD.
Many an American city can today tell tales of costly woe for having built transportation and utility infrastructure along prime waterfront property. It's bad enough that embassies, with their high, secure walls, occupy this land on the peninsula to begin with. Their inefficient use of prime real estate, distant from the administrative offices of the CBD, and in the company of Tanzania's "one percent" and cloistered ex-pats, sounds an awakward echo of colonial elitism.  To boot, now, the embassies and luxury homes will soon be served by a four-lane road that will further limit public access from the peninsula to the already underdeveloped beachfront.

Tanzania in 1974 moved its capital de jure to central Dodoma, in an effort to broaden economic opportunity in the country beyond Dar es Salaam. Nevertheless, concentration of development in Dar is still a problem that plagues the country. A businessman in the northeastern town of Arusha told me there's mounting resentment there about rural taxes paying for big-city infrastructure. (Boston says hello, western Massachusetts.) Maybe foreign nations can help Tanzania take a step forward by transferring their embassies from walled beachfront luxury to central locations with better access to government, whether Dar or Dodoma, on condition that appropriate public development of the Msasani Peninsula be left in their wake.  After all, foreign diplomatic posting is supposed to be a hardship, and it's compensated accordingly.

The new highway runs in front of the historic Ocean Road Hospital, where a street sign bears a familiar name.

Saturday, October 26, 2019

Social-science saucebox opines on bike-bridge closures

A reporter stopped me on a run last week to obtain my critical policy analysis of the bridge-replacement situation on the East Bay Bike Path.  Suffice to say, my testimony was breathless.


Watch at NBC 10 Providence.