When is a ‘travel hack’ unethical?
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Well, airlines are a for-profit business. They don't choose their rates out of some public-service motivation. They charge what they think they can get away with. To re-cast that as some charity program that Americans shouldn't participate in, is pure fantasy.
Get the cheapest ticket you can, from whatever carrier you can find it from, with a clear conscience. Its business.
Is haggling unethical? Is using coupons unethical? This article is nonsense.
Personally, I feel that if you're focused exclusively on price, you're really missing the point. I could 'save' hundreds of dollars clipping coupons, but honestly to me it's not worth it. I was at the bar the other day and some guys next to me used a ScoutMob, I didn't even know what that was. They said you could save $15 on your tab and that I was being irresponsible with my money. I shrugged and paid full price. I went to the bar prepared to spend $X, spending $X - Y doesn't really make that much of a difference in my purchasing power. What makes a difference is in how you conduct your lifestyle, what Ramit Sethi calls "big wins". Cutting ruthlessly on stuff you don't need and spending relatively extravagantly on stuff you do. Planning expenses and not just consuming things mindlessly.
I don't think it's necessarily unethical to wring every last penny from the airlines, but really, wouldn't the time and energy spent learning how to do that, implementing the strategies, and learning from your mistakes be better spent on your own business / career / life? I feel like discount shoppers wind up being like the 5 year old who'll work harder to argue with his mom why he doesn't want to clean his room than it would take to just clean it.
I don't see the problem with any of the others as well, and I'm a closet moralist most of the time. Things like the "hidden city" are attempts by the airlines to game the system; they're trying to take advantage of their customer's behavior.
That said, I thought ticket prices were regulated by the IATA?
If a shopkeeper is distracted, you should not be able to steal candy bars with a clear conscience, even if you believe the price of those candy bars to be unethical.
Dealing with unethical people does not relieve you of your duty to behave unethically. And commerce is just another facet of social interaction.
Paying the posted price for merchandise is always fair in Business. Some PC fool comes along with "it was posted below the other price, low down for people in wheelchairs to see. You are stealing from the unfortunate!" and I will call out the idiot.
Airlines are in my experience among the least ethically run businesses:
* They will cancel a flight at the last minute stranding passengers because it was "undersold".
* They will delay flights for reasons that have no accountability to consumers.
* They pass on 100% of the risk of flights being on time to consumers.
* They give gate attendants authority to claim your bag is "too large" for the overhead bin even when it fits just fine. They can even claim the overhead bins are full when they are not full.
* Airlines will try to make every seat on a plane "economy-plus" (when you have already purchased a ticket, but they haven't given you a seat assignment yet) when they are overbooked and the bump the passengers that don't pay.
On the contrary I challenge airlines to find one example where they act ethically even when their incentives are not to and the law would allow them to act otherwise.
Airlines are going the way of ISPs. Monopolies that just don't care how annoyed they make you.
As for the seat. It's not about caring about your seat, because the seats on the flight that sticks out in my mind were pretty much indistinguishable. It was a 2x2 plane and there were like dozens of "empty" seats to choose from even though the flight was over-sold by one person. I refused to pay and then ended up being the one getting bumped (although in this case it worked out in my favor since I got bumped to the next morning and got paid 4x my fare). They do not make it obvious when you're purchasing that you do not have a seat either, they just "skip" that stage and don't give you one. Very misleading.
* Canceling the return flight if you miss your fight out, even if it was an un-intentional miss.
* (not all airlines) Charging more that the cost of a round-trip ticket for a one-way ticket.
* Making it intentionally difficult to report a problem: Hiding customer service phone numbers, having 1500 character limits on the web forms and no e-mail customer service (to reply to a reply you have to go back to the web form).
* Having lines to check bags that take over an hour to sort through (I avoid checking bags, but not everybody I travel with does).
* Trying to sell bonus miles (correct me if I'm wrong, but these seem like they're always bad value).
* Trying to sell trip insurance (this in particular seems as overpriced as "additional insurance" at a car-rental place).
Any takers? ...No?
Are you sure? I've never heard another free market capitalist argue that government regulations are an important part of how their ideal market works. Can you point out any free market economists that have argued for government regulation?
The economics research on public choice has done a great deal for setting aside the common yet inaccurate assumption that government agents pursue the interests of society. It's not appropriate to compare real world markets to utopian governments. Both are imperfect. The real question is which is superior under realistic assumptions.
And I'd say, why not both? It's obvious that the market is superior in many cases. It's also obvious that the government is superior in others. They both cover for each others' failures.
Over a longer time horizon, I'm not certain how "obvious" it is governments are superior. It takes time for alternative institutions to develop, but the institutional problems that are inherent to governments are avoidable through private institutions. The presence of governmental institutions causes a lot of distortion and disincentives to create alternative forms of governance (governance that could surpass governments in terms of quality provided), so I'm not certain we should simply look at the world as it is today and conclude that governments are inherently superior.
Governments and markets cover for each others failures. Where a government is inflexible, a market can find an efficient solution. When a market is trapped in a race to the bottom, the government creates coordination. They complement each other.
As for the argument that keeping the current government prevents us from experimenting with alternative forms, you could say the same about free market keeping us from experimenting with different forms of markets...
It's probably best to find another term to describe the market you see working, as 'free market' is what free market capitalists argue for. I don't know what a better term would be, but I'm sure that economists would've thought of one.
Regulations that prevent entrance to a market - by artificially rising the capital requirements to the impossible, are probably not helping the free market.
There are many forms of private governance and regulation that protect consumers. That's not to say free markets are utopias, but believing that governments are the only source of regulation is incorrect. In fact, in many cases private governance is far more effective (e.g., the private regulation Uber is subject to is stronger and more efficient than the governmental regulation traditional taxis are subject to).
See "Private Governance" by Edward Stringham for some good examples of market governance in action. The book received the following review from Peter Thiel:
"Stringham dispels state-worshipping fiction with historical fact to show how good governance has preceded Leviathan, ignores it when necessary, and can surpass it when it fails."
Until someone comes, holds a gun to your face and takes your sandwich. Then you'll be thankful for government regulation.
I'm absolutely certain that the government's (attempt of a) monopoly on violence is one of the most crucial aspects of free markets. Another is contract law.
Frankly, I fail to see how you can hold a working market in a big population without a somewhat monopolized government structure. If suddenly, say, the USGOV disappeared, leaving behind a libertarian utopia, I'm pretty sure it would quickly degenerate into acts of violence, an era of warlords and famine, after which people would probably figure out that a single entity enforcing some rules was generally not a bad idea.
Exactly what recourse would I have against someone who stole my sandwich? Unless I know the person or there is solid evidence to identify the individual, the costs of investigation and prosecution far exceed the value to be recouped. Police will take my information, file a report, and nothing else will happen.
Not only is that state not helpful under these conditions, but private institutions have often found solutions to similar problems before the government does. Look at Paypal. They faced very similar conditions of fighting fraud and theft that couldn't be remedied through legal means, so they developed many private forms of regulation which allowed online exchange to flourish.
Enforcement is not perfect, but that the police can punish the armed sandwich thief in principle is already a deterrent. It is common knowledge who in this situation would be in the right. Compare with government-free world, where to determine who's right we'd have to make our security companies get into a firefight over it. And they'll probably decide that fighting isn't in their best interest and shoot us instead. They can always find more customers.
Go back ten years and have a conversation with someone about a private taxi company that uses technology to operate outside of existing regulations. You would hear outrageous claims about murderers, rapists, and thieves using the system to exploit customers. Of course, Uber drivers can and have assaulted people, but it turns out there are all sorts of creative solutions and private incentives that undermine these outcomes. Fortunately, the future does not lie in the hands of the uncreative people of the past and present. It's the people who can actually envision and deliver solutions--people like Kalanick and Camp--that determine the future.
That's why they'd shoot the customers and get on with it :P.
I'd go back 10 years and I'd find multiple companies already doing the thing Uber does now (sans app, because there weren't app back then) - except they were doing it legally and weren't sociopathic about it.
People who envision and deliver solutions with no regard to anything else than their personal profit surely could determine the future - but it won't be a future any one of us would like to live in.
Would it also be unethical of me to call a (to use an example discussed in the article) Chilean travel agent to arrange the cheaper ticket for me? In that case, there would still be the implication that my location when purchasing is in Chile.
What if it's me having my Chilean business partner, or the travel pool in my company's Santiago office do the booking, since that is where I'll be traveling from on that leg?
(Funny, so similar to the ad company / adblocking situation.)
The airlines do everything legal to charge more and I do everything legal to pay less. The airline has an army of lawyers, lobbyists, and consultants and I have a VPN.
"Getting a good deal should comply with local laws and the travel company’s code of business conduct." Since when did an airline have the moral authority to declare a code of conduct for anyone but itself? Where did they find this lady?
When is it unethical for BP to say they're sick of cleaning up their oil spills and they're going to stop doing it?
When is it unethical for the bankers and mortgage lenders to do what they did in 2008?
When companies interact with us, they appear to have no ethical obligations of any kind, so it's amusing to think we're somehow bound to be ethical towards them.
As for ethics of this topic, I think the quoted government response about one such case is spot on - this is people acting in bad faith. Whether or not you think it's fine to act in bad faith depends on to which group you subscribe - defectors, or cooperators.
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EDIT: The article would make a much stronger point if it focused on the problem of "hidden city" tickets, where people choosing to reduce their travel costs are not just haggling over price, but breaking a deal and wasting airline's fuel.
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EDIT2: Took a shower, thought about it some more.
My initial paragraph isn't about airlines really, it's an observation made after seeing a stream of comments arguing for general selfishness.
As for problems with some of the travel "hacks", I have issues with two of those in particular. "Hidden city" flying is one, and using golden-card-carrying third party to buy you tickets is the second. Both of them introduce waste - the more people do that, the more often a plane flies with seats empty, wasting fuel that could otherwise provide utility by carrying other passengers. And speaking of other passengers, this is another thing to consider - if you use a travel "hack" that leaves an airplane with an empty seat, you're taking away the seat from another traveler, who could have used it. Or, given the discriminatory pricing, who could have paid less for it. So by using those kinds of tricks, people are not only hurting the airline, they're also hurting each other.
Providing different prices to different groups of people does not result in "everyone winning". It's a classical example of market segmentation, price based on the average ability to pay of someone who holds the currency. It entirely benefits the airliner, and their profits, to be able to do so.
The "hidden city" tickets? A cheaper ticket to go from A->B->C than A->B is a deadweight loss in the market (assuming competitive markets). Prices are not reflecting costs, and airlines again are segmenting based on ability to pay.
You're right - the prices are not reflecting the costs. A typical traveler pays nowhere near the price they would if there was no segmentation. An average tourist ticket multiplied by number of passengers is barely enough to fuel a jet. And you have to pay the pilots, the airplane crew, the ground crew and still have enough to keep the lights on at the airport. Airlines are in a shitty position, and while probably some of it its their own fault, I'm not that sure if being hard on them is helping anyone.
Ex those considerations, do you really think they would (or could, given the competitive state of air service) leave money with the consumer because it's "more fair"?
Monkey see, monkey do: $%^@ them.*
*For values of @#$^ that don't actually include breaking laws. E.g. obtaining illegal access to their system(s) and creating yourself a ticket.
Does the government pay airlines to fly to podunk towns that wouldn't otherwise get service, or something?
Why don't they just make that leg of the flight $50, but hand out $150 to everyone who's actually on board mid-flight? That would prevent people from booking the flight but not taking it.
In some cases, yes. It's called "Essential Air Service." But that's not the usual reason for B->C having negative apparent cost.
It's not generally considered unethical to, say, buy a bottle of wine just to dump it out. Why would the same thing be unethical when it's an airline ticket instead?
The same amount of fuel is being burned, but one less person is getting transported to their destination. I see a pretty clear-cut example of waste here.
> It's not generally considered unethical to, say, buy a bottle of wine just to dump it out. Why would the same thing be unethical when it's an airline ticket instead?
Not sure if it's not generally considered unethical. It's probably wine being in abundance that makes people don't mind. But imagine if you bought one of the last few bottles in the shop, and then went and dumped it on the ground. It's totally legal, but I don't think many would argue it's good conduct.
Here, we're talking about a product (an extra leg on an airline ticket) whose price is negative. You're being paid to take it. That pretty strongly implies the product is abundant. If it's not abundant, and the airline is still giving it a negative price, that's pretty dumb on their part, and I don't think we can be blamed for making decisions based on the (apparently wrong) information they give us.
Edit: it occurs to me that there's an excellent comparison to be had here with the electricity market, which also sometimes sees negative prices. With electricity, prices go negative when there's an overabundance of supply and it's cheaper to use up extra electricity than to shut down power plants. The electric company wants you to use that power and they don't care how. Whether it's running your refrigerator or just shooting a laser into space, it's worth it for them to pay you to use it.
A negative price means, "Please, I beg you, take this product, we have too much of it." If it's not actually beneficial to the airline for people to buy those tickets (regardless of use, which is a separate bit) then they're basically lying by way of pricing.
I doubt that negatively priced legs come from product abundance. It's most likely optimization - e.g. if they can get more people going A->B->C then they can merge them with B->C passengers group and fly them together on a bigger, more fuel-efficient plane, etc.
Anyway, we're already paying much less than we should when flying privately; price discrimination works in our favour, at the expense of business customers.
In the case of negative-priced airline tickets, they are not paying you to ride an airplane. They're paying you to take a ticket. That ticket then gives you an option to ride an airplane. Ticket use is not mandatory, not even ethically.
If it were somehow advantageous for the airline to actually have people take the trip from B->C, then they could pay people to actually do it by, for example, giving you a rebate when you step off the airplane at C, or charging you a fee for not boarding the airplane at B. But they don't do this. So either they benefit from just selling the ticket, or far more likely they don't benefit from selling the ticket but are trying to manipulate the system in some other way.
I don't understand your optimization comment. There is no scenario in which it's cheaper to fly more people from B->C than fewer. Larger, more efficient planes are still more expensive in total to operate, so if your passengers fit on a smaller plane you'll save money that way, not lose money. Even if the bigger plane were somehow cheaper in total, nothing says you need to fill it up. You can just fly your normal B->C passengers in a bigger plane with lots of empty seats, if that ends up being cheaper. Airliners don't require ballast. There is no scenario where the airline makes more money at the end of the day by having you use your B->C ticket compared to obtaining a B->C ticket but not using it.
I also don't understand your "flying privately" comment. Airlines are cheaper than the alternative, so it's OK if they play pricing games? Well, it's a free country, they can play as many pricing games as they want, but I'm going to play them too.
Fair enough, though I still feel there's an ethical problem with creating waste / disutility.
> I don't understand your optimization comment.
I was thinking about something like this: there are people who want to travel from B to C, but not enough to warrant a new route (or increase in service on that route). So the company figures, if they can get more people to travel from A to C by offering a cheaper ticket, they can bundle them together at B and now there's enough people on B->C route that it makes sense to fly it (more often). I'm also assuming that B acts as a hub - it makes no sense to have direct route between every city due to combinatorial explosion. So here, the cheaper A->B->C ticket exists to attract new people willing to go from A to C.
I guess you're right if you only look at the money made directly on tickets. I don't know if, and how often, airlines get subsidies based on the amount of people they move around but if they do, then having planes flying half-empty may be a loss for them. But personally, I don't consider the money earned by the airline as the most important variable. What matters more is, IMO, the amount of passengers being transported. More people getting to fly = better.
> I also don't understand your "flying privately" comment.
I don't know what's the usual short phrase to refer to people like tourists, who travel in their personal capacity - for leisure, to study abroad, to visit their family, etc. - as opposed to business travellers, who travel to make money, and whose tickets are often paid by their company.
A lot of price discrimination is designed around getting the business customers to subsidize the "casual" ones. My point was, as casual flyers, we wouldn't be able to afford the ticket if it was priced fairly. Pricing discrimination in airlines generally works in favour of ordinary people.
Compare to hidden city ticketing. Instead of buying A->C->B, you buy A->B->C for $200 and then stop at B. It's no more wasteful than buying A->C->B, it's just more comfortable for you. In fact, it's slightly less wasteful, because there's a possibility that the airline could give your empty B->C seat to a standby passenger.
Assuming you don't have an ethical problem with the A->C->B hub flight, why would you have a problem with the A->B(->C) hidden city ticketing flight because of waste or disutility (or indeed anything else)?
I have no problem with price discrimination. But there are good and bad ways to do price discrimination. For example, one common method for flight discrimination is to charge less for tickets purchased farther in advance. Casual travelers typically book their travel well in advance, whereas business and other travelers willing to pay more typically book their travel shortly before they fly. This is just smart business, and it ensures that people who really need it can fly when they need to, but people who are more price sensitive can still travel. And you can't really game this system.
Then you have airlines trying stupid tricks like charging negative prices for certain legs. This is just wasteful and stupid. Why should I feel in any way obligated to support this sort of price discrimination? They are welcome to try such nonsense, of course, but their customers are likewise welcome to take advantage of it. It is not our responsibility to make their pricing scheme work. They're the ones who need to figure out workable pricing schemes.
OTOH, wine shops don't generally offer deals where it is cheaper to by two bottles of wine than one by itself, and prohibit you from reselling (or even giving away) the bottle of wine you don't want.
If they did, lots of people would probably see the seller's conduct as bad conduct, and it might make people more likely to see the buy-two-and-dump-one conduct as, if not good, at least reasonable given the circumstances created by the seller.
I think the airlines, as opposed to wine sellers, have a good reason for having tickets to be non-transferable - seats on a plane are a scarce resource. Compare with a similar area where access to a scarce resource is transferable - cultural events like sports games, concerts, etc. What happens there is that there's a whole industry of people who buy out all the tickets and then resell them at higher price, often hoarding until last minute to justify the markup. This kind of antisocial behaviour is quite common and a big problem.
Stuff like concerts is subject to scalping because the tickets get sold at below market value to avoid pissing people off. A concert venue may well sell out a popular show at $5,000 per ticket, but they won't charge that much because people will be angry. There is nothing like that going on in the airline (or wine) world.
From a particular traveler point of view. Airlines are pretty few, and are consolidating, so in about 2 years you can find yourself banned from all 5-6 of them and have to take the train or drive. Has this ever happened I wonder? Can this happen? Airlines building private no-fly-lists and just refusing to do business with some people. Is that allowed legally.
Insurance companies do it:
https://www.privacyrights.org/fs/fs26-CLUE.htm
Why can't airlines? I imagine travelers who do it, would get pretty vocal online, so maybe some airline will respond publicly and say "we don't care, come to us?"...
I always get the cheapest price and do not care about the other nonsense.
It's such a simple concept, but fantastic in that a higher priced seat that might have gone unsold, instead goes for what someone perceives its value to them to be.
"Hey, I can fly JFK to Heathrow for $800. But I'd be willing to pay $1100 for business class."
You win, great. You lose, no loss.
If anybody needs to be shamed, it's the airlines themselves for arbitrary price discrimination.
Sometimes there may also be regional differences in assessed fees and when they are displayed (maybe the Chilean price shown at ticket selection includes a different checked bag allowance, or does not show any airport fees that would be shown at time of payment)
In fact, the airline probably appreciates being paid in its native currency. Airlines from countries with currencies that aren't always easily convertible, such as airlines from the developing world, probably have to keep substantial reserves in currencies their customers tend to use, to ensure that they can always carry out transactions in that currency. If you buy your ticket in the native currency, then you've not required them to dig into that reserve, which is a win for them.
Conversely, this is probably not a win for the original questioner, because they probably paid a fee for currency conversion to their bank, which was probably larger than that paid by the airline, because the airline has more market leverage with which to set pricing contracts for currency conversion.
I'm not saying I wouldn't do this -- I probably would -- but deception in general makes me uncomfortable, and whether you think this practice is justified or not, it's clearly based on concealing intentions. That sort of thing should at least make you pause.
As a side note, I've noticed that people seem to get confused about this, in general. A cheating spouse will come up with all sorts of reasons that their behavior was justified, without ever addressing the core offense: they weren't honest about it.
Anyone who thinks that 'doctor' is reserved for physicians deserves whatever his mistake costs him.
As for the broader ethical issues: if one party wishes to charge differing rates according to certain attributes, then it's a-okay by me if the other party wishes to signal different attributes. What's sauce for the goose is sauce for the gander.
I'm not convinced that's true. I don't feel pricing has to be a continuous distribution that feels "fair" to be ethical. Gaps in pricing are allowed. If customers feel differently, a transparently priced airline should be able to eat everybody's lunch. That hasn't happened, which makes me think there's value to consumers to segment aggressively.
This should be the biggest class action suit ever.
Airlines have gotten really bad about ticket booking and market sector discrimination.