![]() This is good because it will prevent people from riding that free option, and assigns the costs of unwanted reservations to the people best able to predict, avoid, and mitigate these costs. If no one else wants it, then you are stuck with it. If you don’t want a reservation any more, then you can try to sell it. Luckily, you can get rid of cancellations altogether once you have transferable reservations. This hurts members because they can not reserve a car that will ultimately be available when they wanted it, and hurts Zipcar because the car ends up sitting idle even though there was a member who would have used it if it was not being blocked by a free option holder. Today people make reservations anytime there is any chance they might want them and then ride the free option until the end of the cancel window. This is a symptom of Zipcar’s existing broken cancellation policy, and is a problem with or without transferable reservations. What’s to stop someone from making a crapton of reservations and then just canceling the ones they don’t want/sell – serving only to increase prices to real buyers by intermediation? Low hanging fruit would be Thanksgiving and 4th of July, but reservations for sunny weekends in June are also in high demand, so whoever can earliest and most accurately predict the weather would stand to profit handsomely for the information they are injecting into the system. I predict that speculators would start buying reservations without any intention of ever using them – they’d buy them to sell them at a profit. Since the cost of transfer (to both members and Zipcar) is almost zero, Coase tells us that every car would ultimately end up with the optimal person – and many people would be made better off along the way. People would start offering their Thanksgiving day reservations for sale on Craigslist, and whole new websites would likely show up where you could buy and sell reservations ( is taken, damnit!). The moment they did this, I would be able to buy a reservation from someone who already had one. Zipcar could solve this problem completely by adding a single new option to an existing reservation: Maybe a little marketization could fix this problem and make everyone better off…. If I want a Zipcar on Thanksgiving, my only option is to wait and hope someone cancels their existing reservation (which for other reasons will all likely happen 3 hours and 1 minute before the reservation start times). There are normally lots of Zipcars near me, but looking at Thanksgiving day things look pretty bleak…
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