Motivation
The main motivation for introducing the BahnCard was to increase competitiveness against the automobile. Prior to the BahnCard, Deutsche Bahn priced a trip between any two points in direct proportion to the distance travelled; this pricing structure proved uncompetitive with driving. The card allowed a two-dimensional pricing schedule, which consists of card price (a fixed cost), and ticket price (a variable cost). Once a passenger has bought a card, its price becomes a sunk cost and this makes the train more like the automobile, which is also characterised by high fixed costs. The decision whether to take a car or train for a particular journey depends mostly on the marginal price per kilometer, not on the total cost. The effect of the BahnCard was to shift the marginal cost of the train journey below that of the car journey for many customers.
Read more about this topic: Bahn Card
Famous quotes containing the word motivation:
“Self-determination has to mean that the leader is your individual gut, and heart, and mind or we’re talking about power, again, and its rather well-known impurities. Who is really going to care whether you live or die and who is going to know the most intimate motivation for your laughter and your tears is the only person to be trusted to speak for you and to decide what you will or will not do.”
—June Jordan (b. 1939)