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One reason the Pennsylvania Railroad went broke

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[quote user="schlimm"] Who knows, but you may have to cut their rate and that will lower your overall margin.  It is fundamentally difficult (and frankly wrong) to charge different rates to different customers for the same thing or service and not expect a problem.  Then you have to manage that situation.  Over time, it creates a lot of ill will, distrust and resentment with customers.  Historically the rails created a lot of ill will with their customers for a variety of reasons, just one (among many) why the rails % share of freight traffic by measures other than ton miles declined. <div style="clear:both;"></div> [/quote] I understand your point, but for a customer to have a valid complaint that a company is charging different prices for the same thing, a customer has to prove that the thing they are purchasing is the same thing that is being sold for another price.  And even if they do prove that, there is no recourse other than simply not buying anything from that supplier.  If enough customers do that, the company will have to decide if the ill-will is costing them more than the benefit of selling an item for a lower price than it sells to another customer.  To the customers paying the full price, it does make them feel like they are subsidizing the ones getting the discount.  So the resentment might go beyond just the failure to get the low price.  <o:p></o:p> This question recently came up in some discussion about the Cumbers & Toltec Scenic Ry.  If they board all the paying passengers and are ready to leave, and if someone shows up at the last minute without a reservation; should they discount the price if necessary to get that latecomer to buy the ride?  If they are not willing to discount, and if the seat runs empty as a result, then they make less money than they would have had they offered a discount to make the sale.   <o:p></o:p> However, if they offered a discount to the latecomer and if the other passengers found out, they might feel cheated and thus refrain from riding the railroad again in the future because of ill will.  But then again, the latecomer had to take a chance on being refused a ride even at full fare if the train had sold out and had no extra seats.  So, it might be argued that the discount for the latecomer was compensation for him taking a risk that the full fare passengers did not have to take.  So, the latecomer really did not purchase the same product as the full fare passengers.
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