How to crack the age-old question: what incentives really work?
Avego was mentioned in a recent New York Times article “Carpooling makes a surge on apps and social media,” which discusses the recent explosion of electronic media used for ridesharing, but not without challenges.
Car aficionado Tara Weingarten of vroomgirls.com comments that ridesharing will be tough “where drivers are used to being cocooned in their private auto bubbles padded with comfy seats, satellite radio, climate control and privacy, where they don’t have to make chitchat if they’re not in the mood.” Apparently, behavior is a major foe in the battle against single-occupancy vehicle (SOV) driving. Today, ‘behavior’ is rarely the topic of meetings at transit and planning agencies; but according to behavioral economist and University of Chicago Professor Richard Thaler, it should be. In another NY Times article “Watching Behavior Before Writing the Rules”, Thaler talks about using randomized trials to evaluate behavior and then make rules (or products or whatever) based on the results.
Avego has been experimenting exactly in this way, offering different incentive schemes and prizes to lure commuters into ridesharing. For example, in its Sonoma, USA pilot project, an offering of a free i-pad to the top rideshare participant resulted in overzealous participants collaborating and taking extra trips to rank higher. The lesson there may have been that some rewards are simply too big. In other experiments by Stanford Professor Balaji Prabhakar, findings were not so different: when the rewards are ubiquitous but too small, no one is incentivized to change behavior; and when the rewards are too big and too few, most participants don’t win and end up feeling disenchanted.
The lesson is to provide enough rewards so that most users feel they have a good shot at winning, and getting each reward just the right size so that no participant is under- or over-motivated to win. Avego continues to experiment with different incentive schemes and find out just what this perfect reward looks like.