Pity the Transportation Security Administration! They have a tricky capacity planning problem with their Pre✓™ program. Here is how the TSA describes Pre✓™:
TSA Pre✓™ allows low-risk travelers to experience expedited, more efficient security screening at participating U.S. airport checkpoints for domestic and international travel.
The perks of the program of the program include being able to leave your shoes on, not having to take out your laptop, and leaving your baggie of toothpaste buried in your carry-on. All of that gets you faster screening and — in theory — a faster moving line. The program started off being by invitation but has broadened to include those enrolled in the Custom and Boarder Patrol Global Entry program. Now anyone can apply. The trade off for travelers is that you have to pony up for a background check. For the TSA, it allows them to expend fewer resources on people it knows something about so more time can be spent on those it has no information on.
So what’s the problem? The issue is how the system has to be implemented at airports. Pre✓™ flyers go in a separate line and then through separate equipment and personnel. But, as the Wall Street Journal tells it, that is costly for the TSA and they cannot readily justify dedicating the current resource levels unless they can get more flyers signed up (Trouble Selling Fliers on the Fast Airport Security Line, Apr 16).
TSA wants lots more people enrolled in Precheck to make better use of its designated security lanes, which currently number 590 at 118 U.S. airports. Since December, TSA has encouraged travelers to apply to the program directly. The agency is opening enrollment centers across the country, letting people who are U.S. citizens or permanent legal residents to make an appointment or drop in and have fingerprints taken digitally. The $85 background-check fee buys five years of enrollment.
“It’s one of the last great bargains the U.S. government is offering,” TSA Administrator John Pistole joked at an enrollment-center opening last week at Dallas-Fort Worth International Airport.
TSA said more than 1.2 million people as of December were able to use Precheck, mostly because they had enrolled in Global Entry. Since TSA began taking applications directly, some 170,000 additional people have signed up for Precheck. The program appears on track, but if more travelers don’t sign up TSA will have to scale back the number of Precheck lanes at airports, Mr. Pistole said. TSA hasn’t set an optimum number of enrollees for the program, he said.
How much would you spend to skip a line at a theme park? At Universal Studios Hollywood at least some people are willing to pony up a lot (At Theme Parks, a V.I.P. Ticket to Ride, New York Times, Jun 10).
As stratification becomes more pronounced in all corners of America, from air travel to Broadway shows to health care, theme parks in recent years have been adopting a similarly tiered model, with special access and perks for those willing to pay.
Now Universal Studios Hollywood has pushed the practice to a new level.
It has introduced a $299 V.I.P. ticket, just in time for the summer high season, that comes with valet parking, breakfast in a luxury lounge, special access to Universal’s back lot, unlimited line-skipping and a fancy lunch. …
Universal upgraded its V.I.P. Experience — and raised the price by 50 percent — after realizing that the old one, which did not include lunch, the lounge or other perks, “was selling out more and more frequently,” Ms. Wiley said.
Slate has an article that asks an intriguing question: Who Really Benefits From “Big Data”? (Dec 27). That’s clearly something of a loaded question. Big Data is currently everyone’s favorite answer for everything. The ability to leverage vast amounts of data for new insights and improved decisions holds a lot of promise. There are also many success stories of firms creating new markets or improving profitability or providing great value to customers to back up claims and bolster expectations. Big Data has remade baseball with an emphasis on new statistical measures and has allowed Netflix to suggest the perfect next movie to watch.
Those examples sound great. Of course, consumers may be less enthusiastic about one of the longer standing examples of Big Data, airline revenue management systems. While these have been around for a couple of decades,they bear the hallmarks of Big Data applications. They are built on careful data analysis to forecast how systems will evolve and seek to replace intuition with frequent, reasoned decisions. These decisions may not necessarily be optimal but they clearly balance costs and benefits and can be improved over time. I’m not sure that customers love revenue management systems the way they love Netflix recommendations. Although revenue management systems are just as responsible for some sweet deals as they are over for extravagantly priced tickets, people tend to focus on the latter. Consequently, if you ask who benefits from Big Data and lead with revenue management systems as an example, I would venture that many customers would be leery of embracing Big Data.
So what example does the Slate article go with in thinking about Big Data? Lexus Lanes on the DC Beltway!
Advances in real-time data acquisition, processing, and display technologies means that it is possible to design a toll road that can continually change prices to control how many cars are on the road and how fast they are going. These “hot lanes“ have just been opened along a part of the Washington, D.C., Beltway, the 10-lane, traffic-infested artery that to normal humans is a metaphorical boundary between the real, outside-the-Beltway world and the weird, political one on the inside. (For those of us who live around Washington and must drive on it, however, the Beltway is very concrete indeed, a daily flirtation with delay and frustration, homicidal instincts, and death itself.)
At a cost of $2 billion, a private sector partnership (which gets to keep the tolls) has built a 14-mile-long, four-laned section of highway, parallel to the main lanes of the toll-free Beltway, and has guaranteed to the state of Virginia that it will always keep traffic moving at no less that 45 mph along its length. They do this by continuously monitoring the number of cars (which must be equipped with EZ-Pass transponders) and their speed, and by raising toll prices as necessary to keep the number of cars on the road at a level that will allow the speed to stay at or above the guaranteed minimum. The dynamic toll prices are displayed on huge signs near the entrances to the smart-highway lanes, so drivers get to decide at the last minute whether they want to spend the money to go faster or not. As the traffic on the toll-free Beltway lanes gets worse, some drivers will be willing to spend more to go faster. The worse the traffic is, the more they’ll have to spend. (In the early days of this new technology, numerous accidents were caused by drivers trying to decide how much they were willing to pay, but no doubt this initial problem will sort itself out as people get used to driving-while-economically-rational.
The starting point of the article is that priority service has become fairly ubiquitous from airports to amusement parks to expressways.
But today, many Americans are waiting in a new kind of queue – the priority queue, where certain customers get higher priority because they pay.
In American airports, priority queues are now visible everywhere – at the check-in counter, at security and at boarding gates. Many airlines now board their passengers according to the amount of money they’ve paid for their ticket. …
Take the Six Flags White Water amusement park in Atlanta, which implemented a priority queue system in 2011.
Some guests simply queue up for their rides. Those who purchase green-and-gold wrist bands – fitted with radio frequency technology – are able to swim in the pool or eat snacks before being alerted to their turn.
Guests who pay an even higher fee – roughly double the price of admission – get the gold flash pass, cutting their waiting time in half. …
In October 2011, Atlanta created a priority lane on the highway [I-85] for drivers with a Peach Pass – the price of driving in the lane changes depending on how much traffic there is.
Critics call them “Lexus lanes”, because they claim the lanes benefit only the rich who can afford expensive cars.
Aside from the cost of the express lanes, some drivers are also upset that they replace car pool lanes – special lanes for cars with two or more passengers.
Overnight all the car pool drivers who used to ride free were pushed into the general lanes, making traffic worse for everyone except those who pay.
After the various examples, it builds to this:
Americans have a deep-rooted belief in the market and since priority queues can generate revenue it’s no surprise that they are turning up in the public sector as well.
But are traditional American values like fairness and equal opportunity really compatible with letting someone buy their way to the front of the line? And what happens when the people who pay more want more?