Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking • Hacker News Board

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#31

Post by Bahamut » Sat, Apr 14, 2018, 5:06 PM UTC

Fenn wrote: post #27

nanis wrote: post #13

The title is a polite way of putting it. In reality, what they are backing is a startup which claims that the data they gather will allow airlines to gobble all consumer surplus by being able to offer compensation equal to the reservation price of the customer: I.e., the compensation that leaves the passenger indifferent between flying on this flight vs giving up their seat. I am going to claim that the airlines back…

The game theory is indeed complex. > offer compensation equal to the reservation price of the customer It's a little more complex than this. It's highly feasible to offer compensation higher than than the original purchase price of the ticket while inducing passengers to move to a different flight, meaning they're effectively being "paid to fly". In many cases, customers are actually not on their preferred flight in…

This reminds me of a flight I booked about 3/4 a year ago from SF to DC - I had a suboptimal layover in Houston, which was rerouted to be a layover in Chicago after the hurricane triggered changes to my routing. Unfortunately for the airline, it then had to deal with a situation where they overbooked by 10 people.

I was offered a first class seat on a direct flight + $600 to switch, which I happily accepted. In truth, I would’ve been happy with just any seat on that direct flight.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#32

Post by nanis » Sat, Apr 14, 2018, 5:11 PM UTC

Bahamut wrote: post #31

Fenn wrote: post #27

Earlier quoted context omitted.

The game theory is indeed complex. > offer compensation equal to the reservation price of the customer It's a little more complex than this. It's highly feasible to offer compensation higher than than the original purchase price of the ticket while inducing passengers to move to a different flight, meaning they're effectively being "paid to fly". In many cases, customers are actually not on their preferred flight in…

This reminds me of a flight I booked about 3/4 a year ago from SF to DC - I had a suboptimal layover in Houston, which was rerouted to be a layover in Chicago after the hurricane triggered changes to my routing. Unfortunately for the airline, it then had to deal with a situation where they overbooked by 10 people. I was offered a first class seat on a direct flight + $600 to switch, which I happily accepted. In truth…

> I would’ve been happy with just any seat on that direct flight.

And, the goal of the Volantio is to collect data on you so that the airline never over-compensates you. That is, all the benefits from the rebooking transaction accrues to the airline.

Imagine every time you went to buy a coffee, the coffee shop charged you exactly how much you value the next cup of coffee.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#33

Post by Fenn » Sat, Apr 14, 2018, 5:24 PM UTC

tyingq wrote: post #30

Fenn wrote: post #28

Earlier quoted context omitted.

Sorry, I possibly stated that poorly - what I meant was: The current state of duopolistic airlines technology suppliers means that there may not be sufficient motiviation to evolve the capabilities of the old systems. Case in point: Regardless of whether Sabre/Amadeus have replaced their legacy layer with some sort of nosql, I can absolutely guarantee you that many of their primary APIs are literally screen-scraping…

"I can absolutely guarantee you that many of their primary APIs are literally screen-scraping terminal sessions and returning the screen as XML" True, but TPF is scalable enough that it doesn't matter. The API is responsive, flexible, and handles the traffic. The ugliness isn't limiting new functionality, etc. We spend very little time talking about the cruft at the bottom. The business complexity is more important.…

Well said :)

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#34

Post by alkonaut » Sat, Apr 14, 2018, 5:36 PM UTC

vannevar wrote: post #15

There's a much simpler solution to the overbooking problem: eliminate the fraud exemption that airlines currently enjoy, allowing them to sell the same seat twice. The downside is that, if airlines are unable to resell unused seats, more flights will fly partially empty, reducing overall efficiency of the industry. But if they offer standby "tickets" at steep discounts (instead of making every ticket a probabilistic…

They could just ask every passenger how much they would want to potentially take the next plane. Then just bump those that ask the least. If I’m choosing between the 1pm and 3pm place and decide on 1pm I’m obviously not that opposed to changing to the 3pm, so I’d enter a low sum. But if I’m going to an important event or connecting to another flight then my cost of switching might be huge.

But I doubt any of this will change, anyone who buys a cheap ticket isn’t buying a “seat” they are buying a chance at a seat. The alternative as you say is lower efficiency and higher prices for everyone.

The incident where a passenger was dragged off shouldn’t be possible regardless of system since the bounced passenger should never be boarded.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#35

Post by pilingual » Sat, Apr 14, 2018, 5:41 PM UTC

I love seeing old YC companies continue to try to discover product market fit. I remember this blog post which made me think they were toast because pg told them: “But until you’ve got a major discovery to show, or some serious growth, I can’t recommend you to investors”

http://tomhoward.co/part-1-reality-check

https://news.ycombinator.com/item?id=3941754

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#36

Post by bogomipz » Sat, Apr 14, 2018, 5:47 PM UTC

Fenn wrote: post #24

wpietri wrote: post #12

A good start, but I think this could be taken much farther. If we look back 20+ years, we built up very strong rituals around scheduling because we couldn't make the system work any other way. But in-person plans have become much more dynamic as we become better connected. Air travel is still very much in the old world there: we book far in advance, slotting ourselves into fixed-schedule, fixed-capacity options, even…

This. (Disclosure: I'm cofounder/CTO of Volantio). Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's. It may be worth mentioning that airlines are perhaps less-evil than is apparent from the outside. Most of their baffling behaviour is (IMHO) largely due to lack of capabilities rather than malevolence. Ultimately, they're given a large multi-dimensional optimisation pro…

>"Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's."

Which legacy exactly are they "burdened" with? The airlines in US were deregulated in 1980s. The airlines look nothing like they did in the 1950s. The regulatory regime is gone, there's "power by the hour", fuel futures etc.

>"Ultimately, they're given a large multi-dimensional optimisation problem ..."

Yes and the airlines have pursued a policy of rapid consolidation which means forcing more people through regional hubs which are in no way optimal for their itineraries.

>"We are taking the (very small) initial steps in alleviating some of the issues by introducing increased liquidity into the market ..."

That is a bunch of double speak. Fixing the problem of overbooking is done by airlines practicing some basic discipline - "stop selling what you don't have." If you are selling seats on an A320 with 180 seats then don't sell 200 seats. In what other industry is selling something you don't to sell done as a matter of course?

The problem of overbooking is fixed by not actually overbooking. You are simply enabling airlines to continue this unethical practice of overbooking in a manner that's more profitable to them. I fail to see the innovation.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#37

Post by walshemj » Sat, Apr 14, 2018, 5:51 PM UTC

jaclaz wrote: post #10

>Volantio’s solution: Gather non-identifiable data about purchasing behaviors to learn what type of consumer is more likely to accept what type of offer. Call me a skeptic as much as you want, but the "non-identifiable data", must somehow end up being identifiable, or at least the passenger will be personally tagged as "type A", "type B", Type C", etc. in order to propose him/her the "best deal".

Well would not passengers the game the system by displaying signaling to maximise the best deal for them - just like there are ways of gaming the upgrade system wear a suit if you have a PhD book with Dr instead of Mr or MS.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#38

Post by intopieces » Sat, Apr 14, 2018, 5:51 PM UTC

vannevar wrote: post #15

There's a much simpler solution to the overbooking problem: eliminate the fraud exemption that airlines currently enjoy, allowing them to sell the same seat twice. The downside is that, if airlines are unable to resell unused seats, more flights will fly partially empty, reducing overall efficiency of the industry. But if they offer standby "tickets" at steep discounts (instead of making every ticket a probabilistic…

Your solution means higher ticket prices overall, which consumers have repeatedly indicated they do not want. Most people don’t get bumped from flights. Most people don’t want to pay x% more to see their family once a year.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#39

Post by drewmate » Sat, Apr 14, 2018, 6:01 PM UTC

mc32 wrote: post #25

nanis wrote: post #13

The title is a polite way of putting it. In reality, what they are backing is a startup which claims that the data they gather will allow airlines to gobble all consumer surplus by being able to offer compensation equal to the reservation price of the customer: I.e., the compensation that leaves the passenger indifferent between flying on this flight vs giving up their seat. I am going to claim that the airlines back…

As an aside, some have proposed a mechanism derived from this method as a way to fix congressional redistricting.

That is an interesting and vexing problem and it's not clear to me how this applies. Could you post a link with more details?

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#40

Post by wpietri » Sat, Apr 14, 2018, 6:01 PM UTC

tyingq wrote: post #26

Fenn wrote: post #24

Earlier quoted context omitted.

This. (Disclosure: I'm cofounder/CTO of Volantio). Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's. It may be worth mentioning that airlines are perhaps less-evil than is apparent from the outside. Most of their baffling behaviour is (IMHO) largely due to lack of capabilities rather than malevolence. Ultimately, they're given a large multi-dimensional optimisation pro…

"Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's." Personally, I find this common observation off base. Most airlines have pushed the legacy TPF layer into a sort of nosql data store. Both Sabre and Amadeus have been able to pull the business logic out of TPF. Any sort of lagging technical progress seems more related to either thin margins, or the complexity you point…

Is the legacy only technical? I was speaking of something far broader than just the database they're using at the heart of something.

Our theories of place and travel are slowly changing due to new technical capability. Some of the lag is due to old theories embedded in old technology. But I think a lot of it is embedded in habit, custom, protocol, and business model. And in plain old not knowing. I expect we'll thrash around for decades before a new consensus emerges.