A taxi company in Tashkent sets its prices with a simple formula: a starting fee plus a charge per kilometre. The starting fee is 2 dollars and 50 cents, and every kilometre adds 1 dollar and 20 cents. A 15-kilometre ride from the airport to the city centre therefore costs 2.50 plus 18, which is 20 dollars and 50 cents.
Last year a new ride-hailing app arrived with a different tariff: no starting fee at all, but 1 dollar and 70 cents for every kilometre. Its advertisements claimed the app was "always cheaper". The taxi company's manager, Akmal, did not believe it, so he compared the two formulas.
On a short ride the app does look cheaper, because it has no starting fee. On a 2-kilometre ride the app charges 3.40 dollars and the taxi charges 4.90. But the app's price per kilometre is 50 cents higher, so every kilometre closes the gap by 50 cents. The taxi's head start of 2.50 dollars disappears after 5 kilometres. At that distance the two fares are equal: 8.50 dollars each.
Beyond 5 kilometres, the taxi is cheaper, and the difference grows with every kilometre. On a 10-kilometre trip the taxi charges 14.50 dollars and the app charges 17. On the airport run the app would cost 25.50 dollars, five dollars more than the taxi.
Akmal printed a small card for his drivers with three lines: under 5 kilometres, the app is cheaper; at 5, they are equal; over 5, the taxi wins. Most airport passengers, he noticed, travel more than 5 kilometres.
The company's next advertisement did not attack the app. It simply showed the price of the airport ride, side by side.