[thanhhaimai]

Not a Tinder user or investor, but this makes me curious. Why is it okay for insurance companies to sell me products with hyper-personalized pricing (often based on sex, age, and race), but it's not okay for Tinder or other tech companies to do so?

[Spooky23]

Because it’s based on regulated actuarial science, not explicit bias.

Marketing methods are often a little more fuzzy and less ethical than the actual underwriting. Insurers and marketers know about all sort of stuff that affects insurability, from eating habits, to gun ownership, to participation in high risk activity.

I don’t necessarily understand what Tinder does precisely, but it’s pretty obvious that you can exploit the insecurity or desperation of people looking for dates. It’s gonna be easier to extract cash from a 45 year old divorced woman than a 25 year old single woman. And you may want to use tolls as a friction point to reduce the number of undesirable or less profitable men.

You can probably use willingness to pay as a factor to score matches that will generate more churn that keeps the subscription in place. Generally speaking, I expect the most evil imaginable from companies like this. Online dating is a real mill, especially when you pass the threshold where you’re not attached and most people in your cohort are.

[kevin_thibedeau]

> And you may want to use tolls as a friction point to reduce the number of undesirable or less profitable men.

May as well just ban the sub-180 midgets who are wasting their time. Then charge a premium for having a choice pool of candidates for the other half.

[wsdan]

Insurance companies are supposed to increase the price t relative to the risk. So if you’re paying double the premium than someone else for car insurance, it’s because they have some data to suggest that you’re twice as, “risky.”

In the US, at least, you actually need to to get pre-approval for your prices and how you arrive at that price, and that information becomes public record.

[gruez]

>In the US, at least, you actually need to to get pre-approval for your prices and how you arrive at that price, and that information becomes public record.

But some factors get a free pass whereas others don't. eg. age/sex is allowed, but race/income/education isn't (although zip codes approximate some of those, to an extent).

[dhosek]

It varies based on state though. In California, insurers are legally prohibited from using race, sex or zip code in pricing. It's supposed to be strictly based on age, vehicle type and claims history, although I have no doubt that insurers do their best to get around that.

(Side note, in the lead up to the restriction on how insurers could base their premiums, there was a failed initiative in the 90s that would have made California a no-fault state and would handle funding insurance through a surcharge on gasoline prices.)

[EdwardDiego]

In NZ, car insurance companies openly use location, gender and age in pricing.

Men under 25 pay the highest premiums due to their repeated statistically demonstrated tendency to take far more risks and accordingly have far more serious accidents.

(And good luck getting full insurance if you're male, under 25 and own a vehicle with a turbo.)

Likewise, women 30+ get lower premiums than men because while they have more fender benders, they have far less serious crashes - and our insurance companies proudly advertise to women on that basis.

And your car premium will vary based on your location's car theft rates, although how you store your car (garage vs. driveway vs. street parking) and installed antitheft devices will reduce it.

However, race based pricing is very much not a thing.

It probably could be, as a proxy for socio-economic status, as the indigenous people of NZ are over-represented in all negative socio-economic indicators, thanks to colonisation followed by about a century of government policy, some deliberate (e.g., Tohunga Suppression Act 1907), some accidental (Manpower Act 1944).

And poor young men are even more at risk of serious accident than other young men.

That said, as no insurer will pay out if your car didn't have a current warrant of fitness (proof that your car meets minimum safety regulations), or current registration (just a tax, used to fund road maintenance and our no-fault accident insurance scheme), that effectively discriminates against poor people anyway.

Incidentally, NZ doesn't have compulsory third party insurance.

And I strongly support that - making it compulsory only benefits insurance companies by reducing their risk (which they aren't compelled to pass on to customers as lower premiums), and because once something is mandatory, you can charge far more than is fair, and people can't respond like a rational market would by just not buying your service.

[dhosek]

I used to teach LaTeX classes for the TeX Users Group starting when I was in college up until my mid 20s (so roughly 1989–1994). It was very challenging to find companies that would rent cars to me when I would travel to various locations to teach.

[djbusby]

Ugh, yes. Didn't finish a 4 year degree, so auto insurance was higher price until I was 40.

[EdwardDiego]

Insurance premiums are based on massive tables of probable risks.

E.g., I'm a redhead living in the Southern Hemisphere who has been active in the outdoors all my life and who smoked for 30 years.

So to get insurance that paid out in the event of terminal illness, I had to either pay a massive premium, or agree to exclude melanoma and lung cancer.

Makes sense - redheads produce minimal melanin, and there is far more UV exposure in the Southern Hemisphere due to the ozone "hole" that forms over Antarctica every year and drifts north onto southern South America / southern Africa / Australia / New Zealand. So as a ginger who had spent a lot of time outdoors under a harsher sun, I'm definitely in one of the rows in that actuarial table that's coloured red in Excel.

(And smoking is self-evident).

Now, back to Tinder. Are they charging based on risk? No.

They're charging what people will pay. And I'm willing to bet that they consider a recently divorced 48 year old man is able to pay more, and if I'm being uncharitable, desperate enough to do so.

So your comparison is very much apples and oranges.

[nikanj]

Considering their size, their pricing is probably also based on data. They probably know scaringly well how big the ”risk” of you finding love is, and can price services accordingly

[EdwardDiego]

Hmm, you'd think then that they'd charge a higher price for younger, good looking people with the text "not DTF" in their profile then.

They're a) far more likely to find a partner and b) leave the platform when they do.

So higher "risk" of exiting the platform from Tinder's POV, so you'd want to get their money upfront, presumably?

Divorced men who are going to fat while balding, with 50/50 care of three kids and alimony to pay, aren't flying off the shelf.

So for Tinder, they're a low exit risk, and typically far more able and willing to pay for features that they think might aid them.

A 25 year old man in good shape, no kids, and starting out on a good career, is far less likely to _need_ the features Tinder charges for.

[nikanj]

It’s not the exit risk, it’s ”how likely are you to be desperate”. And they have real-time data on it, they know how long the average user views your profile, how often you match, etc

[badlucklottery]

I don't really have skin in the game (never used Tinder) but I would guess a combination of transparency and competition is what makes personalized pricing feel "fair".

It's well-known that insurance rates vary a lot from person to person (transparency) _and_ there's multiple insurance companies offering what's effectively the same service (competition). So, if I don't like the price, I can get my car/house/boat insured with someone else who will likely give me a different personalized price.

In this case Tinder seems to be working hard to keep the magnitude of the pricing variance secret and there's no real competition since Tinder's apps are the only way to access the service.

[hda2]

Because sex, age, and race are statistically significant factors in how much the insurance companies will pay out for each demographic.

Personalized pricing for a digital service with a more-or-less constant cost-per-user doesn't make sense here (unless you want to maximize profits by unfairly discriminating against certain demographics).

[barry-cotter]

What’s this “unfair” crap? We’re talking about dating and mating. Apart from war there may be no human activity in which fairness applies less. Price discrimination in dating apps is as problematic as in airline tickets. Twenty year old men moan about actually having to try and ask people out if they want a date. Thirty five year old women complain that they can’t find someone who loves them for their career accomplishments or how superficial men their age are, dating women 10 years hone younger. Dating sucks unless you’re a young woman looking for casual sex or an attractive, solvent (young) man who wants to get married.

[hda2]

I don't know what you're going on about, but this "crap" was in reference to increasing price without offering something in return. If a store sold a woman an specific item for 5x the price they offer to men, they would be sued for discrimination. Unless serving certain demographics costs tinder more (thereby justifying the increase the price), it is objectively unfair and discriminatory. End of story.

[barry-cotter]

The “crap” you’re talking about is the idea that fairness has a place in mating. The thing that justifies tinder charging different groups of people different prices is that they want to and if people don’t want to buy they don’t have to. It’s the same rationale by which tiers of software services that differ in their cost to the provider by little or nothing differ in their cost to the buyer by orders of magnitude. If you don’t want to buy don’t.

If discrimination by gender or other relevant characteristic was illegal in the US that might have some legal, not moral bearing, but no one cares.

> In the United States, a few states have adopted statutes forbidding gender-based price discrimination, but these policies are largely unenforced.

https://en.m.wikipedia.org/wiki/Gender-based_price_discrimin...

[hda2]

> The “crap” you’re talking about is the idea that fairness has a place in mating.

That "crap" is something you brought up on your own. We're discussing unfair discriminatory pricing, not mating.

[spoonjim]

> Apart from war there may be no human activity in which fairness applies less.

Agreed, which is why it was a big collective fuckup for Western societies to migrate from the societies where premarital and extramarital sex was condemned, thus ensuring a far more even distribution of sexual access for men and women.

[rahimnathwani]

Most people are fine with movie theatres charging children less than they charge adults.

Is that 'unfairly discriminating against a certain demographic'?

[gruez]

>Is that 'unfairly discriminating against a certain demographic'?

I suspect it gets a free pass because the demographic being discriminated against is better off (eg. adults who tend to have more disposable income). If it were the other way around (eg. software companies charging elderly people more because they don't know any better), there's going to be more backlash.

[chii]

It's not that they're better-off, but rather that the movie theater discovered that a movie the child wants to see often forces the parents with them. By discounting the child, they increased the sale of at least 1 ticket for the parent, and therefore, they make more money. If the child wasn't discounted, the parent might choose an alternative source of entertainment (because face it, adults tend not to want to watch children movies) and the theater lose out on that adult ticket!

this is why you don't see a discount for couples usually - coz they were going to pay even without the discount.

[rahimnathwani]

OK, pretend that I said this instead:

"Most people are fine with movie theatres charging 65+ SENIORS less than they charge adults."

[smt88]

In the US, insurance rates certainly cannot vary by race.

[cmdli]

Insurance is often highly regulated as to what they can do price discrimination on, oftentimes limited to things which directly impacts the cost of that insurance, like age (side note, I don't believe race is legally part of that). Tinder, on the other hand, presumably doesn't have any differing costs per customer and has no generally agreed-upon guidelines as to what kind of discrimination is okay.

[kelseyfrog]

If you think about it, it's kind of weird for a product to have a single price. Everyone who would pay more is paying less.[1] It's much more profitable to just barely meet demand for every one while keeping the lower bound at the cost of production. You're right to point out that insurance operates with price discrimination. Student discounts and senior discounts are another common example. There are many others.[2] Tinder has market power in the sense that they sell access to a unique user base. Sure, their competitors offer access too, but none are identical, and that difference implies an amount of exclusivity.

1. Consumer surplus

2. https://www.economicshelp.org/blog/7042/economics/examples-o...

[zaphirplane]

That’s not an arbitrary pricing on how much they think you can afford, this is (excluding sleazy one) based on risk profile where age is one of the attributes that changes the risk profile

[jonway]

My answer to that question is that the cost of the insurance varies based on demographics (you didn't mention the biggest variables like driving record, vehicle type, loan/lein and collision) while the Tinder service cost is basically the same for all users.

The most sense it makes for Tinder to do is to chage men more than women, which they already did.

Insurance cost is determined based on actuarial tables, whereas Tinder probably doesn't even consider the size of anyones table.

[bananamerica]

Insurance price varies according to how likely you are to use their services, and how expensive these services are likely to be. A 95-year-old with high blood pressure and a history of cancer is potentially more expensive than a healthy 25-year-old. That's entirely different from how an app like Tinder operates.