[raganwald]

Makes sense when you’re selling bikes... a 50% off coupon only makes sense if your margins are 50% to begin with. But when you’re renting bikes, you have already sunk the cost of the bikes and are now looking to extract value from excess capacity. So the economics are different.

Or getting back to Yoga, it’s hard to offer 50% off your price for Lululemon clothes if you’re already discounting your prices to match the economy. But if you have a Yopga studio, your rent has already been paid. If you only have 10 people booked for a class that can hold 20, a coupon deal for ten more people may seem attractive.

Especially if Groupon fronted you the money for the attendees out of the capital they’re raised.

(Still not endorsing Groupon the company, just trying to be “fair and balanced” and make sure we’re looking at all of the factors in play.)