Algorithm system

Uncontrollable ambitionWhen Lin Yuan resigned from Lanbiao Factory, he was naturally met with strong efforts to retain him.

His position, salary, and stock options were all negotiable, as long as Lin Yuan was willing to stay.

But Lin Yuan was resolute in his departure because what he intended to do next would make both Good Group and Lanbiao Factory very uncomfortable.

As for what Lin Yuan ultimately wanted to do, that has to start with the fact that merchants all over the world want to do one thing.

The one thing merchants all over the world want to do most is to tinker with the same product a bit, then put it in different packaging and sell it at different prices to different people.

If Li Si can afford one hundred yuan, then sell it to him for one hundred yuan. If Li Si can only afford fifty yuan, then sell it to him for fifty yuan.

As long as there’s a profit and it’s not a loss, that’s fine.

This is the ultimate dream of all merchants, primarily to scrape up every last bit of profit.

But customers aren’t fools, so naturally no one is willing to be taken advantage of. Why sell it to him for fifty and to me for one hundred?

Thus, the importance of packaging became apparent.

For example, with mobile phones, most manufacturers use flash and RAM size to differentiate configurations. What with 128G, 256G, 512G, different storage sizes can have a price difference of several hundred, but in reality, the price of flash and memory is very cheap, especially for mobile phone manufacturers who purchase in huge quantities, it’s even cheaper.

The most profitable part of selling phones is selling storage; the price difference between 256G and 512G could buy a pile of 25U disks.

The division of product versions adapts to different people’s price acceptance capabilities.

Another example is cars; skilled manufacturers always have precise pricing strategies, making you hesitate whether to spend an extra ten or twenty thousand to upgrade a configuration level. They always make you pay more than the configuration itself is worth for a feature you desire.

These questionable tactics are referred to as ’sales strategies’ by some mediocre talents.

Those mediocre talents hold them as gospel.

And even more questionable are those who sell cars through the dealership model.

The same car, an identical car, can have vastly different prices across the country.

Why is there a manufacturer’s suggested retail price? It’s simply to make it convenient for 4S stores in various places to concoct their own discounts.

As a result, even though humanity has entered the third decade of the 21st century, there are still many people making a living from insider information about car prices, which Lin Yuan sees as nothing but pointless internal friction within the human system.

All of these various factors are aimed at achieving the goal of adapting prices to different users.

Naturally, the food delivery industry cannot escape this rut.

The dazzling array of coupons on food delivery platforms, the seemingly miraculous packaging and delivery fees, all the questionable tactics ultimately aim to introduce variables into pricing.

If the price is ultimately calculated by a formula, then the more variables involved in that price formula, the more variables there will naturally be.

When you’ve had a few special offer deliveries and think you’ve gotten a bargain, the real scythe is waiting for you at the end.

Through the flexible deployment of variables like coupons, packaging fees, and delivery fees, food delivery platforms naturally have reasons for different prices for different users, and thus successfully extricate themselves from accusations of price manipulation.

This arbitrary fluctuation in product prices has the effect of: merchants themselves are unsure how much money they will earn from a meal sold. This uncertainty is also true for delivery riderss.

But in Lin Yuan’s view, food delivery is an industry that requires no innovation at all.

To be precise, food delivery as food itself requires innovation, but the delivery process of food delivery does not require innovation. It’s simply guiding a delivery riders to pick up a meal from location A and deliver it to location B, and then making the entire delivery process as smooth as possible.

This is very simple in a mathematical model.

Since it’s an industry that doesn’t require innovation, why should it be handed over to the private economy to mess around with?

The advantage of the private economy compared to the public economy is precisely its greater innovative vitality oriented towards the market. But now, food delivery platforms are spending their efforts on concocting prices. Is concocting prices considered innovation? It’s simply deceiving people.

Therefore, Lin Yuan put forward his view — the food delivery industry has reached the point where it needs to be standardized.

Directly nationalizing food delivery platforms is naturally unrealistic, and this is certainly not in line with the trend. However, setting standards is necessary. The purpose is to curb the upper limit of the private economy’s self-destructive behavior.

So he quickly wrote a proposal.

The core idea of the proposal is: to formulate a set of public algorithms, oriented towards each independent region, to control the commission rate of food delivery platforms for merchants, and the income of delivery riderss for each delivery. In short, it is to standardize the food delivery industry.

To make the food delivery industry like oil prices, publicly available nationwide, and anyone can check it.

The commission for merchants can be determined by multiplying the price of the meal by a floating percentage, which can be decided based on the local economic development level.

The delivery riders’s delivery income per order can be determined by the delivery distance, the road congestion at the current time, multiplied by a coefficient. This coefficient should also be determined based on the local economic development level.

It’s very simple. The delivery prices in first-tier international metropolises like Shanghai naturally cannot be on the same level as third-tier cities.

Various coefficients can be regularly discussed and decided by local governments organizing merchant representatives, food delivery platform representatives, and local citizens.

The coefficients are completely public, and then any enterprise can participate and get involved in the food delivery industry. This way, the food delivery industry becomes a basic public service.

The government sets the standards (builds the stage), and private enterprises are responsible for operations (perform the show).

This will completely crush food delivery platforms, because once standards are set, there will no longer be a situation where one food delivery platform dominates.

Originally, no private enterprises were willing to enter the food delivery industry, simply because they couldn’t compete with the two major internet capital giants. The other party only needed to subsidize a little with coupons to exhaust and kill any newcomers.

Completely open competition does not necessarily lead to sufficient competition.

During the process of generating giants, competition is sufficient. But once a giant is produced, competition almost stops. Because no new players come in at all.

Thus, a de facto monopoly is born.

The disadvantages of this monopoly are also obvious. Merchants and delivery riderss are completely tools of the food delivery platform. Originally, the food delivery platform should be the tool, but the reality is that the asset-light food delivery platform has become the landlord, while merchants who operate with heavy assets have become its laborers.

This is the landlord of the new internet era — I don’t even provide the land; the long-term laborers (merchants) have to bring their land (shops) to work for me.

With this kind of questionable tactic, it would be strange if high-tech enterprises could be nurtured.

Therefore, Lin Yuan was very indignant about this; he wanted to do something good for this society.

Lin Yuan wanted to make the world understand that what determines the essence of things is not advanced tools, but the purpose for which the tools are used.

When he finished the last word of this proposal, his heart was filled with a sense of mission.

Although Lin Yuan had never been a person with a strong sense of mission, when it came to this point, he still couldn’t suppress the urge to do something.