Originally Posted by
millions
I don't understand why liability would balloon. The credits are still not going out in amounts greater than the cash going in; they don't multiply. Some nonzero number of credits will be unused because of membership termination, and that's JS's profit (in addition to whatever small profit it extracts in the margin between the price paid to the operator and sale to "creator"). It may not be much, but it's better than almost every other aspect of its business.
All the credit use cap accomplishes is providing JS with more operating cash (and a greater pool of potential unused credits), which is not in and of itself reassuring to a holder of those credits.
Agree. Not saying it's a bad thing, I think it is actually a pretty sage move.
Cash coming in will always be greater, and they do not multiply. They are traded among members once they are in the system (member getting on an initiated shuttle can use his credit towards a seat, which transfers to the other member, so it remains in the system).
Cash comes in up front, but they are going to carry a lot of credits among members where this credit pool may be mostly additive and these credits are never 'spent' with JS outside of members leaving or spending on shuttles or in other ways.
Usage cap means they theoretically shouldn't go out of pocket on credits for high value low margin flights. If I were them I would look for high margin ancillary goods and services that members could use credits on. JS wants credits that have been traded once to get out of the system to make room for paying customers on member initiated shuttles.