It could work in the right scenario, but it would be tough to show the numbers if there was anything else competitive out there. Then you will find yourself trying to justify your costs....etc....
I reluctently reduced a daily rate for a guy, but I haven't even flown for them yet as they only fly once in awhile, and I'm #2 in their list anyways. I know there's guys out there that won't bend for anything, but negotiation will get everyone to an agreeable means.
I only fly as a part-time thing now anyways, so it's not hurting me, and I'm not putting anyone else out of a job either. Just the way it is I guess.