Uber dynamic pricing12/8/2023 ![]() In "Frustrated by Surge Pricing? Here's How It Benefits You in the Long Run" (January 5, 2016), Ruben Lobel and Kaitlin Daniels discuss how it's important to see the whole picture - both higher prices at peak times, but also lower prices at other times. ![]() "The Promise - and Perils - of Dynamic Pricing" (February 23, 2016) offers an overview of the arguments with links to some research. The online Knowledge magazine published by the Wharton School at the University of Pennsylvania has been publishing some readable commentary on dynamic pricing. Information technology is enabling dynamic pricing to become more widespread in a number of contexts. To my knowledge, there was no outcry over this policy. On the other side, in 2012 certain Coca-Cola-owned vending machines in Spain were set to cut the price of certain lemonade drinks by as much as half on hot days. The machine will simply make this process automatic.'' However, the reaction from customers stopped the experiment in its tracks. Douglas Ivester, pointed out that demand for a cold drink can increase on hot days and said: "'So, it is fair that it should be more expensive. One classic example is that back in 1999, Coca-Cola ( KO) experimented with vending machines that would automatically raise the price on hot days. In other cases, dynamic pricing is more controversial. For example, when a movie theater charges more on a Friday or a Saturday night than for an afternoon matinee, or when a restaurant offers an early-bird dinner special, or when mass transit buses or trains offer a lower fare during off-peak hours, or when airlines charge more for a ticket ordered one day before the flight rather than three months before the flight, it doesn't raise many eyebrows. Most consumers are inured to dynamic pricing in certain contexts. ![]() Dynamic pricing refers to the practice of changing prices in real time depending on fluctuations in demand or supply. ![]()
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