surinenglish

Surge pricing

You don't have to be a brain surgeon to understand that a hotel room's value at 6pm is greater than that for the same room at midnight. When there is a tube or bus strike it is normal for Uber's rates to increase, sometimes by as much as 400%, and street vendors invariably charge higher prices for their umbrellas when it is raining.

Is this opportunism or price manipulation? Until 1861, when a grocer in Philadelphia decided to label all the items in his shop with prices, the usual way of buying anything was by personal negotiation. No-one paid the same and no item cost the same.

It appears those times are coming back. The price you will pay for many goods and services will be dictated by who you are, where you live, what you have bought in the past, the prices you paid, and frequency of purchase. Buying airline tickets online is more sophisticated than other marketplaces, and typically a fare can be updated as much as 90,000 times in a day. It used to be amusing to ask the person in the next seat how much they had paid, but now it seems there is no identifiable rhyme or reason to justify tariffs.

Our consumer profile calls the tune. Allegedly users of Apple products pay an average of 30% more for online purchases, on the assumption they have greater acquisitive power. Everything is 'negotiable', from cinema tickets to medical treatment, so what about restaurants? Is it reasonable to charge a diner the same rate on a Monday night as on a Saturday? Admittedly the restaurant's costs are the same on both occasions, but is the experience the same? On Monday the dining room may be half empty and the head chef taking a night off. The value-for-money element is very different, which is why the currently accepted price variation formula involves a discount of 25-30% Monday through Thursday. Slowly but surely surge pricing in restaurants is making headway in US and European countries, although Spain is not so far one of them.