What is Surge Pricing?
Six major chains and providers have recently adopted surge pricing, also known as dynamic pricing, during peak times. This pricing strategy, commonly used in the airline and hospitality sectors, allows businesses to adjust prices based on demand, either to increase profit or offset higher costs.
Who's Using Surge Pricing?
Airbnb, the popular accommodation platform, employs dynamic pricing to automatically adjust prices based on demand. Stonegate, a pub chain, has implemented surge pricing by raising the cost of a pint between 5-7pm. Additionally, certain electric vehicle charging point companies and a "big Italian" chain in London are also using surge pricing, according to industry experts.
Surge Pricing in Retail and Pubs
While dynamic pricing has long been used in the travel and hospitality industry, consumers are now encountering it more frequently in retail and pubs. A recent poll by Barclays found that 47% of surveyed individuals have noticed an increase in surge pricing among retailers. Furthermore, 32% reported experiencing higher prices for food and drink at pubs and bars during peak times.
Consumer Concerns and Transparency
James Daley, managing director of Fairer Finance, expressed concerns about surge pricing, stating that it makes it difficult for consumers to make informed decisions and find the best prices. He emphasized the need for transparency from businesses that use this pricing strategy.
Companies Utilizing Surge Pricing
Here is a list of companies currently implementing surge pricing:
Airbnb
Airbnb allows hosts to automatically adjust prices based on demand, ensuring optimal pricing without constant monitoring.
Stonegate
The Stonegate pub chain, which includes popular brands like Slug and Lettuce and Yates, has raised drink prices between 5-7pm on midweek evenings and weekends.
Electric Vehicle Charging Companies
Ubitricity, Genie Point, and Char.gy charge different rates for electric vehicle charging depending on the time of day. Prices vary during peak hours to encourage off-peak charging and reduce carbon emissions.
Ticketmaster
Ticketmaster, a ticket-selling platform, uses surge pricing when demand for artists is high. This pricing model has resulted in fans paying higher prices for tickets to popular concerts and events.
Despite backlash from consumers, these companies continue to implement surge pricing as a way to maximize profits during peak times.
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