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Why ‘dynamic’ pricing feels like such a scam

Why ‘dynamic’ pricing feels like such a scam

CNN
Wednesday, April 3, 2024 11:52 AM GMT

Your Uber costs more at 5 pm on a Tuesday than it does at 8 pm. Buying a plane ticket the day before you fly is more expensive than buying it six months early. These are surge pricing tactics so ingrained in our consumer experience, we hardly notice or care. It’s just the way things are.

Your Uber costs more at 5 pm on a Tuesday than it does at 8 pm. Buying a plane ticket the day before you fly is more expensive than buying it six months early. These are surge pricing tactics so ingrained in our consumer experience, we hardly notice or care. It’s just the way things are. But in the era of AI, surge pricing — or “dynamic pricing,” for those in the business — is becoming a more common tool to help companies pad their margins and, in theory, give a discount to customers when demand is low. Customers don’t always see it that way, of course, and that’s created a serious PR headache for businesses. Wendy’s last month ended up walking back comments about its dynamic pricing plans after consumers were outraged at the notion of a dinner rush making your burger more expensive. “Wendy’s will not implement surge pricing” a spokesperson said at the time. “It was never our plan to raise prices when customers are visiting us the most.” JetBlue this week formally rolled out dynamic pricing for checked bags, which will now run you $35 to $50 depending on when you’re flying, my colleague Jordan Valinsky writes. But the change appears to have been implemented for some fliers before the announcement, and of course, people were angry about it.

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