What do you think about dynamic/surge pricing? \ stacker news ~libertarian

What do you think about dynamic/surge pricing?

1509 sats \ 18 comments \ @tomlaies 28 Feb libertarian

The fastfood chain Wendys renctly announced they want to introduce surge pricing. Meaning the price of a Wendys Burger could rise to $11 on Superbowl night or fall to barely above material+staff wage price on tuesday late morning when nobody is ordering.

The reaction from internet leftists was, of course as always a classic case of Ugh, Capitalism - The laziest form of persuasion on the internet .

As a capitalist and advocate of free market I have more mixed feelings. Of course it's annoying when a Burger is $2 more expensive on Friday evenings and $2 cheaper if you eat dinner at 17:30. Buuuuuttt more dynamic pricing makes markets more efficient and finer tuning to balance supply -demand are always a good thing in my book.

I also think a 19 year old working night shift at 3am is putting more effort in and therefore providing more value just like ordering at 3am is demanding more service and should therefore cost more value. But should this only apply to spot prices of asset, spot prices of natural resources, should companies buffer this as a part of their value creation, should consumers care about when they buy consumer goods?

More dynamic = good71.4%

No, bad!9.5%

Idk0.0%

More nuanced opinion (comment below)19.0%

21 votes \ poll ended

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151 sats \ 0 replies \ @kilianbuhn 28 Feb

People are already buying summer clothes 👕 in winter or going on vacation in off-seasons ⛰️🌴. It's a thing that should be encouraged

108 sats \ 0 replies \ @jeff 28 Feb

Fixed rates come with a premium. Always has. Always will.

In hindsight, Wendies, and all chains, earned a premium for offering this fixed rate. Switching to variable, will cost them margin, per order, but increase # of orders. Very predictable.

More trade == more winners.

13 sats \ 1 reply \ @south_korea_ln 28 Feb

Doesn't like Uber do this in the US? Doesn't it like almost become impossible do use during that time, even away from the special event that causes the surge, due to drivers playing the system? Not sure, just vaguely remembering something i read.

My answer is nuanced in the sense that the market is rarely truly efficient, and unintended side effects do occur. See for instance Airbnb as something that sounded good at first but now has become a cancer to many cities.

0 sats \ 0 replies \ @tomlaies OP 28 Feb

almost become impossible do use during that time, even away from the special event that causes the surge, due to drivers playing the system?

I'm trying to debate this topic in its theoretical concept. It might be implemented in a flawed way. Wendys and Uber aren't really markets anyway - when there is only one seller and seller&marketplace being the same entity hasn't really the hygiene effect that the nyse has.

8 sats \ 0 replies \ @StillStackinAfterAllTheseYears 28 Feb

It's simple: If I'm getting a bargain, dynamic pricing is amazing! If I'm paying more, it's the worst thing ever! :-)

Seriously, I'm fine with it in general, but I also like some notion of there being a cap I can know ahead of time. If I know a Wendy's burger could cost as little as $3 or as much as $10, that gives me a sense of what I could expect. But if I walk into Wendy's and they've got a rush and have jacked the price to $50, that's a little ridiculous.

Now granted, that's where I use capitalism and walk away, but walking away from a Wendy's burger is easy. With rideshares, I've had times where we've gone out somewhere and then been hit with surge pricing on the way back. It would be good to know the worst-case possibility before I go out, since otherwise, I may end up either being gouged or being stuck.

(So I guess my answer is that I like the potential surge pricing, but not the current model.)

4 sats \ 0 replies \ @kilianbuhn 28 Feb

should companies buffer this as a part of their value creation, should consumers care about when they buy consumer goods?

The free market is some companies do this buffering and some companies (only one now) have market prices.

3 sats \ 0 replies \ @joda 28 Feb

I think people who eat shit food are lower income and expect pricing consistency.

There's probably a compromise somewhere, like if you order on their app at the "cheap" time, then you get the cheap price, even if you pick up during surge time.

3 sats \ 0 replies \ @fm 28 Feb

As a capitalist and advocate of free market

Of course it's annoying when a Burger is $2 more expensive on Friday evenings and $2 cheaper if you eat dinner at 17:30

You have mixed feelings there..

26 sats \ 2 replies \ @sgornick 28 Feb freebie

Like the concept of "happy hour" is something new?

0 sats \ 0 replies \ @tomlaies OP 28 Feb

Several people in this thread have mentioned cases where businesses adjust prices. This is true. But all of them don't adjust them as frequently and free and dynamically as a continuous spot price.

0 sats \ 0 replies \ @joda 28 Feb

Solid point

0 sats \ 0 replies \ @TheBTCManual 28 Feb

Businesses have to innovate or die, maybe this works at some scale but I think it brings too much friction and cognitive dissonance for the consumer, you're buying a cheese burger why must i calculate all this shit? lol thats for the business to factor in cost and work out a price point and manage the volatility

Yes some products can have a more dynamic pricing model, but it isn't a model that works for every good or service.

0 sats \ 0 replies \ @Voldemort 28 Feb

I am all in favor for letting supply and demand set prices, which is what this is attempting to do. If they do it correctly, I think it could be successful. If they implement it in such a way that their current prices are base prices and they only go up at high traffic times I think there will be a fair amount of backlash.

I also think fast food chains are decent substitutes. Even if you like Wendy's the most, is it 2 or 3 times better than mcdonalds or BK? At certain price levels people will also start to compare the food to sit down restaurants. Should I go to Wendy's or call in a pick up order from my favorite burger spot?

0 sats \ 1 reply \ @hodlpleb 28 Feb

This is really interesting.

A downside I see is that some people, unfortunately, rely on the 99¢ menu to survive, so could have a big negative effect for those people.

310 sats \ 0 replies \ @sgornick 28 Feb

Does Wendy's still have a 99 cent menu? Or is that just that you can order per Nugget now and that is the price?

0 sats \ 0 replies \ @Bell_curve 28 Feb

Let’s watch and observe what happens.

Definitely worth trying

0 sats \ 0 replies \ @bzzzt 28 Feb freebie

im a fan of any dynamic pricing, but man those poor front line employees. ..fear for their safety 😔

0 sats \ 0 replies \ @benthecarman 28 Feb freebie

This already happens all over, they just call it happy hour