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Companies love dynamic pricing... customers not so much

UK music fans are the latest group to complain about the practice

9/2/24 8:43AM

In recent years an increasing number of companies have flirted with, dated, and even fully married themselves to the concept of “dynamic pricing”.

The prices they are a-changin'

The idea is hardly new. Indeed, technically all prices are dynamic because companies eventually update them (except the Costco hot dog, of course). But here we’re referring to when prices fluctuate quickly or in real-time to changes in demand — a concept that’s increasingly beloved by company execs.

Dynamic pricing mentions — Sherwood News

Uber is one of the most famous advocates of the system. Try getting a ride on a busy Saturday night and you’ve likely experienced “surge pricing” on the ride-hailing app, which automatically adjusts the fare depending on how many people want a cab. Airlines and hotels have also been using dynamic pricing for years to carefully extract every dollar they can from their limited inventory of seats and rooms. Even Coca-Cola has toyed with the idea, with its CEO suggesting a temperature-sensitive vending machine that would raise prices when it was hot back in the early 2000s.

Wendy’s made headlines earlier this year when it touted plans to experiment with dynamic menu pricing... a suggestion that received a wave of backlash. Walmart announced in June that it would be rolling out digital labels for its shelves, which would allow it to change prices more quickly, creating similar concerns about the potential for real-time price changes, although a Walmart spokesperson told Fast Company that the new program would not be used for dynamic pricing.

But, most recently, Ticketmaster has again been in the firing line for its dynamic pricing mechanism in the UK, after Oasis reunion tour tickets shot up during a day of heavy demand, prompting a government review.

Surge protectors

Given that the ability to change prices is so fundamental to how our economy functions, banning the practice feels impossible without getting into a very boring argument about “how” dynamic prices are allowed to be.

However, companies should take heed of how not to do dynamic pricing. Lesson one: don’t change prices after the fact. People can live with paying more, but, if you quote them ~$190 and then by the time they reach the checkout the price is $460+, you will have a lot of people looking, and shouting, back in anger.

Max Knoblauch10/16/25

Uber launches “digital tasks” in the US, paying some drivers to train AI

Beginning later this fall, US Uber drivers will be able to earn money by completing short “digital tasks” like uploading restaurant menus or recording audio samples.

CEO Dara Khosrowshahi teased the new gig income stream back in June at the Bloomberg Tech conference.

At that time, Khosrowshahi said drivers and couriers were “labeling maps, translating language, looking at AI answers, and grading AI answers.” According to Thursday’s announcement, the tasks won’t be so focused on Uber’s business, but instead on connecting workers with “companies that need real people to help improve their technology.”

Per Uber, digital tasks can be done when drivers aren’t on a trip, be it at home or when not driving, and will take only “a few minutes” each.

Uber’s having drivers train its AI while partnering with robotaxi companies that could replace them

Per Uber, digital tasks can be done when drivers aren’t on a trip, be it at home or when not driving, and will take only “a few minutes” each.

Max Knoblauch

10/15/25

United Airlines posts stronger-than-expected profit but weaker sales in its third quarter

United’s full-year profit outlook falls somewhere in between the dual forecasts it issued back in April.

United Airlines Airplanes at Newark Liberty International Airport in Newark, New Jersey

Hyunsoo Rim, David Crowther

HEAD OF MACROS

10/15/25

Pop-Tarts, Doritos, and Uncrustables have joined the protein craze taking over America’s snack aisle

Food giants are catching up with the latest diet obsession.

Apple TV dropped the “plus” as streamers keep pulling back on originals

After the spray-and-pray approach led to a wave of cancellations, Hollywood is settling into an era of just making fewer shows.

Hyunsoo Rim10/15/25

Max Knoblauch10/14/25

The average price of a new vehicle in the US passed $50,000 for the first time ever in September

The average price of a new vehicle in the US surpassed $50,000 in September, according to Cox Automotive’s Kelley Blue Book.

At $50,080, that’s the highest industry average ever, reflecting the price hikes faced by new car buyers in recent years amid pandemic supply shortages, tariff-induced increases, and the high cost of EV production. The figure marks a 3.6% jump from the same month last year.

“Tariffs have introduced new cost pressure to the business, but the pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new-vehicle ATP into uncharted territory,” Cox executive analyst Erin Keating said. Passing the $50,000 mark was inevitable, Keating said, especially considering that the country’s bestseller is a Ford truck that “routinely costs north of $65,000.”

Year over year, new vehicle prices rose nearly 6% for GM, while Ford’s climbed 2.5%. Volkswagen new prices were up 12.5%.

As prices climb, so do delinquencies on loans to borrowers with lower credit scores. Recent data from Fitch Ratings shows the portion of subprime US auto loans 60 days or more overdue reached 6.43% in August.