The industry probably wants us to think of it as dynamic pricing, but I personally prefer the name surge - it's a slightly less polite sounding way of describing something we're all familiar with it and which none of us like very much!
It's well known for being applied to concert tickets and flights but the trend is for this model to be increasingly applied to more and more sectors,
So going forwards the price of a sandwich, a coffee, or your regular groceries might change, not every month or week, but by the hour.
Why Businesses Love Dynamic Pricing
For companies, the appeal is obvious. Tech lets them respond to demand almost instantly. If the lunch rush hits, prices go up. Around 14.30 when things slow down, prices go down.....
advances in AI have made this all possible - AI lets companies digest and react to huge volumes of real-time data almost instantaneously.
Supporters insist this is just the market working properly — high demand means high prices. Economists say this means more profit for companies and better allocation of resources.
This might even help cut waste - if supermarkets reduce prices earlier on the basis of real-time data it could mean less produce thrown away at the end of the day.
But most people are going to hate this...
In practice, most people don’t see dynamic pricing as “efficient.” They see it as unfair.
As a general rule we expect the price of everyday stuff — a sandwich, a loaf of bread, a cup of coffee — to stay pretty steady. Sure, prices rise over time, but we don’t expect to pay £7 for a sandwich that was £4 just because it’s busy.
And imagine having to pay £7 for a meal deal just because it's 12.30 and you couldn't get to the shops in time - in the context of all the current cost of living pressures!
This is just going to mess with people's basic budgeting, and cause a certain level of irritation, if not stress.
All part of algorithmic capitalism...
So this is where we are..... it's now AI that determines prices not humans, but somewhat ironically now based on even more localised and personalised criteria....
It's radically disempowering for consumers. You probably won't ever be able to see the math behind what's fluxing your prices.
And this probably isn't going anywhere!