The urge to surge price is upon us, so get ready to pay up and up.
One of the more glaring examples of local "surge pricing" emerges next Monday around Wrigley Field, just in time for the 2016 World Series champion Chicago Cubs' home opener. Taking advantage of anticipated sky-high demand for parking, the city this year is doubling the meter rate to $4 an hour for up to seven hours for about 1,100 selected street spaces around the ballyard during games and concerts.
Hey, it could have been worse: City Hall floated the idea of $12 per hour before the City Council approved the current rate.
Yet Chicago's Wrigley Field parking gambit is only the latest example of a growing movement toward surge pricing — the practice of making customers pay more during times of heavy or peak demand. Already, airlines and hotels are veterans at charging premium rates during busy times, but now — as high-tech sensors and pricing algorithms make it easier to anticipate demand and boost prices — many other industries are exploring surge pricing, including retail, ride-sharing, sports and entertainment venues, and maybe even health care.>> > John Byrne
New higher "surge pricing" at parking meters near Wrigley Field hasn't even kicked in yet, but a top aide to Mayor Rahm Emanuel told aldermen Thursday that the city could eventually look to broaden the program to areas around Chicago where parking is highly sought-after for other types of popular...
New higher "surge pricing" at parking meters near Wrigley Field hasn't even kicked in yet, but a top aide to Mayor Rahm Emanuel told aldermen Thursday that the city could eventually look to broaden the program to areas around Chicago where parking is highly sought-after for other types of popular...(John Byrne)
Have a Coke and a smile? Not really.>
The public response quickly turned to sheer outrage with consumers, editorial writers and competitors chiding the company for over-reaching and taking advantage. One of the world's savviest marketers, Coca-Cola heeded the angry response and immediately buried the vending machine initiative along with an earlier marketing debacle called "New Coke."
More recently, Uber Technologies came under fire for its variation of surge pricing.
In Sydney in 2014 and New York City in 2016, when public emergencies arose and demand for the ride-sharing service spiked, some unhappy users criticized the company for briefly raising rates.
Uber has revamped its pricing scheme, now calling it "dynamic pricing," and is making terms and conditions more upfront and transparent, according to the company's website. (Rival Lyft also has tweaked its pricing policies.)
These days, Uber isn't the only one using the term "dynamic pricing," which apparently carries less of a stigma than "surge pricing," and other companies are marketing their price plans that way too.Michael Tercha / Chicago Tribune
A worker for LAZ Parking adds a sticker to a meter in the 3300 block of North Clark Street on April 3, 2017. The sticker warns of game day surge pricing around Wrigley Field.
A worker for LAZ Parking adds a sticker to a meter in the 3300 block of North Clark Street on April 3, 2017. The sticker warns of game day surge pricing around Wrigley Field.(Michael Tercha / Chicago Tribune)
Whatever it's called, this practice goes beyond slipping a restaurant maitre d' a few bucks to get a better table or reservation during a busy span.
Instead, some experts predict price fluctuations soon will be infiltrating other business segments. This includes retail or grocery stores where it's technologically possible for the asking price of any product to quickly change depending on higher demand or lower supply.
Price bounces could happen throughout the day or at a moment's notice, making the experience more like playing the stock market than casual shopping.
There's even speculation that health care providers will go this route, enhancing the cost of doctor or medical center visits during flu epidemics or other public health outbreaks.
Do these potential changes border on price gouging or are they just symptomatic of what the market will bear?
It's a slippery slope.
Outright price gouging is typically pretty obvious. For example, it's gouging when there's a flood or other natural disaster and, all of a sudden, the cost of plywood, gas, bread or various necessities becomes prohibitively expensive for the victims. There are laws to crack down on such behavior.
Less obvious is the unleashing of "surge pricing," because increasingly the seller has the power to do so at a moment's notice — maybe even before the customer realizes what's happened.
The city of Chicago says the Wrigley Field surge parking initiative is a test.
If it works, City Hall may expand the effort to other parts of the city where sporting events, concerts, festivals and such often boost the demand for more metered parking spots.
As noted, the urge to surge price is just getting started.
So let the buyers, and parkers, beware.
Source : http://www.chicagotribune.com/business/columnists/ct-surge-cubs-parking-wrigley-field-gouging-robert-reed-04117-biz-20170403-column.html