Peter's Viewpoint

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Dynamic Pricing, Trend or Standard?

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The integrity of Dynamic Pricing
People that use the Internet regularly know where to shop and find the best bargains but the cost of those bargain prices are sometimes not what we think.

I was asked by my cousin to search for an inexpensive plane ticket.  I used a few of the website links that I had and told him that the least expensive round trip flight was 400 euros for the time period and the to and from departures cities.  He called me back and told me of another company that someone had told him about claiming that he could get the flight for 150 euros.  I told him that was nonsense and proved it to him.  Upon doing an initial search, the site (not mentioned) displayed the round trip information just as asked with a total of, yes 150 euros.  After clicking on the reservation button and providing (his) credit card, the full flight information appeared with an overnight lay over in a city.  He was furious of course.  The cancellation was immediate but the company that operates the website charged a 10 euro fee.

Many people assume that this is trickery of the trend known as Dynamic Pricing but in the case of this travel site, I believe that it is outright theft.

The Dynamic Pricing trend is a method that companies are using to adjust prices according to variables such as increased costs that are beyond their control, holidays, etc..  The integrity of its use rests with the company that implements this strategy.

Some examples of this are airlines, hotels, and taxis.  You probably have heard complaints from a friend about how they were charged extra because they stayed at a hotel that charged them extra on the weekend nights of a holiday, or how airlines impose a fuel surcharge because some country decided to tweet an increase in oil prices due to whatever.
For the consumer this is an unfair situation but for the business it is logical.

The following is a quote from the New York Times article. “Sure it’s about the regularity, but someone who is driving a car on a regular occurrence deals with dynamic pricing all the time: it’s called gas prices...”

The article that this is based on was about the complaint that taxi drivers charge “exclusive rates” for working on New Year’s Eve.  Having worked as a taxi driver while attaining my degree, I don’t see why a taxi driver shouldn’t charge exorbitant rates for that night.
CEO’s of major corporations receive millions for running a company while playing golf, why shouldn’t a taxi driver make a bonus for working one or two nights a year that others don’t.

Dynamic Pricing will become a standard because of market instability and the availability of technology that allows the immediate integration of increases and decreases in cost to product and services.  The key here is the integrity of the companies to actually allocate decreases in costs thereby also reducing prices.

Taxis charging exclusive rates to make their bonus

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