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Business: Surge pricing, it’s what’s coming to dinner
maybe not
Surge pricing, sometimes called dynamic pricing is most commonly associated with ride sharing company Uber, but it has actually been used since the 1980s. The Airline Deregulation Act of 1978 removed controls over airline’s routes, destinations and fares, leaving them free to charge whatever they liked. Instead of government control America’s airline industry moved to a free market model
As part of these changes many airlines moved to dynamic, or surge pricing, where different passengers would be charged different ticket prices for trips to the same destination, depending upon when they traveled. This model, used by a majority of airlines today, has spread to other industries such as hotels and ride sharing services. Uber has aggressively adopted surge pricing, a move both praised and criticised but regardless: customer’s acceptance of this pricing model is proven simply by the fact roughly 130M customers use the ride sharing service every month in The US alone
