Strategies to Beat Surge Pricing and Save Money - Money Tip Tuesday

You may have heard that a popular fast-food chain wound up in some hot water a few weeks ago over rumors they were planning to implement surge pricing on their menus.

For obvious reasons, people were upset because they didn’t want to see hikes in even more prices. But were the rumors true, and is this pricing structure something we’ll see more of in the future? 

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Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.  

If you happened to pick up on the recent news story, Wendy’s received some backlash over a rumor that they were planning to implement surge pricing. 

Although the restaurant responded by saying the rumors were false and the message misconstrued, the topic brings forth an even greater discussion about what surge pricing is and how it affects us as customers. 

So, what is surge pricing, and what does it mean for your money and spending habits? 

Surge pricing, sometimes referred to as dynamic pricing, is when a business changes the prices of their goods and services depending on the measure of demand during certain periods of time or due to certain factors.  

Even if you’re not familiar with this pricing structure, you’ve likely experienced it in your own life. It’s not new. The growing debate about it now is whether we’ll start to see it more frequently. 

Some examples of surge pricing you’ll recognize are: 

• Historically, airlines and hotels. It’s commonly known that companies in these industries raise prices during popular travel times like weekends and holidays.  
• You’ve likely seen it at movie theaters. Ticket prices tend to be higher on the weekends to accommodate for the larger crowds than during the slower days of the midweek.  
• Most recently ride share companies like Uber and Lyft. If you’ve used either of these apps, you’ll notice at times when you’re looking to book a ride that they’ll charge more for rides during bad weather or other periods of high demand. 

Surge pricing affects customers and even potential customers because it ultimately means you’ll pay more for items or services during certain time windows. If you’re looking to book a trip to New York City for New Years Eve, you’ll likely be paying more for your travel and lodging than if it were just a random weekend in the middle of the year.  

Much of this is out of our control and we don’t have a lot of influence over what businesses charge for their products or services, but there are a few things we can do to minimize the effect surge pricing can have on our spending.  

First, awareness is key. Knowing when prices are higher is the first step to avoid paying the maximum price for a good or service. Pay attention to when the prices are the highest and try to plan around it. If it means rescheduling that vacation to a different time of year or choosing to fly a different day of the week, it may be worth considering to save yourself some cash.  

Set up notifications for price drops or specific discounts that might land you a better deal. This can come in handy particularly on hotel rooms or plane tickets. You can also try using price comparison apps and tools to take a few moments to review pricing from different companies before making a purchase. 

And of course, consider doing business with different service providers or businesses. If you’re no longer happy with the prices for the service, there may be another one out there you can take your business to.  

A debate over surge pricing is starting to grow with some arguing that it will soon be the future of pricing and that we might start seeing it pop up all over the place.  

Many argue that as businesses adopt newer technology and particularly AI tools that they’re more likely to use those tools to introduce payment structures with greater flexibility. Their pricing could be more in tune with changes in their industries allowing them to swiftly adapt in real time.  

Much of this is conjecture and may still be far off in the realm of science fiction but as for now, we’ll just have to keep an eye out for shifting prices on the goods and services we use every day, reworking our budgets throughout the process.  

If there are any other tips or topics you’d like us to cover, let us know at tcupodcast@trianglecu.org. Like and follow our Making Money Personal FB and IG page, and look for our sponsor, Triangle Credit Union, on social media to share your thoughts.   

Thanks for listening to today’s Money Tip Tuesday. Check out our other tips and episodes on the Making Money Personal podcast.   

Have a great day!