what is surge pricing

what is surge pricing

1 year ago 44
Nature

Surge pricing, also known as dynamic pricing, is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. It is a way of setting the price for a product or service in which the price changes according to how much demand there is for it at a particular time. Surge pricing is most commonly associated with rideshare apps like Uber, where prices increase during peak travel times when there are more riders than drivers available. Surge pricing is a way to incentivize drivers to stay out later and to ensure that those who need a ride can get one. When prices are surging, a multiplier to standard rates, an additional surge amount, or an upfront fare including the surge amount will be shown on the offer card. The surge pricing model is not without controversy, as some critics argue that it is a form of price gouging. However, businesses argue that it is a way to control demand and supply and to shift sales towards consumers with a higher need or willingness to pay.

Read Entire Article