Surge pricing is increasingly being used in restaurants and movie theaters, making everyday activities much more expensive

Hannah Getahun
Updated ·2 min read
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Surge pricing is increasingly being used in restaurants and movie theaters, making everyday activities much more expensive

  • Dynamic pricing is being used to set prices for activities beyond ridesharing and concert tickets.

  • One family was asked to pay $418.90 to go bowling, The Wall Street Journal reported.

  • Experts warned businesses would most likely implement surge pricing in response to the pandemic.

Surge pricing can be a headache for those trying to hail Ubers after sporting events or booking a flight after a treacherous weather event. But now, the pricing method is spreading to other places, like bowling alleys, restaurants, and golf courses, The Wall Street Journal reported.

Alex Yenni, who lives in the Bay Area, told WSJ that when trying to reserve bowling tickets in December. he was quoted $418.90 for two hours with his son at an alley in Petaluma, California — double what it would have cost had he paid in February.

The company that owned the lanes told WSJ the additional cost was due to increased demand during a busy winter break.

"This strikes me as outrageous for a pedestrian family activity," Yenni told the Journal.

WSJ also found examples of the practice at golf courses, restaurants, and movie theater chains like AMC, which recently announced it would start using variable pricing for premium seats with better views.

Insider previously reported that AI-driven dynamic pricing is making its way through business sectors like retail and grocery stores to keep up with changing market demands post-Covid. A startup meant to help restaurants set their own surge prices has also been created, and has helped some establishments double their profits, Insider's Nancy Luna reported.

Experts say that as online shopping becomes more popular, this method of determining prices could even hit brick-and-mortar stores, which are beginning to install electronic shelf labels, Insider reported in 2020.

"Covid has really changed perspectives on pricing... now it is top-of-mind as grocery fights media conversation about price inflation and non-essential verticals such as fashion work to price unsold inventory without racing to the bottom," Jon Duke, vice president of research at IDC Retail Insights, told Insider in 2020.

Some restaurant chains that implement surge pricing are raising their prices up to 40% during peak hours, Colin Webb, the cofounder and CEO of dynamic price startup Sauce, told Insider in December.

Read the original article on Business Insider