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I wouldn't be quite so harsh, they're acting in a completely rational, expected way. And on the face of it there isn't really a problem with helping people pric

I wouldn't be quite so harsh, they're acting in a completely rational, expected way. And on the face of it there isn't really a problem with helping people price better. But I look at this stuff in aggregate - surge pricing on Uber, primetime on Lyft, this service on AirBnb, etc etc, and I get a sinking feeling in my stomach. The utopian technocratic future Silicon Valley is bringing about seems to be one where every merchant everywhere is maximizing every penny they can extract from you at every moment, where everyone spends an inordinate amount of brain cycles trying to defeat pricing algorithms, driving an increasingly maddeningly complicated web of price-maximizers so complex and pervasive you have no chance of understanding what's going on. Individually these things all seem rational and understandable, but as a whole where do we draw the line? As what point do I pick up a chocolate bar and watch its price tag change in front of my eyes because the system knows I have a weak spot for Snickers? This seems dystopian to me, and perhaps more dystopian than this possible future is the fact that a lot of people in our industry would wet their pants in joy at the thought of that future.

haberman 12y ago
There is natural competitive pressure to avoid this, because customers hate unpredictable pricing (observe grandparent). Customers will hate companies (and punish them in the marketplace) if they feel nickel-and-dimed or taken advantage of.
- vertex-four 12y ago
  Until/unless we get to a local maxima where in certain industries, it'd be hard to change and still be profitable. We already see unpredictable pricing in most medium- and long-distance public travel systems, for example.
- gambiting 12y ago
  Unless you have no other choice. In Poland where I come from all trains are state-owned and each journey costs exactly the same regardless of the time of the booking. The cost of the ticket for a train to the capital on Monday morning costs exactly the same if bought 5 minutes before departure and 6 months before departure. In the UK on the other hand, all train lines are private,and they charge whatever they like if there is demand. So a morning train to London will cost hundreds of pounds if bought 5 minutes before departure,but only 20 pounds if bought 3 months in advance. I find this offensive on the deepest level. I understand that this is how capitalism works,but it is against human freedom and flexibility, in order to do nothing else but maximize corporate profits.
  - jarek 12y ago
    To clarify this example, the capacity of the train doesn't change when a ticket is bought on the day of travel, so the higher pricing is simply because they can, not because it costs more to add necessary capacity.
  - jpatokal 12y ago
    But it goes both ways -- if you can plan in advance and are happy to travel at an unpopular time (middle of the day etc), you can get dirt cheap fares, much cheaper than the regular/full fare. In Japan, by contrast, the Shinkansen bullet train from Tokyo to Osaka costs around Y14,000 (~US$140), every day, all the time. So at unpopular times, the trains are half empty, because people fly or take highway buses or drive instead, all of which are slower and less environmentally friendly, but deregulated and thus cheaper. I find this offensive on the deepest level.
    - gambiting 12y ago
      >> you can get dirt cheap fares, much cheaper than the regular/full fare. I think you got tricked into believing that you are getting a deal. You are not. The "dirt cheap" fare is what the regular/full fare should be, it's not a promotion or a good deal. The problem with Shinkansen pricing is that its always expensive. There is no surge pricing,but the baseline price is still too expensive. That is an entirely different problem altogether.
      - haberman 12y ago
        > The "dirt cheap" fare is what the regular/full fare should be Why? Just because you say so? What if the "dirt cheap" fare, offered all the time, wouldn't even cover the costs of running the line? Is your salary higher than you absolutely need to survive? If so, how do you justify your demand-based rate hike?
      - jpatokal 12y ago
        I've paid something like 10 euros to travel the ~250km from Dusseldorf to Frankfurt in a high-speed ICE bullet train. There is no way in hell they could operate that service if everybody was paying that price.
rahimnathwani 12y ago
As what point do I pick up a chocolate bar and watch its price tag change in front of my eyes because the system knows I have a weak spot for Snickers? Here you're talking about price discrimination (separation of markets) rather than dynamic/surge/prime pricing within a single market. These are fundamentally different concepts.
- usingathrowaway 12y ago
  Technology can keep narrowing the size of the market until there's only one person standing inside of it. Do you really think that Travis Kalanick would think it's a bad thing to recognize that you (as a person) are willing to pay double, and charge you more than your neighbor? Absolutely not. The only thing that might restrain him from doing that is the law, and he (like Chesky and such) doesn't give one single shit about the law.
- jarek 12y ago
  Think about someone picking up, e.g., half of a store's supply of Snickers. This increases local demand for Snickers right now and the supply doesn't change. Surge pricing suggests that this is a good time to increase price. Then the same is true, though to a lesser degree, when someone picks up one bar. (Though sorites paradox.)
  - md2be 12y ago
    Double the price of gas during a crisis? It's called price gauging. Put lipstick on a pig, it's still a pig
    - jarek 12y ago
      It's a good thing there are many protests against the rising price of chocolates right before Valentine's Day. The gas price doublers might get the news and the local representatives being outraged, but, empirically, few care about smaller instances of price discrimination.
- potatolicious 12y ago

haberman 12y ago

There is natural competitive pressure to avoid this, because customers hate unpredictable pricing (observe grandparent). Customers will hate companies (and punish them in the marketplace) if they feel nickel-and-dimed or taken advantage of.

vertex-four 12y ago
Until/unless we get to a local maxima where in certain industries, it'd be hard to change and still be profitable. We already see unpredictable pricing in most medium- and long-distance public travel systems, for example.
gambiting 12y ago
Unless you have no other choice. In Poland where I come from all trains are state-owned and each journey costs exactly the same regardless of the time of the booking. The cost of the ticket for a train to the capital on Monday morning costs exactly the same if bought 5 minutes before departure and 6 months before departure. In the UK on the other hand, all train lines are private,and they charge whatever they like if there is demand. So a morning train to London will cost hundreds of pounds if bought 5 minutes before departure,but only 20 pounds if bought 3 months in advance. I find this offensive on the deepest level. I understand that this is how capitalism works,but it is against human freedom and flexibility, in order to do nothing else but maximize corporate profits.
- jarek 12y ago
  To clarify this example, the capacity of the train doesn't change when a ticket is bought on the day of travel, so the higher pricing is simply because they can, not because it costs more to add necessary capacity.
- jpatokal 12y ago
  But it goes both ways -- if you can plan in advance and are happy to travel at an unpopular time (middle of the day etc), you can get dirt cheap fares, much cheaper than the regular/full fare. In Japan, by contrast, the Shinkansen bullet train from Tokyo to Osaka costs around Y14,000 (~US$140), every day, all the time. So at unpopular times, the trains are half empty, because people fly or take highway buses or drive instead, all of which are slower and less environmentally friendly, but deregulated and thus cheaper. I find this offensive on the deepest level.
  - gambiting 12y ago
    >> you can get dirt cheap fares, much cheaper than the regular/full fare. I think you got tricked into believing that you are getting a deal. You are not. The "dirt cheap" fare is what the regular/full fare should be, it's not a promotion or a good deal. The problem with Shinkansen pricing is that its always expensive. There is no surge pricing,but the baseline price is still too expensive. That is an entirely different problem altogether.
    - haberman 12y ago
      > The "dirt cheap" fare is what the regular/full fare should be Why? Just because you say so? What if the "dirt cheap" fare, offered all the time, wouldn't even cover the costs of running the line? Is your salary higher than you absolutely need to survive? If so, how do you justify your demand-based rate hike?
    - jpatokal 12y ago
      I've paid something like 10 euros to travel the ~250km from Dusseldorf to Frankfurt in a high-speed ICE bullet train. There is no way in hell they could operate that service if everybody was paying that price.

rahimnathwani 12y ago

As what point do I pick up a chocolate bar and watch its price tag change in front of my eyes because the system knows I have a weak spot for Snickers? Here you're talking about price discrimination (separation of markets) rather than dynamic/surge/prime pricing within a single market. These are fundamentally different concepts.

usingathrowaway 12y ago
Technology can keep narrowing the size of the market until there's only one person standing inside of it. Do you really think that Travis Kalanick would think it's a bad thing to recognize that you (as a person) are willing to pay double, and charge you more than your neighbor? Absolutely not. The only thing that might restrain him from doing that is the law, and he (like Chesky and such) doesn't give one single shit about the law.
jarek 12y ago
Think about someone picking up, e.g., half of a store's supply of Snickers. This increases local demand for Snickers right now and the supply doesn't change. Surge pricing suggests that this is a good time to increase price. Then the same is true, though to a lesser degree, when someone picks up one bar. (Though sorites paradox.)
- md2be 12y ago
  Double the price of gas during a crisis? It's called price gauging. Put lipstick on a pig, it's still a pig
  - jarek 12y ago
    It's a good thing there are many protests against the rising price of chocolates right before Valentine's Day. The gas price doublers might get the news and the local representatives being outraged, but, empirically, few care about smaller instances of price discrimination.
potatolicious 12y ago