Back in the mid teens, I lived across the street from a bar in New York that had dynamic pricing for beers on tap! It felt like a novelty at the time, but that was also before Uber and surge pricing became a regular feature of my life when I later moved to San Francisco. The thing with surge pricing was that we then had alternatives in public transportation, or walking if we had the time. To your point, Wendy's seems to have flubbed the announcement by not recognizing the price sensitivity and lack of options of their customers. Perhaps they could have charted a different course by offering "dynamic value," deals or freebies for visits during quiet parts of the day. Nevertheless, I think it's a good idea for cities to explore!
The answer to your subtitle is easy: dynamic pricing is more exploitative. It benefits vendors by raising costs on consumers who have no choice but to pay higher prices. There is a strong information asymmetry because consumers cannot predict prices while vendors will get their money regardless. It is an especially horrid idea for public transit, which people *have* to use because they don't have other options.
In particular, Amtrak's dynamic pricing is inequitable, polluting, and ultimately drives business away from Amtrak, at least in my experience. I have repeatedly seen low ticket prices in Amtrak searches, slightly adjusted my preferences, and then seen the same ticket selling $100 a few minutes later because of my own search. The only riders who benefit are those with the leisure time, padded schedules, and capital to buy tickets way out in advance, including those with the extra money to speculate on ticket prices with the flex fares as you describe. People who have to travel on shorter notice and who can't afford to play ticket markets either can't take Amtrak or have to pay higher costs to subsidize the low fares of riders who have more time and money. This has driven me to take the bus (which is either not dynamically priced or much more mildly so) instead of Amtrak and other people to fly instead of taking Amtrak, both options that create more carbon emissions and other kinds of air pollution.
You also used the example of Ensemble Arts, but left out that the biggest seller of concert tickets, Ticketmaster, already uses dynamic pricing--and that their pricing results in higher costs for consumers, higher profits for them, and has brought government investigations of Ticketmaster: https://www.theguardian.com/money/article/2024/sep/03/european-commission-to-investigate-ticketmasters-dynamic-pricing . Public transit should not be more like Uber or Ticketmaster! Especially because these services at least have some competition: you can check Lyft if Uber prices are high, but if the MTA jacks up subway prices unpredictably because of a surge in demand, New Yorkers are either stuck where they are or have to pay up.
Setting different levels of prices in advance, which is long-established practice (e.g., peak and off-peak fares), is very different and has a much better case, because the agency and the consumers are on the same level about what prices will be. It lets consumers adjust their behavior or save up for an expected cost.
While I think dynamic pricing has a place, I'm worried about it's implementation when it's not easy to predict the cost.
Amtrak works in the case because visiting New York is nice, but not essential. You'll check and decide to go if it's cheap. Same for Uber. However, I'd argue that changing people's habits would actual be more effective with different levels of static prices. If you want to spread the passengers to off peak, make sure everyone knows when peak charges are and let them factor it into their day-to-day life.
This is totally reasonable. I guess I would agree that some static tiers of pricing is maybe the best way to go in general, but I also really like the Philly arts example. I am so glad they were able to cash in on their nights w/ Sting! I think about this also with big events that are coming to Philadelphia in 2026 -- World Cup, 250th anniversary of the country, etc. How could we optimize this from a tax revenue and equitable visitor experience perspective?
Back in the mid teens, I lived across the street from a bar in New York that had dynamic pricing for beers on tap! It felt like a novelty at the time, but that was also before Uber and surge pricing became a regular feature of my life when I later moved to San Francisco. The thing with surge pricing was that we then had alternatives in public transportation, or walking if we had the time. To your point, Wendy's seems to have flubbed the announcement by not recognizing the price sensitivity and lack of options of their customers. Perhaps they could have charted a different course by offering "dynamic value," deals or freebies for visits during quiet parts of the day. Nevertheless, I think it's a good idea for cities to explore!
The answer to your subtitle is easy: dynamic pricing is more exploitative. It benefits vendors by raising costs on consumers who have no choice but to pay higher prices. There is a strong information asymmetry because consumers cannot predict prices while vendors will get their money regardless. It is an especially horrid idea for public transit, which people *have* to use because they don't have other options.
In particular, Amtrak's dynamic pricing is inequitable, polluting, and ultimately drives business away from Amtrak, at least in my experience. I have repeatedly seen low ticket prices in Amtrak searches, slightly adjusted my preferences, and then seen the same ticket selling $100 a few minutes later because of my own search. The only riders who benefit are those with the leisure time, padded schedules, and capital to buy tickets way out in advance, including those with the extra money to speculate on ticket prices with the flex fares as you describe. People who have to travel on shorter notice and who can't afford to play ticket markets either can't take Amtrak or have to pay higher costs to subsidize the low fares of riders who have more time and money. This has driven me to take the bus (which is either not dynamically priced or much more mildly so) instead of Amtrak and other people to fly instead of taking Amtrak, both options that create more carbon emissions and other kinds of air pollution.
You also used the example of Ensemble Arts, but left out that the biggest seller of concert tickets, Ticketmaster, already uses dynamic pricing--and that their pricing results in higher costs for consumers, higher profits for them, and has brought government investigations of Ticketmaster: https://www.theguardian.com/money/article/2024/sep/03/european-commission-to-investigate-ticketmasters-dynamic-pricing . Public transit should not be more like Uber or Ticketmaster! Especially because these services at least have some competition: you can check Lyft if Uber prices are high, but if the MTA jacks up subway prices unpredictably because of a surge in demand, New Yorkers are either stuck where they are or have to pay up.
Setting different levels of prices in advance, which is long-established practice (e.g., peak and off-peak fares), is very different and has a much better case, because the agency and the consumers are on the same level about what prices will be. It lets consumers adjust their behavior or save up for an expected cost.
While I think dynamic pricing has a place, I'm worried about it's implementation when it's not easy to predict the cost.
Amtrak works in the case because visiting New York is nice, but not essential. You'll check and decide to go if it's cheap. Same for Uber. However, I'd argue that changing people's habits would actual be more effective with different levels of static prices. If you want to spread the passengers to off peak, make sure everyone knows when peak charges are and let them factor it into their day-to-day life.
This is totally reasonable. I guess I would agree that some static tiers of pricing is maybe the best way to go in general, but I also really like the Philly arts example. I am so glad they were able to cash in on their nights w/ Sting! I think about this also with big events that are coming to Philadelphia in 2026 -- World Cup, 250th anniversary of the country, etc. How could we optimize this from a tax revenue and equitable visitor experience perspective?