Prof G Markets: Google’s Antitrust Trial, Birkenstock’s IPO, and Surge Pricing at the Pub

Surge Pricing

Surge pricing, a familiar concept in industries like air travel and ride-sharing, is now being considered for pubs in the UK. Scott Galloway argues that this time-based pricing model makes sense, drawing parallels to variable pricing in airlines and cinemas. He notes that pubs hold a unique cultural significance in the UK, with some even zoned specifically for this purpose, making them an interesting case for surge pricing 1.

I think surge pricing, I think it makes all the sense in the world. It's everywhere. And if you don't like it, there's something for everybody here.

--- Scott Galloway

Galloway believes that if surge pricing doesn't work, businesses will naturally move away from it, highlighting the adaptive nature of capitalism 2.

   

Consumer Reactions

Consumer reactions to surge pricing are often negative, as seen with AMC and Lyft, where backlash led to reconsideration of these models. Scott Galloway acknowledges that many new pricing strategies fail, but he emphasizes that price discrimination can be effective for different consumer segments 2.

The majority of new pricing schematics or new products fail, and then the company, if it doesn't work, then the pubs will move away from it.

--- Scott Galloway

He suggests that if consumers reject surge pricing, businesses will adapt accordingly, underscoring the trial-and-error nature of market dynamics 2.