The government has indicated that they plan to ban dynamic pricing:
This, if it occurs as indicated may have enormous consequences for traditional demand based pricing, such as hotel room rates in quiet and peak time/season, airfares during low season or when in high demand (such as when there is a major event somewhere), Ubers etc. I expect there will be exceptions, otherwise electricity pricing will be non-compliant as it is now based on dynamic pricing. It will be interesting to see what the government proposes as it could have enormous unintended consequences.
I think we need a special topic to try to keep track of the Govâs flurry of announcements of investigations into this, bans on that, crackdowns on whatever.
They must be getting seriously spooked by polling that shows that they are getting their rear ends kicked by the voters who blame them for their dissatisfaction with the natural effects of capitalism in action. Especially in periods of inflation. Good old supply and demand.
The Government media release pulls that back a bit. It refers to " Dynamic pricing where a productâs price changes during the transaction process." Even that is unlikely to be practical for some transactions e.g. stock exchange transactions and some forms of gambling.
So far we only have press releases and journalistsâ interpretations of the proposal. Perhaps those who draft legislation have some understanding of the world of commerce and will target it well. Time will tell.
One does have final control over the decisions when purchasing or selling shares in the stock market. The options include setting for any trades a range, upper or lower limit or at market. Of course those investing in shares are well aware of the fact the market is subject to risk.
Should performance or entertainment based products be considered at risk investments to hold long or short term? Prospects of resale or loosing all in a crash to be expected.
It would be relatively easy to list what any legislation might include or exclude by industry/business transaction. To dismiss any prospects of regulation of the method of selling and pricing of entertainment products - against what most consumers expect. IE Assurance of the maximum price and on fair and equal terms. The alternative likely to appeal most to those who seek opportunity for making excessive personal gain at the expense of their fellow Australians.
Whilst auctions may be dynamic it is hardly comparable. In that case the whole group of potential buyers know exactly what is going on and they are expecting dynamic pricing.
Itâs interesting that, although we donât live in a communist country, many people seem to want Australia to be one. Why does the government or anyone else interfere with prices set by businesses? Such interference can disrupt supply and demand, impacting the economy and choice.
Pretty sure very few would want to live under a Communist system. Even the inventors got rid of it in the early 1990âs. Russia.
Now Australia is very much a Socialist country when it comes to essential services. Like basic health, education, power, water. Even if the Gov doesnât own the means of production of goods or services, they oversee it. And try to keep unchecked Capitalism under some sort of control with varying levels of success.
The latest flurry of announcements is because the voters in the Socialist country of Australia are expressing their dissatisfaction in polling that they donât like the effects of inflation (higher prices, higher interest rates, higher rents), and blame the current Gov, which faces an election next year.
Is there an assumption there is always a choice - or at least an acceptable alternative?
For the originally raised concern of pricing of promoted events/performance is there an acceptable alternative choice? One can pay the price and attend or one cannot. Some will say that is a fair choice.
Missing out on tickets to the Footy Grand Final because they are all sold out one feeling. Missing out because Dynamic Pricing pushed the last 10,000 tickets out of the reach all but those with Titanium branded credit cards - not the same? To ask which meets the average Aussies expectations of fairness.
There are people here who favour price control though I donât think that equates to communism. I donât think this policy is going to be price control either.
We have already been given some examples of systems where prices can change which are generally accepted - eg auctions. These do not seem to be the target of the policy.
Also dynamic pricing is not the whole scope, drip pricing and hidden fees are included.
We havenât seen the detail yet, until we do it is just speculation about how near price control (where governments set the selling price) it will be or if it will just ban some automated pricing mechanisms.
I donât know whether this qualifies as dynamic pricing as it seemed to be specifically targeted at one booking. Qantas - Iâve long suspected prices increase when cookies reveal what flights youâre looking at.
A recent experience proved this. I started searching flights on ipad. Selected one of several at âlowest priceâ on the day. The selection appeared as selected flight at the top of the booking window with a âcontinueâ button or similar.
Went back to recheck other flight times on the same day. Returned to booking window where the previously selected flight was still shown at the top - but there was no response when I tried to continue with it.
I had to restart the search. Lo and behold, the lowest price for the day had gone up! Not just for the one Iâd selected but for all âlowest priceâ flights.
So I went to the desktop, cleared cookies and started again. Previous âlowest priceâ came back. I was able to book the flight Iâd originally selected at the price originally shown.
Probably not news to a lot of people more savvy than I am, still feels like dirty tricks.
We already have member discounts in a variety of stores. The local bottle-shops, Dan Murphyâs etc have been doing it for some time. One needs to look very carefully to understand that some prices are a general discount, otherâs are a memberâs only special and others may simply be relating product recommendation. Consider it a form of conditioning that as a special consumer one deserves to be treated to savings. Why not reward one for being a regular purchaser of certain brands and products?
Take away dynamic pricing and one looses that opportunity to âSAVEâ and make a customer feel special. Yes, said somewhat in jest. Dynamic pricing can present two very different faces.
There is ample precedent and avoidance of regulation providing a consumer is free to choose which store/retailer one might choose to shop at. Even if it is the only business for 1,000km our political leadership seems to be reluctant to directly impose on said businesses. The 4c off deals and advance pricing offers at select service station brands a widespread example of how some consumers may gain a better deal vs others who do not have easy access to any of those options. To also consider Colesworth regular send out special offers âjust for youâ based on past purchase history of products. Not quite dynamic pricing, or is it? It remains a form of secret price discrimination Prices that other customers are not aware of.
It is worth doing some research on surveillance pricing, this is very different. Surveillance pricing uses collected data to alter prices when one is in the store (bricks and mortar or online). This is extremely concerning as:
a retailer could inflate prices based on their own values. An example being a retailer selling luxury products sees a customer they think doesnât fit their brand image, and makes prices expensive to turn that customer away.
a retailer provides prices based on customer profiling. Say a customer has sort of condition (e.g. alcoholism) that makes them buy alcohol. A retailer profiles the customer and knows that they will buy irrespective of the price, and therefore increases the price to profit from this customerâŠor decreases the price knowing they will sell more, potentially adding to the problems the consumer has.
a retailer might not like a customer and persecute the customer by higher pricing. An example being a customer has returned a item or made a complaint so the retailer charges the customer more.
retailer data shows the customer will be making a purchase, say they have been searching for what particular widget to buy online based on features giving strong indication that they will be purchasing the widget, and increases the price of the widget to that customer.
retailers adjust price based on what a customer can afford to pay, such as using customerâs income, postcode, type of car driven, profession.
retailers inflate prices based on other purchases. A customer buys bread, and the retailer knows butter and jam are often purchased at the same time. The retailer then increases the price of butter and jam to profit off the customer.
There are many examples where a retailer could treat a customer favourably or unfavourably because of the data they have collected on a specific customer or through data they have acquired (such as one of the data mining platforms).
This is why surveillance pricing should be banned.
