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Don’t Hate on Surge Pricing From Uber and MoviePass | TheStreet

What’s worse than pulling up the Uber app to catch a ride home after a long weekend night only to be met with the surge pricing warning? No Uber at all.

That could very well be the fate of a company like Uber without surge pricing. The same goes for the likes of MoviePass, the Helios and Matheson Analytics Inc. (HMNY – Get Report) company that offers a $10-a-month subscription plan that allows users to see a movie in theaters every day. The company is fresh off implementing a surge pricing model, which sent the internet into a tizzy.

Consumers may hate it, but investors should love it. Higher prices, more profits, perhaps a higher stock price.

Basic economic principles in a competitive economy hold that the price of goods and services will move to the point of equilibrium, where supply and demand meet. Demand increases? Price and quantity move higher, and supply follows suit. Further, with today’s costs of doing business in a high-tech, rapidly evolving world, companies have to find creative ways to raise prices.

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Don’t Hate on Surge Pricing From Uber and MoviePass – TheStreet.

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