Do You Order Lunch at Noon? You May Have to Pay Extra
Most of us have become somewhat familiar with Uber and its dynamic pricing model. But just in case you haven’t, dynamic pricing refers to a pricing model in which the cost of a service is based on how many people want that service at a given time.
According to Uber: “With surge pricing, Uber rates increase to get more cars on the road and ensure reliability during the busiest times. When enough cars are on the road, prices go back down to normal levels. It’s important to know that you’ll always be notified in big, bold print if surge pricing is in effect. When rates are more than double, the surge confirmation screen also requires you to type in the specific surge multiplier to ensure you understand what rates to expect.”
Uber is not the only service that’s utilizing this surge pricing model, though. Food delivery services are following suit, and apps like Sprig, a startup food delivery service, are now utilizing this same model.
How will dynamic food delivery pricing work?
Dynamic food delivery will allow you to have your lunch delivered for a better price if you order it during off-hours — like, say, 4 p.m. — but you might to have to pay a pretty penny if you order it at lunchtime (think around noon).
According to an announcement by the startup: “Dynamic delivery fees will adjust up or down throughout Sprig’s service based on how busy things get and how far away a delivery is. While delivery fees will go up during the rushes – like at 8pm in the Marina – they will also decrease when things are slower, meaning you may even see free delivery!” The company said it is adding surge pricing because “it will enable us to continue to provide fair compensation for our hard-working Sprig Servers as we continue to expand. Furthermore, it makes Sprig more reliable for you — so you can get a Sprig meal right when you want it, straight to your desk or door.”
What does this mean for you?
Well, if you’re a Sprig user, you may already be paying greater prices for delivery. According to one of the app’s reviewers, his “delivery fee surged from $2 to $5 after last update.” Sprig is not the only restaurant industry app that’s jumped on the surge pricing bandwagon. Reservation apps, like Table8, help restaurants “scalp” last minute reservations at some of the most sought-after restaurants during some of the most in-demand times.
If apps like Sprig see long-term success with this dynamic pricing model, we could begin to see other food delivery services — like large pizza restaurants — and other services in which there are peak and off-peak hours take on this pricing model in the future.