The Surge Battle

There was a time a while back, when stability and forming a habit was a good thing. Being predictable in our behaviour was the norm. There would be people who would say that a clock can be set to perfect time by their routine.

Not anymore.

I am writing this post while I wait for the surge to end on #uber fares. The fare that should be under 350 (a year back it was closer to 300) is right now 483. #uber app says fares higher due to demand. Well some of it might be true but I think they have figured out my pattern. They know what time I usually book a cab for work. So here I am. Waiting out the surge period and hoping I beat Uber pricing today. So much for being routine oriented and predictable.

But this doesn’t just end with Uber. Take airlines and travel apps for instance. You check out pricing for a certain sector a few times and watch the fares go up. Surge pricing? Hell yeah! Our constant looking at fares has triggered some code somewhere to let the app know that there is an interest in a certain sector and fare algorithm must kick in. I knew back in old days, if something was popular and lot of people were buying it, prices would come down to get more people to buy.

Now, you hope that there aren’t many people interested in the same thing you are else the prices will go up.

By the way, an update… fare is up by a rupee on Uber 🙂

So someone help me understand. I think it has to do with economics and I was terrible at that.

When surge pricing is happening, or airline fares are going up, is there a calculation by the companies which tells them that beyond a certain price point, the consumer may not use the service. Or they now know that irrespective of the pricing, the need far outweighs the price?

Think about it. All tickets sold out at a reasonable price would have been a far better proposition than to wonder that if we jack up the price real high, ticket might not be sold. But obviously morons out there are ready to buy at whatever price.

What if we as consumers decided not to use the service because “fares are slightly higher due to increased demand” (that slightly bit is a sick joke!). We boycott all those who indulge in such practices. I know I know it is all about business demand and supply but still. It’s alright to make profit but more than 50%?? Or in case of airlines, 3 times?!!

There is a fallacy in the logic somewhere and at some point of time, it is going to bite them in their ass.

And I still wait because the far now is up to 490.

If this continues, the government and the auto makers won’t have to blame Uber and Ola. People will start buying cars and using them. The economy will be back on track!

Don’t call them Low Cost Carriers

I have a confession to make. I have fallen in love with what the snooty airlines call Low Cost Carriers. Snooty because supposedly they offer so much more as compared to the LCC.

Having been a traveller for very long, I have finally figured out that under the garb of full services, the likes of Jet Airways and KingFisher to some extent, actually take the consumer for a big ride.

Over the last one year, I had the occasion to travel on Indigo and Spice Jet and my experiences were rather pleasant and delightful.

And I seriously fail to understand how a hand towel (hot or cold), one tiny bottle of juice and at times bad stuff that passes off for food and the frequent flier program can make full service airlines charge so much more as compared to LCC.

Indigo has fabulous aircrafts and SpiceJet definitely has far better aircrafts than Indian. And the last couple of times the food that I “bought” on SpiceJet was much better than anything I had on Jet.

Their ground handling is not very different from Jet, Kingfisher or whatever.

Their aircrafts are equally good. After all everyone buys the aircraft from same manufacturers. And in the age of e-tickets, all airlines have e-tickets. And a max of 3 hours flight in the country, in flight TV and all hardly makes a difference.

And the airport lounges… seriously, who has the time and even if someone does… it is pure snob value (remember the Tata Safari commercial?).

So all of the above put together makes for full fare airlines charge more than the LCC and while an average traveller who does not use any of the facilities, ends up footing the bill for those who do use them.

It is all pretty much the same… if anything, the so called LCC offer far better value to the consumer than the rest. Pure economics – meals on SpiceJet cost INR 150. Makes you wonder how much the full fare airlines con the fliers in the name of exotic spread (which is as bad as any airline food).

The point here is that we need to stop calling them Low Cost Carriers. A better moniker would be Value++ because at the end of the day, that is what the flier gets. Very marginal difference between them and full fare.