Dynamic pricing has been a hot topic in Australia over the last few months. Now, Prime Minister Anthony Albanese and Treasurer Jim Chalmers are reportedly set to announce plans to stop “dodgy” business practices, including hidden fees, tricky subscription traps and dynamic pricing.
“Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop,” Albanese said, per The Guardian.
The proposed legislation changes involve a particular focus on “drip pricing” where extra fees are added throughout each phase of a purchase and “subscription traps” which are when businesses like gyms make it difficult to end subscriptions. There will also be restrictions in place for marketing techniques which make it seem like the consumer only has a limited amount of time to shop.
“From concert tickets to hotel rooms to gym memberships, Australians are fed up with businesses using tricky tactics that make it difficult to end subscriptions or add hidden fees to purchases,” he continued.
“These practices can distort purchasing decisions, or result in additional costs, putting more pressure on the cost of living.”
On paper, these changes sound great. After all, no one likes dodgy business practices. But when it comes to dynamic pricing, concerts are only the tip of the iceberg.
What is Dynamic Pricing?
Dynamic pricing is when the price of a product changes depending on the demand from the consumer throughout the transaction process.
More recently, the concept of dynamic pricing has sparked conversations after it began being used for ticket pricing for concerts and live events. Due to the immense demand at all of these events, ticket prices surged much higher than the advertised amount.
While this practice for ticketed events is fairly new in Australia, it’s seemingly commonplace in the United States and the United Kingdom.
According to leading ticket retailers Ticketmaster and Ticketek, the prices are decided upon by artists and their teams. They also claim that dynamic pricing and demand-driven practices are a way to stop ticket scalping and actively respond to the growing demand these shows have from the public.
“Ticketmaster does not set the price of tickets. Artists and teams set prices that make the most sense for them, and Ticketmaster executes the pricing strategy — whether market or fixed price,” said a spokesperson for Ticketmaster, per the ABC.
Back in September, the British government announced a consultation into the use of dynamic pricing after the cost of tickets to Oasis reunion shows soared much higher than the advertised price due to the intense demand.
Why is Dynamic Pricing creating a bit of a hullabaloo in Australia?
In truth, dynamic pricing has been used without anyone batting an eyelid for ages.
Every time we go to book a plane ticket or a hotel, we expect the price to change depending on the time of year and demand on those purchases. We’ve become accustomed to prices changing depending on demand.
In Sydney, we even see dynamic pricing used for transport during peak times — not only for rideshare services like Uber but for public transport too.
According to the Australian Competition and Consumer Commission (ACCC), they’re well aware of the use of dynamic pricing throughout Aussie industries and believe it’s not an issue as long as the possible changes in price are clearly stated and not misrepresented.
“Forms of dynamic pricing exist in some markets,” a spokeswoman told the ABC.
“For example, airfare and accommodation pricing. Some businesses increase their prices during periods of high demand. This practice is not illegal, but businesses must be clear about the price consumers will pay.
“Whether or not a business’s use of dynamic pricing may be misleading will depend on the circumstances involved in each case, including what representations a business may have made to consumers about their pricing.”
While it’s a positive move from the Federal Government to ban dodgy sales practices and dynamic ticket pricing for concerts in an effort to quell the rising cost of living struggles felt by so many Australians, concerts and live music only scratch the surface of the issue.
It’s a hot ticket item that has caused a public outcry, but if the Government really wanted to make a helpful dent in the daily impact of dynamic pricing — rather than just get brownie points for tackling a hot topic — it could consider scrapping the concept on public transport.
But hey, what do I know?
The post The Government Is Cracking Down On Dynamic Pricing At Concerts — But That’s Just The Tip Of The Iceberg appeared first on PEDESTRIAN.TV .
