If you're an Uber rider, you're definitely familiar with their practice of surge pricing. That's when you need a cab on a rainy Friday during rush hour and Uber quotes you twice what you normally pay for the ride.
It's completely legal and-I have to admit-kind of genius. So much so that other businesses-from airlines to hotels to freight carriers-have been using variations of this model for years.
But now the practice is making its way into the restaurant industry.
Bloomberg recently reported that a well-known London restaurant called Bob Bob Ricard, which is is famous for it's 'Press for Champagne' button, is implementing a surge pricing model this month, with prices for the same meals being offered at a 25 percent discount during off-peak times as opposed to its busiest hours. In other words-you get a break on that Monday lunch as opposed to that Saturday dinner.
"The idea just came from looking at how the rest of the world functions," owner and founder Leonid Shutov said in the Bloomberg report.
Chocolate Glory dessert at Bob Bob Ricard. The restaurant is famed for it's Press for Champagne button. Picture: Twitter.com/bobbobricard
"Airlines wouldn't be able to exist, the business model wouldn't work unless you could balance supply and demand. Everything that we have taken that is widely accepted in the modern economy and applied to restaurants, seems to have worked."
Other restaurateurs in London are keeping a close eye on this practice, and so should you.
Of course, many are worried that the practice could turn off potential customers or come across as too gimmicky. But you can't argue with the cash flow. Shutov thinks serving great meals at a reduced price will increase traffic during the slower lunch hours and increase profits.
"We are not changing the menu," he says. "We are not trying to entice customers with anything from what they know and love. We are just saying that on certain days it will cost less. It's what we learn in economics 101."
Of course, your grandparents in Florida have known about surge pricing for years. They call it the "early bird discount."
The Washington Post