Should the Pricing of Any Service or Product Be Proprietary?
Not only does the number of companies which are perceived to use the obfuscation of information as a way to conduct business with consumers seem to be increasing; but some of the methods which they employ can be considered questionable as well.
Should the Pricing of Any Service or Product Be Proprietary?
“An educated consumer is our best customer” was the slogan cited by Sy Syms, who was the founder of a chain of discounted clothing stores called Syms Corporation, which was based in the greater New York metropolitan area. Customers deserve to be given information which is important in their decisions pertaining to whether or not to patronize a company…
…and in addition to other factors, knowing the prices between competitors is an important part of those decisions — but companies can be loathe to ensure that you have that pricing information; and they may even fight in court to prevent that information from being easily disseminated.
Three of many example come to mind.
United Airlines versus Skiplagged
United Airlines Incorporated and Orbitz Worldwide LLC filed the lawsuit back on Monday, November 17, 2014 to prevent Skiplagged — an Internet web site for lower cost airfares founded by Aktarer Zaman — from helping consumers buy what the companies call improper “hidden city” airplane tickets which undercut their sales. “In its simplest form, a passenger purchases a ticket from city A to city B to city C but does not travel beyond city B,” according to the companies’ complaint. “‘Hidden City’ ticketing is strictly prohibited by most commercial airlines because of logistical and public-safety concerns.”
However, a judge of the the United States District Court for the Northern District Court of Illinois in Chicago dismissed the lawsuit in May of 2015 against Skiplagged for lower cost airfares because the court did not have jurisdiction over the case, with the reason being that Aktarer Zaman did not live or do business in Chicago.
The use of “hidden city” airplane tickets is in and of itself not against the law; but they are usually strictly prohibited as per the policies of most airlines — and passengers who engage in using them could risk retribution from the airline. That includes being threatened with a lawsuit.
Uber versus Urbanhail
Urbanhail was a mobile software application program which was developed by five students who were matriculated at Harvard Business School and launched on Tuesday, April 19, 2016; and it gave ride share customers the ability to compare prices side by side between the official mobile software application programs of different ride share companies in real time at any given moment — and that included rates which increased in the form of a practice known as surge pricing.
Surge pricing is when the cost of a hired ride increases during what are considered to be peak times — such as when bars close, a sporting event concludes, or during a holiday — and customers have had mixed reactions pertaining to that policy. The question of whether or not avoiding the surge pricing of a ride sharing service was ethical was raised in this article I wrote back on Friday, December 19, 2014; and Urbanhail gave the consumer the power to do just that.
Only a mere few hours after the official launch, the developers received an e-mail message from Chris Messina, who at the time was the Developer Experience Lead at Uber, according to this article written by Curt Woodward for the Boston Globe:
Uber’s developer terms explicitly forbid using its data “in any manner that is competitive to Uber. We’re more than happy for you to continue developing your app, but ask that you remove any features that list Uber’s prices next to our competitors. Please let us know if you have any questions. Thanks!”
Ironically, Messina has been an advocate for open source and open standards for years — but he later wrote an e-mail message to the developers of Urbanhail that “Despite our efforts to make these terms and policies clear and transparent, you chose to act against them.”
Urbanhail was ultimately shut down and no longer exists.
In June of 2016, Uber introduced a number of new features and changes for its drivers, according to this article written by Brandy Shaul of Adweek — which included:
- Drivers having the option to input their destinations twice per day; and they will only receive Uber requests that are on their way.
- Drivers became able to pause new requests from coming in while they are completing their last trip.
- Instant Pay became available in all markets within the United States; and it allows drivers to receive payments as often as they would like for free through a GoBank Uber Debit Card.
- Uber drivers who also use Uber as passengers became able to receive discounts on their future passenger trips.
Difficult to Compare Fares of Southwest Airlines With Other Airlines
As a practice, the only place where you can find information on fares pertaining to Southwest Airlines is at its official Internet web site. You will not find them using Google Flights or with most — if not all — online travel agencies. The reason is because Southwest Airlines expressly restricts — among many other things — the harvesting of any information from its service and prohibits anyone to:
use any deep-link, page-scrape, robot, crawl, index, spider, click spam, macro programs, Internet agent, or other automatic device, program, algorithm or methodology which does the same things, to use, access, copy, acquire information, generate impressions or clicks, input information, store information, search, generate searches, or monitor any portion of the Service or Company information
This practice results in more difficulty for consumers in directly comparing the price of airfares between Southwest Airlines and other airlines — but that apparently has not hurt the airline.
Companies have a right to protect sensitive information which can be potentially damaging to their businesses — but is pricing really one of those forms of sensitive information?
Furthermore, is engaging in legal yet questionable tactics to increase the difficulty for their customers to compare prices, fares and rates with competitors really a necessary — and ethical — practice? Mandatory resort fees, carrier-imposed surcharges, basic economy fares, mandatory gratuities and required service charges are only some of the perceived nefarious policies which come to mind.
A company which is confident in what it has to offer does not typically hide pricing information. Value is more than just price. It can also include quality, convenience, aesthetics, and an overall better experience as just some of the myriad factors with which value can be perceived. Apple comes to mind with its new Mac Pro computer: its base model will start at $5,999.00 and could easily top out at greater than $50,000.00 when all options — including a $6,000.00 monitor — are included, according to this article written by
Although companies have a right to withhold pricing information from being easily compared with competitors, consumers have a right to convenience when comparing prices of similar products and services offered by competing companies — and they also have the right to not patronize a company which engages in questionable practices…
Have you experienced other examples in which a company keeps the pricing of its services or products proprietary?
Spirit Airlines allows its fares to be easily compared; but not Southwest Airlines. All photographs ©2016 and ©2018 by Brian Cohen.