Uber as a restaurant

This is Joseph.

Mark sent me this piece on surge pricing for Uber.  He mentioned some thoughts about surge pricing in other industries.  I got permission to scoop him in talking about one specific example: restaurants.  If we are lucky, a broader post on this topic is about to show up.   

One example of "surge pricing" that I have often noticed is the existence of a lunch menu at expensive dinner restaurants.  You can often get the same or a similar entrée at a rather substantial discount if you show up at the (comparatively less busy) lunch hour than in the evenings.  Take a look at this example of cheaper lunch entrees. 

So why is this differential pricing not as annoying?  I think the answer is predictability.  One can look at the menu and make a decision about whether or not to dine.  It can be checked online in advance.  If a taxi service suddenly shoots up in price then it is unclear whether you can still afford it.  The key is the inability to plan, likely coupled with some lack of trust (how do I know for sure that there is a real car shortage?). 

So I suspect that the industry would get less overall push-back with peak/off-peak pricing.  I occasionally see this used for things like road tolls, for example, with very little of the opposition that surge pricing creates.  Because people can plan for the costs, and some marginal customers will opt for off-peak pricing (smoothing earnings and making everyone happier). 

EDIT: Mark points out that these are dips, and that off-peak discounts are somewhat different.  I think he's got a point, as the psychology of loss aversion might matter here.  But I think the predictability point survives this question.