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Are Price Hikes During the Spring Festival Acceptable?
Price hikes in service sectors during the Spring Festival fuel debates
  ·  2019-02-25  ·   Source: NO.9 FEBRUARY 28, 2019

(LI SHIGONG)

Every year during the Spring Festival, a wave of price hikes in various sectors, particularly in service industries like restaurants, hotels, car hailing and car washes, sweeps across China's big cities and this year was no exception.

For example, Didi, a mobile transport platform, demanded passengers pay drivers extra from January 28 to February 10, ranging from 1-9 yuan ($0.15-$1.34) based on local affordability. Didi claimed it did so because many drivers choose not to work during the holiday. Paying more will encourage more of them to continue working during the festival, it reasoned.

Another example were the hotels in Yangshuo, Guangxi Zhuang Autonomous Region in the south, a star tourist resort. Local hotels pushed up their prices by hundreds of yuan or even over 1,000 yuan ($148.67) during the Spring Festival, but the prices all fell back to normal after February 12.

Today, there is a growing outcry against this kind of price hike. Many people are saying that some businesses are exploiting the festival to make a hefty profit and are asking for the government's intervention. On the other hand, the businesses claim they are forced to do so because there is a shortage of workers during the festival and thus, their labor costs rise.

Are price hikes during the Spring Festival a reasonable practice as a result of the market rule of supply and demand? Or should the practice be banned? Most people say they would be happy to bear the extra cost under certain conditions.

A win-win result

Song Pengwei (New Express): While others celebrate the Spring Festival, some people keep working. In many companies and organizations, those who work during the festival are supposed to get overtime pay, then why not Didi drivers, restaurant staff and other workers like them? To pay more for service is based on voluntariness. It should not be banned but instead, should be protected.

Take car washes for example. There are so few of them open during the festival, in contrast to the many cars waiting to be washed. So an increase in the money charged is understandable as long as the car washes are not conspiring among themselves to overcharge car owners.

If a sector is profitable, more capital will flow into it until the price returns to a reasonable level. Simply put, when a car wash makes huge profits during the Spring Festival because of price hikes, more will copy this business model, and when there are enough car washes operating during the holiday, the price will naturally go back to normal.

In a well-developed market, price is the best lubricant. Subjectively, price hikes benefit service providers, but objectively, buyers are also beneficiaries since they would not have the service otherwise. So this is a win-win result.

Those who complain about price hikes tend to turn a blind eye to service providers working overtime during the Spring Festival. On the other hand, low service charges will discourage quality service, leading to a lose-lose result.

Yang Yulong (www.gmw.cn): There are some market factors behind the so-called price hikes during festivals. To some extent, this kind of price hike is reasonable as service providers sacrifice their holiday to serve others. In real life, most consumers will accept fee hikes during the Spring Festival.

However, although the practice is understandable, it must not be unscrupulous. When deciding the price, business operators must follow fair, legal and sincere principles. They should not manipulate market prices, hurting other business operators' and consumers' legitimate rights. Allowing price hikes during the Spring Festival does not mean a reckless increase. Car washes and hairdressers can decide how to raise the price realistically. As long as customers accept it, it's all right.

Another important point is that the new prices must be clearly marked if there is a hike. If businesses charge more than this marked price, or clandestinely charge fees that are not publicly disclosed, consumers have the right to sue.

In general, price hikes during the Spring Festival result from market factors. The extent of the hikes mainly depends on the ethics of the businesses. Although consumers have no say in this, businesses should not play tricks on them as the market rule and state regulation are never absent.

On a reasonable level

Jiang Debin (www.voc.com.cn): During the Spring Festival, a lot of people need to go back home for family reunions, so there is a serious shortage of staff in the service sector. Most service providers stop operating during the weeklong or longer holiday, like restaurants, housekeeping and express delivery. City dwellers find that they can't even buy breakfast and their daily routine becomes chaotic. In recent years, in order to continue serving city residents and tourists, some service providers have been staying open during the festival. However, they also charge higher fees during this period.

From the market perspective, to charge extra during the Spring Festival is reasonable. The demand for various services surges when most of the staff goes back home for the festival. When demand surpasses supply, the price will obviously rise. With labor costs increasing, in order to have more staff working, businesses will have to pay them more. This is a reasonable overtime payment system during the Spring Festival.

Where does the extra payment come from? The consumers, of course. Most of the extra charges are actually spent on the working staff to compensate them for sacrificing their holiday. This will encourage more staff members to remain at their posts during the festival, thus improving service. An extra 5 yuan ($0.74) or 10 yuan ($1.49) charged on a dish or delivery can be afforded by most consumers.

Obviously, the price hike during the Spring Festival is a result of market economy rules. Consumers feel like spending more on service, while businesses try to meet the market demand and workers receive overtime pay.

But of course, service providers have the obligation to spell out the reasons for the hike.

Most consumers feel the extra charge is understandable and acceptable, as long as it is not too much. They realize it's a reward for the staff's hard work during the Spring Festival and know this is the result of the market rule of demand and supply.

But we should not turn a blind eye to exorbitant hikes and poor service quality during the Spring Festival. These violate consumers' rights and damage market fair play. Regulators must take tough action against such behavior lest some businesses recklessly boost prices in the name of the Spring Festival.

In line with the law

Yue Qian (www.chinatt315.org.cn): During the Spring Festival, a lot of stores are closed and many ordinary services become a luxury. Most of the workers in the service sector come from other places and leave for home during the festival. As a result, consumers find it harder to get the services they would easily get other times.

The labor laws stipulate that workers' pay during major festivals like the Spring Festival should be triple that of other times. This causes a direct surge in labor costs in businesses like restaurants and car washes.

To adjust prices in line with the market rule is a legal practice. The challenge is that service providers must inform consumers of the fact with a clearly stated price list so that consumers can decide whether or not to buy the service. If they are told of the price hike only after consuming the service, most will feel tricked and complain.

In some cases, even if the new price is clearly marked, it is not necessarily reasonable. Most services that remain open during the Spring Festival are essential services. If these charge extra just because these services are urgently needed, the practice will amount to gouging. Also, there are cases like some hair salons not allowing clients to use membership cards that provide discounts, giving the price hikes during the Spring Festival as an excuse. This is unfair to consumers.

When demand exceeds supply, price increase will act as a way to balance trade. This means price hikes in many sectors during the Spring Festival should not be rejected or regarded as wrongdoing. What matters is whether the practice is based on reasonable factors and accepted by consumers.

Copyedited by Sudeshna Sarkar

Comments to dingying@bjreview.com

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