Fast food restaurant Wendy’s plans Uber-like surge pricing, with digital menu boards that change prices depending on demand::The price of a Wendy’s Frosty could soon fluctuate throughout the day as the chain looks to introduce Uber-like surge pricing on its menu.
God damn this is ridiculous. People need to read the transcripts it’s not surge pricing.
What are you talking about? Just because they aren’t calling it “surge” doesn’t mean it’s not surge. Unless you’re just saying you prefer the term “gouging”?
In a statement Wednesday, Wendy’s clarified that “dynamic pricing” will include new menus that could offer discounts at slower times of the day, denying the company will raise prices during peak demand.
Lowering prices, also known as “discounts,” and then restoring prices after the “discount” can be understood in reverse: prices go from “normal” to “increased”.
Given the fact that they (like every other fast food company) always charge the absolute maximum the market will bear, then any price – even a reduced one – is still going to be what they calculate to be the maximum. The fact that the maximum is different at times of “increased demand” is exactly what surge pricing is.
Well dynamic pricing and surge pricing in practice are the opposite. Both raise prices.
Surge pricing raises it on peak times while dynamic does it throughout the day and usually during off-peak times to subsidize on peak times.
Surge pricing is vastly different than dynamic pricing. Surge pricing has not chance of working in retail when competition exists.
Dynamic pricing is done in retail already and no one bats an eye at it.
Tesla does dynamic pricing. Fuel stations do dynamic pricing.
Energy companies do surge pricing. Uber does surge pricing.
When there’s a monopoly on a market you wouldn’t do dynamic pricing.
But also it’s why heavy regulation is done.
Uber broke this model because they get to operate as a monopoly while gouging their customers.
I’m not defending Wendy’s but as someone in pricing this is a vastly different thing and is 100 times worse than dynamic pricing.
I get what you’re saying, but it honestly sounds like kool aid drinking. “Surge” vs “dynamic” might be different in terms of back end calculation, but the external appearance is the same.
Again, you have to remember that prices are still maxed out. Think about it this way: if you normally wear 2000 calories a day, and every now and then you have an extra donut or burger and that puts you at 2500, that’s only balanced if, on other days, you have only 1500 calories. If the only exceptions are in the “plus” direction, the average is up.
Dynamic pricing is done in retail already and no one bats an eye at it.
Don’t mistake prior not knowing about it for people saying they think it’s ok. If this is happening in retail, and people knew, they wouldn’t be happy.
Surge pricing is toxic and needs to stop.
I haven’t read the transcript of the earnings call, but I read the article(s) and the Wendy’s blog post in response.
It seems like there was indeed some misunderstanding somewhere along the way, in that the “dynamic pricing” that was referenced was not to be construed as surge pricing in any way, and was intended to reflect decreased (ebb? discounted? receding?) pricing that would be presented during off-peak hours to drive business.
The practice in itself isn’t inherently bad, but I can see this as an incremental move towards true surge pricing across the industry - which for the record I am against - and there isn’t really a way to position it in such a way as to be seen as a benefit to the consumer.
As with everything else, customers will vote for this practice with their wallets, and by the state of several other industries in which similar models have been adopted and begrudgingly accepted as the norm, I’m not holding out a lot of hope for a positive outcome here.
