We’ve all been there before: you call an Uber after a night out only to find that the prices are currently higher than usual. This practice is referred to as surge pricing.
What Is Surge Pricing?
Surge pricing is when a company increases the cost of a good or service when there is the greatest demand for it. For example, in Uber’s case, you might experience surge pricing during high volume hours like midnight on a Friday or on New Years Eve.
According to Uber’s website, “In these cases of very high demand, prices may increase to help ensure that those who need a ride can get one. This system is called surge pricing, and it lets the Uber app continue to be a reliable choice.” The company goes on to state that users are always informed when a price is surged so that they can wait it out if they choose not to pay the extra fee.
Beyond Uber, surge pricing is also seen in other areas such as airline tickets where prices are much higher during high-volume seasons.
Is Surge Pricing Coming To Wendy’s?
Earlier this month, Wendy’s CEO Kirk Tanner stated that the fast food giant will start testing what they are calling”dynamic pricing” as early as next year.
Tanner only became Wendy’s CEO earlier this month and is planning massive changes right away.
“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,” Tanner said. “As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system.”
I don’t think @Wendys understands why surge pricing works and in this case WON’T work
The consumer will go to another restaurant if they even suspect surge pricing will be in effect
With Uber or Lyft, the alternative to avoiding surge is a far different alternative than going… pic.twitter.com/oG3p5dNEwA
— Iman Jalali (@Stealx) February 26, 2024
The system works very similarly to the surge pricing seen in ride-sharing apps. During busy hours at Wendy’s, prices will increase. During slow hours, the prices fall back down to normal. The unveiling of this plan garnered negative reactions across social media, with many pointing out the obvious: Wendy’s is not Uber, and higher prices will just cause potential customers to go somewhere else for their meal.
Others raised a question looming on many people’s minds: will raised prices during high-demand hours mean that workers will also receive a bump in pay? Logically speaking, if the price is to cover the effect that increased demand has on a restaurant and its staff, then surely pay would increase alongside it.
Hey @Wendys, will you also be paying your workers more during these surge “dynamic” pricing hours? 🤔 https://t.co/z39EUbZDuu
— Neale (@AbeFroman) February 27, 2024
Wendy’s has not released specific details about their all-new “dynamic pricing,” but many speculate the difference in price will be something like a quarter rather than several dollars. However, it remains true that many people will outright refuse to eat somewhere if they know the price has surged. After all, if Wendy’s is telling you it’s peak hours and the prices are raised to match, then you’re never too far from a McDonald’s or Burger King.
About the Author/s
Peter Candia is the Food + Drink Editor at New Jersey Digest. A graduate of The Culinary Institute of America, Peter found a passion for writing midway through school and never looked back. He is a former line cook, server and bartender at top-rated restaurants in the tri-state area. In addition to food, Peter enjoys politics, music, sports and anything New Jersey.
1 comment
This is Uber disgusting! Really! Charging increased prices for the privilege of waiting on a line. I’ll go to McDonalds. I’m sure they are very happy about your dynamic pricing.