Reblogged:Warren, Wingers Wrong on Wendy's

[Gus Van Horn blog]

Editor's Note: Ars Technica substantially revised its coverage of this story, as can be seen in the screenshots of an archived version (left, below) and a later edition (right), which also changed the headline, but not the URL.

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Wendy's will experiment with dynamic surge pricing for food in 2025: Surge pricing test next year means your cheeseburger may get more expensive at 6 pm.

As soon as I saw this headline at Ars Technica, I immediately thought that might be one of the shortest experiments in retail history.

Screenshots of an archived copy of the original story (left) and the revised version (as of today, right) of the news as presented by Ars Technica. (The author believes these screen captures of a publicly-available web page are protected as Fair Use under U.S. Copyright law.)

American fast food chain Wendy's is planning to test dynamic pricing and AI menu features in 2025, reports Nation's Restaurant News and Food & Wine. This means that prices for food items will automatically change throughout the day depending on demand, similar to "surge pricing" in rideshare apps like Uber and Lyft. The initiative was disclosed by Kirk Tanner, the CEO and president of Wendy's, in a recent discussion with analysts.

The piece led that way when it came out, prompting me to think, This will cause anyone on a budget or with a small amount of cash on hand to go somewhere else.

There's nothing inherently wrong with dynamic pricing, and I'm not a businessman, but it seems obvious that it's a bad strategy in this particular market: There is nonzero value to certain customers of having some idea of what they might need to pay before they get in a line to buy something.

Glad to know what might be up, I made a mental note that, come 2025, I might wait out the experiment by going elsewhere.

Liz Warren's reaction?

...Wendys [sic] is planning to try out "surge pricing" -- that means you could pay more for your lunch, even if the cost to Wendy's stays exactly the same.

It's price gouging plain and simple, and American families have had enough...

It should be plain from my initial reaction that the first sentence would be poppycock even if the news stories were accurate, which they apparently weren't.

As for the second sentence, I'll leave a discussion of "price gouging" to others. But do note that usually, when rabble-rousers like Warren drop the phrase, they at least have the good grace to use it for something essential like fuel or food staples during times of emergency or general distress -- rather than minor luxuries like fast food lunches in a highly competitive market.

As it turns out, even my modest annoyance was unfounded. (I blame our culture -- which does produce companies known for screwing their customers -- rather than capitalism.) In this case, though, Wendy's just wanted to be able to adjust prices company-wide in less than the six weeks its current technology requires, and sometimes to be able to offer surprise discounts.

That makes sense to me, both as a customer and as someone imagining what someone wanting to make a profit might actually want to do.

It's too bad so many on the left (and increasingly on the "right") limit their imaginations by assuming that businessmen are grasping and think only short-range -- neither of which is in their actual self-interest.

-- CAV

Link to Original