Wendy's Considers Surge Pricing Like Uber

Wendy's, the popular fast-food chain, is exploring the possibility of introducing dynamic pricing, akin to surge pricing used by ride-sharing services like Uber, to its menu. This innovative move is part of Wendy's broader strategy to enhance customer experience and streamline operations.

A spokesperson for Wendy's revealed that the company plans to test several features, including AI-enabled menu adjustments and suggestive selling based on various factors such as weather conditions. These changes are expected to provide greater value to customers while improving the overall customer and staff experience.

Dynamic pricing, also known as surge pricing, entails adjusting the cost of products or services based on real-time factors such as peak hours and weather conditions. This approach aims to optimize pricing in response to fluctuating demand, ensuring that prices reflect current market conditions.

Wendy's intends to begin testing these new features as early as 2025, signaling a potential shift in the fast-food industry towards more personalized and dynamic pricing strategies.

The trial by the restaurant chain also demonstrates how businesses that interact with customers are trying to use so-called generative AI to enhance anything from online product ordering to providing customized shopping experiences.

Wendy's Technological Innovations in Drive-Thru Systems

According to the CEO, Wendy's has implemented a drive-thru system called "Wendy's Fresh AI" at a few of its locations. This system leverages generative AI to increase drive-thru speed and accuracy.

A spokesperson for Wendy's, headquartered in Dublin, Ohio, highlighted the company's investments in technology, emphasizing its ability to enhance menu flexibility and drive traffic during slower periods. The spokesperson noted that these technological advancements would enable Wendy's to adapt its menu more easily, catering to changing customer preferences and optimizing value offerings throughout the day.

As the fast-food industry witnesses a growing trend of online ordering and app-based purchases, the spokesperson emphasized the importance of such features in meeting evolving consumer demands and enhancing the overall customer experience.

Steven Suranovic, an associate professor of economics at George Washington University, commented on the significance of Wendy's adoption of dynamic pricing, stating that while this approach is not new in various industries, its introduction in the fast-food sector represents a notable advancement in technology utilization.

Surge pricing in the food and beverage business is not unheard of, but it is rare. The largest pub firm in Britain, Stonegate Group, embraced it. According to a September New York Times story, the company started charging an extra 25 cents for a pint on weekends and in the nights at around 800 of the 4,000 pubs it owns and runs.

Theoretically, raising the price of meals during periods of heavy traffic might assist in defraying the increased expenses associated with hiring more employees. However, restaurant brands also face the danger of alienating customers.