Wendy's announces Uber-like surge pricing model

The second-largest burger chain said it will invest in high-tech menu boards.

February 27, 2024, 8:17 AM

Wendy’s announced it will launch new menu prices that will fluctuate depending on the time of day.

The country’s second-largest burger chain, which has 6,000 restaurant locations, said the change will begin next year.

Signage is displayed outside a Wendys Co. restaurant in El Sobrante, Calif., May 6, 2020.
David Paul Morris/Bloomberg via Getty Images, FILE

Customers could pay $1 more for a sandwich like the Baconator during the lunch rush, for example.

“Historically, companies just set one price that was constant across time. Pricing algorithms allow companies to change prices throughout the day or perhaps even throughout an hour,” Zach Brown, a professor of economics at the University of Michigan, told “Good Morning America.”

Wendy’s CEO Kirk Tanner said the company will spend $20 million on high-tech digital menu boards that can update prices in real time, similar to surge pricing strategies adopted by rideshare companies like Uber and Lyft, airlines and hotels.

“During the busy times, they can obviously increase profits then,” Brown said. “And also, some consumers will want to shift to the less busy times when demand is lower and prices are lower.”

Wendy’s is already receiving a frosty reaction to the price change announcement with one user on X, formerly known as Twitter, writing, “Surge pricing is just Price Gouging by any other name.”

Wendy’s told ABC News in a statement that its dynamic menu pricing can “be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value. We will test a number of features that we think will provide an enhanced customer and crew experience.”

Some experts say customers could see more menu pricing changes ahead at other fast food chains, including McDonald’s and Burger King, especially if Wendy’s sees a boost in its bottom line after implementing dynamic pricing.

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