Wendy's Is Introducing Uber-Style 'Surge Pricing'
Wendy's Is Introducing Uber-Style 'Surge Pricing'
Kirk Tanner, the new CEO and president of Wendy’s, shared with analysts his various plans to increase company profits, including investing in digital menu boards that will have the capacity to display dynamic pricing that fluctuates throughout the day by 2025. Here's what customers need to know.
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I guess that’s one way to cut down on business during the rush hour
It's a way to maximize profits from a shifting demand curve:
It makes logical sense! It’s just very… capitalism
In an ideal world, it would only be a way to reduce demand so it meets a limited supply... but yeah, when supply can be increased, it's kind of fleecing, since profit margins increase.
The flip side is that, in the low hours, the same fixed costs would need to be spread over a lower demand, increasing prices... but that would reduce demand even more, which would increase prices even more. So a "seasonal" (or "hourly") business, needs to sell at a lower profit or even at a loss during low demand in order to stay open, then recoup that during high demand. If they don't, then we get a "farmers vs Europe" situation.