Surge pricing is not a new or even a particularly controversial idea. Uber is credited with inventing it, after it began unapologetically charging customers more for cars booked at busy times. Photograph: Agency Stock
It recently became notorious as a pioneer of something else, a phenomenon dubbed “surge dining” following the announcement that it would be using AI and digital menus to adjust its pricing at times of peak demand.is credited with inventing it, after it began unapologetically charging customers more for cars booked at busy times. In truth, the hotel industry has been doing this forever.
Given the reaction to the Wendy’s news, few restaurants will be rushing to find out. The backlash following the company’s announcement that it had invested $20 million in AI systems and would soon start testing “AI-enabled dynamic pricing menu changes and suggestive selling” was instantaneous and apoplectic. There were calls to #boycottwendys and accusations of “price gouging” from US senator Elizabeth Warren. Wendy’s rushed to clarify that, no, it would not be introducing surge pricing.
The second part of that statement – the “based on what an algorithm has decided a particular customer will pay” – is where it all gets a bit murky. Few diners would delight at being charged more because an algorithm has looked at their income, search and purchasing history and even their health tracker apps to determine how hungry they might be, and set the price accordingly.