Wendy's Is Testing Out An Uber-Style Dynamic Pricing Model In 2025
Soon, your Wendy's burger could cost more depending on the time of day. In 2025, Wendy's Co. plans to implement a new system — one that ride-share services and gasoline companies are actually already using. As Uber prices surge during rush hour and gas prices constantly fluctuate, Wendy's is planning to adopt a similar price change to its menu. Earlier this month, the company executives announced several plans to increase profits in the future.
One of those plans — unveiled by Kirk Tanner, the new CEO and president of Wendy's — is to test digital menu boards that would display dynamic pricing as demand fluctuates throughout the day. A Wendy's burger may cost more depending on what time you go to the restaurant, the location, and the demand. According to Nation's Restaurant News, Tanner says the company is planning to invest nearly $20 million in digital menu boards at all U.S. Wendy's restaurants by the end of next year.
The company has already rolled out "Wendy's FreshAI" at several locations, which is a drive-thru AI system that pushes you to spend more money, in an attempt to grow sales. "We will begin testing more enhanced features like dynamic pricing and daypart offerings along with AI-enabled menu changes and suggestive selling," Tanner said.
Will consumers take the bait?
Many industries have adopted dynamic pricing — from ride-share apps and live events to airline tickets. But do customers always take the bait? A census by CivicScience recently studied consumer sentiment toward dynamic pricing. It reveals that 62% of customers think of dynamic pricing as "price gouging," and a majority of them claim they won't purchase the product at all when a surge occurs.
According to Nation's Restaurant News, Faizan Khan, a Dog Haus franchise owner, claims that customers are now used to dynamic pricing. He was an early adopter of the method and says it has "yielded a 10-to-15-times return."
"For us it was all about consumer reaction. The concern was if you're going to raise prices, you're going to sell less product and it turns out that really wasn't the case," Khan said. "I think there's a lot of room for consumers in terms of price amounts they're going to accept. Generationally, I think we're seeing this being acceptable."
As for Wendy's, only time will tell if dynamic pricing will work on the company's signature square burgers. Factors like lunch hour rush or even the weather can determine its pricing through a series of algorithms.