How Wendy’s Planned “Uber-Style” Pricing Fluctuations Could Be Bad for Arizona

I'm a big sci-fi fan. Books and movies where robots or artificial intelligence take over the human world have lived in my imagination since I was a kid. The ideas both fascinate and frighten me.

I'll be honest. When I imagined artificial elements entering the fast-food world, I envisioned them taking our jobs. Things like robot arms flipping burgers, an automatic beverage filling station, and other repetitive, mundane tasks seem custom-made for robots.

The High Cost of Labor in a Business

To a degree, I get it. For any business, labor is one of the most expensive costs. Replacing a human who takes sick leave, doesn't show up, and only expects to work a set number of hours a day with a machine that doesn't need to sleep and won't complain - well, it kind of makes sense.

Artificial Intelligence in the Fast-Food Model

This, however, is something entirely different and something I didn't see coming. Artificial intelligence is everywhere these days. Now, it's hitting the fast-food world.

Wendy's, one of Arizona's largest and arguably most expensive fast-food chains, is planning to use artificial intelligence in much the same way Uber uses it: to adjust pricing based on demand, location, and time of day.

FoxBusiness reports that the company claims this will help optimize its revenue and offer customers more value and convenience.

How Will Wendy's AI Fluctuating Price Model Impact Arizona?

This seems like a giant red flag, and experts and consumers are sounding the alarm. We're all skeptical about the benefits of this Uber-style pricing model. With the odds stacked in favor of the company, it's easy to imagine ways this will not only exploit customers but workers, as well.

Let's say it's 2:27 in the afternoon, and your Dave's Double costs $5.89. You look around and see the restaurant is mostly empty, and the grill is pretty slow.

Fast forward to 6:00 pm. Soccer families are grabbing a quick meal before dashing off to practice; college students are stopping by on their way back to the dorm; hungry office workers pop in to pick up a meal for the family as they head home.

A quick check of the ever-changing menu board and you see that the burger is now $8.39. It's busy, and customers are in a hurry. Do you pay the extra three bucks just because you're already there, or do you find somewhere else to eat?

Criticisms of the AI Model at Arizona Wendy's

One of the main criticisms is that the AI pricing system will exploit customers’ preferences and willingness to pay and charge them more for their favorite items or charge extra during peak hours.

There's a good chance this all adds up to making Wendy’s food less affordable for everyone, and it will be much less accessible to anyone on a fixed income. Is that fair? How soon before even their most loyal customers jump ship?

The Impact of AI Pricing on Wendy's Workers

Workers will also be impacted. What if wages begin to fluctuate based on how busy the restaurant is? I can't even imagine dealing with a customer who begins to order their burger at one price only to discover AI just moved the entire store into a later time period, adjusting the price for the now-premium timeslot.

Will the anticipated profits be worth the pain? Wendy’s AI pricing plan is an ambitious but very risky endeavor. US News reports, "Wendy's Co. plans to invest about $20 million to launch digital menu boards at all of its U.S. company-run restaurants by the end of 2025."

I can only guess that investing that much money means they're willing to take a chance this move will work in their favor. I shudder to think this concept will succeed and become the norm for restaurants and other establishments elsewhere.