A social media backlash to media reports that said fast-food chain Wendy’s had plans to increase menu prices during its busiest hours shows a limit to where, when and for what U.S. consumers will trade more cash for convenience.
I don’t think it’s either of those so much as intolerance to openly price gouging.
Higher prices reduce demand (or at least overall sales). That’s basic economics and we have seen a lot of that over the past 3 years.
We’ve seen scarcity lead to increased prices (see eggs). This also led to reduced sales but not outrage, because most consumers understand how a chicken disease can lead to the loss of huge portions of egg laying chickens and how an event like that can lead to temporary price increases.
Even with Uber surge pricing, while it does indeed piss people off and reduce demand, even those who hate it can at least understand the principle that some of that increase is passed on to the drivers as an incentive to get more drivers to serve areas and times with high demand. You’re still seeing the economic function of a price increase, but at least some of it is going toward a measure to mitigate the issue.
But in this case there’s no factor that makes a burger at noon cost Wendy’s any more than a burger at 3pm. I think that’s where the outrage comes from. It’s Wendy’s basically saying, “We’re increasing prices at this time because we like money.”
Are they paying employees more at surge times? Is their food more expensive to buy and prepare at those times? Are they increasing staffing for a few hours to ensure that wait times don’t increase?
Nah. It’s still the same old thing on their end, they’ve just decided they want more money.
I have news for you: Uber increases prices based on their guesses about how much you’ll pay. They have been caught increasing prices for different customers at the same time in the same exact place.
For example:
They read your phone state and battery life. If they know you have 10% battery left, they will raise your price because they know you probably can’t wait for another car. If they think you are a woman and you look at rides after midnight and your battery is low, they are going to charge an arm and a leg.
I try to keep my battery charged at 100% when I go out. I also check the price 10 minutes before I need it on both Uber and Lyft. That way they see someone load the app, check a price, and close the app quickly. This looks like a cheap person who they think can be enticed by a low price. They will routinely drop the price because they think I’m considering driving or something.
It’s both. The “surge pricing” just means everyone has an increase at the same time. They don’t even give that to the driver anymore.
Maybe people don’t know this: drivers don’t necessarily get the extra money. Drivers have known this since they decoupled the customer price from the driver earnings.
They fluctuate the price a passenger sees based on what they think they can get. They do the same per driver, so sometimes they offer a ride to drivers at a really crappy price in case there’s a dumb driver who’s new or desperate. It’s better for drivers to reject that and wait for a better ride.
That’s what the app is doing when it’s “searching for a driver” for a whole minute even though there are clearly drivers in the area. It’s the algorithm trying to scam some driver out of a couple bucks and you pay the price in extra wait time.
I don’t think it’s either of those so much as intolerance to openly price gouging.
Higher prices reduce demand (or at least overall sales). That’s basic economics and we have seen a lot of that over the past 3 years.
We’ve seen scarcity lead to increased prices (see eggs). This also led to reduced sales but not outrage, because most consumers understand how a chicken disease can lead to the loss of huge portions of egg laying chickens and how an event like that can lead to temporary price increases.
Even with Uber surge pricing, while it does indeed piss people off and reduce demand, even those who hate it can at least understand the principle that some of that increase is passed on to the drivers as an incentive to get more drivers to serve areas and times with high demand. You’re still seeing the economic function of a price increase, but at least some of it is going toward a measure to mitigate the issue.
But in this case there’s no factor that makes a burger at noon cost Wendy’s any more than a burger at 3pm. I think that’s where the outrage comes from. It’s Wendy’s basically saying, “We’re increasing prices at this time because we like money.”
Are they paying employees more at surge times? Is their food more expensive to buy and prepare at those times? Are they increasing staffing for a few hours to ensure that wait times don’t increase?
Nah. It’s still the same old thing on their end, they’ve just decided they want more money.
It’s intolerance to blatant greed.
I have news for you: Uber increases prices based on their guesses about how much you’ll pay. They have been caught increasing prices for different customers at the same time in the same exact place.
For example:
They read your phone state and battery life. If they know you have 10% battery left, they will raise your price because they know you probably can’t wait for another car. If they think you are a woman and you look at rides after midnight and your battery is low, they are going to charge an arm and a leg.
I try to keep my battery charged at 100% when I go out. I also check the price 10 minutes before I need it on both Uber and Lyft. That way they see someone load the app, check a price, and close the app quickly. This looks like a cheap person who they think can be enticed by a low price. They will routinely drop the price because they think I’m considering driving or something.
That sounds more like individual pricing than the “surge pricing” being discussed here (and a both/and situation is very possible).
I almost never use Uber/Lyft so I am not terribly familiar with their business models.
It’s both. The “surge pricing” just means everyone has an increase at the same time. They don’t even give that to the driver anymore.
Maybe people don’t know this: drivers don’t necessarily get the extra money. Drivers have known this since they decoupled the customer price from the driver earnings.
They fluctuate the price a passenger sees based on what they think they can get. They do the same per driver, so sometimes they offer a ride to drivers at a really crappy price in case there’s a dumb driver who’s new or desperate. It’s better for drivers to reject that and wait for a better ride.
That’s what the app is doing when it’s “searching for a driver” for a whole minute even though there are clearly drivers in the area. It’s the algorithm trying to scam some driver out of a couple bucks and you pay the price in extra wait time.