Group of friends eating fast food burgers and.width .jpg

Wendy’s Is Testing Uber-Style Surge Pricing

Group of friends eating fast food burgers and fries

Image source: Getty Images

If you’ve ever hailed an Uber before, you may have noticed that the cost of securing a ride can vary based on the time you hail it. It’s a practice known as surge pricing, and while many consumers hate it, they’ve come to accept it in the context of hitching a ride.

But while you may be okay with paying a bit extra to take an Uber during rush hour, the idea of being upcharged on a burger or fries for placing an order during dinnertime may not sit as well with you. But unfortunately, Wendy’s is going to start testing a dynamic pricing model in 2025. And if the fast food giant is pleased with the results, consumers everywhere might start paying more for their Wendy’s meals.

A frustrating change for consumers

It’s easy to argue that buying prepared food — even fast food — is a luxury, and that as such, consumers shouldn’t complain when the price goes up. After all, there’s always the option to hit the supermarket, buy groceries at a lower price, and cook.

But the reality is that many people fall back on fast food restaurants when they need a quick meal on the go or simply want a break from the chicken casserole they’ve been eating all week. And if the cost of buying fast food increases at Wendy’s, it could put a strain on a lot of consumers’ personal finances.

Furthermore, while it’s one thing for fast food chains like Wendy’s to simply raise their prices, it’s another thing to impose surge pricing where the cost of your meal varies based on the time at which you place your order.

Let’s say the cost of your go-to order increases by $1 across the board. That’s an increase you’ll know to budget for. But if the cost of a meal at Wendy’s fluctuates based on the hour of the day, it can be really hard to figure out what price you’re looking at. You might, for example, think you’ll be looking at a $7 tab only to place your order and see that you’re facing a $9 charge instead.

Should you continue to eat at Wendy’s if it moves forward with surge pricing?

To some degree, you can argue that surge pricing isn’t so different from simply raising prices across the board. And in practice, surge pricing might be a less painful thing to absorb, since you may, in theory, eventually learn to time your orders to snag a lower price. Or, you might just totally hate the idea, and that’s understandable.

You don’t necessarily have to cut ties with Wendy’s on a permanent basis if this surge pricing model ends up coming to life. But in that case, you may want to pad your fast food budget to allow for the fact that some of your meals might have an upcharge.

Of course, one option for saving money on Wendy’s food is to join the company’s rewards program. Currently, rewards program members earn 10 points per $1 spent. Those points can then be redeemed for free menu items. You can also be on the lookout for offers and promotions from Wendy’s that allow you to save money during the year.

All told, surge pricing makes sense for a business like Uber, even though customers may not like it. When traffic is at its most intense, it takes longer to complete a ride. It’s that simple. So while surge pricing in that context may not be wonderful, it’s somewhat justifiable.

Surge pricing on French fries is a bit of a different story, since conceivably, it should take the same amount of time to whip up an order regardless of how busy things are. So it’ll be interesting to see whether consumers start to boycott Wendy’s or not if this surge pricing model actually ends up getting implemented.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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