Uber-Like Surge Pricing Is Coming For Fast Food (sfgate.com) 198
Fast food chain Wendy's announced it's adopting a similar approach to Uber's Surge Pricing policy by dynamically adjusting the prices of its menu items during peak demand periods at certain locations. The controversial strategy seeks to leverage real-time data to align pricing and demand, enhancing efficiency and potentially improving customer satisfaction. From a report: During a conference call earlier this month, Wendy's CEO Kirk Tanner said the fast-food chain would experiment with dynamic pricing as early as next year. "Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling," he said. "As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system."
Prices seesaw all the time on the sites of online retailers like Amazon that use algorithms and artificial intelligence to monitor competitors and glean insights into individual shoppers, adjusting prices depending on interest in the product or in the brand, said Timothy Webb, an assistant professor at the University of Delaware's hospitality and sport business management program. Coupons and other offers are also routinely dangled in mobile apps to encourage people to make purchases. "A lot of this stuff is already happening even if you don't realize that it is happening. If you have the Starbucks app and I have the Starbucks app, we probably have different offers," Webb said. "We might not be in the drive-through and they just increased the prices, but we are already paying different prices for the same products."
But, he says, Wendy's fans will likely see moderate, not massive, price swings during periods of peak demand. "It's not like $200 or $300 on a flight. This is a hypercompetitive industry. If Wendy's goes up $2 to $3 on a burger at dinner time, I would be shocked. People have too many options. They will just walk down the street and eat at Burger King instead," Webb said. "There will just be little price changes here."
Prices seesaw all the time on the sites of online retailers like Amazon that use algorithms and artificial intelligence to monitor competitors and glean insights into individual shoppers, adjusting prices depending on interest in the product or in the brand, said Timothy Webb, an assistant professor at the University of Delaware's hospitality and sport business management program. Coupons and other offers are also routinely dangled in mobile apps to encourage people to make purchases. "A lot of this stuff is already happening even if you don't realize that it is happening. If you have the Starbucks app and I have the Starbucks app, we probably have different offers," Webb said. "We might not be in the drive-through and they just increased the prices, but we are already paying different prices for the same products."
But, he says, Wendy's fans will likely see moderate, not massive, price swings during periods of peak demand. "It's not like $200 or $300 on a flight. This is a hypercompetitive industry. If Wendy's goes up $2 to $3 on a burger at dinner time, I would be shocked. People have too many options. They will just walk down the street and eat at Burger King instead," Webb said. "There will just be little price changes here."
Seriously, What the Hell? (Score:5, Funny)
The controversial strategy seeks to leverage real-time data to align pricing and demand, enhancing efficiency and potentially improving customer satisfaction.
Absolutely. I'll gladly pay more when there's a line out the door. My satisfaction will soar!
when the line out the door lay down some more (Score:2)
when the line out the door lay down some more.
That is the people working at wendy's have any grill skills
Re:when the line out the door lay down some more (Score:5, Interesting)
I worked at a McD's for about a year when a teenager, many decades ago. It didn't take long to figure out how many patties we needed at any given time, so my goal became to get them off the grill about the time that our assembler needed them. Without ever making him wait, so I'd usually have some excess.
More than once we'd have a bus pull up at some odd time like 2 or 3 pm. Off would come like 60 people. But by the time they were approaching the registers, I had all 4 grills completely stuffed, and chicken nuggets down on the fryers.
Seeing McD's today, this seems to be a lost art.
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Food waste was a given as there was not supposed to be a wait for your "Fast" food. Yes, the menu's were incredibly simpler. I don't think they could do it today.
The shift manager determined the volume of food. Their bonuses were based on their accuracy. Shift/Sales - Waste: Bonus
Food sat on a warming tray for X minutes. At X+1 minutes, it was pulled, tallied and put in a trash bag for the dumpster.
There was no waiting at the drive
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I worked at McDonalds for two months as a teenager back in the 70's. Food waste was a given as there was not supposed to be a wait for your "Fast" food. Yes, the menu's were incredibly simpler. I don't think they could do it today. The shift manager determined the volume of food. Their bonuses were based on their accuracy. Shift/Sales - Waste: Bonus Food sat on a warming tray for X minutes. At X+1 minutes, it was pulled, tallied and put in a trash bag for the dumpster. There was no waiting at the drive up. Order, pay, get food, move along. For the people who were clever enough to order a special, we had a few plain burgers sitting on the warmers and various condiments in trays. A 1/4 pound cheeseburger without cheese? "Sure thing, coming right up.", as we dressed the burger, omitting the cheese. There was always someone (usually presentable, with an easy personality) out in the lobby busing tables and mopping floors.
Today's experience:
Talk to somebody hundreds or thousands of miles away at the drive-up. They may speak english, or some reasonable derivative, but you won't be able to understand them. Hopefully you still manage to get your order across by screaming numbers instead of food names.
Pull up to window 1: Payment
Pull up to window 2: Drinks are handed over. "Please pull up to waiting area."
Sit in waiting area for ten or more minutes. Maybe your food will come. If not? proceed.
Go inside and politely inquire a
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Priorities, maybe. When I was a teen, there were generally dedicated bussers for that stuff. They cleaned the tables, waiters didn't. However, consider - you're a customer, potentially a tipping one. Keeping you and other customers happy is more important than cleaning the table.
Re:when the line out the door lay down some more (Score:4, Insightful)
And having to sit next to a dirty table makes the customer happy? How about the new customer looking for an open, clean table?
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Source: 5-6 years as a cook and waiter
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I know an empty dirty table in my sight tends to annoy me, so it depends on the person.
Source: I once worked as a busboy. I could have a table cleared in about a minute, though generally I'd have to drop the dishes off and come back and wipe the table down - I didn't have a cart to put dishes on so I couldn't do a complete wipe and reset without taking the tray back first.
In the described scenario, it was evident that there wasn't a dedicated busser, which there probably should have been, the server may h
Re:when the line out the door lay down some more (Score:4, Interesting)
Absolutely it does!!!
I was a busboy till old enough to serve alcohol...and a waiter for years and also a bartender.
As a waiter, I pretty much never left or went to the kitchen empty handed.
I would try my best to pre-bus the table as the meal went along....whenever I walked by a table, and I saw a plate emptied and pushed aside, I would ask if I could clear that for them, etc.
If nothing else, getting meal dishes out of the way, makes room for desert to sell, and pulling empty glasses, especially for alcoholic beverages, give you a good opportunity to ask if they want another....so, not only is it for keeping a clear table for the customer, it is an opportunity to sell or up-sell...and when they leave it makes it quicker to turn the table.
I worked as a server long enough to be able still to see when things are busy or if someone is in the weeds....and I am sympathetic to that.
I give my servers a LOT of benefit of the doubt...bartenders too, and I am a very healthy tipper.
But when I can see what the OP said about the server making trips back and forth without picking anything up, to me sounds like bad training or at least a lazy server.
Yes, it bothers me to see dirty dishes stacked up around on tables near me that I have to look at.
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Well, if you're waiting on a refill on your drink, do you want to wait for them to finish cleaning the table or would you want to get your refill first?
Generally speaking they have a number of tables to wait on and the goal is to make sure all of them are serviced in a timely fashion. Cleaning the table is a low priority compared to serving customers in a prompt and efficient manner.
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The controversial strategy seeks to leverage real-time data to align pricing and demand, enhancing efficiency and potentially improving customer satisfaction.
Absolutely. I'll gladly pay more when there's a line out the door. My satisfaction will soar!
The point is that by raising prices they'll reduce demand and the line won't be out the door. During peak times, Wendy's will be where you go if you don't want to wait but are willing to pay more.
So, how is charging more during peak demand... (Score:2)
Re:So, how is charging more during peak demand... (Score:5, Insightful)
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There's no tipping on fast food.
And for fast food, it's not like I'm really looking at the prices at all, you know....it's a fscking fast food burger, something to grab and eat quick.
I rarely do fast food, but it's
We call this (Score:5, Insightful)
Late Stage Capitalism.
Re:We call this (Score:5, Insightful)
You call everything late stage capitalism.
Re:We call this (Score:5, Funny)
It really is a verbal Fedora. tips hat. M'comrade.
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What would you call it?
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Unmitigated dumbassery
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The art of gouging, all the while hoping the dupes don't snap and can't be fleeced anymore.
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At some point... (Score:2)
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Re:We call this (Score:5, Interesting)
No we don't. "Late-stage" implies that we're approaching a limit for the insanity that businesses will come up with. I am under no such illusions that they can't continue to screw around in new and revolutionary ways for as long as capitalism exists.
Re:We call this (Score:5, Interesting)
At some point it will fail, likely explosively. Often it is income disparity that triggers the explosion. Unrestrained capitalism leads to extreme income disparity. Late stage capitalism is squeezing the money in the name of increasing profits.
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I hope we are getting close, because right now young people can't afford a house and are about to be outbid on a hamburger.
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It's not squeezing the money, it's squeezing the turnips harder and harder in the attempt to get the last drop of blood out.
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No we don't. "Late-stage" implies that we're approaching a limit for the insanity that businesses will come up with. I am under no such illusions that they can't continue to screw around in new and revolutionary ways for as long as capitalism exists.
I think it's a terminology issue to call today Late-stage. To someone from a century ago, it would certainly appear to be Late-stage. To someone experiencing the future we're currently headed toward, today will probably appear to be a utopia of freedom and prosperity.
Not playing their game. (Score:3)
Yay! You just have to love living in a predatory capitalist society.
Fuck these people. Greedy SOBs.
Re:Not playing their game. (Score:5, Insightful)
Yay! You just have to love living in a predatory capitalist society."
Such narrow views.
It is called supply and demand. When demand exceeds supply, prices go up. That is normal and expected and needed both as a signal and as a way to fix what is not working. And having the price going up will (assuming it is NOT a monopoly, of course, because those are the enemy of capitalist/free market):
1) Discourage some consumers who will go to a competitor.
2) Reward the business and its owners and capitol holders for doing something right by creating such demand for their products and services.
3) Allow additional incoming money to hire more people and/or upgrade equipment and processes to increase supply and attract more customers.
But no, it has to be "greedy and predatory", right? Truly spoken as someone who has extremely likely never owned or run a company or had his on money on the line. How dare the free market set prices!!! YOU should dictate prices. Or perhaps the ever-efficient and competent government can know all and do that, better, right? (Yes, that government that has us $34.3 TRILLION dollars in debt and paying $758 BILLION per year now to service that debt). Please, do yourself a favor and take at least a principles of economics class. If you did take one, you weren't paying attention.
Re:Not playing their game. (Score:5, Insightful)
Oh, and follow-up to self:
You do know that gold prices, gas prices, and many, many other prices vary throughout each day... sometimes minute by minute, right?
So if your objection is surge pricing then how often, in your view of the free market, is a business allowed to change prices? And why? If demand is wildly fluctuating in the day relative to production, it is actually more "fair" to consumers in several ways. Movie theaters lower prices for less in-demand timeslots in the day, as a perfect example. Tolls do the same.
I do believe that if they don't communicate the changes with the consumers there would be a problem. And I also believe it would be wrong to try and change a price on a sign before all in-process transactions are complete (or right before ordering as well). Both are easily addressed.
Re:Not playing their game. (Score:4, Insightful)
Life is better when capitalism is restrained and regulated. That's demonstrably true, as any number of studies comparing the US and Europe will demonstrate.
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>"Life is better when capitalism is restrained and regulated. "
If by restrained and regulated you mean anti-trust (busting monopolies and illegal price fixing and undercutting) then I agree. That is an essential part of ensuring competition, which is needed for things to work properly.
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I mean look at the countries with the best quality of life measurements.
High regulation, high taxes, lots of collective bargaining, strong social safety nets, very large government with a large fraction of the population working for it.
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Re: Not playing their game. (Score:2)
Smaller, homogeneous countries, like Denmark have succeeded creating more socialist societies with a high standard of living. The larger and more diverse a country, the harder it becomes to make that work.
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Are you saying that capitalism is a disease of diverse societies? That's quite the claim, and goes against everything that most people who support cultural and racial homogeny seem to believe in.
It seems to work reasonably well in places like The Netherlands and Germany too, where there is a lot less racial and cultural homogeny. It also doesn't appear in other places that are highly homogenous. I don't think that's the key to it.
This has nothing to do with supply and demand (Score:2)
It is called supply and demand. When demand exceeds supply, prices go up.
This has nothing to do with supply and demand. During peak business hours Wendys will still have plenty of burgers, fries, and nuggets for it's customers just like it does now. There is no supply scarcity causing prices to go up in other words.
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During peak business hours Wendys will still have plenty of burgers, fries, and nuggets for it's customers just like it does now. There is no supply scarcity causing prices to go up in other words."
Wrong. If there are long lines, as indicated in the summary, then there is scarcity of access, payment, lanes, cooking capacity, employees... something.
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Yay! You just have to love living in a predatory capitalist society.
Fast food places like Wendy's have what is called highly elastic demand. That means that demand for what Wendy's offers can easily go down if Wendy's behavior is unacceptable. Given that there are many alternative to Wendy's, people can vote with their credit cards.
Maybe this will motivate a few people to stop buying the poison that is fast food.
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I'm not sure we're going to see restaurants use dynamic pricing anytime soon because too high a proportion of customers will be pissed off by not knowing what pricing will be like until they get there. I can absolutely see them having different p
One thing's for certain (Score:5, Insightful)
During their lowest-demand time periods, the price will, at a minimum, be equal to what it is right now.
This isn't "surge pricing", it's an attempt to disguise a significant overall price increase.
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but how much more can wendy's really change? and when they cost the same as 5 guys?
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but how much more can wendy's really change? and when they cost the same as 5 guys?
As TFS indicated, that depends on the individual. How much is left in your bank account and lines of credit? Good. We'll take all of it then.
Another reason why privacy is essential. The more information you have in a transaction the more leverage you have against the other party, and a random company is always going to have more resources (read: leverage) available to it than a random individual.
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>"During their lowest-demand time periods, the price will, at a minimum, be equal to what it is right now."
That doesn't make much sense.
>"This isn't "surge pricing", it's an attempt to disguise a significant overall price increase."
Not really. If it were, they will simply raise the prices all the time. They can set prices to whatever they like. In reality it doesn't matter what you call it. If they don't do it right, they will lose the game. And it *is* a gamble. Some consumers will like it- if
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During their lowest-demand time periods, the price will, at a minimum, be equal to what it is right now.
This isn't "surge pricing", it's an attempt to disguise a significant overall price increase.
Maybe. Once they've adopted a dynamic pricing model it may make sense to lower prices significantly during slow times of the day. When customer traffic is low, the cost of keeping the lights on and staffing the place dominates the cost of ingredients and it may be more profitable to slash prices to draw more customers in.
This is the sort of thing that makes perfect sense if you have economist brain, but tends to really piss off normies. It'll be interesting to see how it plays out.
We've always had it. (Score:5, Insightful)
But we called it the dinner menu, which is more expensive than lunch. Or the weekend menu, with no daily specials. So this "surge pricing" thing is just a new spin on an old practice.
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They know that on lunch time the customers are truckers and workers, and they prefer a quick and cheaper lunch. On the other hand a dinner customer
Re:We've always had it. (Score:5, Insightful)
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"interest in digital menu boards" (Score:2)
franchisee interest in digital menu boards
Yes, only franchisees would be having any interest into that abomination!
It's already bad enough these digital menus cycle through their menus/ads without enough time for patrons to read what's available on the menu parts, boy oh boy am I sooooo excited there to be dynamic pricing added!
If you want to see ordering times increase as patrons take even more time deciphering what they'll end up paying before ordering (you know, between the menus and ads cycles), that's your ticket, man!
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Lol one of those "it's better on the app" arguments? I'm sure companies will keep pushing for their privacy-raping apps, no doubt.
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On the other hand, I hate it when restaurants insist that I use a QR code to download the menu.
The best ordering is, of course, on the McDonald's kiosk. You get a very large screen and can specify exactly what you
I predict surge rampaging (Score:3)
...when people find out the same lunch they ordered yesterday is an extra $5 today, because reasons.
Quiet? (Score:5, Funny)
They'll add low prices during the less busy times too, right? RIGHT?!
How are fast food joints still making it? (Score:2)
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Bye Wendys (Score:3)
I can get a baked 'tater at home for cheap.
As for the rest, it's just NOT that good
Who eats this shit nowadays anyway? (Score:2)
So fast food prices aren't that stable anymore... (Score:3)
... all the more reason for former customers to get healthier food from home
Everyone is treated equal. (Score:2)
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Fun! (Score:2)
They got the marketing on this backwards (Score:5, Insightful)
Hey I know! (Score:4, Insightful)
How about...
Fuck that?
And drop them when empty, right? (Score:2)
Make those things come out at cost and it'll increase demand when you're empty.
No, I will NEVER go to a restaurant that "might" charge me more when I'm going there for a cheap, fast meal. If it's an insignificant amount of money... don't charge it!
What about reporting accurate times to receive my food, before I order? When you're busy, the customer is already paying extra... in time waiting on your already too low labor and equipment pool.
Pizza has been doing this since forever (Score:2)
Pizza costs more on the weekend than it does during weekdays. My local buffet also changes prices depending on the day and time of day.
Surge Pricing = Fast Food Failure (Score:5, Insightful)
Marketing at its finest (Score:5, Insightful)
What about surge waging? (Score:5, Interesting)
So, the workers work harder, the customers pay more, the other customers wait longer in the line: do the workers get a bonus?
Seems they perfect exploitation: workers get to work harder and gain nothing, customers have to pay more and: gain nothing.
For me it's easy! (Score:2)
It's a very easy decision for me. In short, I will not allow an eatery to nickle and dime me, raising or lowering its prices willy-nilly. I go to places because I know what their prices are. They're part of the calculus. Variable pricing? No Wendy's. It's as simple as that. Of course, for me it's is an easy decision for me because the Wendy's in town closed years ago and was replaced by a Starbucks and a BBQ place. If I want a frosty now, I have to wait until I leave town, but knowledge of this shit
App (Score:2)
App to track price changes soon thereafter.
Hmmm (Score:3)
Natural, predictable consequence of econ policies (Score:2)
A given job is only worth the value it adds. If a fast food worker only adds $10 of value to things per hour, but government mandates that the employee gets paid $20 an hour, something's gotta give. It's actually worse than most people who've never hired employees think, because the government adds costs to an employer (like half of Social Security tax, unemployment insurance costs, etc) so that a $20/hour wage employee actually costs an employer far more than $20 per hour. Fast food USED to be where highsc
Wendy's has sucked hard for 20+ years (Score:2)
I genuinely feel sorry for people who aren't old enough to remember when biting into a Wendy's hamburger was almost a religious experience... dripping fat, tasty bits of crispy meat bits along the edge, and all. Or spaghetti & meat sauce at the Superbar. And the torment of having to choose between them, because *both* were awesome.
Wendy's *completely* went down the shit hole after Dave Thomas died. The closest you can get to a 1980s Wendy's hamburger *now* is probably Five Guys.
Burger King sucks now, to
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Just bringt your own sandwich (Score:2)
Problem solved.
Capitalism at work (Score:2)
This is capitalism at work.
Here, my local breakfast restaurant became overwhelmed by orders for DoorDash, MenuLog, UberEats, etc. 80% of orders were bulk meals and were for delivery drivers. The business no longer had time to train staff or serve walk-in customers. They decided to refuse those orders for the breakfast shift.
Ideally, they should have put on more employees and sold more meals. But when employees are part-time teenagers who disappear during the holidays, that's not an option.
Peak demand pricing.... (Score:2)
It's Health Pricing! (Score:2)
Hopefully it results in people eating less fast food.
Yeah, they will probably go next door where this isn't happening, but one can hope (even if one knows it is futile...).
Market price (Score:2)
Wendy's has already done this after a manner (Score:2)
I once drove up to Wendy's late at night, probably just before closing and ordered a small fries and a chocolate frosty. Pulling around to the window, they handed them to me and said they were free. The frosty was fine. The fries looked like they had sat around for a while and were not very good. But I had no complaint. It was surge pricing at its best!
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and when the black guy pays more then the white just before him?
You can see a surge in racism - who says you can't?
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That might be the only way to fight surge-pricing... it's the only way to fight gerrymandering.
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More likely is to have price depending on your social credit. Be a god, law-abiding citizen and your burgers cost 10% less, traitors of the state must pay more!
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Mmhmm.
Gas stations publish their prices on a huge sign at the street so when the customer pulls in, it's a known quantity. A decade or so ago most gas stations made the swap to LED signs that could be updated very easily, so if gas prices fluctuated during the day itself the store clerks could change them to reflect the new prices easily, or it could even be automated without requiring the clerk to do anything at all.
If a fast food restaurant doesn't publish its prices where potential customers can see the
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Contrarily, gas prices should be the same across an entire state. Gotta hike a price? Pay a gains tax like everyone else. Smooth out fuel prices. Don't let the oil companies game you and stress your life.
Food prices at Wendy's? Same answer. The fast food that was killing you will now add stress to your life. Most will just swallow it. Others will pass it by, preferring a predictable, non-provoked existence.
People wonder why greed capitalism has a bad name, and I shake my head. Go ahead, genuflect to the sur
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Contrarily, gas prices should be the same across an entire state.
That's silly. A gas station on a busy highway is paying way more in rent than another station on a side street.
So the highway station charges higher prices to cover the rent, while the side street station sells cheaper to incentivize people to drive a little further.
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You don't know that, and that's not how it's formularized. The C-store is what makes the biggest part of the revenue, not the fuel.
Predictability relieves stress. Rando-numbers create stress. The adventurous may enjoy the adrenaline or Type A response, but most do not.
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Geez, it's gas...there's not sweat or stress.
Hell, I rarely if EVER look at the price of gas, I just have to have it and I stop and fill up.
99% of the time, I hit Costco where I live...but when on the road, I just pull over when I need t
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They have you.
Millions unlike you have to watch prices carefully. They don't make a living wage-- or even less. They may be on fixed incomes, disabled, students. And those millions have to sweat every penny.
Costco is a reasonable choice. You have to justify the spend to join and sustain it. Again, millions can't do that.
A basic rule is that every penny you put in their pocket is one less in yours. For many, that's stunningly important in this age.
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This. My local A&W's price for the combo I like has already risen to 2 cents shy of my long-ago decided cut-off price. I predict they'll be losing a customer pretty soon.
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If a fast food restaurant doesn't publish its prices where potential customers can see them without having to wait in line first (think the drivethrough) then they're simply going to enrage their customers and drive them away.
That would be the correct approach. Come to them at the moment of highest demand. Order something really unpopular for 20 people. Look at the price when the order comes. Say "sorry, I didn't expect the price increase, I'm not accepting that" and walk away.
Unfortunately they'll probably have an app that you have to accept everything in before you actually get your order, so they can probably protect their price gouging. I do wonder if you could do the same and then justify it by doing the calculation at the
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Hmm...not sure where you live.
I've never lived or visited a place where Uber is "regulated"....there is still surge pricing.
I find it often happens when a concert lets out in town...or something special is going on.
At those times, I've just walked to a local bar, sat down drank maybe ate a bit till prices went normal again and then went home.
No big deal.
Surge prices on Uber rarely last that long...