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  • Writer's picturePeter Backman

Why is pricing surging acceptable in some circumstances but not others?

A couple of weeks ago Wendy’s CEO revealed, on an investors’ earnings call, that the US fast food brand would introduce surge pricing (Wendy’s called it dynamic pricing). Last week the company backtracked on that and introduced a new idea.

In the past, other companies have also set out plans to introduce such pricing structures – Dog Haus did so in 2022, Noodles & Company in 2023, and both followed Finnish pizza chain, Kitopizza, which had also revealed intentions to introduce surge pricing.

But not much has happened with these initiatives. Why? The answer is probably contained within the statement that Senator Elizabeth Warren posted on her X account last week: ‘Wendy’s is planning to try out ‘surge pricing’ — that means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s price gouging plain and simple.’

But the paradox is that surge pricing works and is accepted. It's widespread in hotels, airlines use it all the time, it works for ride hailing. So how come it’s OK in some circumstances but not in others?

Read the full story here.



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