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Wendy’s will experiment with dynamic surge pricing for food in 2025

Sir, this is Wendy’s new AI-powered menu —

Surge pricing test next year means your cheeseburger may get more expensive at 6 pm.

A view of a Wendy's store on August 9, 2023 in Nanuet, New York.

Enlarge / A view of a Wendy’s store on August 9, 2023, in Nanuet, New York.

American fast food chain Wendy’s is planning to test dynamic pricing and AI menu features in 2025, reports Nation’s Restaurant News and Food & Wine. This means that prices for food items will automatically change throughout the day depending on demand, similar to “surge pricing” in rideshare apps like Uber and Lyft. The initiative was disclosed by Kirk Tanner, the CEO and president of Wendy’s, in a recent discussion with analysts.

According to Tanner, Wendy’s plans to invest approximately $20 million to install digital menu boards capable of displaying these real-time variable prices across all of its company-operated locations in the United States. An additional $10 million is earmarked over two years to enhance Wendy’s global system, which aims to improve order accuracy and upsell other menu items.

In conversation with Food & Wine, a spokesperson for Wendy’s confirmed the company’s commitment to this pricing strategy, describing it as part of a broader effort to grow its digital business. “Beginning as early as 2025, we will begin testing a variety of enhanced features on these digital menuboards like dynamic pricing, different offerings in certain parts of the day, AI-enabled menu changes and suggestive selling based on factors such as weather,” they said. “Dynamic pricing can allow Wendy’s to be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value. We will test a number of features that we think will provide an enhanced customer and crew experience.”

A Wendy's drive-through menu as seen in 2023 during the FreshAI rollout.

Enlarge / A Wendy’s drive-through menu as seen in 2023 during the FreshAI rollout.

Wendy’s is not the first business to explore dynamic pricing—it’s a common practice in several industries, including hospitality, retail, airline travel, and the aforementioned rideshare apps. Its application in the fast-food sector is largely untested, and it’s uncertain how customers will react. However, a few other restaurants have tested the method and have experienced favorable results. “For us, it was all about consumer reaction,” Faizan Khan, a Dog Haus franchise owner, told Food & Wine. “The concern was if you’re going to raise prices, you’re going to sell less product, and it turns out that really wasn’t the case.”

The price-change plans are the latest in a series of moves designed to modernize Wendy’s business using technology—and increase profits. In 2023, Wendy’s began testing FreshAI, a system designed to take orders with a conversational AI bot, potentially replacing human workers in the process. In his discussion, Tanner also discussed “AI-enabled menu changes” and “suggestive selling” without elaboration, though the Wendy’s spokesperson remarked that suggestive selling may automatically emphasize some items based dynamically on local weather conditions, such as trying to sell cold drinks on a hot day.

If Wendy’s goes through with its plan, it’s unclear how the dynamic pricing will affect food delivery apps such as Uber Eats or Doordash, or even the Wendy’s mobile app. Presumably, third-party apps will need a way to link into Wendy’s dynamic price system (Wendy’s API anyone?).

In other news, Wendy’s is also testing “Saucy Nuggets” in a small number of restaurants near the chain’s Ohio headquarters. Refreshingly, they have nothing to do with AI.

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would-luddites-find-the-gig-economy-familiar?

Would Luddites find the gig economy familiar?

Machine Breakers Unite! —

Luddites were hardly the anti-tech dullards historians have painted them to be.

Woman about to swing a hammer at a laptop.

The term Luddite is usually used as an insult. It suggests someone who is backward-looking, averse to progress, afraid of new technology, and frankly, not that bright. But Brian Merchant claims that that is not who the Luddites were at all. They were organized, articulate in their demands, very much understood how factory owners were using machinery to supplant them, and highly targeted in their destruction of that machinery.

Their pitiable reputation is the result of a deliberate smear campaign by elites in their own time who (successfully, as it turned out) tried to discredit their coherent and justified movement. In his book Blood in the Machine: The Origins of the Rebellion Against Big Tech, Merchant memorializes the Luddites not as the hapless dolts with their heads in the sand that they’ve become synonymous with, but rather as the first labor organizers. Longing for the halcyon days of yore when we were more in touch with nature isn’t Luddism, Merchant writes; that’s pastoralism—totally different thing.

OG Luddites

Weavers used to work at home, using hand-powered looms (i.e., machines). The whole family pitched in to make cloth; they worked on their own schedules and spent their leisure time and meals together. Master weavers apprenticed for seven years to learn their trade. It worked this way in the north of England for hundreds of years.

In 1786 Edmund Cartwright invented the power-loom. Now, instead of a master weaver being required to make cloth, an unschooled child could work a loom. Anyone who could afford these “automated” looms (they did still need some human supervision) could cram a bunch of them into a factory and bring in orphans from the poorhouse to oversee them all day long. The orphans could churn out a lot more cloth much faster than before, and owners didn’t have to pay the 7-year-olds what they had been paying the master weavers. By the beginning of the 19th century, that is exactly what the factory owners did.

The weavers, centered in Nottinghamshire—Robin Hood country—obviously did not appreciate factory owners using these automated looms to obviate their jobs, their training—their entire way of life, really. They tried to negotiate with the factory owners for fair wages and to get protective legislation enacted to limit the impacts of the automated looms and protect their rights and products. But Parliament was having none of it; instead, Parliament—somewhat freaked out by the French Revolution—passed the Combination Acts in 1801, which made unionizing illegal. So, the workers took what they saw as their only remaining avenue of recourse; they started smashing the automated looms.

The aristocrats in the House of Lords told them they didn’t understand, that this automation would make things better for everyone. But it wasn’t improving things for anyone the Luddites knew or saw. They watched factory owners get richer and richer, their own families get thinner and thinner, and markets get flooded with inferior cloth made by child slaves working in unsafe conditions. So they continued breaking the machines, even after the House of Lords made it a capital crime in 1812.

Merchant tells his story through the experience of selected individuals. One is Robert Blincoe, an orphan whose memoir of mistreatment in his 10 years of factory work is thought to have inspired Dickens’ Oliver Twist. Another is Lord Byron, who, like other Romantic poets, sympathized with the Luddites and who spoke (beautifully but futilely) in the House of Lords on their behalf. George Mellor, another figure Merchant spends time with, is one of the primary candidates for a real-life General Ludd.

Edward Ludd himself doesn’t qualify, as he was mythical. Supposedly an apprentice in the cloth trade who smashed his master’s device with a hammer in 1799, he became the movement’s figurehead, with the disparate raiders breaking machines all over northern England, leaving notes signed with his name. George Mellor, by contrast, was one of the best writers and organizers the Luddites had. He’d spent the requisite seven years to learn his cloth finishing job and in 1811 was ready to get to work. The West Riding of York, where he lived, had been home to wool weavers for centuries. But now greedy factory owners were using machines and children to do the work he had spent his adolescence mastering. After over a year of pleading with the owners and the government, and then resorting to machine breaking, there was no change and no hope in sight.

Finally, Mellor led a raid in which a friend was killed, and he snapped. He murdered a factory owner and was hanged, along with 14 of his fellows (only four were involved in the murder; the rest were killed for other Luddite activities).

Even as their bodies were still practically swinging on the gallows, the aristocracy and press were already undermining and reshaping the Luddite story, depicting them as deluded and small-minded men who smashed machines they couldn’t understand—not the strategic, grassroots labor activists they were. That misrepresentation is largely how they are still remembered.

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