Surge in Wendy’s complaints exposes limits to consumer tolerance of unstable prices

FILE – An Uber sign is displayed inside a car in Glenview, Ill., Saturday, Dec. 17, 2022. Consumers will pay more for that airline flight or willing to fork out more for a ride on Uber during rush hour. But a big shopper backlash to media reports this past week that fast-food chain Wendy’s had plans to increase prices during the busiest time at its restaurants clearly showed that consumers don’t want basic food items like hamburgers and shakes going up and down(AP Photo/Nam Y. Huh, File)

Consumers will pay more for a flight to Florida or for a hotel room during peak vacation times. They fork out more for a rush hour Uber ride, perhaps while grinding their teeth, and rely on apps like ParkWhiz or ParkMobile to book spots for their cars at premium prices.

But a social media backlash this week to media reports that said fast-food chain Wendy’s had plans to increase menu prices during its busiest hours showed a limit to where, when and for what U.S. consumers will trade more cash for convenience. It looks like a Dave’s Double Combo or a Frosty won’t make the cut.

Wendy’s clarified its intentions Wednesday, drawing a distinction between the company’s “dynamic pricing” strategy and “surge pricing” practices that charge more during times of peak demand. The company said any fluctuations it decides to test in the future “would be designed to benefit our customers and restaurant crew members.”

Here’s a look at the differences between dynamic and surge pricing, which industries are using them and some of the more subtle ways in which companies build price fluctuations into their bottom lines.

WHAT’S THE DIFFERENCE BETWEEN DYNAMIC PRICING AND SURGE PRICING ?

Dynamic pricing and surge pricing are both models that continuously adjust prices based on a range of factors, sometimes within minutes. Dynamic pricing can involve both increasing and decreasing prices, based on market conditions, the season and supply changes. Surge pricing…