McDonald’s has been using artificial intelligence to dynamically price menu items in the US and some global markets, according to a report by Reuters. This involves finding the “optimal price” to match what a particular store’s patrons would be willing to pay.
This fluctuates according to location, and even stores in the same city can have different cost amounts for the same exact items, according to information reviewed by Reuters. This is basically surge pricing, like with ride-share platforms, but for hockey puck burgers that have been sitting under a hot lamp.
Reuters got a look at the interface that franchisees use to access this technology and it’s pretty creepy. Messages show stuff like “your restaurant is showing MEDIUM SENSITIVITY to price” based on “customer willingness to pay in your area.” Cost differences at nearby locations can be stark. Researchers found that a Bic Mac at a Fresno, California store cost $5.69, but the same burger cost $6.89 at another branch two miles down the road. That’s a 21 percent difference.
On the plus side, surveillance pricing legislation has already been introduced in (IIRC) four states just this year, and if I had to guess, we could eventually see state-level bans in at least half of the states.
This, like the electronic tags at Walmart, or Uber charging more when your phone battery is low, or Target mining your loyalty club data to surge price you, is something that they’re speedrunning to try and normalize before the law catches up.
The issue is that these are black boxes. No one but the authors of the system know what’s happening. Law prevents Uber from increasing the price on a nearly flat mobile-computer? They didn’t. That’s just the normal price. Who has all the data? Only Uber. No one else. How then can you enforce such laws?
Only allow flatrate pricing per distance and time?
No government is going to enforce a universal flat-rate. However that doesn’t prevent what I’m talking about. Uber can give everyone a different flat-rate. How would you know? You wouldn’t. That’s the problem. A friend gets charged a different flat-rate? Ok, now you know, but when the government goes to investigate Uber says, “well the flat-rate had to increase. It’s now XXX.” Again, the imbalance is enormous between the businesses that have the data and any external regulatory body that has to do footwork to get any data.
The same item sells for two different prices at separate stores? “Oh, that store just had a sale.”
Except you know, all the cities that already do for taxis, which is what Uber is, regardless of how it tries to skirt around it. Get a taxi, the rate is literally posted on the side of the vehicle. Yes, taxis certainly have their own issues, but it’s a sure whole lot more honest than Uber pricing, and that’s the bottom of the barrel.
Yep. I’ve been saying for years that if ubers were regulated like taxis, they would cost the same amount as taxis, and the company would have no reason to exist. It’s not about using new tech to provide new services, it’s about using new tech to skirt regulation—and also the regulations existed for great reasons, and we get to rediscover why.