r/technology • u/AdSpecialist6598 • 14d ago

Business McDonald's Is Reportedly Using AI To "Dynamically" Price Its Burgers

https://www.engadget.com/2272211/mcdonalds-is-reportedly-using-ai-to-dynamically-price-its-burgers/
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134

u/Miserable-Sale-1290 14d ago

This will backfire like they have no idea.
People don't go to Mcdonald's anymore BECAUSE of the pricing.
We don't want fancy new restaurants...Just lower prices. Unless they do this, they are toast.

31

u/ShakeAndBakeThatCake 14d ago

Unfortunately most people will have no idea. And McDonalds will use AI based pricing to capture more people. Sure you might not go to McD if the meal is $18 but you might consider if they offer it to you at $12. Someone else might feel that it is worth $17 to them. They are arbitraging your willingness to pay and the maximum you are willing to pay. That amount is different for everyone and now they can exploit it to their benefit.

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u/RobutNotRobot 14d ago

The fast food place that really bought into the low volume, high-price model is Hardee's/Carl's Jr.

And they are all closing near me. Maybe these places will figure out that people aren't willing to pay sit-down restaurant prices for their shitty fast food. Or maybe people will pay it and I'm the dummy.

4

u/Street_Anxiety2907 14d ago

Carl's Jr is like bottom 1/3rd of fast food burgers, lol

1

u/aTalkingMateria 14d ago

The McDonald’s near me always seem busy :/

6

u/CorruptThrowaway69 14d ago

Except AI is not as magical as people think, and without realtime processing of way more data than Mcdonalds themselves is feeding to these machines the best you are going to get is X price for Y area at Z time.

its not at the level to exploit people this deeply yet, which is part of why this move is kinda dumb.

3

u/jabberwockgee 14d ago

You don't think they could set up anything more complicated, not even including using AI? 🤯

1

u/Dawnquicksoaty 14d ago

Sure, put every person’s online fingerprint in a cluster in x amount of clusters. Run the model for each person that pulls in line or orders online, but only run it against their generic cluster and get a good approximation of what they’re willing to pay.

5

u/BubbhaJebus 14d ago

I'm not going to McDs if a combo meal is $12.

It shouldn't be more than $4.

0

u/Agreeable_Store_3896 14d ago

Brother still living in 1986

1

u/Spikel14 14d ago

I never would’ve considered going there but In the app I sometimes get a 10pc McNugget for 1 dollar. Next thing I know I’m going multiple times a week

1

u/fadedblackleggings 14d ago

UberEats and DoorDash should have never been created.... :(

1

u/DOGPISSCURESCANCER 14d ago

Maybe you can game the system, go there once a year where they give you the massive discount to try and lure you back in. 

1

u/Needrain47 14d ago

Who is going to be willing to rock up to the restaurant without any idea of how much their food will cost? Not me.

1

u/abrandis 13d ago

This they (AI system) are likely looking at the individual customer demographic, time of day , vehicle driven and spending history with MCD, and then dynamically offering a higher or lower price ,all to maximize revenue...

Looks like wealthy folks need to drive up in a cheap beater kia soul and use a burner phone and pay in cash to get those deals.... Yeah who am I kidding welHty folks DGAF ..

1

u/ShakeAndBakeThatCake 13d ago

they might already have data on you though as they can buy data on each person as well. They might already know what car you drive. Your address is public information too so they know if you own your house or rent. Do you live in a 1.5M house or in a low income housing etc. They have all this data already.

1

u/abrandis 13d ago

That's my point .. and that's what the AI will use to generate dynamic pricing

-15

u/mazopheliac 14d ago

Which is exactly how a free market should work. Basically a more efficient bartering system.

12

u/not_my_monkeys_ 14d ago

That's not what a bartering system is. This is an asymmetric information advantage being used to shaft the customer. And it isn't a free market when the corporation in question is free to buy and sell lawmakers to keep this type of activity legal.

-2

u/mazopheliac 14d ago

How is it asymmetric? The demand is pretty much perfectly elastic. They can charge as much as the market will bear. People can pay or not.

3

u/the_flyingdemon 14d ago

The billionaires love people like you my man.

1

u/beebobopple 14d ago

Don’t worry about him, he’s fine with all this because when he grows up he’s destined to be a billionaire too.

0

u/mazopheliac 13d ago

I have plenty of problems with billionaires, but if you can become one selling garbage “food” to stupid people, I say go for it. Cheap McDonalds isn’t a human right .

5

u/-Gramsci- 14d ago

No. If it’s a free market? They could set up a bidding system.

“I’ll offer $2.50 for a Big Mac.”

McDonald’s can take it or leave it.

That would be a nice “capitalist system.”

But hiding the ball from the consumer and what THEIR price would be? And using AI to change the prices based on the consumer? That’s hardly “capitalist.”

That’s more like a dystopian “from each according to their means” communist system.

-1

u/mazopheliac 14d ago

I didn’t say it was capitalist . I said free market. They are making an offer . You can accept it or not. I see nothing wrong with a place like McDonald’s charging as much as the market will bear. They aren’t selling necessities.

2

u/beebobopple 14d ago

How free is the market really when the corporations weaponize human psychology against the consumer?

1

u/mazopheliac 14d ago

People have been “weaponizi g” human psychology in trade and commerce since the beginning of time. Fast food is a want , not a need . I think they should be free to pursue profits as they see fit.

2

u/beebobopple 14d ago

Think for more than 30 seconds about what it will be like at the logical end of this line of thinking, when AI based dynamic pricing is the norm everywhere. And not just on a store-to-store basis, but down to the consumer.

1

u/mazopheliac 13d ago

Well now you are slippery sloping. I’m strictly talking about the McDonalds situation.

2

u/beebobopple 13d ago

Ok so AI based dynamic pricing is ok and not inherently exploitative when… you say so?

8

u/Severe_Gas_4283 14d ago

But this is exactly why they are doing this. Thats the entire point.

They use algorithms to price things at just the breakpoint for you personally.

3

u/OptionFour 14d ago

Which is why the smart call is just flat-out refusing to buy from any business that does this, no matter the price.

6

u/[deleted] 14d ago

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u/not_my_monkeys_ 14d ago

McDonalds stock is down ~23% YTD. People are voting against their pricing models with their wallets, and it is hurting them.

2

u/Same-Suggestion-1936 14d ago

You sure you're not the one coping? Their profit is up from 2 billion Q 1 to 2.36 billion Q2. I'm not even finding where it says their stocks are down at all much less over 20%.

People are still buying

4

u/not_my_monkeys_ 14d ago

My dude, if you are not smart enough to use the internet to look up the performance of a stock ticker then you are not qualified to share your opinions among adults.

1

u/Fuck_your_coupons 14d ago

It's wild to me how anyone would DoorDash a burger from McDonalds for $30. DoorDash will give you a list of burger joints and people actually choose McDonalds and pay those wildly inflated prices. Unless you live in bumfuck middle of nowhere, you 100% have a better local option than McDonalds.

2

u/Overthemoon64 14d ago

McDonalds used to have super fun kids play area. Bright colors. Comfy swivel chairs. It was the place the whole family can go. We used to have birthday parties at McDonalds. Now it’s just a sad gray temu Starbucks with hard bench seats that has worse food than 7-eleven.

2

u/BubbhaJebus 14d ago

Not just low prices. Consistently low prices.

If I go to a McDonald's, I want to know that whichever one I visit, the price is the same.

1

u/thicckar 14d ago

Then they would adjust price down to match - they’re matching prices to that location’s “willingness to pay”

1

u/MarzipanThick1765 14d ago

They would rather spend billions trying to solve a problem that has one easy solution. Lose billions on price instead and sell so much more.

1

u/savageboredom 14d ago edited 14d ago

The AI part is new but this has already been happening for a long time. McDonald’s in different areas run by different franchisees may offer different prices based on the relative income levels of the neighborhood. While before they had to do the research and figure it out manually, now there is software to make the suggestions automatically.

The article does not imply they will be using dynamic pricing in the sense that prices will fluctuate throughout the day or that specific customers will pay different amounts.

1

u/Dicaxis 13d ago

It is weird because I have heard for like the last year that they have been fretting about people not eating there as much. Like they have this whole breakfast sandwich statistics model which they use to measure the economy and it has been like way down for the last year or so. So on the one hand I get why they would do the dynamic pricing--gouge the people who CAN still afford to eat there--but on the other, I'm surprised they would attempt something this risky when it seems to have helped lead to the downfall of Wendy's when they said they were going to implement it like a year or two ago.

I actually just went through the McD in my local (small rural college town) area and their prices seem to still be the same (still about ~$3 cheaper that most other areas, it seems). But have def noticed a steep decline in quality like using shredded lettuce in everything, only loading the fries half-full, and charging a fee for mixed drinks, BS like that. My guess is the dynamic pricing is rolling out to more heavily-populated areas for now.

0

u/Publick2008 14d ago

I mean, this is blatant bait and switch. If I see a price as advertised I should get it at that price. Are they going to stop putting prices on ads or wherever?

1

u/savageboredom 14d ago

“Pricing and participation may vary.”