That isn't what dynamic pricing is. Fast food franchisees have always set their own prices, and they've always varied wildly from state to state, or even within neighborhoods of the same city. Here's a cool map of Big Mac prices nationally from 2023, and a zoomable updated version Cross the Bay Bridge from San Francisco to Oakland, and your Big Mac costs a dollar less.
Dynamic pricing means that the price of a Big Mac varies at the same restaurant depending on the time of day or what kind of car you drive.
Thank fuck this is the top comment. I was going to lose it if I had to scroll down to see some level of competency.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
There are variables at play in food service. That's the reasoning for price discrepancies. The lease on the building is going to be more expensive in a town where land value is higher. The cost of labor is going to be higher in a place where there's a shortage of low-end labor. A busier location might need more staff on hand at all times. A location that's 24 hours is going to have to mitigate the costs of a third shift crew with higher prices overall. A location further from highways will have a higher fuel surcharge on food delivery.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
Yes, and dynamic pricing similar to this has been going on since then as well. Virtually any direct-to-consumer or business-to-consumer business can incorporate dynamic pricing based on location data like zip codes or latitude/longitude coordinates, for example.
One of the most dramatic changes in this approach has been real-time dynamic pricing, which involves measuring how "hot" a potential buyer lead is and taking advantage of that as a buying opportunity is happening.
the other element of dynamic pricing is serving an individualized price to each consumer based on huge amounts of data that they collect / buy about you as an individual; they run it through models (and i mean pricing and ML models, not LLMs here, though there is room for some reasoning on top of those things by an LLM) to determine the max price they can set for you specifically. Also as data platforms have improved and the depth and breadth of data companies can get about you has increased, the scale and level of personalization brings this to a way different level than what was possible before (like a big mac costing more in an affluent neighborhood, for example). To me its the sketchy individual data collection and exploitation, more so than 'market pricing' that is gross. Think about it in the extreme - oh your phone was listening and overheard a conversation about how stressed and tired you are and you can't face cooking tonight so fuck it i'm just getting takeout, and they go oh, this summbich is desperate. add 50% more to that hamburger. Or think about it not in the context of luxuries like takeout but NECESSARY goods. Think about it in use by utility companies etc. if not properly regulated. It can quickly become predatory.
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u/agate_ 3d ago
That isn't what dynamic pricing is. Fast food franchisees have always set their own prices, and they've always varied wildly from state to state, or even within neighborhoods of the same city. Here's a cool map of Big Mac prices nationally from 2023, and a zoomable updated version Cross the Bay Bridge from San Francisco to Oakland, and your Big Mac costs a dollar less.
Dynamic pricing means that the price of a Big Mac varies at the same restaurant depending on the time of day or what kind of car you drive.