Nine times out of ten, if asked to choose sides in a dispute between Sen. Elizabeth Warren (D-Mass.) and Ronald McDonald, I would choose the McDonald. No questions asked. Warren, after all, went viral for claiming Native American ancestry, only to be ridiculed and forced to offer groveling apologies. Ronald, meanwhile, has spent over 60 years selling Americans Happy Meals and creating plenty of happy memories.
Yet we live in strange times, so strange that I now find myself siding with the teepee-loving teller of tall tales. Warren, along with four other Democrats, recently sent McDonald’s CEO Chris Kempczinski a furious letter.
Your perceived wealth dictates your bill.
In it, the pols demanded answers about the company’s AI-powered pricing tools. The technology estimates what customers at each location are prepared to pay and quickly recommends the prices the company believes will make it the most money. It’s sneaky, and I’m certainly not lovin’ it.
The golden arches built a huge empire on low-cost convenience. Drive into any suburban strip mall, drop a few dollars, and receive a standardized slab of meat-like matter. The transaction was simple and straightforward. Today, that transaction is morphing into a machine-learning surveillance operation designed to calculate the absolute limit of your financial tolerance.
The question is no longer what a Big Mac actually costs to produce, but how much McDonald’s thinks it can fleece you before even a Jack in the Box burger starts to look appealing.
Maybe one lost customer doesn’t even register for a chain as big as Mickey D’s. But dissatisfaction can spread like wildfire. And every day, the fast-food giant serves approximately 26 million people across the country. In other words, well over a million people every 60 minutes. At that scale, little algorithmic tweaks that leave you grumbling can net out to megabucks of profit.
May I take your Orwellian order?
Corporate executives love to hide behind technical jargon and market theory. They insist that their AI doesn’t technically set menu prices because individual franchisees retain final authority over their final prices. Three separate franchisees told Reuters that the pricing engine’s recommendations have noticeably widened the cost gaps between nearby locations. When a multibillion-dollar corporate headquarters sends automated price targets to a franchise owner, those numbers carry the weight of an imperial mandate. Calling it a mere suggestion is nothing but corporate doublespeak.
Let me paint a somewhat sinister picture. Two working-class parents pull up to a drive-thru window after a 10-hour shift. Ten miles down the highway, another family pulls up to an identical menu board. The meat in the kitchen arrived on the same refrigerated truck. The workers behind the register wear the exact same uniforms and earn the exact same hourly wage. Yet the family living in the slightly higher-income neighborhood pays an extra dollar for every single item. The AI analyzed local income metrics, traffic patterns, and economic desperation, concluding that those specific parents had nowhere else to go.
RELATED: Your zip code or computer type can determine what you pay for groceries, deliveries, and services
Your zip code or computer type can determine what you pay for groceries, deliveries, and services L-R: Patrick T. Fallon/Bloomberg/Getty Images, Klaudia Radecka/NurPhoto/Getty Images
This dynamic is disturbing, and it flips traditional commerce on its head. In a standard market, prices reflect supply, demand, and overhead costs. Algorithmic pricing discards that tried-and-tested trinity, creating a localized dynamic in which your perceived wealth dictates your bill. Forget inflation. Forget rising beef costs or supply chain bottlenecks. McDonald’s has built a shady system designed to squeeze every penny out of your pocket.
The broader implications extend far beyond a bag of French fries. Fast food has historically functioned as an economic equalizer, a place where a plastic surgeon and plumber bought the exact same lunch for the exact same five-dollar bill. Algorithmic pricing makes each neighborhood into a distinct cash cow, milked through digital demographic profiling.
And if this software succeeds across 14,000 American locations, you can be sure it won’t stop with burgers. Every major retail sector could adopt the exact same play. Supermarkets, pharmacies, gas stations, and hardware stores may run machine-learning software to price basic necessities based on your neighborhood’s financial scorecard.
Flimsy defenses
American consumers are already struggling to keep their heads above water. More and more have less than $500 in savings, while countless others are being squeezed by higher rents and eggs priced as though they came with the chicken.
Eating out at a fast-food chain used to provide a brief reprieve from economic stress. Now, even a simple meal has become a calculated financial extraction exercise. You drive up to the speaker box, state your order, and wait for a computer server in Chicago or California to decide how much value it can pull from your checking account today.
McDonald’s insists that its machine-learning tools merely help store operators navigate ever-changing economic environments. That defense is flimsy, and it ignores the fundamental contract between a business and its customers. People don’t walk into a fast-food restaurant expecting to be on the receiving end of algorithmic manipulation. They want a quick burger, a side of fries, and a few minutes of peace without worrying about their bank balance.
If the golden arches can turn a routine bite into a localized wealth-extraction test, the traditional concept of a fair price is dead. We are rapidly moving toward a future in which the price tag on the wall is little more than an illusion, tailored in real time to extract maximum revenue from whichever unfortunate soul craves some greasy goodness. Elizabeth Warren might be an unlikely defender of the average American’s wallet. But on this issue, McDonald’s has made the not-so-native American look surprisingly reasonable.
Tech, Mcdonald’s
