I sometimes like to compare my instincts against some specific lenses, ways of looking at the world. And I was struck by "pay what you want" businesses – my initial reaction is that it is a type of strange false charity. It's unusual to think, if I wanted to feed someone, that I'd give extra money to a restaurant, for instance. There's a slight of hand involved with pretending those two are the same, and it rubs me the wrong way.
So here are some other lenses we might use: is it even-handed? Well, sort of? I mean, if everyone gets the same thing, that's pretty even-handed, but if everyone is paying different amounts, it's almost quintessentially not even-handed. You could say, hey, people pay different amounts, but that's their choice. But obviously the purpose is to have wealthier people pay for poorer people, frequently explicitly so, and usually the sales process is attached to really specific guilt-inducing phraseology about it. If the purpose of the system is to interact differently with people based on their socioeconomic status, I'm not sure why the theater of equality is more important than the mechanism.
Is it generous? It definitely seems like it – you hear about people in need getting things, things that cost real money and labor, for free. But of course, they're getting them from the business... but the business isn't really paying for it. The other customers are. Is it generous to pay $25 for a bagel? Sort of, if you're giving the extra to someone who needs it. In this case, you're giving it to... a business... which is sort of similar? Clearly you aren't doing a bad thing. It's good to support a system that can give food away to those who need it... or those highschoolers who want a free snack before fourth period starts. But it strikes me as not really generous, so much as, sort of good-feeling. It probably replaces another normal business transaction, not charity – but I suppose that's an empirical question. If it replaced charity, it probably would be bad.
It does rely most heavily on those who can handle the burden, but only partially – you can't involuntarily recruit people to purchase somewhere, so the cost-benefit for the most well off customers is trivially known to be bad. They know if most the people can't pay, they're getting a $2 bagel for $20, and at some point, buying fancy bagels for people in desperate need just doesn't seem like the most efficient charity.
Is it pro-social? NPR's report on Panera Cares (the pay-what-you-want charitable-ish Panera) says the normal, well off customers didn't like eating near the poor, food-insecure ones, and vice-versa. People should probably be comfortable with that in general, but if you bring two groups together and both of them would prefer to be apart, I'm not sure who is supposed to be the recipient of the kindness. Perhaps a more honest view of homelessness creates better citizens, but homeless people tend to be extremely visible. They are literally right outside. I pass them on the street, and see them more often than any neighbors not in my own building. So I'm skeptical that seeing them across a business lobby is helping bridge a lot of gaps. It's not like Panera was getting people to actually talk to each other.
I think, though, the most important element here is the damage it does to the valuable social institution of single-priced markets. If I've said it once, I've said it a million times: the Quakers got it right. Price discrimination is a moral wrong (albeit not as severe as, ya know, hurting people). And having right and wrong mixed up is exactly what we don't need more of these days.