Instacart Kills AI Pricing Tests That Charged Some Customers More Than Others 11
Instacart has ended its AI-powered pricing tests after a study from Groundwork Collaborative, Consumer Reports and More Perfect Union revealed that the grocery delivery platform was showing different customers different prices for identical items at the same store. The company said Monday that retailers can no longer use Eversight, the AI pricing technology Instacart acquired in 2022, to run such tests.
"Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices -- period," the company wrote in a blog post. The study drew attention from lawmakers; Sen. Chuck Schumer wrote to the FTC that "consumers deserve to know when they are being placed into pricing tests," and Reuters reported that the agency had opened an investigation. Instacart says the tests "were never based on supply or demand, personal data, demographics, or individual shopping behavior."
The company also reached a $60 million settlement last week over separate allegations including falsely advertising free shipping.
"Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices -- period," the company wrote in a blog post. The study drew attention from lawmakers; Sen. Chuck Schumer wrote to the FTC that "consumers deserve to know when they are being placed into pricing tests," and Reuters reported that the agency had opened an investigation. Instacart says the tests "were never based on supply or demand, personal data, demographics, or individual shopping behavior."
The company also reached a $60 million settlement last week over separate allegations including falsely advertising free shipping.
They are waiting to regroup (Score:5, Insightful)
when they don't have so much optics. They put the frog in the water too fast.
Re: (Score:3)
Exactly. They'll circle back to this in Q1 and make it more subtle like different prices from different physical store locations. Then they'll roll out "surge pricing" before a weather event or major event to help recoup their make believe losses from this "oops" moment.
Re: (Score:2)
Maybe you should get a job there.
Re: (Score:2)
They're full up. Turns out it's not particularly hard to find a competent scammer. Especially when your society promotes it.
Re: (Score:2)
Or maybe they'll just go back to old-fashioned algorithm-based pricing (without AI). That's probably more profitable anyway.
Re: (Score:3)
From each according to his ability, to each according to his needs.
That was, of course, a quote from Karl Marx' description of an ideal communist society. This test was the opposite, a description of an ideal capitalist society, where each consumer is to be squeezed for the maximum possible profit.
Going back to variable pricing (Score:3)
Fixed pricing is a recent invention. Until the mid 1800s, you bargained for everything. The price tag as we know it was invented by Quakers who believed it was morally wrong to charge different people different amounts for the same item, just because some were better at bargaining.
Modern retailers don't care about the moral side. They want to go back to variable pricing, but without letting you bargain. They'll do the bargaining for you and charge you the highest price they think you'll accept.
There will be resistance, but expect them to keep pushing. It's what they want, and they'll do anything they think they can get away with.