Instacart scraps AI pricing tests after backlash over grocery price swings

"Instacart said Monday that it will no longer allow retailers to use an AI-powered price testing program, two weeks after an extensive investigation showed wide discrepancies in the cost of groceries purchased through the platform. Effective immediately, retailers will no longer be able to use Eversight technology to run price tests on Instacart, the San Francisco-based company said in a blog post. Previously, a small number of retail partners were able to conduct testing that resulted in different prices for the same item at the same store-something that "missed the mark for some customers," Instacart said in a blog post."

""At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart," the company said. "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." Monday's announcement of the end of item price tests marks the third time that Instacart has responded to a widely-shared study by Consumer Reports and Groundwork Collaborative."

"The monthslong investigation conducted by the magazine and progressive policy group found that algorithmic pricing might result in price differences for the same items of as much as 23%. Instacart responded swiftly to the concerns raised in that investigation. In a lengthy blog post late last week, the company sought to clarify what sorts of pricing tests it does-and doesn't-allow on the platform by responding to four different "myths," including that it was engaging in " dynamic " or "surveillance" pricing."

Instacart will immediately stop allowing retailers to run AI-powered price tests using Eversight technology. Previously, a small number of retail partners could conduct tests that produced different prices for the same item in the same store. Instacart said those tests raised concerns for customers and pledged that two families shopping the same items at the same time from the same store will now see identical prices. The change follows a Consumer Reports and Groundwork Collaborative investigation finding algorithmic pricing differences up to 23%. The issue also prompted scrutiny from policymakers in Washington, D.C.

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