"The issue came to light after a study revealed that shoppers are seeing wildly different prices for identical groceries from the same stores - up to 23% higher prices in some cases. Instacart says these price tests were randomized, not ties to an algorithm that targets customers based on their browsing history. But when people are already anxious about affording eggs, that distinction probably doesn't mean much."
"Dynamic pricing isn't new or necessarily nefarious. Harvard Business School will tell you it's how digital platforms stay competitive. Airlines use it, hotels use it, Uber famously uses it. Companies argue that it helps balance supply and demand, maximizes profitability, and creates win-win scenarios. But there's a difference between paying surge pricing for a ride home from the bar and paying extra for groceries (food isn't optional)."
Instacart received a civil investigative demand from the FTC regarding its AI-powered pricing tool Eversight and the reasons for varying customer prices. A study found shoppers sometimes see up to 23% higher prices for identical items at the same stores. Instacart says the price tests were randomized and not tied to individual browsing histories. Dynamic pricing is common across digital platforms and is used to balance supply and demand and increase profitability. Critics note groceries are essential goods, making differential pricing more sensitive than surge pricing for discretionary services. The FTC's inquiry follows prior probes into data-driven pricing strategies.
Read at TechCrunch
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