"It was a pretty big online shopping scandal earlier this month and came about two weeks before Christmas when an independent investigation found that SF-based delivery platform Instacart was using an AI pricing test algorithm that was charging certain customers as much as 23% higher prices for the exact same items, from the exact same store, purchased at the exact same time."
"The investigation found one Washington, DC Safeway where Instacart was charging different shoppers anywhere between $3.99 and $4.79 for the same carton of eggs. Right now, Instacart is quietly running experiments on millions of us while we shop for groceries online. They are trying to figure out exactly how much they can get away with charging you for breakfast cereal, lunch meat, pasta, and everything in between."
"Like so many Americans, we are disturbed by what we have read in the press about Instacart's alleged pricing practices, the FTC said in a statement last week to Reuters. Now it seems the pushback has gotten to be too much for Instacart. The SF Business Times reports that Instacart is ending the AI price-testing practice, claiming that they will no longer conduct these tests "effective immediately."
An independent investigation found Instacart used an AI pricing test algorithm that charged some customers up to 23% more for identical items purchased at the same store and time. The investigation documented one Washington, DC Safeway where prices for the same carton of eggs ranged from $3.99 to $4.79. Instacart ran experiments on millions of shoppers to measure price sensitivity across items like cereal, lunch meat, and pasta. The practice drew public outrage and attracted the Federal Trade Commission's attention, which threatened a federal probe. Instacart announced it will end the tests effective immediately and acknowledged the experiments missed the mark for some customers.
Read at sfist.com
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