The secret reason your delivery order costs more than your neighbor's

"Companies using black box software and personalized data to set special just-for-you prices, and hoping - pretty reasonably - that we don't realize what's going on. Maybe a retailer or delivery service sees that you're ordering from an affluent suburb, or using a fancy Amex Platinum card to pay, and charges you a little extra."

"New York state lawmakers tried to discourage the practice - lightly - with a new law that requires companies to tell you when they're using personalized algorithmic pricing, or as its critics call it, 'surveillance pricing.' Uber's app doesn't go out of its way to tell you that it uses personal data to set pricing, but if you poke around, you'll eventually find the state-mandated warning."

While variable pricing makes sense for limited-supply services like flights and concerts, most retail goods should have consistent prices. However, businesses now leverage technology and personal data to set individualized prices based on factors like location, payment method, or customer wealth. This practice, called surveillance pricing, remains largely invisible to consumers. New York state requires companies to disclose when using personalized algorithmic pricing, though compliance remains unclear. Business Insider conducted an experiment ordering identical McDonald's meals from the same location simultaneously to investigate how this pricing mechanism operates in practice.

Read at Business Insider