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Instacart responds to AI pricing claims as U.S. Senator introduces bill to prevent individualized prices
U.S. Senator Ruben Gallego is introducing legislation to stop companies, like Instacart, from using shoppers data to set individualized prices at the grocery store. FOX 10's Steve Nielsen reports.
PHOENIX - Are you paying more than your neighbors when you buy groceries? A new national investigation has found that prices for groceries purchased online can change from person to person.
Why you should care:
Now, a U.S. Senator says he is introducing legislation to stop it.
The question is what drives price changes on goods. Sometimes there are sales or deals, which consumers love. But if the price increases just for one person, how would that individual know? And is that fair?
Local perspective:
Jason Romero just went shopping when he was asked about something called "surveillance pricing."
"This will be 10 dollars... five and six," Romero said while shopping.
When asked about varying prices for the same item, he added, "If we're buying the same thing it should be the same price, but if there's two different prices, it's like, ‘Huh.’"
David Miller was similarly concerned by the findings.
"If I have kids and I want to buy more milk it's going to cost me more money... so whose... so oh man," Miller said.
By the numbers:
A new investigation by Consumer Reports, using 400 volunteers, claims that Instacart is experimenting with AI-driven pricing.
"Skippy, for example, people were getting it for $2.99, others getting quoted $3.69, and no one knew what anyone else was getting," said Justin Brookman of Consumer Reports. "That might not sound like much, but over time it really matters."
Dig deeper:
Now, U.S. Senator Ruben Gallego is introducing the One Fair Price Act, and says it would stop companies from using your data to set individualized prices.
"These corporations teaming up with data companies and massive powerful AI companies are basically creating an environment where it's an uneven playing field for the individual consumer," Gallego said.
The other side:
Instacart, however, says that is not what's happening. In a statement, they explained the price differences:
"These tests are not dynamic pricing - prices never change in real-time, including in response to supply and demand. The tests are never based on personal or behavioral characteristics — they are completely randomized."
Adam Kovacevich with Chamber of Progress, which represents Instacart's interests, echoed this sentiment.
"People saw different prices but they didn't see different prices because of anything having to do with those people's attributes," Kovacevich said. "What happened here [is that] the grocers that use Instacart are constantly experimenting with prices."
What's next:
In the meantime, Consumer Reports asked what consumers can do to make sure they're getting the lowest price when they fill up their cart. They didn't have many ideas, saying the biggest change needs to come from Congress.
The Source: This information was gathered from a spokesperson with the Chamber of Progress, an investigation by Consumer Reports, and FOX 10's Steve Nielsen who spoke with local shoppers.