The central goal here, at least as far as we know, is to drive more McDonald’s sales—both on an individual level and across its entire customer base—by harvesting data. That’s bad enough. But sometimes companies are deploying AI to actually trick you into paying even more for things.
Groundwork Collaborative, Consumer Reports, and More Perfect Union collaborated on an investigation released this month showing that Instacart, the grocery shopping and delivery app, used AI-enabled data collection to manipulate and change prices. The investigators sent 437 shoppers out in four cities and placed items in their Instacart shopping carts at the same time. The results showed that almost three-quarters of the items had prices that varied, and prices for the same items could vary as much as 23 percent. These variations are often invisible to consumers.
Dynamic pricing has long been used by airlines to shift prices as demand changes, and it’s been adapted to consumer goods at online retailers, like Ticketmaster. But AI has turbocharged the practice, making it easier to target price changes to specific customers based on geolocation and IP data, in an attempt to maximize the amount a customer will pay. Customers are largely ignorant of this fact—because companies are loath to disclose it prominently—and in some cases may not have much choice. Many families use apps like Instacart for the convenience; they may not have the time or ability to physically shop in a store themselves. But now we know what they’re paying for this convenience: The Instacart report estimates that the hidden pricing differences could amount to as much as $1,200 a year for some customers.