According to ReutersInstacart is currently receiving regulatory approval from the FTC, which has sent the grocery delivery platform a civil investigative demand regarding its AI-powered pricing tool, Eversight. In other words, the agency wants to know why some people are paying significantly more than others for their organic granola.
This issue came to light after a study showed that buyers are looking at wildly varying prices Prices for similar groceries from similar stores – in some cases up to 23% higher. Instacart says these price tests were random, not linked to any algorithm that targets customers based on their browsing history. But when people are already concerned about buying eggs, this difference probably doesn’t matter much.
Dynamic pricing is nothing new or necessarily nefarious. Harvard Business School will tell you how digital platforms stay competitive. Airlines use it, hotels use it, Uber famously uses it. Companies argue that this helps balance supply and demand, maximize profitability and create a win-win scenario.
But there’s a difference between paying surge pricing to get home from the bar and paying extra for groceries (food isn’t optional). So although the investigation does not prove wrong, it is hardly shocking that the FTC – which conducted a data-driven investigation pricing strategies Questions are reportedly being asked – by other companies. In an economy where everyone’s emotions were squeezed, AI-powered price testing of kitchen essentials was bound to grab attention.
