File photo: Instacart shopper Loralyn Gegat delivers to a customer’s home in Falmouth, Massachusetts, on April 7, 2020.
David L. Ryan | Boston Globe | Getty Images
grocery delivery app instacart The company uses artificial intelligence pricing tools that cause many U.S. shoppers to pay higher or lower prices for identical items in the same store, according to a new study.
The study, released Tuesday by progressive advocacy groups Groundwork Collaborative, Consumer Reports and news organization More Perfect Union, asked 437 shoppers in four cities to help add identical items to their carts within the same store’s Instacart app.
Researchers conducted an experiment at a number of popular grocery retailers that partner with Instacart. target, costco, albertsons, kroger And Safeway.
The group said it found that nearly 75% of the items tested were offered to shoppers at different prices. In one case, a user observed a carton of 12 Lucerne eggs listed at five different price points at a Safeway in Washington, DC.
Groundwork said the total cost for the same product at a single store can vary by about 7%, which can equate to “a cost change of about $1,200 per year.”
Instacart said in a blog post after the report that “some” of its retail partners are conducting limited online price testing. Instacart said the test did not use personal, demographic or individual-level behavioral data, adding that prices “never change in real-time, including in response to supply and demand.”
“These short-term, randomized tests will help our retail partners understand category-level price sensitivity and enable them to sustainably invest in the low prices that consumers care about most,” the company wrote.
An Instacart spokesperson said in a statement that the company is focused on affordability and that retailers “manage prices” on the platform.
Instacart acquired Eversight, an AI-powered pricing and promotions platform, for an undisclosed amount in 2022.
The study comes as regulators, politicians and advocacy groups focus on the use of AI-driven pricing tools, which they argue make a difference in what consumers pay, often without their knowledge.
Lawmakers are particularly critical of airlines and ride-hailing companies’ use of AI to set prices.
Last month, New York enacted the first law requiring companies to disclose when they use customers’ personal data to set algorithmic prices. The Federal Trade Commission is also looking into the issue, launching an investigation last year to better understand the surveillance pricing strategies used by companies.
Sen. Ruben Gallego, D-Ariz., introduced a new bill Tuesday that would prohibit companies from using personal data to charge consumers different prices for the same product or service.
