US delivery service Instacart stops AI price manipulation

US delivery service Instacart is stopping the secret manipulation of product prices. Instacart is a delivery and pickup service for groceries from various supermarket chains in the US. The reason for the change is the public reaction to test results from consumer advocates. They found that Instacart uses artificial intelligence to vary the prices of supermarket chain products -- even when the customer does not want delivery but picks up the ordered goods themselves at the store.

Test shoppers put the same product in their shopping carts at the same time – for later self-pickup at the same store, to exclude the factor of potentially different delivery costs. Nevertheless, Instacart charged prices with significant differences. This was shown by the test of purchasing everyday groceries, conducted jointly by Consumer Reports, Groundwork Collaborative, and More Perfect Union.

For three-quarters of the products, the e-commerce price fluctuated by up to 23 percent. The goal was apparently to guess how much a customer was willing to pay and to charge them as much as possible. When the system became known, Instacart initially reacted with the excuse that the stores themselves set the prices. The chain Target contradicted this, while the others remained silent.

Trust Damaged

The realization that they were not getting the same prices as other customers has made "some people doubt the prices they see on Instacart," the company writes in a blog post. "That's not okay." From now on, all price tests for individual items on Instacart will be discontinued. If two families order the same product from the same store at the same time, they should see the same prices.

Supermarket chains will also no longer be able to book the algorithmic price control promoted by Instacart under the brand name Eversight. Furthermore, Instacart states that the price manipulation was not based on personal data or supply and demand.

Instacart will continue to run promotions, both in cooperation with stores and with brand product manufacturers. In addition, there may continue to be price differences between different branches or between prices charged in-store and online. Instacart has long urged stores to charge the same prices online and in person. Some chains do this, others do not, for example, because they would rather not pass on the costs associated with Instacart to customers who shop in the store themselves without using Instacart. Or simply because they are interested in consumers wandering through the aisles.

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