Instacart scraps AI pricing tests that made some products more expensive (www.theverge.com)

Instacart has decided to discontinue its AI-powered pricing tests, which had inadvertently led to some customers encountering higher prices for identical grocery items within the same store. The announcement follows a study by Groundwork Collaborative, Consumer Reports, and More Perfect Union, which revealed the presence of varying price points for the same products, prompting scrutiny from lawmakers, including Sen. Chuck Schumer. The Federal Trade Commission (FTC) has also launched an investigation into these practices, emphasizing the need for transparency in pricing. This decision highlights the delicate balance between leveraging AI for dynamic pricing and maintaining consumer trust. Instacart clarified that the pricing tests, powered by the Eversight technology acquired in 2022, were not influenced by factors such as supply, demand, or individual shopping behavior. Moving forward, Instacart will ensure consistent pricing for customers shopping simultaneously from the same location, although retailers may still set different prices across various store locations. This shift reflects a broader industry trend prioritizing customer feedback and ethical considerations in AI implementations, particularly amid rising scrutiny over digital pricing strategies.