Popular app used to buy groceries called out for using AI to charge more

Instacart has faced scrutiny after it utilized artificial intelligence to adjust grocery prices based on consumers’ willingness to pay. Following backlash over this practice, the company has decided to discontinue the pricing strategy.

Instacart’s pricing model involved charging different prices for the same items based on the perceived price sensitivity of consumers. This meant that if the company believed a shopper was less price-sensitive, they could be charged more for identical products compared to other shoppers.

Consumer Advisor Clark Howard pointed out that Instacart was not the only company experimenting with such pricing strategies. “Everyone in business is testing ways to charge different prices based on how likely they think you are to pay more,” he said. “The more you shop around, the more important it has become to compare prices.”

While Instacart has halted this specific practice, many businesses continue to explore how AI can optimize pricing strategies to improve their profits, indicating a trend in digital pricing adjustments across various sectors.

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