Instacart Halts AI Pricing Tests Amid Controversy
Instacart has announced that it will stop using artificial intelligence to test prices on its grocery delivery platform. This decision follows scrutiny from a recent study and criticism from lawmakers.
In a blog post released on Monday, the company stated that retailers will no longer have access to its Eversight technology for pricing experiments, effective immediately. Instacart recognized that the previous tests—which created different prices for the same items in the same store—created confusion for customers. “At a time when families are trying hard to make every grocery dollar count, we understand these pricing differences raised concerns,” the company said. They emphasized their commitment to trust and transparency.
Instacart acquired Eversight for $59 million in 2022, believing that the technology would help retailers boost sales and provide better deals to customers. However, a recent study revealed that shoppers were paying different prices for identical items. The research found that price variations for the same basket of goods could reach around 7%, potentially leading to over $1,000 in extra costs annually for consumers. Instacart clarified that prices listed on its app are set by the retailers themselves.
Additionally, the Federal Trade Commission (FTC) has been looking into Instacart’s pricing practices. Last week, the company was also ordered to pay $60 million in refunds to settle claims related to deceptive practices in its subscription offerings and advertising. While Instacart denied any wrongdoing, they mentioned they had provided information to the FTC regarding their AI pricing tools as part of the settlement.
As the situation unfolds, Instacart is working to regain customer trust and address pricing concerns.
