How Instacart's AI Pricing Is Costing Some Customers More Than Others

Rising grocery costs have many people looking for deals on everything from the best store-bought pizza to game day snacks like tortilla chips and stellar store-bought salsa. But if you're having those foods delivered to your door via Instacart, you might be paying more than even the eye-watering prices at the supermarket. A recently released investigation Consumer Reports and Groundwork Collaborative found that the grocery delivery service is utilizing AI to manipulate prices — and you are part of the experiment.

The nonprofit consumer advocacy group gathered hundreds of volunteers to place identical orders on Instacart to determine if there were any pricing inconsistencies between customers. CR found that the cost of some goods varied widely between shoppers, with sometimes five different prices listed for the exact same product. This wasn't an isolated incident, either. All participants experienced cost divergences driven by AI algorithms when compared with other volunteers, on at least some of their groceries.

Not all products seemed to be affected. Heinz ketchup and Barilla pasta (one of the Italian pasta brands you could be paying double for soon, anyway) didn't show any disparities. And foods like Lucerne eggs and Ruffles potato chips varied by just 8%. However, major cost fluctuations were documented for Wheat Thins and Skippy peanut butter, sometimes more than 23%. The findings also included big-name retailers. Prices from Albertsons, Kroger, Safeway, Sprouts Farmers Market, and Target were all discovered to vary by CR's volunteers when orders were placed on Instacart. Even Costco — since you don't need a membership to buy groceries through Instacart — wasn't safe from the pricing variances.

Many Instacart users are likely outraged to discover that they have been part of an AI-driven experiment they had no way of knowing about. However, the company has been forthright in admitting it's been playing with the numbers. As Consumer Reports noted, investor information from Instacart previously stated that the company was experimenting with individual customer prices via AI. However, it was insinuated that the variances were insignificant. With grocery pricing currently rising at rates not seen since the 1970s, I would wager the average Joe these days doesn't consider 23% a paltry cost difference.

Instacart responded to the Consumer Reports findings with a company statement. "Just as retailers have long tested prices in their physical stores to better understand consumer preferences, a subset of only 10 retail partners — ones that already apply markups — do the same online via Instacart. These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable." With every volunteer who participated in CR's investigation experiencing some form of price fluctuation, I have to say this appears less "randomized," and more like business as usual.

While this practice isn't illegal, it certainly registers as shady to a large swath of the population. It seems that the only way to ensure Instacart's AI isn't taking advantage of customer trust is to make a physical trip to the supermarket. Unfortunately, for seniors and folks with disabilities, that may be less of a viable option compared to those of us who just don't want to leave the house.