Instacart Price Hike: Study Reveals Potential 20% Markups

Instacart Accused of Inflated Pricing Through AI Experiments

A newly released study from Consumer Reports (CR) suggests that Instacart is utilizing AI-driven dynamic pricing tests. These tests reportedly result in significant price increases for specific items.

The investigation, conducted in collaboration with Groundwork Collaborative, revealed that these experiments are taking place at retail partners such as Kroger, Albertsons, Costco, and Safeway. Consumers are, in certain instances, paying up to 23% more for identical products compared to other shoppers, according to the report.

The Role of Eversight Software

The Eversight platform, a Software-as-a-Service (SaaS) product, is central to these experiments. It provides grocers with a retail pricing suite intended to boost revenue and optimize pricing strategies.

Instacart’s own Eversight webpage acknowledges that some customers “may encounter marginally increased prices” compared to others. However, the observed price increases appear to exceed this stated margin.

A 23% price increase represents a substantial difference in cost for consumers.

Instacart’s Response

In response to inquiries, Instacart directed TechCrunch to a prior statement. The company explained that, similar to price testing in physical stores, a limited number of its retail partners – currently ten in the U.S. – are leveraging Instacart’s Eversight technology to conduct controlled online pricing tests.

Instacart disputes the characterization of this practice as “dynamic pricing,” instead referring to it as an “AI-enabled pricing experiment.”

An Instacart spokesperson clarified: “These tests do not involve dynamic pricing – prices remain constant and do not fluctuate based on supply or demand. Furthermore, the tests are entirely randomized and do not consider personal or behavioral data.”

Broader Trends in Dynamic Pricing

The use of dynamic pricing is becoming increasingly prevalent across the e-commerce landscape. Numerous large online retailers have faced accusations of employing this practice.

A separate recent report indicated that school districts throughout the U.S. have been subjected to higher prices for essential school supplies due to Amazon’s implementation of dynamic pricing. Amazon has subsequently labeled this report as “inaccurate and misleading.”

This article was updated to include further commentary from Instacart.