AI is helping decide what you pay, and you can’t see the math |
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AI is helping decide what you pay, and you can’t see the math
From McDonald’s and Walmart to Instacart and Uber, here’s how A.I. pricing works and why consumers are pushing back
KHemaz/GVN via Getty Images
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It was not Burger King, but McDonald’s customers were about to have it very much their way. McDonald’s has used some form of AI pricing since at least 2019, but a recent Reuters investigation showed how far it has gone. Its pricing engine used data from millions of daily transactions to come up with an “optimal price” for every item at every location. One input was an estimate of how much customers in an area were willing to pay.
McDonald’s called it “a tool, not a mandate.” It was not surveillance pricing in the strictest sense, but it ran on the related idea that a mountain of data could be used to figure out how much customers would pay.
McDonald’s has company
The Federal Trade Commission and consumer advocates have used the term surveillance pricing to describe companies using personal data like browsing history, location, device type and past purchases to estimate how much each........