Instacart's AI Pricing Algorithm Charges Different Prices to Different Shoppers
Instacart reportedly uses AI-powered dynamic pricing algorithms to charge different prices for identical products to different customers on its platform. According to an investigation by consumer advocacy groups, price variations reached 23 percent for the same items at the same location and time, potentially costing households thousands of dollars annually.
What happened
Instacart uses AI-enabled pricing experiments that charge different prices for identical products to different customers shopping on its platform at the same time and location. According to an investigation by Groundwork Collaborative, Consumer Reports, and More Perfect Union involving 437 shoppers, price differences for the same item reached as high as 23 percent, with an average variation of seven percent across the same location and time.
At Safeway stores in Seattle, the same cart of groceries cost some shoppers $123.93 while others paid $114.34 or $119.85. At a Target in Minnesota, researchers found customers were split into seven distinct price groups ranging from $81.24 to $86.78 for identical groceries.
Instacart acquired the AI company Eversight in 2022, which enabled these pricing experiments. In a 2024 investor call, Instacart's CEO stated that AI pricing algorithms help the company determine which product categories customers are more price sensitive to and set prices accordingly.
Reported impact
A household of four could spend approximately an extra $1,200 per year on groceries through Instacart if exposed to the average price fluctuations documented in the investigation. According to the executive director of Groundwork Collaborative, these discrepancies are "costing families dearly at a time when the grocery affordability crisis is worse than it's been in over a generation."
The retail stores whose platforms were involved in the pricing experiments—including Target, Albertsons, Costco, Kroger, Safeway, and Sprouts Farmers Market—told researchers they were unaware the tests were being conducted. Target stated it has no relationship with Instacart and does not directly share pricing information or dictate Instacart's prices.
Index analysis
The investigation involved orchestrating simultaneous online shopping sessions with hundreds of volunteers across stores in multiple American cities including Seattle and Minnesota. Researchers compared shopping carts of consumers instructed to buy the same products at the same time to identify price variations.
Governance controls
Instacart stated that price fluctuations resulted from tests to determine how much extra charge is needed to cover operating and technology costs. The company claims it scrapes Target's prices and adds an additional amount for its own costs, but acknowledged conducting pricing experiments.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.