U.S. House committee asks travel companies to answer questions about using AI to set prices

The chairman of the U.S. House Oversight Committee on Thursday called on the CEOs of five major travel companies, including Uber, Lyft and Expedia, to disclose whether they use consumer surveillance pricing to drive up costs.

In a letter to companies, the committee’s Republican chairman, Rep. James Comer, expressed concern that the rise of supervised pricing algorithms and the use of highly personalized consumer data could create opportunities for “companies to weaponize personal data and inflate profit margins at the expense of providing transparency to consumers.”

Surveillance pricing is a strategy in which companies use consumers’ personal data, such as browsing history, location, and shopping habits, to set personalized algorithmic prices for products, rather than using standard market-wide pricing.

Comer said in the letter, first reported by Reuters, that travel companies use supervised pricing to deploy algorithms that determine consumers’ emotional state, purchase intent and maximum willingness to pay, and individual prices are adjusted accordingly.

Comer cited media reports that Uber is introducing AI-based pricing technology to offer different prices for the same product. Uber said Thursday that it does not engage in surveillance pricing and does not individualize prices. “Fares are determined by factors such as location, time and demand, not by a customer’s personal characteristics, past behavior or device information,” Uber said.

Other companies that received letters, including Booking.com and Instacart, did not immediately respond to requests for comment.

Comer’s letter asks for documents by March 19, including communications detailing the revenue management algorithm and its financial impact.

“Often, this occurs in a ‘black box’ environment, with consumers unaware that personalized pricing is occurring or that the information collected about them determines the price,” Comer wrote.

Comer pointed out that companies are using consumer data to “create ‘profiles’ to assign different prices to different individuals based on discrete data such as location, demographics, browsing history, purchase history, device type, battery life, and even mouse clicks.”

In January, California Attorney General Rob Bonta announced a broad investigation into the use of personal data to set personalized prices.

In November, 20 U.S. House Democrats asked Delta Air Lines to answer questions about whether it uses generative artificial intelligence to price flights.

Lawmakers have expressed concern that airlines could use AI, personal data and consumers’ internet usage, such as visits to funeral home websites, to determine when people most want to travel, and then raise airfares and other fees.

“Delta has never used, is testing or plans to use, customer-targeted fare products that provide personalized offers based on personal information or other factors,” Delta said in a statement.