WASHINGTON, March 5 (Reuters) – 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 like Booking.com and Instacart, the committee’s Republican chairman, Rep. James Comer, expressed concern that the rise of monitored 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.
In the letter, first reported by Reuters, Comer said travel companies could use supervised pricing to implement algorithms that determine consumers’ emotional state, purchase intent and maximum willingness to pay, and individual prices could be 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 individual characteristics, past behavior, or device information,” Uber said.
In response, Expedia said: “We do not increase prices based on user data or activity, nor do we personalize prices based on protected personal characteristics.”
Instacart said in a statement that it “does not and has never engaged in monitored pricing. No personal, demographic, or user-level behavioral information about individuals is used by retailers to set Instacart product prices.”
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 what information collected about them determines prices,” Comer wrote.
Comer pointed out that companies use consumer data to create “profiles” based on individual characteristics such as “location, demographics, browsing history, purchase history, device type, battery life, and even mouse clicks to assign different prices to each individual.”
In January, California Attorney General Rob Bonta announced a wide-ranging investigation into practices that use 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 does not plan to use fare products that target personalized offers to customers based on personal information or other information,” Delta said in a statement.
(Reporting by David Shepherdson in Washington; Editing by Chizu Nomiyama, Matthew Lewis and Muralikumar Anantharaman)
