Duration The semi -annual bonanza Prime Day of Amazon, the underwear that usual purchase had a discount at such a low price that I assumed that it was only for me, the frequent buyer. I have three packages and I felt good about it. But a few days ago, when I saw the news that Delta Air Lines was using AI to customize her flight prices, I got angry. I begin to suspect that something sinister was behind my great offer in Amazon drawers. Was that sale only for me? Where else have I paid my legs personalized prices?
The CEO of Delta, Glen Hauenstein, actually announced last year that the airline was using AI to make “a total resentment of how the price and how we will have pricing in the future” in its annual investor day event. He promised, something sinisterly, that air rates would be determined “on that flight, at that time, for you, the individual.” Last week, Hauenstein lit a rage of Count investors that Delta was currently using technology with 3 percent of flight prices and planned to increase that to 20 percent for the end of this year.
Welcome to the era or hyperpersonalized prices. Companions are increasingly implementing technology with AI that is able to identify thousands of different signals in real time, from their location and loyalty state to their device and the search history to sell the same product to two different. This represents an advanced form of dynamic prices, the old practice of adjusting prices based on market conditions. With the help of algorithms and data resamas, some companies are adopting a new personalized approach: surveillance prices. The dynamic price is perfectly legal, but the surveillance prices and the privacy conerns that accompany it are new.
It is enough to say that consumers do not like the idea that companies use AI to establish prices. On Wednesday, Democratic representative Greg Casar announced plans to introduce a bill that would prohibit surveillance prices at the federal level. The Senator of Arizona, Ruben Gallego, accused Delta or “using AI to find his pain point, which means that they will squeeze it for each penny” and sent an angry letter to the company, which was harassed by Sens. Mark Warner of Virginia and Richard Blumenthal or Connecticut. And earlier this month, New York promulgated a law that requests sellers to reveal when the personalized algorithmic price is in force, with a similar legilation in consideration in other states.
Consumers do not like the idea that companies use AI to establish prices.
When I asked George Slover, general advisor to the Center for Democracy and Technology, about prices models like this, he said: “This is a different animal than the airlines have been doing in the past, and is more personalized and intusive.”
Delta denies that anything integrates is happening here. The company said in a statement: “There is no rate product that Delta has used, whether tests or plans to use that aimed at customers with individualized offers based on personal information” and that the rates are “based solely on the progress related to the trip.” “” “In other words, according to the company, AI helps Delta to establish prices using metrics that the airline already uses to determine air rates. Amazon, it also says that it is not the US surveillance price. UU. After a failed experiment 25 years ago.
Even so, surveillance price is already a documented phenomenon. Kroger sacrifices different discounts to different clients based on personal data, according to an investigation of consumer reports published in May. Target established a lawsuit and paid $ 5 million in fines after a local Kare 11 news investigation in Minneapolis discovered that the Target application prices changed when customers entered the perimeter of a store. And a propublic’s investment revealed that Princeton’s review charged High prices for Asian families for university preparation services.
“It is a more sophisticated and algorithmic and selective price,” Slover said on surveillance prices, which he calls pricing. “You are focusing on a particular individual based on their vulnerability and susceptibility.
The dynamic price, sometimes with an algorithmic impulse, is also controversial and increasing. Only in the last year, we have seen indignation for irregularities in the ticket prices for the cowboy Carter Tour de Beyoncé, a menu enabled for the AI in Wendy’s that offered articles at different prices depending on the time of day and the rental software of the real page that the Department of Justice says that it caused collusion among the owners. And when returning back, Uber has that allows a massive increase in Hurricane Sandy and Amazon prices doing random price tests on customer purchase DVDs.
If you ask who to blame this tendency of this era or computer -optimized price schemes, the answer is surprisingly obvious: they are the airlines. Well, and Jimmy Carter.
Airline prices always have a black box
The era of dynamic prices as we know it began in 1966, when American Airlines launched its Semiautomated commercial research environment, or knowing. This computerized reservation system became the company’s nervous center, where data on each reserve and cancellation were maintained.
After President Carter signed the airline deregulation law in 1978, which allowed airlines to establish their own prices, American Airlines invested the data they collected through knowing to maximize the profits. The company even created a new system called Dinamo to do so, and in a few years, dynamic prices became an industry standard. American Airlines led the way, launching their super souver rates and helping to reduce the price of flights for leisure travelers, while business travelers made the discounts account. However, it was only clear why some seats were cheaper than others. This remains the black box approach for the prices of the air tickets with which we live today.
Air rates can vary widely depending on a series of factors, from the amount of discounts on the airline launches when passengers reserve the flight. The person who is sitting next to any flight could have paid twice as much as you, or half. It is also more difficult to discover how to play the system, since computers have improved and algorithms have more sophisticated Gods. And now there is ia.
Does this mean that Delta will know when he is flying to a short -term funeral and charges full rate, because he knows he will pay it? Probably not, according to Laurie Garrow, aviation professor at George Tech.
“The characteristics they are seeing to make this discount are characteristics about their trip: how far I am reserving in advance, what market, how many people travel together, historical purchase patterns in the aggregate, that is what it is.” They are not the things that are being hypothesis, like “am I to a funeral?”
In other words, what Delta knows is based on the data it has given, as special when buying flights.
It turns out that this is happening with Amazon prices is a little less disastrous. The company uses dynamic prices with the help of algorithms, constantly changes prices according to supply and demand, but Amazon says it has no personalized or surveillance prices. So that super low price in Boxer’s letters was only for me. According to reports, Amazon changes its prices up to 2.5 million times a day, or approximately once every 10 minutes per product, but those fluctuations appear for all customers.
“The algorithmic price exploits a fixed asymmetry of information,” said Elise Phillips, public knowledge policy advisor. “Since there is little transparency in how these algorithms work, it is essential unfair to consumers.”
What you can do to avoid the look of the algorithm
It may seem impossible to escape the scope of dynamic prices both online and out of place. Again, they are not just airlines and Amazon do it.
Ticketmaster, which is infamous for dynamic prices, and its parent company Live Nation is sued by the Federal Commerce Commission (FTC) for illegally operating a monopoly. (It is also Amazon). Kroger is being examined not only for his personalized discounts but also for his new electronic shelf labels, which change the prices of groceries for arbitrary reasons. Uber has normalized the increase prices, and is now finding new ways to charge customers too much.
If you find yourself buying a flight, a pair or underwear, or even a concert ticket, and want to be treated like a stranger, make a stranger online.
You can avoid spending money with companies that use dynamic prices, if there is a good alternative. (Unfortunately, for air trips, that is almost impossible because most airlines use a dynamic form). However, if you are buying a flight, a couple of underwear or even a concert ticket, and you want to be treated like a stranger, make a stranger online.
You can do this in several different ways. Use a VPN when you buy online. And then use the unknown mode in Chrome or in a private browser window in Safari to keep the data out of the hands of the algorithms. I could even use a privacy -centered browser, such as Duck Duck Go, to avoid even more trackers. Devils, try the three approaches and see if prices change. Theoretically it is possible that delivering your personal data will drive at lower prices. That doesn’t do it well, he thought.
“Just because technology exists, we don’t have to let companies do the most profitable for them,” Brian Callaci, chief economist of the open market institute. “You know, the whole objective of capitalism should be working for us and not vice versa.”
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