Algorithmic Pricing Practices Observed in E-commerce

Businesses are increasingly using technology to implement variable and personalized pricing strategies. This approach often involves software and individualized data to adjust costs for consumers, a practice that can be difficult for customers to detect.

Business Insider's Uber Eats Experiment

Business Insider conducted an experiment to investigate this phenomenon. Six colleagues in Manhattan placed identical McDonald's Big Mac meal orders simultaneously through Uber Eats from the same restaurant.

Despite identical orders, the total bills varied by 15 to 20 cents.

An analysis of the receipts showed that the difference stemmed from varying service fees, with some individuals paying $3.25 and others up to $3.45. This variation occurred even when two individuals had the same delivery driver.

Company Stances and Regulatory Context

An Uber spokesperson stated that while fees can vary, differences are "never based on a user's personal characteristics."

The company attributed a New York state-mandated warning on its app, which indicates prices are set by an algorithm using personalized data, to the state's "poorly drafted and ambiguous law." New York law requires companies to disclose when personalized algorithmic pricing is used.

Broader Implications and Expert Perspectives

Oren Bar-Gill, a law and economics professor at New York University, noted that companies are not transparent about their use of variable pricing, making it challenging to assess its prevalence.

The Federal Trade Commission's 2025 paper aims to map the technical and industrial systems supporting algorithmic pricing.

Past instances, such as an Instacart experiment that reportedly charged different customers varying prices for the same items, and public discussions around potential dynamic pricing by Wendy's and individualized fares by Delta, highlight consumer sensitivity to price fluctuations.

Industry experts caution that if dynamic pricing is perceived as unfair, it could lead to public backlash. The absence of price transparency in e-commerce, unlike traditional retail, facilitates these variable pricing practices. The article suggests that personalized pricing models are likely to become more widespread.