Wednesday Morning Rant

Last week, the New York Post ran an article on an obviously predatory activity with a major online grocery ordering platform - and managed to seriously miss the real point. The article is about a recent study of Instacart, which exposed wildly different pricing for the same items at the same stores at the same time, depending on who did the ordering. Per the study, prices varied by an average of 13% and as much as 23%. That's a huge range.

Too bad the Post misses the problem entirely in its coverage of the story and misinterprets the underlying issue. As the paper put it:

It's the latest example of so-called "dynamic pricing" -- the hated practice introduced more than a decade ago by Uber and Lyft, hiking prices for rides during rainstorms -- that is nickel-and-diming consumers, even as relentless inflation has sparked an affordability crisis.

"Dynamic pricing" - or "surge pricing" as it is sometimes called - is a response to suddenly increased demand. Rain? Ballpark emptying out? End of a concert? Enjoy a higher price for your ride. There is more demand for rides, and the price goes up. The crucial difference between "dynamic pricing" and what Instacart is allegedly doing is that "dynamic pricing" applies to everyone trying to get a ride in that area at that time. Two people standing next to each other ordering an Uber will both get the surge price in that scenario. One guy won't get socked with a surcharge while the other guy doesn't. That is not at all like what Instacart is doing.

Instacart is showing different prices for the same goods at the same store at the same time. That's "dynamic" all right, but it ain't the same. There is no reason for it (besides the obvious one), and it doesn't apply evenly. Arbitrary and opaque pricing differences are completely counter to the entire concept of prices - and per Instacart, it is arbitrary:

In response to a query by The Post, Instacart said its price "tests" are never based on the personal or behavioral characteristics of shoppers.

Like the Post however, Instacart also makes a false comparison - though unlike the Post, the company must know that it's false:

"Just as retailers have long tested prices in their physical stores to better understand consumer preferences, a subset of only 10 retail partners -- ones that already apply markups -- do the same online via Instacart," an Instacart spokesperson told The Post in a statement.

This is likely a violation of antitrust law. Goods must be offered to all competing customers on the same terms. If you offer a discount - say, for quantity purchase, or for paying cash instead of with a credit card, or for being a member of a club, etc. - that discount applies to anyone who meets the terms. Anyone buying 1000 units gets the 1000-unit discount, and anyone with the club card gets the club card price. That is not what is going on here if the study is accurate. Competing customers, purchasing the same items on the same terms from the same location and at the same time are charged different prices. The FTC ought to be very interested in this, but they aren't.

And why should they be? As we see time and time and time again, federal regulators and investigators aren't there to do their stated jobs, they're there to protect the anointed and punish the disfavored. If confirmed, Instacart's behavior would make for a prosecutorial lay-up.

Too bad there are more important things to do, like subverting the President, shielding the Clintons and defending Pfizer. Not even the low-hanging fruit is worth plucking if the only benefit is to Americans.

posted by Joe Mannix at 11:00 AM

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