At The Money: Is Technology Price Gouging Consumers?

PodcastMasters in BusinessLindsay OwensOct 14

The guest argues that pricing tools—from algorithmic rent recommendations to dynamic and personalized prices—can help companies extract more from consumers, particularly where competition is limited. Examples include a potential RealPage rent impact estimated at up to $120 a month and Instacart price differences of as much as 23%; the speaker says Instacart later ended its pricing experiments after backlash and announced probes. The host notes that war, tariffs, and rising yields also push prices higher, while cautioning against overlooking technology’s role.

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Key Takeaways

Lindsey Owens argues that pricing has become an engineered process, with companies using consultants, AI, and tools such as price optimization and dynamic pricing to extract more from consumers. The guest’s example of Delta’s AI fare experiment—starting with 1% of fares and planning to expand to 20% after favorable results—shows how that approach can be applied to airline pricing.

The guest describes electronic shelf labels as a pricing tool with contrasting possible uses: Walmart’s 2023 patent described changing mayonnaise’s price based on a shopper having tuna in the cart, while the labels could also let stores quickly discount food nearing expiration. Walmart said it was not using the patented technology.

Owens says companies felt confident they could pass rising costs to customers, sometimes raising prices by more than their costs had increased, while the guest says 75% of industries are more concentrated than a generation ago. The host cautions that although war, tariffs, and rising yields also contribute to higher prices, technology’s role in retailers extracting more from consumers should not be underestimated.

GEO-POLITICS

RealPage Case — The guest says RealPage’s YieldStar software let landlords share competitively sensitive information and receive recommended rents, which many landlords accepted by default. She notes that the Biden administration’s Justice Department charged RealPage with an alleged price-fixing conspiracy in late 2024.

“And YieldStar, the revenue management software that RealPage acquired, allows landlords to share competitively sensitive information about floor plans and amenities and price points, but it also spits out recommended…”—

TECHNOLOGY

Engineered Pricing — Lindsey Owens argues that companies have made pricing an engineered process, using pricing consultants, physicists, and AI acquisitions to improve their ability to extract more from consumers.

“Today, pricing is a highly engineered science. Companies hire armies of pricing consultants. They hire physicists.”—

Pricing Infrastructure — The guest argues that companies’ pricing methods were changing through tools such as price optimization, revenue management, dynamic pricing, and electronic shelf labels. She describes this as a shift in pricing infrastructure and mechanisms, not simply a period of higher prices.

“The way in which companies were describing their pricing techniques had changed. They were talking about their new price optimization and revenue management systems, their new yield management systems.”—

Walmart Patent — The guest says Walmart filed a 2023 patent describing scan-and-go technology linked to electronic shelf labels that could change mayonnaise’s price when a shopper has tuna in the cart. Walmart said it was not using the patented technology; the guest says the patent lasts through 2039.

“They filed for a 2023 patent that did exactly what you described, used scan and go technology connected to electronic shelf labels to track what you were already buying, say…”—

ECONOMY

Passing on Costs — Owens says companies told investors they felt confident they could pass rising costs on to customers and, in some cases, raise prices by more than their costs had risen.

“And what I was surprised to hear is companies were quite bullish on their ability to navigate inflation…”—

Industry Concentration — The guest says 75% of industries are more concentrated than a generation ago. She argues that reduced competition gives companies more room to overcharge and use aggressive pricing technologies.

“Concentration in our economy, 75% of industries more concentrated now than they were a generation ago, is terrible for prices…”—

Personalized Pricing — The guest argues that personalized prices can undermine comparison shopping by withholding a standard price from consumers, weakening a mechanism she says helps keep prices in check.

“So when you're being offered a personalized price, if a company selects a price just for you, You know, how are you gonna comparison shop if you're not actually being…”—

MARKETS

RealPage Rent Impact — The guest says some estimates put RealPage’s potential impact on rental markets at as much as $120 a month, while emphasizing that this is an estimate.

“But by some estimates, RealPage's impacts on rental markets could be as much as like $120 a month.”—

Expedia Location Pricing — The guest says Expedia charged people from higher-income geographies more than those from lower-income geographies for the same Manhattan hotel room, illustrating location-based price differences for an identical offering.

“Even in ecommerce, not they don't need your license plate, they can tell, you know, from your IP address where you log in from…”—

Technology And Prices

The host asks whether pricing technology is adding to price increases, and Owens explains how modern pricing systems have transformed a once-simple process into a highly engineered effort to raise revenue.

Pandemic Pricing Shift

Owens says pandemic inflation led her to investigate corporate earnings calls, where businesses described new pricing systems and dynamic tools as ways to manage costs and pursue additional revenue.

RealPage Rent Algorithms

Owens describes how RealPage's YieldStar software shared landlord data and recommended rents, enabling coordination across a fragmented rental market and prompting an alleged price-fixing case.

Competition And Surveillance

Owens argues that consolidation weakens price competition, while personalized pricing and extensive consumer data make comparison shopping harder and let companies tailor prices to individuals.

Walmart Data Patents

Owens cites patents and examples involving location, shopping behavior, and household details to illustrate how companies could use surveillance data to adjust prices, including Walmart's tuna-and-mayonnaise example.

Pricing Technology's Uses

Owens says surveillance pricing mostly threatens consumers but notes electronic shelf labels could also quickly discount food nearing expiration and reduce waste.

Instacart Price Tests

A consumer experiment found Instacart charged different shoppers up to 23% more for identical items, leading to public backlash, government probes, and the company's decision to end the experiments.

Personalized Pricing Risks

Owens rejects the idea that surveillance pricing reliably redistributes money to lower-income shoppers, warning that companies can target anyone with an urgent need and capture consumer surplus.