DENVER — It may sound like science fiction: big corporations charging you more for baby formula, medicine or even plane tickets because their algorithm knows you need it and you will pay.
Colorado lawmakers say that’s happening to shoppers and workers every day, and they want to stop it.
It’s called surveillance pricing, and consumer advocates at the state Capitol are rallying behind House Bill 26-1210 to ban the practice.
Under the proposal, companies would be barred from using personal data, including browsing history, location, gender, race, zip code or financial circumstances to decide how much a consumer pays or what a worker earns.
Sen. Iman Jodeh, D‑Aurora, says whether consumers realize it or not, price surveillance is already a reality.
A recent Consumer Reports investigation found that grocery delivery platform Instacart was running hidden price experiments that charged some customers up to 23% more than others for the same item ordered from the same store at the same time.
“So what we’re trying to do is protect consumers and make sure that algorithms are not being predatory when they’re setting prices or wages,” she said.
Uber driver Kareem Sawadogo said wage setting is something he has experienced first‑hand.
► Watch Jaclyn Allen's report in the video player below:
Sawadogo says Uber’s algorithm adjusts wages based on a driver’s desperation to get a fare.
“Ride offers began to come in, and every single driver got a different offer, a different fare offer, the same ride and destination,” Sawadogo said.
He also described signing up for Uber’s “Pro Card.”
After overdrafting his account and accepting a loan, he noticed a change.
“Soon after that, they were sending the lowest fare I had seen in a while," he said. "Was it because they pay less when you need more? That is terrible. Desperate drivers should not be penalized by an algorithm for being poor.”
David Seligman, executive director of Towards Justice, calls rideshare drivers "the canaries in the coal mine of this new dystopian economy.”
For Seligman, HB 26-1210 is a solution to limit corporate spying on consumers and workers.
“All it says is that corporations can’t use intimate data about us, private data, the stuff that they capture online, in order to decide how much, on an individualized basis, we should be charged for something and how much we should be paid for our work. That’s all it does,” Seligman said.
Seligman cited a new poll from the American Economic Liberties Project that found 78% of Colorado voters support a ban on companies using surveillance data to set what workers earn or consumers pay.
In a House committee hearing, opponents argued the bill is overly broad and could prohibit targeted discounts and promotions.
“These are not predatory practices,” said Rebecca Hernandez with the Denver Metro Chamber of Commerce. “They are pro-consumer tools businesses use every day to compete for customers and help people stretch their budget.”
Supporters say the measure still allows pricing based on supply and demand, discounts and loyalty programs, but not based on individualized pricing from surveillance data.
