Ep. 266: “How Much Is Surveillance Pricing Costing You?”

“What the Hack?” is DeleteMe’s true cybercrime podcast hosted by Beau Friedlander.

Clip: How much is that dog in the window, the one with the waggling tail?

Beau: You and I might not be paying the same price for that dog in the window.

Clip: How much for George?

Clip: Price is 15 pounds, sir.

Clip: He says you’ve doubled his price because I look rich.

Clip: Pedigreed dog, sir. The price is 15 pounds.

Beau: It’s funny or old-timey, I guess, till it’s totally not funny or okay, and it’s happening in real time.

Chris: Let’s book the exact same hotel on the exact same night.

Clip: What’s the name?

Chris: La Quinta hotel, Denver.

Clip: Okay, $122.50.

Chris: $122?

Clip: Yeah.

Chris: My price is $84.

Clip: Wow.

Beau: Used to be prices were set on the spot. You look rich, you pay this. You look like you might leave. Then someone thought standard pricing was a better idea. You know, there’s a price tag on stuff, so you know. Then came big tech and a return to the good old bad days. You look rich, you should pay this. You don’t, you should pay this. Welcome to surveillance pricing, where everyone gets charged exactly as much as possible, and it’s figured out by AI inference, endlessly deep personal data files. They know exactly how much you’re willing to pay for something. And yeah, it should be illegal, but it’s not.

Clip: The Federal Trade Commission is seeking input on a proposed policy targeting [inaudible] called surveillance pricing. That’s when companies use your personal data, such as browsing history, location, or shopping habits, to set prices based on what they believe you’re willing to pay. The FTC cannot ban the practice outright, but it says businesses could violate the law if they do not clearly disclose personalized prices and the data used to set them. Chairmen Andrew Furguson says the agency will not hesitate to enforce the law.

Beau: I wouldn’t hold your breath for the FTC to move in and fix this right away, but I would definitely sit tight and listen if this surveillance pricing is news to you, because it could be costing you thousands of dollars a year. I’m Beau Friedlander, and this is What the Hack?, the podcast that asks, in a world where your data is everywhere, how do you stay safe online? How would you like me to introduce you? Are you Chris the Producer?

Chris: Yeah, sure. That’s cool. I guess I am now. I’m Chris the Producer.

Beau: But do you like Chris Parr or… I mean, I like him. I think he’s cool, but, like…

Chris: Let’s do Chris the Producer.

Beau: Chris the Producer has a channel on YouTube, and you can also catch him on social media. Chris, welcome to the show.

Chris: Hey, thanks so much for having me. I’m super stoked to talk.

Beau: First of all, the video that you released on YouTube about surveillance pricing was fun. And there’s nothing fun about the topic, so thank you so much for that video.

Clip: We’re all currently paying different prices for the exact same thing, and this is because of a brand new thing called surveillance pricing.

Chris: Yeah, I was pretty depressed afterward. I’m glad you had fun.

Chris Parr Clip: I had never heard of this before, but it’s like price tags are dead now, and even though 76% of people think it should be illegal, surveillance pricing is being used by more and more companies.

Beau: I have been depressed about surveillance pricing for a while.

Chris: You’re past that stage now?

Beau: I am like, it’s not too soon for jokes.

Chris: Yeah, sure, okay. Got you.

Beau: In fact, we need lots of jokes. But I don’t wanna just go diving into this. I wanna wade in. How did you get interested in surveillance pricing? Let’s back up a little bit. What’s your beat?

Chris: I really wanted to make videos about things happening in Minnesota. That was my goal. I made a video about this strange city called North Oaks, Minnesota. It’s the only private municipality in the country, and it’s also the only city in America that is not on Google Maps Street View. There’s a whole story about that.

Chris Parr Clip: Through a bizarre series of political maneuvers, one city in the middle of the country got erased. So because Google is legally not allowed to map the city, I’m going to get creative and try to finish the job myself and finally complete Google’s map.

Chris: But what I found out when making that video is that they really pride themselves on privacy, but they have Flock cameras. And I don’t know if you know much about Flock cameras-

Beau: We do.

Chris: They are a huge violation of your privacy. So that led me down the Flock camera pathway. I made a video about Flock cameras. Everybody’s making videos about Flock cameras now. And that kinda got me super interested in this world of surveillance that we live in.

Chris Parr Clip: We kind of already know that for decades corporations have collected our personal data to sell us targeted ads. But now that same data is being used with an AI algorithm to set the maximum possible price they think you’ll pay, and a different maximum price they think I’ll pay and a different price for my mom and your mom and a different price for every mom in America.

Chris: I found out about surveillance pricing. I actually work part-time for PBS on NewsHour. So I did a motion graphic on their story about surveillance pricing. It’s like three headlines with surveillance pricing. So it was like a year ago they were talking about this. I think they were the first big media entity that was talking about surveillance pricing.

Beau: Now is this when The American Prospect were covering it already?

Chris: Yes.

Beau: Yes. [inaudible] why they were doing it.

Chris: Exactly. I kind of logged it back and then I got reintroduced into this world of surveillance and I was like, “I wanna explore this.”

Beau: I wanna just start with some basic things we know about selling stuff. Like back in the day when you walked up to a retailer, there were often no prices on things. And the person selling to you might eyeball you and be like, “You look like you got a lot of money. It’s gonna cost you more,” right?

David: Yeah. I mean, that’s 19th century surveillance pricing, right?

Beau: This is David Dayen.

David: So yeah, there were no formal price tags, and your appearance or your desperation to want to buy or need to buy that particular product would dictate what you were charged for it.

Beau: David Dayen is the executive editor of The American Prospect. He has been a contributing writer to Salon.com, The Intercept, the New York Republic and Fiscal Times. He’s also written for The New York Times, Vice, a lot of places. Now he and antitrust researcher Matt Stoller started a podcast called “Organized Money” not that long ago. It’s really a great listen. And David’s most recent book is “Monopolized: Life in the Age of Corporate Power.” It’s published by Andre Schiffrin’s, in my opinion, legendary publishing house called The New Press. David, welcome to “What the Hack?”

David: Thanks for having me on.

Beau: Let me go back to the time when there weren’t price tags. 19th century, you paid whatever the seller decided to say you were paying, basically. But you could also push back, haggle. Commerce was a dance. How did we get from that dance to standard pricing?

David: John Wanamaker, who was a Philadelphia retailer and Quaker, decided actually it would be more fair if we gave a uniform price to everybody, and that we listed it right on the product on a price tag. And that was really, this is like the 1860s, 1870s, that was the first real instance of the price tag, and that held for a long, long time. And now we’re kind of reverting back to the past in some ways, where there are individualized prices for individual people.

Beau: So we’re familiar with different prices for senior citizens and different prices for students. We’re familiar with the fact that…I think most people are familiar with the fact that car dealerships may have a price that’s advertised that’s different from the price you might be able to walk out with, and other things like that. Are we living in a kind of mechanized version of something is only worth as much as a buyer is willing to pay for it?

David: Yeah. I mean, I think there are, as you say, key product categories where the price has varied. What you’re talking about with happy hour or senior blue-plate specials or things like that, that’s been generally accepted among broad categories. I think the difference with surveillance pricing is that it is not about we want to do something for seniors or we want to do something for students in a broad way, but it’s about an individual look into your personal characteristics and then setting prices based on that. That is true to an extent maybe; car dealers is a whole other world where there’s upselling and a whole lot of shenanigans that go on that maybe look as much to the past of the pre-price tag days as any other product that we purchase. But generally, the new innovation here is that these characteristics which we sort of give freely through surveillance marketing, through the use of our cell phones, through any number of ways in which information is extracted from us is then used against us. I think because of the sort of anger that that generates among people, this has become a very provocative topic.

Beau: Okay, so just like you thought, there’s a whole lot happening behind the velvet curtain in Oz, and it’s not what it seems on the surface. And by “it” here, I mean the way things are priced, or better yet, how super complex models using your personal data and AI figure out the maximum amount that you can be charged. It’s just like the 19th century. You look rich or desperate, pay more. But with your personal data providing the basis of decisions, there’s no way to know what’s causing prices to go up or down. How much did it cost to make or how much time did it take to create it or produce it or grow it? None of that matters. Coming up, we’ll hear how this weird pricing quagmire could affect you. Okay, so, surveillance pricing or personalized pricing. Which do you prefer?

Grace: I think either work.

Beau: This is Grace Gedye.

Grace: I think no matter what, you need to explain that concept a little bit.

Beau: Grace Gedye is a policy analyst at Consumer Reports. She focuses on artificial intelligence and issues including algorithmic bias, accuracy, independent testing, safety, impersonation. You know, our topic today is surveillance pricing or personalized pricing. If you’re actually at a company that does it, I think they like that euphemism, but for me it’s a little Orwellian.

Grace: Surveillance pricing gets at the fact that your data is all being gathered, maybe without your knowledge, and that companies know quite a lot about you. So I think that’s a useful concept to convey.

Beau: And personalized pricing, for me, it sounds like what you do to a birthday cake at Carvel. I don’t know if I date myself there. But anyway, it’s like “happy birthday Grace” or “Beau,” not what we’re talking about here. So before we get into it, I think we should talk about normal pricing. We’re talking about the way companies decide what to charge us for various things, and that can be staples, things that we all buy or most of us buy, like gasoline or electricity or bottled water. And so supply and demand is simple. You have a truck full of strawberries, and there’s another truck right behind it. Strawberries are cheap. You have a pickup truck full of strawberries, they’re not so cheap. Do you agree with that basic premise?

Grace: Yeah. I think companies gather a lot of inputs on how they try and monitor demand, but overall, monitoring market demand and then pricing accordingly is the basic way of doing pricing.

Beau: Now, that’s different from price gouging. Price gouging, we’re all familiar with the term. It means that there’s a shortage of something and it requires an immoral person, right? It’s not everybody. When there’s price gouging, you don’t go to every store and everybody’s charging $5 for an N95 mask, as we experienced during COVID. But there were people who were charging huge amounts of money for a 25 cent mask back then. That’s price gouging. Then we get into something called dynamic pricing. Is dynamic pricing, Grace, a euphemism for price gouging or is it something else?

Grace: Not necessarily. Dynamic pricing is kind of a more capacious term. A lot of folks working in this space generally mean by dynamic pricing: pricing that changes for everyone, perhaps quite rapidly over time, not necessarily always rising to the level of gouging. Often price gouging is happening in a situation where the demand is extremely acute for some reason, whether some natural disaster is happening that’s creating really intense need for a product. Whereas dynamic pricing might refer to just much more rapid shifts in pricing due to a whole bunch of demand signals.

Beau: And that can be a price that goes down because maybe something’s not selling, and a price that goes up because they think that there’s gonna be demand for beach balls in the middle of August.

Grace: Totally. Or a lot of airline pricing—we’re used to seeing different prices on different days, even if you’re many months out from your trip. And so that’s kind of an example of dynamic pricing.

Beau: Pricing is a piece of the puzzle. Is it different from personalized pricing?

Grace: Yes. You could have the two strategies happening at once, but generally, dynamic pricing is the price for everyone fluctuating perhaps quite rapidly over time—seeing a different price when you refresh the page or when you check back day to day. Personalized pricing would be, Beau, you and I looking at the same product at the same time and seeing different prices based on something the company knows about one or both of us. So maybe it’s the fact that I’m searching from a Mac or my current geolocation, which they have from my phone, or the fact that I just searched their competitor’s products, which are priced more highly, or perhaps they have an inference about my income or my family size. If they’re changing the price based on factors like that and the two of us are seeing different prices for the same exact good at the same time, that would be personalized pricing.

Beau: Okay, so dynamic pricing, that’s just a price that sort of changes for a variety of reasons. It’s not necessarily unethical, it’s just reacting to market forces. Does that include surge pricing for services like Uber and Lyft? Because we’ve all had that experience where it’s rush hour. I mean, maybe we haven’t all. I do realize that there are listeners that live in places where you have a car and if you order an Uber it takes 16 hours. But in metropolitan areas, if you order an Uber during certain times, you’ll see very clearly in the app it’ll tell you there’s surge pricing, and that surge pricing could be considerably more. Friday night at 11:00, you might see that a trip that cost you $20 is gonna cost you $100.

Grace: I would consider surge pricing a subset of the kind of broad category of dynamic pricing tactics.

Beau: Why is that?

Grace: Because it’s still fundamentally changing prices for everyone more rapidly over time. Surge pricing might be quite rapidly over time. Whether or not consumers object to it, I think has somewhat to do with what we’ve gotten used to, right? So while we may be used to the ride from our office to our home if we regularly request a rideshare fluctuating and being different every single day, we might not expect our grocery prices at the aisle to change hour to hour. We’re just not used to it, and if that were rolled out, people might push back.

Beau: Right. So, surge pricing is just a form of dynamic pricing, and the reason it is is because it applies equally to everyone who’s looking for a car at that moment on that app. Now, I’m not a real fan of personalized pricing, so I call it surveillance pricing. What side of that coin do you fall on?

Grace: In terms of which term to use?

Beau: Yeah, which one do you use? Are you a surveillance or are you a personalized person?

Grace: I think I often start with surveillance pricing, because it conveys that sense that it’s based on information that’s been gathered about you likely without your knowledge.

Beau: And so when Chris set out to make a video, it was surveillance pricing that was still stuck in his mind, not personalized pricing, not the euphemism, and he wanted to put it to the test.

Chris Parr Clip: We’re going to buy the exact same product from the exact same store.

Beau: In his video, Chris the Producer runs a simple experiment with his best friend and his brother.

Chris Parr Clip: Go to Target and then buy Spam. How much is it?

Chris Parr Clip: $4.99.

Chris Parr Clip: My price is $4.59.

Chris Parr Clip: That’s bull[BEEP], dude.

Chris Parr Clip: We’re going to order the exact same ride scheduled for tomorrow at noon.

Chris Parr Clip: From where?

Chris Parr Clip: We’ll do it from Target Field to the airport.

Chris Parr Clip: Here’s my prices. $36.94 for the Uber X.

Chris Parr Clip: Mines $52.95. That is a 30% difference in price.

Chris Parr Clip: And for what? No difference.

Beau: And then with his mom.

Chris: Let’s book the exact same hotel on the exact same night.

Clip: What’s the name?

Chris: La Quinta hotel, Denver.

Clip: Okay, $122.50.

Chris: $122?

Clip: Yeah.

Chris: My price is $84.

Beau: Your video demonstrated in a way that anyone can understand the way that data brokers piece together a dossier and then decide, the term of art is infer things about you, right? So there’s this inference model. Were you getting that technical? Were you thinking like, “I’m going to figure out what the AI inference model is regarding this or that consumer?” How did you enter into it?

Chris: I don’t know anything. I just wanted to explore this world and I present it in a way that I could understand it. If I can understand it, anybody can understand it. I didn’t anticipate getting into the weeds on things. And man, you could do multiple feature length documentaries about how data brokers collect and infer things about you, for sure. I mean, I wanted to kind of put this surveillance pricing system to the test. So I compared prices with my family and friends. Those were all different. I became a new person, which sounds kind of crazy. I’ve always wanted to do that. Turns out it’s super illegal to get a new Social Security number. I don’t know, maybe it’s possible.

Beau: It’s super illegal. You can do it.

Chris: Okay, sick. Cool. We can talk offline if you-

Beau: I can, but I’m not going to.

Chris: Anyway.

Beau: There are places where you can create something that’s similar to having your own Social Security number, and that’s what you did, right?

Chris: Yeah, so I mean, really I wanted purchasing power. I wanted a credit card. So if I created a new LLC, I could get a credit card under that name. And using the Wyoming corporate loophole, you can hire someone to create an entity for you. So I got a credit card that way, and I got a new smartphone, the cheapest smartphone available at Walmart.

Beau: And that was registered to the LLC that you had set up for you in Wyoming under the name of Frank Reynolds.

Chris: Yeah. So I got a credit card that way, and I got a new smartphone, the cheapest smartphone available at Walmart. It’s crazy what you can get for $20. Actually it’s behind… I don’t know.

Beau: Show the phone because I know-

Chris: Yeah, I’ll grab it actually.

Beau: The brand was TracFone and with all things inexpensive or free online, you always know that that’s where you’re giving up the most data.

Chris: Yes. Yeah, so that was a little part of it. Yeah, for sure.

Beau: And it’s ironic the phone was actually called TracFone. They’re not even…they’re saying the quiet part out loud.

Chris: Yeah, I know. It’s pretty crazy. But this is the phone.

Chris Parr Clip: Excuse me. I’m just looking for the cheapest possible smartphone. Oh, $20? $19 for that one? I headed to the lowest income zip code in Minnesota to activate my… or actually, to activate Frank’s phone. And fortunately, it’s right next to where I live, so I guess that’s a good thing for this. So I got a parking spot right next to this place called Hard Times Cafe. They have really good biscuits and gravy. Anyway, I activated the new phone and opted in to all possible tracking options. We are going to give this phone access to everything that we are doing, our location, our app usage, our battery, absolutely everything.

Beau: So you got the phone from Walmart, the TracFone, and then you with the phone, started to make purchases, or…

Chris: So the first thing I did was I just compared prices with myself. I went onto Instacart and tried to buy the same pack of diapers from the exact same Target, and the TracFone price was actually higher than my phone price. I think it was like $6 more expensive on the TracFone. I’m like, “What? I just went through all this stuff just to get a higher price? That’s ridiculous.” As we talk about this, I don’t know why prices are set the way they are.

Beau: Right, why it would be higher for a $20…

Chris: Yeah.

Beau: Cause you’d think a $20 phone would signal to everybody like, “I don’t have a ton of money.”

Chris: Yeah. So I don’t know. But I knew that I had to take it further and I’m not necessarily the best person to improvise and become this new person, Frank Reynolds, which is the name of the LLC. So I hired an improv guy and I gave him the credit card, and I gave him the TracFone, and I gave him a little bit of direction. His name’s Comrade. He’s an improv, stand-up guy in Minneapolis. And he took it, and he ran with it.

Comrade Clip: Hello, Comrade Tripp here. I’m still here in Minneapolis.

Chris: I actually knew of Comrade just from, like, I enjoy going to see stand-up and stuff, so I knew of him. I reached out to him and was like, “Would you wanna do this?” And he said, “Yeah, sure.” I just told him I want you to become this new thing, Frank Reynolds, and try and get a good deal for me. I was like, I could explain it on the phone better or…basically saying can I call you, and he’s like, “Nah, we’ll just meet at the park. I got it.” I was like, okay, whatever. And he was great, man. He did it. He nailed it.

Beau: One of the things that was so interesting about him was that he seemed to have a really good instinctual understanding of how to mess with the system.

Chris: Yeah. I think he has a little bit of like “F the man” mentality for sure. So he maybe has been thinking about this for a bit.

Beau: What was the phrase that you used? Not a likely buyer?

Chris: “A low intent to purchase.” That actually is the direction I gave. That’s the one piece of direction I gave him. For four hours he took the bus to Dinkytown here in Minneapolis, which is where-

Beau: Is that a real thing?

Chris: Yeah, Dinkytown. It’s kind of where I live. It’s where the University of Minnesota is, so a lot of college students live there. You’d have to ask him, but I feel like he went there because college students have a low intent to purchase things. Like, I don’t know about you, but when I was in college, I was super cheap, super frugal. So that’s geolocation. They’re tracking this phone. I turned on the tracking and everything, so they know that he’s in Dinkytown. He took the bus there, but he didn’t pay for the bus. He downloaded the app. In the eyes of data brokers, they can see that he downloaded the app, got from A to B, but didn’t buy a ticket, signaling that he has a low intent to buy things. He went to McDonald’s, he went to Starbucks, he went to Great Clips even though he’s bald, and didn’t buy anything. The only thing he did buy was a single banana at Target and gave it to an unhoused person on the street, which was a boss move. For four hours he kinda just walked around and did a bunch of stuff. And then we tested our prices after.

Beau: Comrade Tripp—first of all, I’m like, oh my gosh, I’m in love. What a guy.

Chris: I can hook you up.

Beau: Well, I’ve got a partner, but maybe at some point…

Chris: As friends. Yeah.

Beau: We’re both bald. I mean, we could just like rub each other’s heads. Oh my gosh, I’m really going way too far here.

Chris: I love it.

Beau: Comrade… Me too, actually. All right, if you’re hearing this, Comrade Tripp, open invitation to Fairfield County, Connecticut, and you can touch my bald head as long as I can touch your bald head. Comrade Tripp was such good casting. In the video you’re like, “Well, I put an ad out on Craigslist to get somebody to do this part,” and I was like, “Sure you did. You just called your friend Comrade Tripp up ’cause he’s so cool.” But you really got him through the Craigslist thing?

Chris: You’re right and wrong. I made a Craigslist post and I got so many responses, but nobody…I don’t know, like nobody was quite perfect. So I reached out to a couple people and Comrade was one of them, and I sent him the Craigslist post. I can’t even remember how I contacted him, like Instagram or something.

Beau: So this was a one-day experiment. He went around with a low intent to purchase, and he just gamed these places.

Chris: You say one day, but that is infinity to Frank Reynolds’ life, you know? I had just activated the phone that morning.

Beau: He did not otherwise exist.

Chris: Yeah, so I have 33 years of data on myself. If I were to go and do that, it would be a drop in the bucket of data on me, and it probably wouldn’t impact the price that I get served on any of these e-commerce sites. But for Frank, that is the entirety of his data profile, whatever profile that these data brokers are creating on him. That defines who he is—that four hours, you know? So it is significant.

Beau: Coming up, does any of this actually move the price? Does “poor” Frank Reynolds, college student in Dinkytown, give you a discount? What about the richest zip code in Minnesota? Does that change the algorithm? Stick around. Okay, Chris, before Comrade Tripp was running around pretending to be Frank and creating a whole new data set for data brokers—a totally stingy one, a actually brilliantly stingy one—you decided to try and buy some things to get a baseline price to compare your prices against Frank Reynolds.

Chris: Yeah. We tested a few things. The biggest price difference was we tried to order an Uber at the exact same moment going to Union Depot in St. Paul. It’s like a 20 or 25-minute ride. And Frank Reynolds’ price, Comrade’s price, was cheaper than mine. I think it was like 11% cheaper than the price that I got on my phone. Literally, we’re sitting next to each other ordering this Uber at the exact same instant, and it’s 11%. Imagine if every price was 11%. That is an enormous amount of money across every person that orders Uber.

Beau: Imagine that same 11% applied to every DoorDash order, every Instacart order, every Amazon purchase, every who knows who else is doing surveillance pricing right now. But let’s go a little farther down the rabbit hole in this experiment.

Chris: Everything that Comrade did in Frank Reynolds’ name was like he appears as though he’s low income. I thought that would get the lowest price. My thought was if someone were to go from super low income to high income, you as a business want that as a customer, right? ‘Cause suddenly they’re high income and they have money to spend. So my thought was they’re gonna give you a discount if I were to suddenly become high income. But I didn’t really know how to look like you’re high income when I’m not high income. North Oaks is the wealthiest city in Minnesota per capita. The average home is worth a million dollars in North Oaks, which might not seem like a lot to other people, but in Minnesota, that’s a lot. That’s a really nice house, right?

Beau: This is the same city that erased themselves from Google Maps?

Chris: Yeah, and the only way to get in there is if you live there or if you’re an invited guest. So you’re either wealthy or invited by a wealthy person.

Beau: Is there a gate around this whole thing?

Chris: There used to be a gate. The residents I think just didn’t wanna deal with the gate opening, so they took the gate out. It really confuses people ’cause it looks like you can just drive on in there, but it’s super illegal if you do that. So there is no gate, but when you pull up to the entrance of North Oaks, there are these Flock cameras, there’s like four of them on each entrance. Every entrance to the city is super intimidating.

Beau: So North Oaks isn’t on any Google Maps, but presumably you can see it from Google Earth?

Chris: Satellite images exist of the entire planet, including North Oaks. Yeah. But the Google car could not drive into North Oaks because it’s not allowed in, ’cause it’s private. You have to be invited to go in there and the Google car, actually, it’s an interesting story. They did put it onto Google Maps, and the City of North Oaks sent a cease and desist to Google. So the wealthiest city in Minnesota versus Google. Boom. Google was like, “All right. You’re right. We shouldn’t have done that,” so they took it down.

Beau: But that’s the way it should be everywhere.

Chris: And you know what? It was a process for me to get there, but I agree with you. At the time of making the video, I thought it was unfair that they weren’t on Google Maps, and I was.

Beau: Yeah, it is.

Chris: So that was my mission to right the wrong and put them onto Google Maps. But actually, I was wrong. I shouldn’t be on Google Street View. Nobody should be on Google Street View. That is my ultimate takeaway from the whole thing.

Beau: Yeah. The old way of looking at it is just like, “I’m getting abused, so should you be.”

Chris: Yeah, for sure. An eye for an eye ain’t the right way, man. I learned that after making that video, for sure.

Beau: North Oaks is the future of the internet. Let’s all be not.

Chris: Yeah. Anyway, so I figured if I were to get into North Oaks, I’d be perceived as being high income—a pretty surefire way to look like you’re high income, just geolocation-wise. In the video I made about North Oaks, I attempted to put it onto Google Maps. If I launched my drone from public property outside of North Oaks, which I can launch a drone from, and fly it into the unrestricted airspace, and then fly it into the airspace above North Oaks, that’s totally cool. The FAA regulates the airspace. North Oaks’ property is different from the airspace above it. So I just did the same thing. I attached the phone to the bottom of my drone with a phone mount. It was really kind of taxing on the drone, but I got it up outside of North Oaks, flew it into North Oaks. I called the phone and gave it remote access to control it so I could control it from where I was sitting in my car outside of North Oaks. So technically, my phone was in the airspace above North Oaks, but a data broker doesn’t know it’s in the air, right? DoorDash doesn’t know it’s in the air. So I tested the prices from the drone, which was inside of North Oaks, and where I was sitting outside of North Oaks. And you’ll find out the results next week. No.

Beau: No way. So you’re sitting outside of North Oaks. Geofencing would say if you’re outside of it, data brokers can see you’re outside of it, so you’re not wealthy. If you’re inside of it, you might be.

Chris: Harsh but true, but this was like, ultimate despair moment that I talked about earlier. The prices inside of North Oaks were even cheaper than outside North Oaks, even cheaper than every other test I’d done before that. We ordered White Castle through DoorDash and the price inside of North Oaks was like $8 cheaper, literally 300 feet away from where we were sitting, for the exact same White Castle- And it was pickup, so there was no delivery charge. They’re just going to be obviously maybe a higher-

Beau: $8.

Chris: Yeah, for pickup, for the exact same Crave Case order at White Castle. And just to be clear, we used DoorDash, so the price difference I believe is due to DoorDash being the middleman between the purchase, not necessarily has anything to do with White Castle.

Beau: DoorDash is like Uber and Lyft and other companies that are known to have used what they call personalized pricing, surveillance pricing. It’s Orwellian speak that it’s personalized pricing.

Chris: Yeah. And I knew that going in, that DoorDash has a higher propensity to change prices. It wasn’t super scientific. I knew that would have a better chance of changing my price on me, so therefore I used it.

Beau: Now, the folks who live in North Oaks probably qualify for better mortgage rates when they’re buying a house than folks who live in Dinkytown.

Chris: Maybe, I don’t know.

Beau: Well, they would. I mean, if you have better credit…

Chris: Oh yeah, sure.

Beau: You’re gonna get a better mortgage, and I’m just wondering if that’s how this works. The richer you are, the better prices you get. Did you get any correlation there?

Chris: From one data point I did.

Beau: Done. Nobel prize.

Chris: To be honest, my drone battery gets depleted so fast, and it was like 95 degrees that day and we’re sweating. I mean, I could go back and keep testing this thing over and over again. There’s been data that supports that wealthier people get better deals than not as wealthy people. I only had the opportunity to test a finite amount of things during our flight.

Beau: I know some of these companies will say, as they have, that prices are random and they’re just experimenting. It has nothing to do with income level or where you live or how much you’ve paid in the past or whether you’ll pay more if they keep charging you more. But they’re tracking all of it. They’re tracking all of it, and you should be concerned. So what’s the takeaway for people? You did this thing and what’s the takeaway?

Chris: We’re kinda getting screwed right now and we gotta do something. I don’t know what, but we gotta do something. I feel like people are pretty motivated. I’ve gotten a lot of people reaching out to me like, “Oh, I’m building something.” It’s great. I think the government needs to get motivated to do something, and people need to get motivated to do something ’cause our data has been collected for decades now at this point, and it’s been incrementally used against you more and more. I really think we’re at a boiling point now. You’re asking me for a specific call to action. I don’t know what it is. We gotta do something.

Beau: Your video is called “How I Tricked Big Tech’s AI Pricing Algorithms to Save $8,793.”

Chris: Yeah. I’d have to get out a marker here, but if you save 19% on everything that you purchase online, I crunched some numbers when I was making this title. When I was doing that, I hastily cut it from the end of the video and instead made the direction like, “Oh, government is working on this.” So that was a scene that was cut where I calculated if I were to have every purchase save 19%, which is the discount that I got from inside of North Oaks, it would be $8,273.

Beau: Wow. So to trick big tech’s AI pricing algorithm, you need to make it think you’re loaded.

Chris: Yeah. Or just be loaded.

Beau: That’s a movie, but also it’s part of the movie where they sneak into the swag room at some Hollywood debut, you know, premier.

Chris: Yeah, actually, that’s the call to action: get rich. Get super rich.

Beau: Right, you heard it here first. Get rich if you wanna save money.

Chris: Yeah, there you go.

Beau: Thanks, Chris.

Chris: By the way, just so everybody knows, as an American, you have a right to know and access the data that data brokers are collecting about you. Every data broker has a button that’s like, “Here you go. Click this button, fill out your information, and we’ll send you your personal data that we have on you.” Man, you wouldn’t believe how difficult it is to actually pursue that.

Beau: It’s wicked hard.

Chris: Have you done that?

Beau: Yeah, DeleteMe, which does removals, has a DIY section. If you don’t wanna pay for the service, there’s a DIY section and it explains how to do each one. But if you did each one, that’s all you would do.

Chris: Oh, man.

Beau: Okay, so in the next episode, we’re gonna be talking to Grace Gedye from Consumer Reports again, and also Derek Kravitz from Consumer Reports, who’s an investigative reporter and has been digging into the question of surveillance pricing and what it actually means for consumers. We’ll get into what companies are saying that they’re doing, what researchers and regulators and investigative reporters are looking for and what they’re finding, and what we actually know about how these pricing systems work, ’cause there’s not a lot of visibility into it. We’re also gonna talk to David Dayen from The American Prospect, and we’re gonna go really deep into the whole backscape of what’s going on here. And if all that sounds a little dystopian, well, welcome to this version of The Hunger Games, I guess. To give you a little taste of what’s coming, here’s David:

David: Do we want a world in which you have to pay a premium if you want to shop anonymously? This is about taxing people who don’t turn over their data and manipulating people who do.

Beau: Come back for next week’s episode. It’s gonna be a doozy. And now it’s time for the tinfoil swan, your paranoid takeaway to keep you safe on and offline. This week’s tip is simple as can be. I’ve told you to do it for different reasons, but here I’m gonna give you some specific instructions. Turn off location access for retail and shopping apps on your phone. Turn it off. Surveillance pricing works best when a company can connect what you’re shopping for with signals about you: where you are, where you go, and potentially what kind of customer you seem to be—whether you’re high intent or low intent. Location is one of the most valuable signals for these companies, and you can easily cut it off. On an iPhone, just go to Settings, then to Privacy and Security, Location Services. For shopping, delivery, travel, and retail apps that don’t really need your location, set it to “Never.” Never. For ones that do sort of need it, try to set it up for “While Using the App,” but turn off “Precise Location” ’cause you can do that. For Android phones, go to Settings, Location, App Location Permissions, then go through all the same things: shopping, retail, travel, food delivery, yada, yada, and hit “Don’t.” Right? “Do not allow” unless they genuinely need your location. For apps that need location sometimes, choose “Allow only while using the app,” and where available, switch “Use precise location” to the off position. On a Samsung, it’s basically the same. Go to Settings, Location, App permissions. This is a concrete thing that you can do today that reduces the data available for surveillance pricing without requiring you to stop shopping online. It’s also a way to push back because if enough people do it, these companies are gonna realize that people are aware of it, and it will affect their compliance when the FTC eventually passes a law that makes what they’re doing illegal, and they begin to start counting the beans as to whether it’s worth them doing the thing and paying the fine or whatever, which is the other part of this. So we’re not gonna get involved in the whole enforcement side of things. It’s above our pay grade, definitely mine. But there is something you can do. I suggest you do it and come back next week if you would like to be scared further. As ever, if you like the podcast, would you please rate and review it wherever you’re listening? It helps people find the show. See you next week. What the Hack is produced by a bunch of people. I’m one of them. Andrew Steven is another and Sarah H helps out enormously from time to time. We’re available wherever you get your podcasts. If you are a regular listener to the show and you don’t use DeleteMe already, I want to tell you, you should. If you’re not and you want to, here’s what to do. Go to joindeleteme.com/wth, that’s joindeleteme.com/wth and get 20% off. I kid you not, 20% off. That’s joindeleteme.com/wth.

Learn More:

• Read our article that covers surveillance pricing and why personalized pricing is a lie.
• Visit Chris Parr’s YouTube channel to learn more about how surveillance pricing works and other topics.
• Listen to more from What the Hack.