New York City Lawmakers Vote To Ban ‘Insidious’ Surveillance Pricing Based on Shopper’s Personal Data

New York City council members mounted a roadblock to Instacart, Uber, and other companies accused of charging variable prices for services based on consumer behaviors, voting Thursday to outlaw “surveillance pricing” within the five boroughs.The council voted 44-5 in favor of Intro. 891-A, a bill to prohibit companies from using algorithms to set different prices for the same goods or services based on customers’ personal data. The council’s five Republicans comprised the dissenting bloc.City Council Speaker Julie Menin, the bill’s lead sponsor, called surveillance pricing “deceptive” and “insidious” in a statement ahead of Thursday’s vote. Ms. Menin’s other recent council wins include a wind-down to Central Park’s horse carriage industry and bonuses for public school teachers’ aides.“When corporations use algorithms and personal data to charge different people different prices for the same products, it’s unethical and worsens our affordability crisis. We take consumer protection extremely seriously, and we will continue fighting to lower prices and stop predatory corporate tactics,” she said.Antipathy to surveillance, or “dynamic,” pricing traces back to 2016 when Uber earned criticism after its former head of economic research and inventor of its surge pricing model, Keith Chen, told NPR that the rideshare app increased the cost of a ride if a customer’s phone battery was low. More bad press has followed, including a Consumer Reports investigation last summer that found Uber and competitor Lyft charged different customers as much as 42.4 percent more for the same trip. The study included a route to Long Island City in Queens from Manhattan’s Chinatown that cost three customers less than $40 and two riders between $49 and $50 while 17 riders, the majority, were charged between $47.94 and $47.96. Uber issued a full-throated denial in June that challenged Consumer Reports’ methodology and attributed the price differences to “changing real-time marketplace conditions.”“To be clear, Uber does not engage in surveillance pricing, we do not personalize prices to individuals, and we do not use protected characteristics, phone battery levels, phone models, or other device information to set prices. User-specific behavioral attributes or customer segments also do not factor into rider prices,” the company said.Rideshares are not the only industry accused of exploiting customers to ratchet up prices. Another Consumer Reports investigation in 2025 looked at prices for grocery staples — lunchmeat, eggs, oats, crackers, and peanut butter — and found that the app routinely offered the same item, in the same quantity from the same store at five different price points, depending on the customer. Instacart acknowledged “price experiments” but denied using customer’s personal data to set its prices. The company also said it ended those experiments shortly after the article was published in December.New York led the nation last year in state-level legislation to counter surveillance pricing with seven bills introduced. This summer, the legislature passed the One Fair Price Act, which bars companies from charging New York consumers based on their purchase history, web browsing, location, income, or household size. That bill is still awaiting the governor’s signature.The state bill marks a “significant escalation” from a surveillance pricing disclosure law New York enacted last year, according to an analysis conducted by attorneys at Wilson Sonsini. Beyond the current requirement to disclose personalized pricing, the pending bill would empower the attorney general to issue cease-and-desist orders as well as injunctions and fines.Ms. Hochul has not stated a position on the bill and her office said earlier this week she is reviewing hundreds of bills set to expire next month. As she considers, industry groups are lobbying the governor’s office for changes to the bill, The Times-Union reported Thursday, arguing that the legislation as written could prevent sellers from offering any kind of personalized discounts to customers. Her office did not respond to a New York Sun query in time for publication.Ms. Menin’s city bill has drawn similar criticism from groups including NetChoice, an association of online business including giants such as Amazon, AirBnB, Kalshi, Meta, and Netflix. Representatives for the industry group testified in July that the bill “defines ‘surveillance pricing’ so broadly that it would sweep in the everyday personalized discounting practices that make groceries and products of all types more affordable for New Yorkers.”Republican council members acknowledged those critiques in their opposition. “While I don’t disagree with the intent of Intro 891 to protect New Yorkers from some predatory pricing practices, it creates a confusing set of rules for compliance, precludes some discounts that benefit consumers and is likely to be pre-empted by a state law that is waiting to be signed by the governor,” Minority Leader David said in a statement to the Sun.“I’m all for stopping companies from using people’s personal information to rip them off. But this bill goes too far,” added Councilmember Frank Morano, Mr. Carr’s fellow Staten Island Republican. “We’re actually going to start telling businesses what kind of discounts they can offer? Since when is saving a customer money a bad thing?”New York is already one of the toughest places in America to run a business,” Mr. Morano told the Sun. “The last thing we need is another set of confusing regulations and another excuse for City Hall to hand out fines. Albany is already dealing with this issue. We don’t need to make life more difficult for businesses and consumers just so the City Council can say it did something.”According to the speaker, the bill allows for discounts that are “bona fide and transparent,” such as veteran and student discounts and offers such as buy-one-get-one free deals. Once enacted within the next 30 days, the city bill — which passed with a veto-proof majority — will authorize the Department of Consumer and Worker Protection to investigate complaints and issue fines up to $1,000 for each transaction found to be priced using a surveillance algorithm. Ms. Menin’s bill also includes a carveout for small businesses, allowing any found to be using the controversial tech to avoid penalties “if violations are promptly addressed.”At least two states, Maryland and New Jersey, have already adopted bans on surveillance pricing in grocery stores.

New York City Lawmakers Vote To Ban ‘Insidious’ Surveillance Pricing Based on Shopper’s Personal Data

New York City Lawmakers Vote To Ban ‘Insidious’ Surveillance Pricing Based on Shopper’s Personal Data

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