Aug 20, 2026
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Add us on GoogleIt’s late on a drizzly Friday night, and you and your friends are trying to book a rideshare service back to your place. So begins the research process, as all of you hit the rideshare apps and compare rates like they’re mortgages. It’s the same trip across all of your phones, but rates can vary widely among the group.
You’re experiencing dynamic pricing, pioneered by rideshare apps like Uber and Lyft. A Consumer Reports investigation found that rideshare prices among the lowest and highest pricing groups varied by a median of 42.4% for the same ride. In one test, an Uber ride in Florida would cost one user $98.95, discounted to $89.05. A minute later, a different user requested the same ride which would’ve cost $65.95 with no discount available.
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Rideshare apps are far from the only industry that participates in dynamic pricing. Airlines are well-known users of dynamic pricing, as well as ticket vendors like Ticketmaster, which came under fire for raising prices on Oasis tickets that were “in demand.”
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While dynamic pricing has been adopted by industries largely providing nonessential services and online retailers where prices are easy to change multiple times within the hour, advancing technology has made dynamically priced grocery stores a potential reality, which has come to the attention of lawmakers.
On Aug. 16, Sen. Elizabeth Warren posted across her social media pages warning against dynamic pricing. “If it’s hot out, the cost of ice cream could go up. If it’s cold, tea bags could go up. It’s a way for giant companies to squeeze you even more,” she writes.
Legislative moves on dynamic pricing
There’s currently no federal laws prohibiting dynamic pricing or its cousin, surveillance pricing, in which prices are tailored to an individual based on their personal data, like browsing history, previous purchases, and location. However, three bills have been introduced in the House of Representatives and one in the Senate since 2025 targeting surveillance pricing.
A handful of states have also started legislating against real-time pricing. Maryland became the first state to pass dynamic pricing legislation in late April, called the Protection from Predatory Pricing Act. The law, going into effect on Oct. 10, requires grocery stores to keep any price changes for at least one business day and bans the use of surveillance data to set individualized prices.
Connecticut and New Jersey subsequently passed laws banning surveillance pricing, though dynamic pricing remains legal under these laws, both taking effect in 2027.
As of August 2026, there are 26 states considering legislation relating to dynamic or surveillance pricing. New York’s state legislature passed a surveillance pricing ban in June, which awaits a signature from Gov. Kathy Hochul. While the act leaves dynamic pricing intact, the New York City Council is considering bills that would ban surveillance pricing and require grocery store price changes to remain unchanged for 24 hours.
“Nobody should leave work to find the price of eggs spiked for rush hour demand, or watch the price of milk change between the shelf and the cash register,” New York City Council Majority Leader Shaun Abreu said in a statement.
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Warren’s home state of Massachusetts has not introduced any bills that would ban either practice, but it has introduced a bill that would require merchants to disclose when prices are personalized using consumer data.
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Can dynamic pricing be beneficial for consumers?
On Aug. 18, the Wall Street Journal’s deputy op-ed editor Matthew Hennessey published an opinion piece that lambasts Warren for her post on dynamic pricing, writing, “How can anyone with a brain think the price of ice cream should never go up?”
Hennessey likens dynamic pricing to the menu items at a seafood restaurant that, in lieu of a fixed price, simply read “MP” or market price. “Ask your server. He’ll tell you what the market price is and you can make an informed decision,” he writes, implying that if the market price is too expensive for you, you can opt for a cheaper item on the menu. But, what is the alternative to grocery shopping?
There is an argument to be made in favor of dynamic pricing. A 2023 study on airline prices found that dynamic pricing resulted in a Pareto improvement, which means consumer welfare and airline profits both improved.
By increasing ticket prices closer to the departure date, leisure travelers who know their travel plans and can book early were able to access lower prices. Last minute bookings, generally made by business travelers, were more expensive, but these travelers were still able to access seats at a price they were willing to pay. In a competitive market, dynamic pricing improved consumer welfare by 3% while airline profits rose by 8%.
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Additionally, while dynamic pricing means that grocery stores can increase their prices, Hennessey notes, “they come down as well.” Data from Decodo confirms that retailers using dynamic pricing generally maintain a balance between price increases and decreases. Walmart and Target both saw slight downward biases in their price changes, 53% and 53.5%, respectively. Kroger, which came under scrutiny for its exploration of facial recognition in 2024, saw a slight upwards bias in its price changes, increasing prices 50.8% of the time.
John Zhang, a professor of marketing at the University of Pennsylvania’s Wharton School, told the Washington Post he’s confident that dynamic pricing will intensify price competition, “And ultimately, that the right people will benefit from the dynamic pricing, which means the people really at lower rungs of society that cannot afford to pay a lot.”
However, the 2023 study found that the lack of competition had the opposite effect. Dynamic pricing in a monopoly led to a 14% decrease in consumer welfare and an 8% increase in airline profits. The broader point the study makes is that market design, competition policy, and regulatory oversight will determine whether dynamic pricing is an improvement for everyone, or just the companies that employ them.
“Dynamic pricing is a powerful tool,” a blog post about the study by the National University of Singapore, reads. “Whether it serves the public interest depends entirely on the competitive conditions that surround it.”
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Paul Kim is a Brooklyn-based freelance writer and editor. He has spent much of his career in service journalism, helping readers make smart decisions, whether they’re looking for the best pet insurance or a great place to grab lunch.
