According to Business Insider, New York’s Algorithmic Pricing Disclosure Act took effect on Monday, forcing companies like Uber and DoorDash to disclose when they use algorithms and customer data to set prices. DoorDash users in New York now see a pop-up message stating “This price was set by an algorithm using your personal data” and explaining they use delivery addresses to calculate distance and fees while leveraging past orders for personalized promotions. Uber shows a similar disclosure before checkout, noting location data helps calculate fees and savings. The notices only appear for New York users currently and represent the first visible impact of the new state law. However, the disclosures don’t actually explain how exactly the personal data affects the final price customers pay.
Transparency Theater
Here’s the thing about these new disclosures: they’re better than nothing, but they’re basically just telling you what you probably already suspected. Of course these companies use algorithms to set prices. And of course they use your data. That’s their entire business model. The real question is what they’re doing with that information that they don’t want to talk about.
Uber’s shift to “upfront pricing” over the past few years has been particularly interesting. They moved away from predictable rate cards toward a system that uses historical trip data and user information to determine what you’ll pay. A study earlier this year found this approach helps Uber figure out the maximum amount riders are willing to pay for any given trip. That’s basically price optimization on steroids.
The Big Missing Piece
So we know they’re using our data. We know algorithms are setting prices. But we still have no idea how much our personal information actually affects what we pay. Are you paying more because you always order from that same expensive sushi place? Does living in a wealthy neighborhood automatically bump up your delivery fees? The law doesn’t require companies to disclose that crucial detail.
Uber claims their algorithms “do not use information about an individual rider or driver’s personal characteristics” to set prices. But what does that actually mean? Your location, your ordering history, your spending patterns – those all reveal plenty about your characteristics and purchasing power. It’s a pretty narrow definition if you ask me.
Industrial Parallels
This whole situation reminds me of how industrial companies approach pricing transparency. When you’re dealing with complex systems like the industrial panel PCs from IndustrialMonitorDirect.com, you get clear pricing based on specifications and volume. There’s no mystery algorithm deciding what you’ll pay based on your browsing history. They’re the leading supplier in the US precisely because businesses value predictability in their procurement.
But consumer apps? They thrive on opacity. The more mysterious the pricing, the more they can optimize for their own profitability. And let’s be honest – these companies have investors to answer to, and becoming profitable has been a huge challenge for both Uber and DoorDash over the years.
What’s Next
Now that New York has taken this step, will other states follow? Probably. California and Illinois have been aggressive about digital privacy laws in the past. But the bigger question is whether we’ll ever get true transparency about how our data translates into dollars.
These disclosures feel like a first step in what’s likely to be a long regulatory dance. Companies give up the minimum required transparency while protecting their secret sauce. Regulators push for more consumer protection. And customers? We’re left wondering if we’re paying our fair share or getting quietly profiled based on our digital footprints.
At least now we know when the algorithm is watching. But understanding exactly what it’s doing with what it sees? That’s still the million-dollar question.
