“Surveillance pricing” means riders pay more, drivers get less

Aim is to extract the highest possible price using intrusive personal data

Federal Members of Parliament appeared to be shocked by revelations about algorithmic pay processes as they were investigated at an Ethics Committee meeting on December 3rd.

McMaster University’s Vass Bednar spoke and answered questions at the meeting, as did George Wedge, president of the Rideshare Drivers Association of Ontario. Jonathan Hamel, spokesperson for Uber Canada, appeared by video teleconference.

Bednar is Executive Director, Master of Public Policy in Digital Society at McMaster University and Host of “Lately” from the Globe and Mail. She is also co-author of the book about competition in Canada titled “The Big Fix: How Companies Capture Markets and Hurt Canadians.”

“The use of these (algorithmic) systems and their terms are rarely disclosed to shoppers,” Bednar told Ethics Committee members, “though the aim is often to extract the highest possible price from them using intrusive personal data.

“This is sometimes called ‘surveillance pricing,’ that data is sometimes acquired directly through interactions with consumers and so, voluntarily shared or collected as sort of some of their exhaust right more often purchased through third party data brokers.”

Bednar went on to explain to Committee members how corporations have designed algorithms which will automatically adjust pricing after assessing a consumer’s potential for increased payment:

“Companies now know our intimate spending habits and can calculate our maximum willingness to pay…It requires the use of highly invasive data collection and personal identification techniques. Now, this kind of sophisticated price calibration, it’s happening much more often without any sort of consumer consent disclosure or labeling. I’ve also contributed to journalism covering some of the recent Uber price change called upfront ‘upfront pricing,’ which you heard about.”

*****

This article is part of Taxi News & Road Warrior News coverage of Canada’s federal Standing Committee on Access to Information, Privacy and Ethics. The Ethics Committee is investigating algorithmic pay processes and surveillance pricing and other emerging technologies in preparation to writing a report on the topic.