How companies are using AI to set individual prices

Straight Arrow / By

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Companies often reward loyal customers with perks like coupons, exclusive deals or features other customers don’t get. But a new pricing practice is scrambling that logic. Instead of a predictable reward for loyalty, some customers are finding their price has quietly shifted, and they have no way of knowing why. 

It’s called algorithmic pricing. It uses artificial intelligence to track a user’s data to determine what they’ll pay. According to NeimanLab, news organizations like Wired and Hearst newspapers are using this price feature, factoring in signals like how long someone has subscribed and how much they engage with content to set individualized renewal prices. Sometimes this price is lower than the standard — other times it’s higher.

But it’s not just news outlets using algorithms to set pricing. A recent Consumer Reports investigation found that Uber and Lyft riders can see different prices for the same ride booked during the same time. The outlet found that prices had a median gap of 50% between the highest and lowest prices on tested routes. Both companies deny using personal data to set those base fares, saying the differences reflect real-time supply and demand. But they did acknowledge using personal data to shape the discounts and promotions riders see. 

Other industries like airlines and grocery delivery platforms are also using user data to adjust pricing in the hopes of maximizing what each customer is willing to pay. 

What is algorithmic pricing?

Algorithmic pricing, also known as dynamic pricing, uses multiple data points collected from users to determine if and how much a user would spend for a service or product. Using that data, the algorithm scores each user and sometimes places them into groups, which then will target them with offers or products it thinks the user is more likely to buy. 

The system even uses more complicated factors, like time of day or the user’s willingness to pay, to set prices or offer specific products, according to the U.S. House Oversight Committee. 

For companies with subscription models, like a growing number of news outlets, they often use dynamic paywalls. This is a process where a site uses a reader’s engagement signals, like how many articles they’ve viewed or how long they’ve subscribed to the site, to raise or lower prices. 

One example of this that NeimanLab presented was NJ.com, a New Jersey state news site owned by Advance Local. One user on Bluesky posted a screenshot of a subscription renewal notice that said his annual subscription cost $130 and was determined by an algorithm using his personal data. NJ.com lists its basic annual subscription starting at $100, and its premium subscription costs $200. 

In his post, other users chimed in saying they too got similar renewal notices. One subscriber said the algorithm charged $145 for an annual subscription, while another said their price was $175. 

The Wall Street Journal has similar dynamic pricing, NiemLab reports. One reader said The Journal’s email told her she would be charged $76.99 every four weeks — about $19.25 a week, or $923.88 annually — for her print and digital subscription. That was well above the paper’s promotional rate of $16.25 a week, which reflects a 40% discount offered to new subscribers for their first year. 

Is this legal?

Dynamic pricing is legal, unless a company does it deceptively, according to NeimanLab. In June, Washington Post readers filed a class action lawsuit against the company, alleging the paper didn’t disclose its use of it. 

But some states already have laws in place that either ban or regulate dynamic pricing. New York passed its Algorithmic Pricing Disclosure Act in 2025. The law requires companies to tell New York residents about their dynamic pricing policy. In California, state lawmakers banned companies from sharing “common pricing algorithms” with competitors to price similar products and services. 

Federal lawmakers are also working on legislation that would prohibit companies from using dynamic pricing to set prices and wages. Rep. Greg Casar, D-Texas, introduced his Stop AI Price Gouging and Wage Fixing Act in July 2025. This ban targets companies like airlines that raise prices after seeing someone had searched for a family obituary. Casar accused Delta Air Lines of using people’s data to set prices, as Straight Arrow previously reported. The company later disputed claims that it used customers’ personal data to set prices. 

As lawmakers continue to debate the legality of dynamic pricing, consumers are left to navigate a marketplace where the price they see may not be the price everyone else pays.

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