Rep. Frank Pallone wants answers by Nov. 5 on what critics call surveillance pricing, as the companies that have spoken publicly say their prices follow market conditions, not who the customer is.
The top Democrat on the House Energy and Commerce Committee has asked ten of the country’s biggest consumer apps, four of them headquartered in San Francisco, to explain whether they use what they know about their customers to decide what those customers pay.
In letters dated Oct. 22, Rep. Frank Pallone Jr. of New Jersey, the committee’s ranking member, asked Uber, Lyft, DoorDash, Instacart’s parent Maplebear, Booking Holdings, Expedia, Grubhub, Live Nation, SeatGeek and StubHub to describe any use of personal data to set individualized prices since Jan. 1, 2025. He asked for responses by Nov. 5.
“Americans are struggling to make ends meet and to afford basic necessities, and now they have to worry their personal data may be used to charge them higher prices,” Mr. Pallone wrote, according to a release from the committee’s Democratic staff.
It is the third round of such letters from Mr. Pallone this year. He wrote to 25 companies in May and to eight airlines in July. “Today’s letters are the third set we’ve sent across industries as we work to fully understand the scope of surveillance pricing and what needs to be done to address it,” he said.
What the letters ask
The letter adopts the Federal Trade Commission’s description of surveillance pricing as a form of dynamic pricing in which a company uses “advanced algorithms, artificial intelligence and other technologies, along with personal information about consumers—such as their location, demographics, credit history, and browsing or shopping history—to categorize individuals and set a targeted price for a product or service.”
It poses 19 questions: what customer data each company collects and how that data affects prices, whether it buys or licenses data from third parties, whether it uses artificial intelligence to set prices, whether it sorts customers into segments, including by race or other protected characteristics, and what it discloses to customers. The letter also asks whether the companies were affected by tariffs imposed since Jan. 21, 2025. Among the reporting it cites is a February 2025 SFGATE account that hotel booking sites showed higher prices to travelers searching from the Bay Area, and a Consumer Reports investigation of ride-hailing fares published in June.
Letters from a committee’s minority do not carry the force of a subpoena.
What the companies say
The two ride-hailing companies have already answered the central question in public, and both say no.
“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,” Uber said in a June 16 response to the Consumer Reports study, which found that volunteers checking similar routes at roughly the same time were quoted different fares. Uber called the study’s methodology flawed, saying fares change second by second with demand, driver availability, traffic and GPS precision, so that requests made moments apart are not the same trip.
Asked about Mr. Pallone’s letter, CJ Macklin, Lyft’s director of communications, wrote to The Inquirer: “Thanks for reaching out. Sending you our blog, which explains how we do pricing. Feel free to pull whatever is helpful from there.”
That post, by Sid Patil, Lyft’s executive vice president for rideshare, says the company’s upfront base fare reflects trip distance and duration, origin and destination, ride type, nearby driver availability, local demand, time of day, and tolls and fees. It lists what the algorithm does not use, including battery level, credit card type, demographics, saved addresses, device type, browsing history and whether a rider has competitor apps installed. “Different riders with the same circumstances, same pickup, same destination, same moment in time see the same upfront base price. Full stop,” Mr. Patil wrote. “And no, we do not engage in ‘surveillance pricing.’ Period.”
Both companies acknowledge that promotions can differ from account to account, such as discounts for new riders or for customers who have not ridden in a while. Lyft says those offers are disclosed in the app.
Instacart, also on the list, ended item-price tests on its platform in December after a Consumer Reports and Groundwork Collaborative investigation found shoppers seeing different prices for the same grocery items; Reuters reported at the time that the FTC was examining the pricing tool involved. In a Dec. 22 post, the company said the tests “were not dynamic pricing or surveillance pricing – and were never based on supply or demand, personal data, demographics, or individual shopping behavior,” but that it was ending them because they “fell short” of customer expectations.
Live Nation, which owns Ticketmaster, did not respond to a request for comment. Nor did the FTC’s press office or the Electronic Frontier Foundation, a digital-rights group in San Francisco.
Where the majority stands
The committee’s Republican majority, led by Chairman Brett Guthrie of Kentucky, has not joined the letters, and The Inquirer found no public statement from the majority on them. Republicans on the panel have focused instead on a comprehensive federal privacy bill, the SECURE Data Act, introduced in April by Mr. Guthrie and Rep. John Joyce of Pennsylvania.
Its sponsors say the bill would give consumers rights to access, correct and delete their data and to opt out of targeted advertising and certain profiling, while replacing a patchwork of laws in 22 states with one national standard. “We’re not competing with Europe to regulate. We’re competing with China to regulate,” Mr. Guthrie said at a June hearing, Roll Call reported. Rep. Gus Bilirakis of Florida, chairman of the Commerce, Manufacturing and Trade Subcommittee, said it would “protect American consumers and provide much-needed certainty for businesses across the country.”
Mr. Pallone has opposed the bill, arguing that its preemption of state law “will leave many Americans with fewer privacy protections than they have today,” StateScoop reported. Some Democrats on the panel said at the hearing that it would make it easier for companies to engage in surveillance pricing.
Concern about the practice is not confined to one party. In March, Rep. James Comer of Kentucky, the Republican chairman of the House Oversight Committee, sent document requests on the subject to Uber, Lyft, Instacart, Booking Holdings and Expedia. His letters said the committee supports AI tools that help companies “align prices with demand fluctuations, consumer preferences, and operational costs,” but warned that pairing pricing algorithms with highly personal data “may create arbitrage opportunities for companies to ‘weaponize personal data.’”
The California angle
California has no law aimed specifically at the practice. A bill to restrict it, AB 2564, passed both houses this year but died on the session’s final night when the Assembly did not take a concurrence vote before the deadline, Gizmodo reported. The California Retailers Association, which opposed it as overly broad, said it hoped lawmakers would “begin with the areas where there is genuine agreement” next session.
The state’s existing privacy law may still apply. In January, Attorney General Rob Bonta announced an investigative sweep of retailers, grocers and hotels, saying that using personal data to set prices in ways consumers would not reasonably expect could violate the California Consumer Privacy Act.
At the federal level, the FTC under Chairman Andrew Ferguson closed public comment on a Biden-era request for information about surveillance pricing shortly after the change in administration in 2025. The agency has continued consumer-protection work involving pricing, including the Instacart inquiry reported by Reuters.
For Bay Area residents, the stakes are practical. Uber, Lyft, DoorDash and Instacart, all based in San Francisco, handle a large share of the region’s rides and deliveries, and the answers they give Mr. Pallone, if they give them, could shape both the federal privacy debate and California’s next attempt at a law.
Callum Petrossian covers the House Natural Resources, Energy and Commerce, and Transportation and Infrastructure committees, from power grids and offshore leasing to water projects, highways and disaster aid, for the Inquirer’s Energy & Environment desk. More from Callum Petrossian
