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Delta’s new AI-powered pricing strategy

blog.getjetback.com

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Re: Delta’s new AI-powered pricing strategy

#41

Post by buyucu »

nradov wrote: post #31
yodon wrote: post #4

As someone who always checks both Uber and Lyft, and always keeps both apps open during the ride so the loser knows I went with the cheaper alternative[0], I'm guessing I won't be flying Delta anymore. [0]no proof, but presumably one or both of their analytics teams have figured out this signal, given its prevalence in the population

For better or worse I think Delta will be happy to lose you as a customer. They are not a low-cost carrier, and their current business strategy is focused on charging higher fares for slightly better service than the competitors. As far as they're concerned, price-sensitive consumers who are looking for the cheapest fare can go fly on Frontier or whatever.

I travel around the world a lot, and Delta was by far one of the the worst airlines I have ever taken. I doubt they 'charge extra for slightly better service'.

Re: Delta’s new AI-powered pricing strategy

#42

Post by MITSardine »

ineedasername wrote: post #30

Time to open source some adversarial AI! De-wealth your data footprint for better prices, leave digital traces that say “I’m dirt poor, but willing to buy if the price is right”. I think the OSS community might be able to fight this fight.

I don't think that's possible, there's too much data that pairs your real identity with purchases.

Even Delta's own information on your past purchases (recall tickets are nominative) could be enough to size you up.

I don't know who's responsible, but there's clear information sharing related to using a credit card in the US. E-mail address and whether you have Amazon Prime are two examples I've seen (I was never asked for permission to share this information).

Then there's smartphone-based payment methods, by Google and Apple no less. I'm sure that results in no data at all being disseminated.

I don't think it'd be too complicated for a few major retailers, Amazon and airlines to get together and have a good estimate of your income (or at least of your expenses). What are you going to do against that? Pay by cash everywhere?

Re: Delta’s new AI-powered pricing strategy

#43

Post by [deleted] »

chollida1 wrote: post #35
jawns wrote: post #2

The Civil Rights Act requires companies not to discriminate against legally protected classes. That includes both disparate treatment and disparate impact. I can't see how "personalized pricing" would remain unchallenged, given those hurdles, if it truly means pricing fares based on individual characteristics. It's totally fine to have loyalty programs that reward people who fly Delta frequently with better rates. Bu…

Interesting thought. What specific protected class is "harmed" by personalized pricing? And how would you prove that the model discriminated against them based on a protected element?

[deleted]

Re: Delta’s new AI-powered pricing strategy

#44

Post by stult »

chollida1 wrote: post #35
jawns wrote: post #2

The Civil Rights Act requires companies not to discriminate against legally protected classes. That includes both disparate treatment and disparate impact. I can't see how "personalized pricing" would remain unchallenged, given those hurdles, if it truly means pricing fares based on individual characteristics. It's totally fine to have loyalty programs that reward people who fly Delta frequently with better rates. Bu…

Interesting thought. What specific protected class is "harmed" by personalized pricing? And how would you prove that the model discriminated against them based on a protected element?

You can’t charge black people systemically different prices than white people, for example. Neither better nor worse prices. Proving causality would likely be the hard part, but a systematic survey of disparate pricing could show disparate impact. AI models frequently are invisibly biased on race because of some feature that operates as a proxy measure that the developers don’t recognize. eg something as simple as ZIP code combined with a name is a highly reliable predictor of race, and there are many similar, far more subtle ways bias can creep into a model.

Re: Delta’s new AI-powered pricing strategy

#46

Post by fn-mote »

belter wrote: post #15
sjclemmy wrote: post #6

Sounds like consumers need AI identities to help them get the best deals from this kind of thing.

That is why this is so diabolically effective. To book the ticket they need your real id, quickly correlated across the hundreds of brokers willing to sell your data. I bet they have a partnership with Visa and Amex.

Currently that data is entered long after they display price information.

The article notes that they might require you to be logged in to your DeltaAir account to see the (good?) prices for routes.

I’m curious what this will do to route planning tools, resellers and travel agents. Ones I can think of would be Booking.com or Kayak — you couldn’t even see price info? That would be a radical change.

Re: Delta’s new AI-powered pricing strategy

#47

Post by svachalek »

MITSardine wrote: post #34
ivanovm wrote: post #25

the funny part about the backlash is that the travel budgets are likely somewhat pareto distributed and under the not-personalized pricing strategy it is the little guy who is probably overpaying for plane tickets, not the corporations and the wealthy individuals

It's not usually up to businesses to compensate wealth inequality by adapting prices to customers. I personally find this appalling, not because of the prospect of paying more or less, but because of the arbitrariness and opacity of it all. I'm not too excited for a future where we'll have to spoof various browser identities and try different times of day and VPNs to book plane tickets... At the extreme, some people…

Historically, all prices are negotiated. We ended up with a culture of flat pricing for efficiency, with only a few high value items like cars being negotiated. You walk into a car dealer and spend hours to determine exactly how much they can get you to pay for the car you want. But now with advanced automation, it's worth the complexity to extract the maximum value out of each customer again, even on small purchases of a dollar or two.

Re: Delta’s new AI-powered pricing strategy

#48

Post by pavlov »

SilverElfin wrote: post #40
jawns wrote: post #2

The Civil Rights Act requires companies not to discriminate against legally protected classes. That includes both disparate treatment and disparate impact. I can't see how "personalized pricing" would remain unchallenged, given those hurdles, if it truly means pricing fares based on individual characteristics. It's totally fine to have loyalty programs that reward people who fly Delta frequently with better rates. Bu…

How can anyone allege discrimination when all you have is an AI telling you the price you get? It’s not open source and you don’t get to see data across all races or sexes or whatever to spot a pattern. I think we just need new regulations and laws. Maybe make income or wealth a protected trait you cannot discriminate on. Or require transparency and reporting on algorithmic pricing. Or higher taxes for businesses tha…

> “make income or wealth a protected trait you cannot discriminate on”

Seems like that would be problematic for progressive tax rates.

Honestly it’s pretty clever. “Wealth is a protected class” would fit right in with the modern right-wing rhetoric, continuing the inversion theme already established with “actually whites are the targets of racism” and “actually Christians are persecuted in the West”, etc.

Re: Delta’s new AI-powered pricing strategy

#49

Post by usefulcat »

Seems like there's a relatively simple solution for this: allow airline tickets to be resold.

Apart from the fact that this restriction massively benefits airlines, I've never understood why it's not allowed. No matter what, you still have to go through security and present your ID there, so the additional security benefit of knowing a traveler's identity at the time of purchase seems pretty marginal.

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