Delta denies using AI to come up with inflated, personalized prices

Delta finally explains how its AI pricing works amid ongoing backlash.

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[Hard Thoughts]

Can I use the “I don’t believe you” gif?

Because I’m sure they won’t commit to not tracking us.

 

[Resolute]

They literally bragged about how it was driving up revenue. That is prima facie evidence that it is predatory.

 

[gsgrego]

Uh huh. What they mean to say is that the price is the price because Ai said so. Don't worry about prices not being tied to any real world cost.

 

[UserIDAlreadyInUse]

"Delta finally responded after they had finished pruning the system in order to plausibly prove that what they were about to reply with could be proven in court. And once scrutiny had been turned away, a test of their AI disaster recovery processes took place to ensure that they were able to recover their pricing agents and models from a backup taken just prior to the probe."

 

[whoisit]

Besides meaning Doesn't Ever Leave The Airport, Delta can also mean change. Just change, it doesn't have to be a positive one.

 

[Shurikt]

Delta to investors: We're using AI!
Delta to regulators: It's an algorithm!

 

[msawzall]

The AI use can result in higher or lower prices, but not personalized fares for different customers, Carter said.

Should be easy to prove. Let's see the proof.

 

[Fatesrider]

"Your letter presupposes that we are using, and intend to use, AI for 'individualized' pricing or 'surveillance' pricing, leveraging consumer-specific personal data, such as sensitive personal circumstances or prior purchasing activity to set individualized prices," Carter said. "To clarify, this is incorrect and this assumption, unfortunately, has created confusion and misinformation in the public discourse."

In what world are people supposed to believe corporate denials of bad behavior?

Is this a new reality thing? Because I can't think of a single instance in the last 100 years where the allegations weren't substantiated in whole or in part.

 

[lolnova]

But "to reiterate, prices are not targeted to individual consumers," Carter emphasized.

[X] Doubt

 

[mcswell]

I wonder how this works when I go through a site that shows me a bunch of flights + fares from a bunch of different airlines, and I book through there. Of course some airlines don't allow that--afaik, you can't book a Southwest flight that way.

 

[numerobis]

I'm confused about this story because ... Delta (and others) has always been doing this since deregulation. The processes of market segmentation and constant flight price adjustment keep getting "improved" (for the airlines' benefit). This is just "and now we use AI for it" to juice the stock price as they roll out a new pricing algorithm.

 

[numerobis]

[X] Doubt

It's already the case that clearing your cookies can change the price you see.

 

[crente]

Of course not! They will inflate all prices and then generously offer personalized discounts to participating customers who willingly engage in their 'AI Haggling' system, which requires cookies, personal information, a genealogy transcript, and a blood sample.

 

[rcduke]

Data collection is never beneficial for the customer, and any company that tries to say otherwise is lying through their teeth.

This AI calc is just increasing the weight of customer data against fares, which is in fact discriminatory. Delta PR can say what they want, but executives don't lie to shareholders.

 

[terrydactyl]

The AI use can result in higher or lower prices, but not personalized fares for different customers, Carter said. Instead, Delta plans to use AI pricing to "enhance market competitiveness and drive sales, benefiting both our customers and our business."

I'd like to know how higher or lower prices can simultaneously benefit both customer and the business. I suspect it's the company makes more money while the customer gets something other than savings.

 

[FloormasterSqueeze]

It is weird that they brag that the AI is using "thousands of factors" but insist none of those factors are "personal". The definition of personal is probably one of convenience for Delta not anything consumers would agree to.

Consumers can still be gouged by AI even if it is not "personal". Airlines already use many factors to create prices and adding in "thousands of factors" will mean more direct personal experience of inflated rates (and I suppose in a few rare instances those prices might be lower so they get to say higher and lower changes).

The one thing I have noticed before is that if you look at the price of a flight and then go back to the same website (airline sites in particular) even a short time later the price is too often higher when you come back (yes, I know that some factors like actual purchases could have changed but it happens too often to be that alone). I have even gotten back to the lower price by switching the booking site for a third look. (Yes, clearing your cookies or switching sites can lower price back).

 

[numerobis]

I'd like to know how higher or lower prices can simultaneously benefit both customer and the business. I suspect it's the company makes more money while the customer gets something other than savings.

There will be one flight where Delta realizes that cutting the price means they get enough more traffic on the flight to be able to make more revenue overall, while passengers spend less.

Pay no attention to all the other flights.

 

[yoshipod]

We don't allow any retail stores to price discriminate like this. Why do we allow airlines to hide their prices and change them for each customer?

 

[whoisit]

Pay no attention to all the other flights.

"Ladies and Gentlemen, we are preparing for take off now. We please ask that you pay no attention to the aircraft off to your right. This is your Capt., Launchpad McQuack signing off for now."

 

[numerobis]

It is weird that they brag that the AI is uses "thousands of factors" but insist none of those factors are "personal". The definition of personal is probably one of convenience for Delta not anything consumers would agree to.

Consumers can still be gouged by AI even if it is not "personal". Airlines already use many factors to create prices and adding in "thousands of factors" will mean more direct personal experience of inflated rates (and I suppose in a few rare instances those prices might be lower so they get to say higher and lower changes).

The one thing I have noticed before is that if you look at the price of a flight and then go back to the same website (airline sites in particular) even a short time later the price is too often higher when you come back (yes, I know that some factors like actual purchases could have changed but it happens too often to be that alone). I have even gotten back to the lower price by switching the booking site for a third look.

SABRE doesn't give the passenger information to the airline when you ask it for a price. So the airline can't directly use that. Instead they have to guess at what the passenger will agree to pay based on the limited data they get from SABRE, plus the huge gobs of data they get from prior operations.

In the past they hand-built heuristics like "if the passenger is staying over Saturday night and booking coach then they're a price-sensitive leisure passenger". The AI is going to let them fire the people who came up with such heuristics.

 

[graylshaped]

Critics demanded transparency, raising concerns that Delta's AI pricing could lead to discriminatory pricing based on a customer's search history or prior purchases.

News flash: Airlines and hotels have practiced "yield management" for years if not decades, at the aggregate and at the individual level, based on the most granular data they have about a customer or group of customers. Loyalty programs aren't there solely to prejudice a customer towards a particular provider: they exist to gather usage data that can be applied more broadly. This is not illegal unless used to discriminate based on a protected class, OR if that data is shared in a manner that manipulates the market.

Within those boundaries, it doesn't matter if it is "AI" or "a guy named Bob," it isn't illegal. Outside those boundaries, hell yes it is illegal.

Arguably, all pricing algorithms should be subject to transparency laws, use of "AI" or not.

 

[spopepro]

I'd like to know how higher or lower prices can simultaneously benefit both customer and the business. I suspect it's the company makes more money while the customer gets something other than savings.

I mean, that's more or less the definition of marginal benefit right? But it does require there to be a commensurate increase in something for the consumer, which is nearly unheard of in the airline industry these days.

 

[muddledzen]

Even if I were to buy this denial, which I don't:

Factors weighed by the AI system, Carter explained, include "customer demand for seats and purchasing data at an aggregated level, competitive offers and schedules, route performance, and cost of providing the service inclusive of jet fuel."

Using the cover of 'aggregate data' has been a massive load of bullshit from every company that's ever tried to duck behind it. It's been literally decades now that we've seen how aggregate data can be de-anonymized. From a publication that I'm very fond of, for example, back in 2009: https://meincmagazine.com/tech-policy/2009/09/your-secrets-live-online-in-databases-of-ruin/

Don't tell me in one breath that everyone gets pricing based on objective factors like seat selection, destination, etc, and then in the next that it includes aggregated customer purchasing data.

 

[graylshaped]

We don't allow any retail stores to price discriminate like this. Why do we allow airlines to hide their prices and change them for each customer?

Goods can sit on shelves. An airplane seat or hotel room, unused, is a permanent net loss to the economy. There is an argument for allowing prices to be adjusted to utilize those types of assets fully if done within non-discriminatory boundaries.

 

[RandomLab]

I note that Delta does not explicitly mention the effect of membership in their frequent flyer program and passenger status as inputs to their AI pricing. Doesn’t have to be personal, they could be applying a policy to everyone of specific status levels traveling dates/times/destinations just like they do for filling upgrades and waitlists or those “buy your way into more-legroom seats for $XX”. And if you have a Delta credit card, there’s data right there that does get personal.

 

[chaos215bar2]

Can I use the “I don’t believe you” gif?

Because I’m sure they won’t commit to not tracking us.

Oh, I believe them. All Delta is saying here, if you read carefully, is that they're not using "sensitive personal data" to provide individualized pricing.

I don't see any denial that they're using AI to provide individualized pricing, and what's "sensitive personal data" is very much something a lawyer is going to have a lot of leeway arguing if any of this ever makes it into any kind of hearing where they have to provide sworn testimony.

 

[Sajuuk]

In what world are people supposed to believe corporate denials of bad behavior?

Is this a new reality thing? Because I can't think of a single instance in the last 100 years where the allegations weren't substantiated in whole or in part.

I mean, corporations continually get away with everything and anything, because the populace not only lets them, but encourages them. So, uh, this world.

 

[HiggsForce]

Hotel sites have been known to show different prices for the same room at the same time based on geolocating the IP address that's trying to book the room. For example, the linked study showed that folks booking via IP addresses in the San Francisco bay area were charged significantly higher prices (sometimes more than 2x) for the same room than folks booking via IP addresses in less wealthy areas of the US.

 

[yoshipod]

Goods can sit on shelves. An airplane seat or hotel room, unused, is a permanent net loss to the economy. There is an argument for allowing prices to be adjusted to utilize those types of assets fully if done within non-discriminatory boundaries.

Well non perishable goods can. But that does not mean that they can't change prices based on time. Retail stores certainly do that. What they are NOT allowed to do is charge you a different price for the same item that I buy at the same time you.

 

[ubercurmudgeon]

Responding, Delta's chief external affairs officer, Peter Carter, thanked lawmakers for their "thoughtful questions regarding Delta’s use of AI."

Translation: "Come on politicians, this isn't the way things are meant to work. You're not to supposed to anticipate the obvious endgame of our new technology, and publicly shame us out of doing it. You're supposed to let us get away with it for a decade, spend another decade debating whether to stop us, then slap us on the wrist and tell us not to do it again. By which time most of the present C-suite would've been retired and lounging on the yachts bought with the proceeds."

 

[aapis]

If the american people were capable of standing up for themselves this might not be a problem anymore. Oh well.

 

[evan_s]

I wonder how new and actually AI this is or if this is just slapping the buzz word on the latest version of what they've been doing for a while. I mean all airlines have played with pricing over time for a while. Dropping it when they need to sell more seats, raising it when they don't have as many to sell. Raising it through the roof when they've only got a few seats left shortly before the flight or dropping it through the floor when the plane looks like it will be too empty.

 

[Hacker Uno]

I am a Million Miler on Delta. If you have ever read their terms and conditions, it clearly states (or did, the last time I read it) that they used algorithmic pricing.

I read Delta's "AI announcement" as the equivalent of "we have a new pricing algorithm we are experimenting with" and because of all the AI hype, they called the new algorithm "AI" so as make Wall Street think that they are doing things which are state-of-the-art.

Knowing Delta, the entire "AI Announcement" was an attempt to influence Wall Street. Whereas, in reality, it was business as usual, simply calling something "AI" to seem "with it" to Wall Street. (Got to bow down and pay homage to the corporate Gods.)

Then, it all blew up on them and they were forced to essentially concede it wasn't really AI without admitting it wasn't really AI.

Delta is well known to have technologically obsolete IT infrastructure and to be seriously overly dependent on M$. I would find any claim of true AI use by Delta to strain credibility.

But, all that criticism said, they still have the best customer service of the US Majors and treat their customers far better than any of the other US majors. Plus, they have THE bag tracking system which is the envy of the industry.

My $0.02 worth.

 

[Carewolf]

In what world are people supposed to believe corporate denials of bad behavior?

Is this a new reality thing? Because I can't think of a single instance in the last 100 years where the allegations weren't substantiated in whole or in part.

Microsoft invented covid to spread 5G(or was it the other way around ?) . Credible concerns often means some kind of fire, but there are a lot of nuts out there

 

[graylshaped]

Well non perishable goods can. But that does not mean that they can't change prices based on time. Retail stores certainly do that. What they are NOT allowed to do is charge you a different price for the same item that I buy at the same time you.

Sure they can. You got a membership card for our loyalty program? You paying cash or credit? Do you have the coupon we only give to our preferred customers?

 

[starglider]

You can either lie to your investors about how you're going to use AI to inflate your profits by screwing over your customers or lie to lawmakers about how you're not going to do that, but it's kind of hard to do both simultaneously.

These companies behave like regulators speak one language and investors another so they can tell them completely different things.

 

[graylshaped]

I wonder how new and actually AI this is or if this is just slapping the buzz word on the latest version of what they've been doing for a while. I mean all airlines have played with pricing over time for a while. Dropping it when they need to sell more seats, raising it when they don't have as many to sell. Raising it through the roof when they've only got a few seats left shortly before the flight or dropping it through the floor when the plane looks like it will be too empty.

Emphasis added. What they appear to be hiding is whether they are now using even more individualized data that might cross a line into discrimination based on class.

 

[Hacker Uno]

Hotel sites have been known to show different prices for the same room at the same time based on geolocating the IP address that's trying to book the room. For example, the linked study showed that folks booking via IP addresses in the San Francisco bay area were charged significantly higher prices (sometimes more than 2x) for the same room than folks booking via IP addresses in less wealthy areas of the US.

And, different prices dependent upon your web browser, with Safari nearly always showing the highest prices.

Some airlines and rental car agencies do the same thing.

 

[doug r]

They literally bragged about how it was driving up revenue. That is prima facie evidence that it is predatory.

Delta pricing AI V 1.0