Dynamic pricing: Bay Area lawmaker's bill would ban retailers using phone data to increase prices

SAN FRANCISCO (KGO) -- Amid the ongoing cost-of-living crisis, one Bay Area state senator says she's trying to make some prices more affordable.

Senator Aisha Wahab has introduced a bill that would prevent retailers from using artificial intelligence to increase prices by using the information stored on customers' phones.

"They will call it dynamic pricing, which is basically pricing that fluctuates," Wahab said.

Wahab says companies use dynamic pricing for everything from airline tickets, to ride shares and even vacation accommodations.

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She says a major driving force behind her bill is to create an equal playing field for all consumers.

"If you live in a very predominantly Asian district, which my district is, they would charge you higher for SAT prep courses," Wahab said. "We would see that if your phone was the latest model, you would not get charged more just because they assume your socioeconomic status is higher."

Several labor groups and consumer rights organizations are supporting the bill.

Carmen Balber, the executive director of Consumer Watchdog, says many people aren't even aware that dynamic pricing is happening in their everyday lives.

"When you go online, there is only one price you will see," Balber said. "You will have no idea that your neighbor next door, or the person in the state next door or maybe someone across the country is seeing a totally different price based on their geolocation."

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Some tech groups and the California Chamber of Commerce are against the bill.

At a meeting of the Assembly Judiciary Committee last month, they argued it would limit innovation and raise prices.

"If it's too high, you don't buy it, I mean, people are smart," Assemblymember Diane Dixon said. "We don't give people enough credit. People can vote with their feet. I just find this overregulation is impeding how we do business and how people want to do business."

Despite some pushback, Wahab is determined to move the bill forward saying otherwise the issue won't go away.

"Policy doesn't move as fast as technology, and we are seeing technology that could be utilized for a lot of good also be utilized to make things more expensive for the average person," Wahab said.