"Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident."
While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets, which implies increased future risk of loss.
In fact, I received a letter from my homeowners insurance company a couple years ago stating that they would not renew our coverage due to conditions that they'd observed (clearly from aerial imagery) including overgrown bushes touching the walls of the house and some larger tree branches growing over the house.
I had a landscaping company come and fix the issues, sent my own drone up to take new pictures, sent the company the pictures, and they agreed to continue coverage. And now my house has less future risk of damage. This seems like a win-win for both of us.
The issue is that often the data gathered and used with no consideration of other evidence. For example, I had a similar situation of home insurance sending a letter demanding I replace my roof based on drone footage. No issue was immediately obvious from the footage and we had just replaced the roof less than 5 years earlier. We had an inspection done and then sent both proof of replacement and the inspection report. We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.
So it is not necessarily objective, fairly considered observations (and I think pretty different from speeding tickets). At least in our case it was maximally for the benefit of the insurer. I think that is relevant to their claimed premise.
Never heard of this happening. It's weird anyway because roofs are something you're expected to maintain and are pro-rated. If you have storm damage to a 20 year old roof, your insurance is only going to pay for the estimated remaining life, not the full cost of a new roof.
If the roof is beyond end-of-life they probably won't pay anything, as it's a predictable cost of owning a home not an unexpected loss which is what insurance is for. Same reason they won't pay to have a tree taken down just because it could fall and cause damage. You're supposed to maintain your property; insurance is for losses beyond normal wear and tear/maintenance expense.
The house insurance in this case is a part of a mortgage contract or voluntary insurance? And if it is a part of a mortgage (as an extra payment), how does one predict how much they will have to pay for unexpected things like fixing the roof, and how does one estimate the full cost of a loan?
Also if it is a part of the mortgage why doesn't the lender pay for it? They need it, not the homeowner.
Is insurance company affiliated with companies doing the repairs?
If you end up with a roof that doesn’t last 5 years, isn’t that the kind of thing you’re buying insurance for in the first place? It’s an unexpected risk that a lot of people would have trouble predicting.
Homeowner’s insurance does not cover replacing a roof after 5 years if poor workmanship or substandard materials are the reason that replacement is needed.
Insurance is fundamentally lopsided in the risk of a bad decision by the insurer. They have little incentive to keep you as a customer, since the potential profit is just not that big. And thus they have little incentive to do a thorough investigation of potential problems. It's just not worth it. They'd rather dump you, or risk forcing you to replace a perfectly good roof, than put effort into determining whether their report is accurate.
It's a funny business. Every insurer wants better risk assessment, since it's a competitive advantage. At the same time, the better the risk assessment gets, the less point there is to having insurance in the first place. At the limit, insurers that could accurately predict the future would charge you premiums equal to your actual future costs and you might as well just put the premiums in a savings account instead.
Honestly I'd report it to the state insurance commission. Did they call out any specific issue with the roof at any point? Some kind of new code they were mandating an upgrade to or anything?
Yeah, I probably should have reported it at the time. They didn’t cite anything specific even after we requested what in the on-roof (not drone) inspection indicated an issue or was missing from the inspection.
Though to be precise, this was over a year ago so I’m not remembering their exact wording. But it likely wasn’t literally “drone footage alone,” but probably something more like “our drone footage and associated analysis” — in any case the effective interpretation being “we don’t care about installation date or your inspection. Replace it or lose coverage.”
Not that it makes it right, but there’s enough providers in my area it was less effort to get new coverage than continue to fight them.
> pricing (or making available) coverage based upon risk.
The whole point of insurance is to manage risk by spreading it across all consumers. If my insurance rates go up based on my usage or individual risk factors, it’s just an elaborate money making scheme. It should be like “everyone has to pay x to get insurance to get covered and if the claims start going up, everyone has to pay more”.
> Why should someone who has an unpatched hole in their roof pay the same rate as someone who maintains their roof?
Because otherwise the insurance companies can just look at your completely maintained roof that will last another 20 years and ask for a full replacement because it is 10 years old. And if you don’t comply they will drop you. (Happened to me)
Well yeah, abuse can happen. But the general principle of some people paying higher premiums than others because they're higher risk isn't a bad one.
If we mandate that insurers keep premiums equal for everyone, get ready for a lot of people to have zero access to insurance as they're deemed too risky to cover.
> But the general principle of some people paying higher premiums than others because they're higher risk isn't a bad one.
So someone with cancer should be charged $20k/month then? I am completely healthy and haven’t used my insurance much in the last 10 years. Why are my premiums so high? And why are 65+ year olds not footing most of the bill? I am not advocating for that but just pointing out that were obviously okay with charging for some risk profiles but not others.
>> The whole point of insurance is to manage risk by spreading it across all consumers.
Yes, but this does not imply that customers with (potentially vastly) different risk profiles should pay the same rates.
The canonical example is that 18-year-old single males with previous speeding tickets pay more for auto insurance than married 40-year-old women with clean driving records.
So does that mean the minute you have a cancer diagnosis, the insurance company gets to charge you $20k/month or drop you?
If the same argument is to be followed why does a person with potentially large medical bills not pay a disproportionately larger premiums than a healthy person?
But then again, there's presumably some sort of balance. If someone insists on building and rebuilding in a flood or fire zone, it's not obvious that everyone else should see their premiums go up to cover that. One option is for the insurance company to just cease insuring the property(ies), but I suspect there's more overall negatives to that than if they bump the premiums of clients in specific locales.
This conundrum (and many others) is why insurance is a highly regulated business. The commission working in the public interest decides how the compromise is drawn, not the insurers.
> This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets
This is more like your insurer following you around and evaluating your driving skills.
And yes black boxes are a thing but a) are opt-in and b) universally reviled.
Prices carry information and are not arbitrary. Insurance is a paid transfer of risk. Policies that have greater risk of loss require higher premium charges or the insurer goes broke.
Actuarial science is its own field that prices uncertain future events. As you’re bringing out here, the insurer has additional uncertainty as to the actual driving habits of their policyholders, so some conservatism is likely priced in. Aggressive drivers would like to pay the premiums of careful drivers.
This is related to the origin of GEICO, Government Employees Insurance Company. Back in the day, you had to be a state or federal employee for them to bind coverage. The investment thesis was that civil servants’ caution in their choice of employment was an accurate indication of their overall risk appetite and risk-taking behavior. GEICO was able price policies lower without going broke because they by design insured a lower-risk population.
Presumably since many people opt in, they are not universally reviled. In fact, I'd wager that people who are safer-than-average drivers don't revile them at all and actually appreciate the fact that their premiums are reduced by virtue of the evidence of their safe driving habits.
Seems like a rare instance of an insurance company actually doing their job and providing actuarial services rather than just gouging you after a claim.
The problem is that every facet they add to the analysis increases the complexity, making it harder to price risk - meaning they'll eagerly overprice [0] (based on "what if") with some idea that "the market" (ie nobody) will sort it out. This creates a race to the bottom against anything that might seem "weird", aka regular people just living their lives (while being put under a microscope), similar to how the ever growing housing bubble has painted most houses beige.
Your bushes only seem like a reasonable example because you are looking at them in isolation - it was only a single issue you had to deal with, and something you seemingly wanted to deal with anyway. If they had instead blasted you with a litany of different issues, or a bush that you wanted to keep for sentimental reasons, or you simply didn't have the time/resources to create your own counter-documentation and operate their heavyweight bureaucracy, you'd be singing a much different tune.
And while these things can happen anyway with regular in-person home inspections, the point is that increasing surveillance and unaccountable "AI" make it much easier to bury customers in a deluge of complexity making for even-less-competitive markets.
(I would give a healthy list of examples of my own home being deficient in many ways an insurance inspector would call out yet are in the process of being managed, but I'm sure it would just invite a lot of "well ackshually that's dangerous and weird!" out of touch responses from people whose first instinct is to call someone rather than to fix something themselves)
[0] Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
>> Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
Given that the annual premium is like 0.27% of the value of the policy, a change in risk of a few percent because some big tree limbs were hanging over the house or because some brushes might have enabled a fire to spread to the house more easily could clearly swamp the value of the premium to them.
And, to be clear, I didn't want to spend $2,000 to fix the problems, I would have rather not had to deal with it, but that's part of the joy of being a homeowner.
====
We live in a place (California) where the government has generally prevented homeowners insurance companies from effectively charging for risk (e.g., wildfires) and therefore many companies have stopped writing policies altogether. This doesn't seem like a good outcome. Note that this is the same state that won't let auto insurers charge based on "black boxes" either, so good drivers are subsidizing bad drivers (even more than in other places).
You should try driving a tesla with tesla insurance.
Each drive you make will rate you based on hard braking, aggressive turning, unsafe following, excessive speeding, late night driving, forced autosteer/fsd disengagements, unbuckled driving.
You'd think that driving well would eliminate these, but no.
But they give you a pass if you use tesla fsd. That is their endgame, but it sometimes gets a pass for driving more dangerously than you do. You speed - ding. fsd speeds 3x what you do? 100% score.
lol. do you know the world this is creating? who is making the rules?
Vegetation is the enemy in forest fires, for example. One of the main reasons that lone house survived the Maui wildfire[0] was because they properly managed vegetation, which prevented the embers from setting fire to the property via a bush that's way too close. Nothing prevents you from letting the rest of your backyard go wild if you prefer, but keep it away from your walls.
Most/many structure fires that are caused by wildland fires start due to "ember cast" - hot embers carried by the wind (for distances, almost unbelievably, of up to a mile). While taking care of building-adjacent vegetation is an excellent step to reduce fire risk, it won't stop fires that start on the roof, or around the soffits, due to embercasting. That requires different approaches (roofing materials, careful roof/wall interface design and more).
ps. Firefighter II (volunteer), Santa Fe County, NM
> While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works. So, I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
If you take it to the extreme of them being able to tell with 100% certainty who's going to need a payout when, they'll just arrange it so they'll never need to pay out. They'll not do or stop doing contracts with those that will need a payout, or they'll raise the premiums such that they still gain. Insurance would become pointless and customers are better off saving for their own expenses.[1]
I've made this comment before. I'll just quote myself on the basics of how insurance works, to make this point clear:
> With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.
> The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.
> The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.
[1] As a parenthesis, it being better to save is in a closed system sort of way. In reality, the fact that a lot of people would still get insurance because "that's responsible" means end providers can raise their prices on the assumption that most of their customers are the insurance companies and insurance companies "are rich", so there would still be a price difference. That's kind of what you see with health insurance where people that are not insured can get lower prices than those that are, such that it may end up even cheaper than the copay. That's for example, kinda what can be seen with styropyro's healthcare story:
> 5:39 so my insurance denies the CAT scan right I mean that's a really really common move for health insurance they just like to blanket deny procedures
> 6:21: but uh but the stupid part is is then I got billed $3,300 for that scan with insurance and the even dumber part is that I I got a quote from my clinic on what it would cost me without insurance and it was only $1,400 so because I have this insurance it actually cost me more money to get this scan like how is that how is that even possible that is the stupidest thing in the world
I imagine he can't see it because of the stress and anger, but that's probably exactly why the insurance denied it, because they were being billed way too high by the provider. If the provider billed the company what they billed regular people, they likely wouldn't deny them at the start. There's a limit to what anyone can pay, even insurance companies, and they have to put a stop at some point.
Back to the original point, imagine what that looks like with end providers that don't provide separate pricing between the insured and the non-insured, and where most people have insurance. The end provider would just give the higher pricing, the one for presumably rich insurance companies, so you would still save money with the insurance despite the fact that you'd save even more if the insurance companies didn't exist.
Anyway, this is a separate problem from insurance companies investigating too much and undermining how insurance works for their own profit.
> I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works, so I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
This is why mutual insurance companies exist, where there is no external investor who is trying to extract profits.
Sure, but insurance companies also routinely pay only part of the cost - I.e. if the hospital has evaluated that a CAT scan costs them $1250 to do, and they need a small profit margin (make up your own numbers), they need to bill the insurance $3300 just to get $1400 paid out. Insurances routinely only cover a certain percentage of the cost (to save $$), so hospitals have to bill more to get the $$ they need.
And I'm not saying the hospital is innocent here, but this "costs more when billed to insurance" is a long-known issue.
It's a vicious positive-feedback cycle where both parts are both cause and effect. You can also say that the insurance company also does that (fight to pay only a part) because the hospital bills too high for them. They're fighting to be billed fairly as the regular people are billed.
> if the hospital has evaluated that a CAT scan costs them $1250 to do
Remember that the fact that they can use insurance companies to drive up prices means they can also drive up their own costs.
My issue with dynamic pricing boils down to price discovery and information asymmetry.
When I buy something, I really don't know what it's supposed to cost. Barring atypical levels of research, I know how much it's worth to me, and how much it usually costs, and that's it.
But my supermarket knows almost exactly how much eggs are worth to me. If it can show me, and everyone else, a different price at different times of day, I'm no longer confident in my ability to "bargain" effectively with the supermarket. So while I can see some strong economic arguments for dynamic pricing, especially in cases like power or water usage where there's a very inflexible supply, I basically just don't trust that we won't get screwed.
Fixes could be possible. Maybe with a third party system for monitoring prices, quality, etc. But it's hard, and pretty obviously not solved in the current market, much less one with even more price complexity.
I have a a modest proposal. Any company wishing to use this kind of dynamic pricing should be willing to submit itself to "dynamic taxation".
Under dynamic taxation, we the public, would examine that firm's books at the end of the fiscal year and decide how much taxes they owe based on their ability to pay.
Note that companies are not natural people, they do not have a fundamental right to exist. Just like under dynamic pricing, if the shareholders and board think their dynamic taxes are too high, they are perfectly free to just dissolve the company and use their capital elsewhere.
Which is why we're entering that fun stage of capitalism where the winners have won enough that they just buy up any possible competition in the market, and regulators absolutely fail to enforce any sort of anti-trust/anti-monopoly measures because they're just another thing that's been bought up.
Nothing like
- Major bank consolidation
- Major media condolidation
- Major tech consolidation
- Major grocery store consolidation
etc... to really provide wonderful competitive options.
I reject the eschatology that your comment assumes. I believe we agree, however, that the answer is more competition, not less.
But imposing heavier regulatory burdens has disproportionately adverse effects on smaller would-be competitors. The big, established players know this and actively engage in enlargement of regulatory scope and regulatory capture to widen their moats. Historical examples of this are Jeff Bezos encouraging states to be more aggressive in requiring sales tax levies on internet purchases and more recently the calls by Sam Altman and Dario Amodei to “pace” AI through regulation. On the surface, they appear to be public-spirited moves but are deeply self-interested.
Breaking up big players does not impose anything on smaller competitors.
It's just that breaking up large companies has taken a very distant back seat to imposing "good for the consumer on the surface, but actually a moat" type regulations.
It might differ by geography, but I have no complaints about bank, media, or grocery consolidation. Not sure what tech consolidation would be. My main gripe is ISP monopolies.
Of course in enterprise sales this has been the norm since forever, referred to as “value pricing”.
Back in the early days of laptops, I went to Oracle to give them a quote; while cooling my heels in the lobby I looked round, realized I was being an idiot, and so opened my laptop and increased the prices across the board.
I don’t think that would go in consumers’ favor. If anything, it’s more likely that dynamic pricing is not hurting the protected groups as their members on average have less disposable income and hence see lower (non-inflated) prices.
Can’t wait for the onslaught of opinion pieces on “Has dynamic pricing fixed wage inequality” or similar. Less discrimination if an airplane ticket always costs 300$ or 3% of your monthly salary, whichever is higher.
In short -we should have our nose rubbed in something we have no ability to control. Cool.
I'm pretty sure that the pervasiveness and the inability to do anything about it is what the person you're referring to meant by 'exhausting', though I may be projecting what I find exhausting about the topic!
Don't lose all hope. Federally, I wouldn't hold my breath, but states and cities are fighting back. California, New York, Connecticut, Georgia, Ohio, Maryland, Illinois, Seattle, New Jersey, have all banned surveillance pricing. Colorado almost did but their governor vetoed it, so hopefully he gets voted out on his ass soon, but there is more push back on this than I expected from both parties. Lots of places still have bills being worked on. https://www.icsc.com/images/made/c54c2b3e89d2a51d/Pricing-Le...
If a firm has that kind of pricing power of course they will use it. Competition is the only thing that restrains this. Most firms don't have this kind of pricing power at all, if Safeway marked up all their groceries to my maximum willingness to pay I would of course just go to Kroger or the local co-op or a restaurant for dinner.
Whenever you analyze a dynamic system, the primary question you ask is, which direction will it evolve in, and will it hit some steady state?
If you apply this thinking to the economic system practiced in most countries, the answer is that the system forces have been set up in a way that the capital owners need to be paid back on an exponential schedule, and there are barely any counter-forces to this. Hence, the system will never hit a real steady state. People will continue to creatively design more and more immoral methods of extracting monetary value from a finite system that cannot indefinitely and continuously grow exponentially. There is no other way to pay back the capitalists. There is no counter-force.
Price gouging and discounts are exactly the same thing, seen from a different angle. You can look at the people who pay more and complain, or you can look at the people who pay less and give praise.
It is kind of obvious, and supported by economists who are the experts in this field, but the article dismisses it as bullshit without much proof.
It says differential pricing benefits no consumer, and yet, I managed to travel for way bellow cost. If it wasn't for dynamic pricing, I wouldn't have travelled at all. Of course, some people were price gouged, someone has to actually pay for these costs, but these people could afford it, otherwise they wouldn't be in.
The article then mentions overall price increases. Well, yes, sometimes prices increase, for good or bad reasons. Maybe the costs have increases, because there is a war somewhere or something, and the company has no choice but to increase the price to stay in business. Or maybe the company finds itself in a monopoly position and just wants to make more profit. In any case, the price would have increased, dynamic or not. And the solution is not to ban dynamic pricing, it is to avoid getting into wars for the first one, and break down monopolies for the second.
There is also the question of spying on people, but if you don't want spying on people, ban spying on people, dynamic pricing or not. You don't need to spy on people to do dynamic pricing, and many businesses who don't do dynamic pricing spy on their users.
Uber is given as an example, saying that they raised the prices and paid the drivers less. Well, of course they did, at the beginning they operated at a loss, this can't last, at some point they need to make profit. This, by the way, is one of the many shady things Uber has done, a company for which the entire business model is not to play by the rules. The problem is not price gouging now, it is that they were too cheap before, and yes, it is bad, because that's how you unfairly drive off the competition that can keep your prices (dynamic or not) in check later on.
So I think there are a lot of good arguments to be made against price discrimination, and I don't think it is obvious what the best answer is.
However, I have to push back on the idea that increasing corporate profits during the pandemic means that the price increases were not market based, or that companies had the option to just keep prices the same and everything would have continued as normal.
I feel like this conclusion (that companies should not raise prices if profit is high) shows a fundamental misunderstanding of what a free market price means, and why prices are tied to supply and demand and not profit.
SO MANY people seem to think prices are (or should be) set to "total cost to create and distribute the good + a fixed profit margin", and that market competition means every company working to drive down the cost to create the good, which would mean they could sell for less than their competitor.
But that isn't how prices are set. Prices are only slightly related to the cost to manufacture and distribute the good, and are mostly based on the demand for a good and how much supply there is.
So why would profits go up during a shortage situation like the pandemic?
Well, imagine you are a company that makes widgets, and under steady market conditions you sell 1000 widgets a month for $50, and you have a warehouse that holds about 6000 widgets (a 6 month supply). It costs you about $45 to manufacture and distribute the widgets, so you make a $5 profit on each one you sell.
Now the pandemic happens. Let's suppose your supply pipeline is completely shut down, and you can't get the materials to make more widgets at any price. However, you still have the 6000 widgets in your warehouse that you have already made. Based on your experience and the situation, it seems like you won't be able to get any new raw materials for a year, and your competitors are all in the same situation.
Now, you could keep selling your widgets at your normal price, but in 6 months you will be completely out of widgets to sell, and you won't be able to make any more. So you would sell all your widgets in the first 6 months, and then people would be unable to buy any of your widgets for at least 6 more months, no matter how much they are willing to pay... you literally won't be able to make any more to sell.
Or, you could raise prices enough so you only sell 500 a month, which will make your 6 month supply last a year.
Since all the widget manufacturers are in your same situation, they all choose to do the same, and widgets go up a lot in price. Of course, your company doesn't have any extra expenses (you aren't buying any new raw materials), so the extra money you make per item is profit. Your profit increase a bunch during that time period.
Is this bad? Should the manufacturer just keep selling the product at the traditional price? If they do that, there will be no product for anyone in 6 months. Should they keep the same price, but only sell 500 a month? If they do that, then they are going to sell out very quickly every month, and half the people who want them won't get them.
Of course, half the people that would want them aren't going to get them anyway, but how should we decide who gets them and who doesn't? We could do a lottery, but that does not seem very efficient; not everyone needs a widget with the same level of need. Some people really need the widget, because it is vital to something they do, and some people just kinda like widgets but would buy something else if it was too expensive. Making it more expensive weeds out the "kinda want it, but don't need it" consumers and lets the consumers who REALLY need widgets get them (for a higher price).
Look, we can argue for a long time about whether this is the most fair way to distribute goods. While the increased priced does weed out people who don't REALLY need the item, it also weeds out people who need it but can't afford the higher price.
But you are going to end up with people not getting the item who want it no matter what, and having some mechanism to order consumers by who actually needs it the most is a much better selection mechanism than randomly choosing.
It also shows this isn't just companies raising prices for no reason.
E.g. I'm using a per-mile car insurance policy with a device that monitors my behavior. I'm a conservative driver, so I save a lot of money. But if such systems become universal, stupid speeders will get heavily penalized because they won't be able to offload their risks onto everyone else.
So on the one hand, it's more fair to careful drivers. But on the other hand, it will logically remove all the "slack" in the system, which serves as a de-facto social safety net.
Per-mile insurance is just usage-based pricing, no different from per-gallon water or per-pound potatoes. That's not normally what people consider to be dynamic pricing.
Where it becomes a problem is when the price starts being set based on aspects of the would-be purchaser that have nothing to do with the actual product, and are solely there to evaluate your willingness to pay. Charge me twice as much because I'm buying twice as many potatoes? Of course, that's how prices work. Charge me twice as much because you've purchased a detailed psychological profile based on tracking my internet activity and that profile says I really like potatoes and I'm willing to pay extra for them? No, straight to jail.
In my example, the price actually depends on _how_ I drive (speeding, use of turn signals, etc.), so it fits.
> Charge me twice as much because I'm buying twice as many potatoes? Of course, that's how prices work. Charge me twice as much because you've purchased a detailed psychological profile based on tracking my internet activity and that profile says I really like potatoes and I'm willing to pay extra for them?
This really makes no sense. If you raise the price of potatoes on me, I'll just go to someone else. Competition still exists, after all.
More realistically, you'll raise the prices by a couple of percent for potatoes for me so I won't notice that. This is more insidious, but it also is self-limiting in scope.
I guess the key here is that there's only so much information that _people_ can track. For example, I don't really care about the price of Sensodyne toothpaste that I always buy, so a store can sneakily add a dollar or two to the price.
Car insurance is a terrible example to use, drivers and cars are not fungible. The risk of insuring a driver and/or vehicle has a lot of variance.
Do you want Amazon charging you twice as much for a product as someone that has half as much disposable income because they’ve determined you can afford to pay more for the exact same physical item?
And they did it the way they always do it: start with poor people and minorities, so that the public get inculcated with the tacit notion that the people being price-gouged "deserve" it.
Have the lockdowns and empty shelves that formerly held toilet paper really been that long ago? Artificially forcing sale prices to remain static when the underlying dynamic, which is to say the price, has changed creates economic dislocation and even suffering. Prices carry information and are not arbitrary.
Choose your emergency: paper products, bottled water after a hurricane, etc. Value is subjective; no item has an underlying True Intrinsic Price. When demand increases, the item becomes more valuable. The price should go up, at least in the short term. When held lower than the market price, runs occur and shelves empty. When allowed to rise, increased prices have a natural rationing effect to keep goods on the shelves for people who need them. Higher prices attract new providers, and the increased supply brings prices back down as circumstances return to normal.
Analyzed rationally, we see there’s no such thing as price gouging. The concept is an appeal to our base instincts.
I think "gouging" is an entirely fair description for targeted pricing that charges certain people more solely because your analytics suggest that they're willing to pay more.
When a potential employer demonstrates willingness to pay more with an offer that includes higher compensation, is the applicant a “price gouger” for charging a higher price than she would would have otherwise?
When someone is selling a house, is the seller a “price gouger” for accepting the higher of two competing offers for the same house?
Do you have any rhetorical examples that don't involve major negotiations? There's a big difference between two parties sitting down to hammer out a deal worth six or seven figures, and getting charged more in a retail transaction because the company has collected megabytes of data on my personal habits and they think I'll pay more for mouthwash.
People don't want every single retail transaction to turn into a negotiation on the level of buying a house or taking a new job.
It happens all around us. The term from the literature is market segmentation. Exceedingly bright people make a lot of money identifying, analyzing, and adapting to the boundaries of market segments. Airline prices tend to be more expensive during the week because business travelers occupy more seats, want to get home sooner, and are less price-sensitive due to employers footing the bill. In the U.S., your choice of Publix, Kroger, Walmart, or Aldi for grocery shopping demonstrates your most comfortable segment. After passing through the doors of your favorite grocer, further opportunities for market segmentation are in your choice between name brands or store brands, which both may have originated from the same supplier.
Grocery store margins tend to be thin. Where they really want you going is to the pharmacy, and surprisingly, what they want you to buy is generic drugs — more market segmentation. The name brand drugs tend to be really expensive. The generics are much cheaper in direct comparison, and for the store, the margin on generics is higher because name-brand prices create headroom. Yes, these broad generalizations have lots of exceptions, e.g., some generics are not perfect substitutes for name brand drugs, but the general pattern is there.
Market segmentation and dynamic pricing aren’t the same thing. Dynamic pricing is showing two different people different prices for an identical purchase based on your knowledge of the potential purchasers. It’s not, Amazon carries name brand and generic products because some people will pay more for the brand. It would be, Amazon shows me $10 for SKU X and shows you $20 for SKU X because their data says you’ll pay $20.
A yes, capitalism; a system that works perfectly as long as communication and data processing technology is innefficent enough to put a natural efficiency limit on all firms. Reminds me of the scandal around rental price "collusion", which ultimately was kinda just really effective software for doing stuff that would normally be fine.
*ETA:* And FWIW, the author here goes about as far towards that as they can -- a shoutout at the end! Anything else would be decried as biased, after all. Great article; shame it'll soon be downranked by the wonderful machines running this place :(
You're describing conditions that actually result from the opposite of unfettered capitalism. Housing supply is artificially constrained because of zoning laws, tax incentives, rent freezes, environmental reviews, and general opposition to anything new, allowing landlords to behave like this (which, as an aside, they seldom actually do). The solution is to eliminate restrictions on housing construction so supply can grow with demand.
That feels like a worthy critique but I'm not sure it relates? That's just how capitalism prioritizes capital over anything else, which is the core problem of course but isn't super related to the problems of increasing information. In fact, wouldn't this technique get harder to pull off as renters have access to better and better tools themselves?
What kind of tools would help renters? This "just one penny less than they will bear" is part of the problem of modern society. There used to be SOME areas you could "win" a little. Pay a reasonable price for rent, not exactly 33.3333% of your income. Pay a reasonable price for a car, not 25.0% of your income, etc. Save a few percent here, a few percent there, and you could eventually get a downpayment on a house, or indulge in a hobby.
The endgame for these ghouls is to have you work 996+ and spend 99.9999999...% of your income on just the bare essentials so that there's not one penny left unmonetized for you to just exist, and nothing left for any type of enjoyment.
Maybe different but where I live you can certainly shop the rental market and pay less if you'll accept an older building, without modern updates. You'll have a Formica countertop not a granite one. You'll have basic appliances not stainless steel. You'll have carpet and not hardwood laminate floors. You won't have a pool or exercise room or party room. Your address won't impress anyone. But you'll pay hundreds less per month in rent.
I wouldn’t expect it to; better information, without power to act on it, doesn’t do much.
That said, this’d be one of those things where you can say “this is my prediction”, and if it doesn’t come true, go looking for the forces and factors you missed from your initial prediction.
Are you under the mistaken impression that chronic homelessness is caused by lack of housing supply? It’s much more correlated with mental illness and addiction in people who can’t be forced into care, but still desperately need it.
It’s not exactly a cryptic relationship, and it implies the need for more than just housing, people need serious inpatient care or structures outpatient programs and those are hard to fund. It’s doubly challenging because of how the US mental health system changed in the 1980’s… very much for the worse.
At least you didn’t assume I was arguing against housing.
I love that you just Googled sources and didn't even read them
your first source says verbatim: "One of the main causes of homelessness is the lack of affordable housing". it also doesn't link addiction or mental illness as a cause - it describes that the rates are higher in unhoused populations
a brief thought experiment: if you were unhoused, living on the streets, barely enough money for food and water, your body exposed to the weather, knowing that society looks down on you at worst or ignores you at best, how would your mental health fare?
well, according to your second source:
> It can be more challenging for people who are homeless to stop using substances, because they may not have easy access to treatment, often have smaller social support networks, may have decreased motivation to quit drugs or alcohol, and may have other, higher priorities, such as finding housing or food
it's almost like being unhoused itself causes cycles of addiction because at least the drugs take the pain away for a short stint?
your third source similarly contradicts your initial claim:
>For years, ending chronic homelessness was thought to be a multi-step process, with individuals receiving treatment for addictions and illnesses, perhaps while living in transitional or temporary housing, before being found capable of living on their own. However, the strategy for ending homelessness has changed, largely due to research pioneered by housing providers. Instead of requiring chronically homeless individuals to be "housing ready" by first addressing issues thought to underlie homelessness, the new strategy allows chronically homeless individuals to move into permanent supportive housing without preconditions.
either find better sources or actually read the research you're citing, learn from them, and stop making unfounded and ludicrous claims you can't even back up
All of that is true, and I don't deny any of it. I also don't think it's unreasonable to conclude based on my initial phrasing that I was somehow against housing. I'm not. I'm for housing the homeless *but also we need to do more unless you want their lives to continue to be hell*.
I'm sorry, but the idea that having a place to sleep is enough to save a life is sorely mistaken. A third of chronically homeless people have at least a serious mental health issue and those don't go away. Likewise substance abuse is a hard thing to kick EVEN WITH A HOME. It's doubly so these days when drugs are routinely cut with fentanyl, designer drugs, and worse. A good friend of mine died three years ago very much homed, but almost totally unable to find meaningful, quality, and lasting treatment. In the end after a DECADE clean someone abused her, tricked her, and she was gone three months later.
that's totally fair and I'm really sorry to hear that. wraparound services provided in-full is necessary and often a skipped thing that municipalities ignore and foist on ill-equipped and often-problematic religious institutions and things like AA (which is effectively also a Christian/deist indoctrination program)
I'd love to live in a utopia where our money doesn't go to murdering hundreds of children in an elementary school in another country and instead provides fully funded and socialized longterm treatment programs for people who need it, with strict regulatory and auditing guidelines to prevent abuse and non-evidence-based practices
it's a fucking shame how far we are from that ever becoming reality
...did you just link to "American Addiction Centers" as proof that the root cause of homelessness in the US is drug addiction? I... I can't believe this is the level of rigor that justifies such horrible cruelty. Just mind boggling.
You’re making a lot of wrong assumptions about my argument based on what appears to be an expectation that anything less than a tonal echo of you is a rejection of the concept of providing housing. All of this in an environment that explicitly instructs us to charitably interpret what others are saying.
The internet is full of places to pick a dumb fight and declare your moral superiority, this doesn’t need to be one of those places.
Are you under the mistaken impression that housing is not a human right? Do you protest your taxes being too high in response to this argument? They're much more correlated with the total number of children in 3rd world countries that got blown up in a given year. I can't force you to care, but you still desperately need it. Fiscally, it's asinine to talk about the costs associated with this if you refuse to care about the actual holes in the US's pocketbook.
If you don’t want to respond honestly to my question that’s your right, but at least don’t get on a soapbox over it. This is HN not TikTok. You aren’t impressing anyone by avoiding the question with a deflecting rant.
> Uber is another key villain in Gouged. Per Owens, Uber’s “greatest innovation wasn’t ‘disrupting’ the taxi industry—it was socializing and normalizing the very idea of dynamic pricing. They made us comfortable with the notion that prices could change at any moment.”
In my opinion, Uber has several key innovations over traditional taxi services:
* An accurate machine-provided fare quote that you can review at your leisure before agreeing to take a trip. (Instead of, like, calling a human dispatcher to ask for a quote.)
* The fact that the passenger can't screw over the driver by making fake requests and not showing up, or running off at the end of a trip - because the online platform is in charge of the payment collection.
* The fact that the driver can't screw the passenger over by driving extra distance, because the price is set ahead of time.
> roughly 75 percent of the items in identical Instacart baskets purchased at the same time varied in price from one shopper to the next
If the price differential is large enough, it sets up an opportunity for arbitrage. Maybe if 10 people cooperate and compare notes on each of their Instacart account's product prices, and then make group purchases using the account with the lowest prices...
In general, it's harder (though not impossible) to price-discriminate on goods rather than services. If seniors get a grocery discount for example, then it might be worthwhile to hire a senior to purchase things on your behalf.
"Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident."
While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets, which implies increased future risk of loss.
In fact, I received a letter from my homeowners insurance company a couple years ago stating that they would not renew our coverage due to conditions that they'd observed (clearly from aerial imagery) including overgrown bushes touching the walls of the house and some larger tree branches growing over the house.
I had a landscaping company come and fix the issues, sent my own drone up to take new pictures, sent the company the pictures, and they agreed to continue coverage. And now my house has less future risk of damage. This seems like a win-win for both of us.
The issue is that often the data gathered and used with no consideration of other evidence. For example, I had a similar situation of home insurance sending a letter demanding I replace my roof based on drone footage. No issue was immediately obvious from the footage and we had just replaced the roof less than 5 years earlier. We had an inspection done and then sent both proof of replacement and the inspection report. We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.
So it is not necessarily objective, fairly considered observations (and I think pretty different from speeding tickets). At least in our case it was maximally for the benefit of the insurer. I think that is relevant to their claimed premise.
Never heard of this happening. It's weird anyway because roofs are something you're expected to maintain and are pro-rated. If you have storm damage to a 20 year old roof, your insurance is only going to pay for the estimated remaining life, not the full cost of a new roof.
If the roof is beyond end-of-life they probably won't pay anything, as it's a predictable cost of owning a home not an unexpected loss which is what insurance is for. Same reason they won't pay to have a tree taken down just because it could fall and cause damage. You're supposed to maintain your property; insurance is for losses beyond normal wear and tear/maintenance expense.
The house insurance in this case is a part of a mortgage contract or voluntary insurance? And if it is a part of a mortgage (as an extra payment), how does one predict how much they will have to pay for unexpected things like fixing the roof, and how does one estimate the full cost of a loan?
Also if it is a part of the mortgage why doesn't the lender pay for it? They need it, not the homeowner.
Is insurance company affiliated with companies doing the repairs?
> We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.
This is the point where you stop talking to the insurance company and start talking to an attorney as well as your state insurance commission.
Not everyone has $20k to retain an attorney.
I wouldn't accept a five-year old report either. Stuff can change in five months.
If you end up with a roof that doesn’t last 5 years, isn’t that the kind of thing you’re buying insurance for in the first place? It’s an unexpected risk that a lot of people would have trouble predicting.
Homeowner’s insurance does not cover replacing a roof after 5 years if poor workmanship or substandard materials are the reason that replacement is needed.
The report was done at the time of the dispute. The roof was 5 years old.
Pretty sure they had the inspection done at the time of rejection.
Insurance is fundamentally lopsided in the risk of a bad decision by the insurer. They have little incentive to keep you as a customer, since the potential profit is just not that big. And thus they have little incentive to do a thorough investigation of potential problems. It's just not worth it. They'd rather dump you, or risk forcing you to replace a perfectly good roof, than put effort into determining whether their report is accurate.
It's a funny business. Every insurer wants better risk assessment, since it's a competitive advantage. At the same time, the better the risk assessment gets, the less point there is to having insurance in the first place. At the limit, insurers that could accurately predict the future would charge you premiums equal to your actual future costs and you might as well just put the premiums in a savings account instead.
Were you able to get insurance from another insurer?
Yes, that ended up being the solution. Cost aside, I’d find it pretty wasteful to do the replacement.
Honestly I'd report it to the state insurance commission. Did they call out any specific issue with the roof at any point? Some kind of new code they were mandating an upgrade to or anything?
Yeah, I probably should have reported it at the time. They didn’t cite anything specific even after we requested what in the on-roof (not drone) inspection indicated an issue or was missing from the inspection.
Though to be precise, this was over a year ago so I’m not remembering their exact wording. But it likely wasn’t literally “drone footage alone,” but probably something more like “our drone footage and associated analysis” — in any case the effective interpretation being “we don’t care about installation date or your inspection. Replace it or lose coverage.”
Not that it makes it right, but there’s enough providers in my area it was less effort to get new coverage than continue to fight them.
> pricing (or making available) coverage based upon risk.
The whole point of insurance is to manage risk by spreading it across all consumers. If my insurance rates go up based on my usage or individual risk factors, it’s just an elaborate money making scheme. It should be like “everyone has to pay x to get insurance to get covered and if the claims start going up, everyone has to pay more”.
Why should safe drivers pay the same rate as people with multiple DUIs?
Why should someone who has an unpatched hole in their roof pay the same rate as someone who maintains their roof?
> Why should someone who has an unpatched hole in their roof pay the same rate as someone who maintains their roof?
Because otherwise the insurance companies can just look at your completely maintained roof that will last another 20 years and ask for a full replacement because it is 10 years old. And if you don’t comply they will drop you. (Happened to me)
Well yeah, abuse can happen. But the general principle of some people paying higher premiums than others because they're higher risk isn't a bad one.
If we mandate that insurers keep premiums equal for everyone, get ready for a lot of people to have zero access to insurance as they're deemed too risky to cover.
> But the general principle of some people paying higher premiums than others because they're higher risk isn't a bad one.
So someone with cancer should be charged $20k/month then? I am completely healthy and haven’t used my insurance much in the last 10 years. Why are my premiums so high? And why are 65+ year olds not footing most of the bill? I am not advocating for that but just pointing out that were obviously okay with charging for some risk profiles but not others.
>> The whole point of insurance is to manage risk by spreading it across all consumers.
Yes, but this does not imply that customers with (potentially vastly) different risk profiles should pay the same rates.
The canonical example is that 18-year-old single males with previous speeding tickets pay more for auto insurance than married 40-year-old women with clean driving records.
So does that mean the minute you have a cancer diagnosis, the insurance company gets to charge you $20k/month or drop you?
If the same argument is to be followed why does a person with potentially large medical bills not pay a disproportionately larger premiums than a healthy person?
So much this.
But then again, there's presumably some sort of balance. If someone insists on building and rebuilding in a flood or fire zone, it's not obvious that everyone else should see their premiums go up to cover that. One option is for the insurance company to just cease insuring the property(ies), but I suspect there's more overall negatives to that than if they bump the premiums of clients in specific locales.
This conundrum (and many others) is why insurance is a highly regulated business. The commission working in the public interest decides how the compromise is drawn, not the insurers.
> The commission working in the public interest decides how the compromise is drawn, not the insurers
I haven’t laughed so hard in years.
> If my insurance rates go up based on my usage or individual risk factors, it’s just an elaborate money making scheme.
How is pricing risk more accurately “an elaborate money-making scheme”? You’re paying an insurer to assume risk.
> This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets
This is more like your insurer following you around and evaluating your driving skills.
And yes black boxes are a thing but a) are opt-in and b) universally reviled.
Prices carry information and are not arbitrary. Insurance is a paid transfer of risk. Policies that have greater risk of loss require higher premium charges or the insurer goes broke.
Actuarial science is its own field that prices uncertain future events. As you’re bringing out here, the insurer has additional uncertainty as to the actual driving habits of their policyholders, so some conservatism is likely priced in. Aggressive drivers would like to pay the premiums of careful drivers.
This is related to the origin of GEICO, Government Employees Insurance Company. Back in the day, you had to be a state or federal employee for them to bind coverage. The investment thesis was that civil servants’ caution in their choice of employment was an accurate indication of their overall risk appetite and risk-taking behavior. GEICO was able price policies lower without going broke because they by design insured a lower-risk population.
Presumably since many people opt in, they are not universally reviled. In fact, I'd wager that people who are safer-than-average drivers don't revile them at all and actually appreciate the fact that their premiums are reduced by virtue of the evidence of their safe driving habits.
In normal places that's what police is for, but the decisions were made.
Seems like a rare instance of an insurance company actually doing their job and providing actuarial services rather than just gouging you after a claim.
The problem is that every facet they add to the analysis increases the complexity, making it harder to price risk - meaning they'll eagerly overprice [0] (based on "what if") with some idea that "the market" (ie nobody) will sort it out. This creates a race to the bottom against anything that might seem "weird", aka regular people just living their lives (while being put under a microscope), similar to how the ever growing housing bubble has painted most houses beige.
Your bushes only seem like a reasonable example because you are looking at them in isolation - it was only a single issue you had to deal with, and something you seemingly wanted to deal with anyway. If they had instead blasted you with a litany of different issues, or a bush that you wanted to keep for sentimental reasons, or you simply didn't have the time/resources to create your own counter-documentation and operate their heavyweight bureaucracy, you'd be singing a much different tune.
And while these things can happen anyway with regular in-person home inspections, the point is that increasing surveillance and unaccountable "AI" make it much easier to bury customers in a deluge of complexity making for even-less-competitive markets.
(I would give a healthy list of examples of my own home being deficient in many ways an insurance inspector would call out yet are in the process of being managed, but I'm sure it would just invite a lot of "well ackshually that's dangerous and weird!" out of touch responses from people whose first instinct is to call someone rather than to fix something themselves)
[0] Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
>> Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
Given that the annual premium is like 0.27% of the value of the policy, a change in risk of a few percent because some big tree limbs were hanging over the house or because some brushes might have enabled a fire to spread to the house more easily could clearly swamp the value of the premium to them.
And, to be clear, I didn't want to spend $2,000 to fix the problems, I would have rather not had to deal with it, but that's part of the joy of being a homeowner.
====
We live in a place (California) where the government has generally prevented homeowners insurance companies from effectively charging for risk (e.g., wildfires) and therefore many companies have stopped writing policies altogether. This doesn't seem like a good outcome. Note that this is the same state that won't let auto insurers charge based on "black boxes" either, so good drivers are subsidizing bad drivers (even more than in other places).
You should try driving a tesla with tesla insurance.
Each drive you make will rate you based on hard braking, aggressive turning, unsafe following, excessive speeding, late night driving, forced autosteer/fsd disengagements, unbuckled driving.
You'd think that driving well would eliminate these, but no.
But they give you a pass if you use tesla fsd. That is their endgame, but it sometimes gets a pass for driving more dangerously than you do. You speed - ding. fsd speeds 3x what you do? 100% score.
lol. do you know the world this is creating? who is making the rules?
Vegetation as the enemy, that is a sad consequence.
Vegetation is the enemy in forest fires, for example. One of the main reasons that lone house survived the Maui wildfire[0] was because they properly managed vegetation, which prevented the embers from setting fire to the property via a bush that's way too close. Nothing prevents you from letting the rest of your backyard go wild if you prefer, but keep it away from your walls.
[0] https://www.npr.org/2023/08/24/1195331310/red-roof-house-fir...
Most/many structure fires that are caused by wildland fires start due to "ember cast" - hot embers carried by the wind (for distances, almost unbelievably, of up to a mile). While taking care of building-adjacent vegetation is an excellent step to reduce fire risk, it won't stop fires that start on the roof, or around the soffits, due to embercasting. That requires different approaches (roofing materials, careful roof/wall interface design and more).
ps. Firefighter II (volunteer), Santa Fe County, NM
> While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works. So, I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
If you take it to the extreme of them being able to tell with 100% certainty who's going to need a payout when, they'll just arrange it so they'll never need to pay out. They'll not do or stop doing contracts with those that will need a payout, or they'll raise the premiums such that they still gain. Insurance would become pointless and customers are better off saving for their own expenses.[1]
I've made this comment before. I'll just quote myself on the basics of how insurance works, to make this point clear:
https://news.ycombinator.com/item?id=49820825
> With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.
> The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.
> The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.
[1] As a parenthesis, it being better to save is in a closed system sort of way. In reality, the fact that a lot of people would still get insurance because "that's responsible" means end providers can raise their prices on the assumption that most of their customers are the insurance companies and insurance companies "are rich", so there would still be a price difference. That's kind of what you see with health insurance where people that are not insured can get lower prices than those that are, such that it may end up even cheaper than the copay. That's for example, kinda what can be seen with styropyro's healthcare story:
https://www.youtube.com/watch?v=1162ouPHH3Q
> 5:39 so my insurance denies the CAT scan right I mean that's a really really common move for health insurance they just like to blanket deny procedures
> 6:21: but uh but the stupid part is is then I got billed $3,300 for that scan with insurance and the even dumber part is that I I got a quote from my clinic on what it would cost me without insurance and it was only $1,400 so because I have this insurance it actually cost me more money to get this scan like how is that how is that even possible that is the stupidest thing in the world
I imagine he can't see it because of the stress and anger, but that's probably exactly why the insurance denied it, because they were being billed way too high by the provider. If the provider billed the company what they billed regular people, they likely wouldn't deny them at the start. There's a limit to what anyone can pay, even insurance companies, and they have to put a stop at some point.
Back to the original point, imagine what that looks like with end providers that don't provide separate pricing between the insured and the non-insured, and where most people have insurance. The end provider would just give the higher pricing, the one for presumably rich insurance companies, so you would still save money with the insurance despite the fact that you'd save even more if the insurance companies didn't exist.
Anyway, this is a separate problem from insurance companies investigating too much and undermining how insurance works for their own profit.
> I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works, so I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
This is why mutual insurance companies exist, where there is no external investor who is trying to extract profits.
Sure, but insurance companies also routinely pay only part of the cost - I.e. if the hospital has evaluated that a CAT scan costs them $1250 to do, and they need a small profit margin (make up your own numbers), they need to bill the insurance $3300 just to get $1400 paid out. Insurances routinely only cover a certain percentage of the cost (to save $$), so hospitals have to bill more to get the $$ they need.
And I'm not saying the hospital is innocent here, but this "costs more when billed to insurance" is a long-known issue.
It's a vicious positive-feedback cycle where both parts are both cause and effect. You can also say that the insurance company also does that (fight to pay only a part) because the hospital bills too high for them. They're fighting to be billed fairly as the regular people are billed.
> if the hospital has evaluated that a CAT scan costs them $1250 to do
Remember that the fact that they can use insurance companies to drive up prices means they can also drive up their own costs.
My issue with dynamic pricing boils down to price discovery and information asymmetry.
When I buy something, I really don't know what it's supposed to cost. Barring atypical levels of research, I know how much it's worth to me, and how much it usually costs, and that's it.
But my supermarket knows almost exactly how much eggs are worth to me. If it can show me, and everyone else, a different price at different times of day, I'm no longer confident in my ability to "bargain" effectively with the supermarket. So while I can see some strong economic arguments for dynamic pricing, especially in cases like power or water usage where there's a very inflexible supply, I basically just don't trust that we won't get screwed.
Fixes could be possible. Maybe with a third party system for monitoring prices, quality, etc. But it's hard, and pretty obviously not solved in the current market, much less one with even more price complexity.
I have a a modest proposal. Any company wishing to use this kind of dynamic pricing should be willing to submit itself to "dynamic taxation".
Under dynamic taxation, we the public, would examine that firm's books at the end of the fiscal year and decide how much taxes they owe based on their ability to pay.
Note that companies are not natural people, they do not have a fundamental right to exist. Just like under dynamic pricing, if the shareholders and board think their dynamic taxes are too high, they are perfectly free to just dissolve the company and use their capital elsewhere.
Competition, and being willing to shop around is the only thing that has ever kept prices down.
Which is why we're entering that fun stage of capitalism where the winners have won enough that they just buy up any possible competition in the market, and regulators absolutely fail to enforce any sort of anti-trust/anti-monopoly measures because they're just another thing that's been bought up.
Nothing like
- Major bank consolidation
- Major media condolidation
- Major tech consolidation
- Major grocery store consolidation
etc... to really provide wonderful competitive options.
I reject the eschatology that your comment assumes. I believe we agree, however, that the answer is more competition, not less.
But imposing heavier regulatory burdens has disproportionately adverse effects on smaller would-be competitors. The big, established players know this and actively engage in enlargement of regulatory scope and regulatory capture to widen their moats. Historical examples of this are Jeff Bezos encouraging states to be more aggressive in requiring sales tax levies on internet purchases and more recently the calls by Sam Altman and Dario Amodei to “pace” AI through regulation. On the surface, they appear to be public-spirited moves but are deeply self-interested.
Breaking up big players does not impose anything on smaller competitors.
It's just that breaking up large companies has taken a very distant back seat to imposing "good for the consumer on the surface, but actually a moat" type regulations.
Here's how antitrust was gutted by Robert Bork and the Chicago School:
https://www.theamericanconservative.com/robert-borks-america...
It might differ by geography, but I have no complaints about bank, media, or grocery consolidation. Not sure what tech consolidation would be. My main gripe is ISP monopolies.
you left out the best example of having no ability to shop around: internet.
do you want comcast or comcast?
Of course in enterprise sales this has been the norm since forever, referred to as “value pricing”.
Back in the early days of laptops, I went to Oracle to give them a quote; while cooling my heels in the lobby I looked round, realized I was being an idiot, and so opened my laptop and increased the prices across the board.
I'm just waiting for the class action suits when dynamic pricing is shown to disproportionately affect protected groups.
I don’t think that would go in consumers’ favor. If anything, it’s more likely that dynamic pricing is not hurting the protected groups as their members on average have less disposable income and hence see lower (non-inflated) prices.
Can’t wait for the onslaught of opinion pieces on “Has dynamic pricing fixed wage inequality” or similar. Less discrimination if an airplane ticket always costs 300$ or 3% of your monthly salary, whichever is higher.
At 176 pages I may read it but also I’m already so exhausted by this topic since nothing is changing.
It is changing. It's accelerating, spreading, and getting worse all the time.
In short -we should have our nose rubbed in something we have no ability to control. Cool.
I'm pretty sure that the pervasiveness and the inability to do anything about it is what the person you're referring to meant by 'exhausting', though I may be projecting what I find exhausting about the topic!
Don't lose all hope. Federally, I wouldn't hold my breath, but states and cities are fighting back. California, New York, Connecticut, Georgia, Ohio, Maryland, Illinois, Seattle, New Jersey, have all banned surveillance pricing. Colorado almost did but their governor vetoed it, so hopefully he gets voted out on his ass soon, but there is more push back on this than I expected from both parties. Lots of places still have bills being worked on. https://www.icsc.com/images/made/c54c2b3e89d2a51d/Pricing-Le...
The CO governor can't run again due to term limits, and he has already demonstrated he is willing to sell out the state as he exits.
If a firm has that kind of pricing power of course they will use it. Competition is the only thing that restrains this. Most firms don't have this kind of pricing power at all, if Safeway marked up all their groceries to my maximum willingness to pay I would of course just go to Kroger or the local co-op or a restaurant for dinner.
Whenever you analyze a dynamic system, the primary question you ask is, which direction will it evolve in, and will it hit some steady state?
If you apply this thinking to the economic system practiced in most countries, the answer is that the system forces have been set up in a way that the capital owners need to be paid back on an exponential schedule, and there are barely any counter-forces to this. Hence, the system will never hit a real steady state. People will continue to creatively design more and more immoral methods of extracting monetary value from a finite system that cannot indefinitely and continuously grow exponentially. There is no other way to pay back the capitalists. There is no counter-force.
Price gouging and discounts are exactly the same thing, seen from a different angle. You can look at the people who pay more and complain, or you can look at the people who pay less and give praise.
It is kind of obvious, and supported by economists who are the experts in this field, but the article dismisses it as bullshit without much proof.
It says differential pricing benefits no consumer, and yet, I managed to travel for way bellow cost. If it wasn't for dynamic pricing, I wouldn't have travelled at all. Of course, some people were price gouged, someone has to actually pay for these costs, but these people could afford it, otherwise they wouldn't be in.
The article then mentions overall price increases. Well, yes, sometimes prices increase, for good or bad reasons. Maybe the costs have increases, because there is a war somewhere or something, and the company has no choice but to increase the price to stay in business. Or maybe the company finds itself in a monopoly position and just wants to make more profit. In any case, the price would have increased, dynamic or not. And the solution is not to ban dynamic pricing, it is to avoid getting into wars for the first one, and break down monopolies for the second.
There is also the question of spying on people, but if you don't want spying on people, ban spying on people, dynamic pricing or not. You don't need to spy on people to do dynamic pricing, and many businesses who don't do dynamic pricing spy on their users.
Uber is given as an example, saying that they raised the prices and paid the drivers less. Well, of course they did, at the beginning they operated at a loss, this can't last, at some point they need to make profit. This, by the way, is one of the many shady things Uber has done, a company for which the entire business model is not to play by the rules. The problem is not price gouging now, it is that they were too cheap before, and yes, it is bad, because that's how you unfairly drive off the competition that can keep your prices (dynamic or not) in check later on.
Insurance companies "from each according to his ability, to each according to our needs".
All of this is GosPlan with extra steps anyways. It works better with those extra steps and makes people believe too, so I can't complain
So I think there are a lot of good arguments to be made against price discrimination, and I don't think it is obvious what the best answer is.
However, I have to push back on the idea that increasing corporate profits during the pandemic means that the price increases were not market based, or that companies had the option to just keep prices the same and everything would have continued as normal.
I feel like this conclusion (that companies should not raise prices if profit is high) shows a fundamental misunderstanding of what a free market price means, and why prices are tied to supply and demand and not profit.
SO MANY people seem to think prices are (or should be) set to "total cost to create and distribute the good + a fixed profit margin", and that market competition means every company working to drive down the cost to create the good, which would mean they could sell for less than their competitor.
But that isn't how prices are set. Prices are only slightly related to the cost to manufacture and distribute the good, and are mostly based on the demand for a good and how much supply there is.
So why would profits go up during a shortage situation like the pandemic?
Well, imagine you are a company that makes widgets, and under steady market conditions you sell 1000 widgets a month for $50, and you have a warehouse that holds about 6000 widgets (a 6 month supply). It costs you about $45 to manufacture and distribute the widgets, so you make a $5 profit on each one you sell.
Now the pandemic happens. Let's suppose your supply pipeline is completely shut down, and you can't get the materials to make more widgets at any price. However, you still have the 6000 widgets in your warehouse that you have already made. Based on your experience and the situation, it seems like you won't be able to get any new raw materials for a year, and your competitors are all in the same situation.
Now, you could keep selling your widgets at your normal price, but in 6 months you will be completely out of widgets to sell, and you won't be able to make any more. So you would sell all your widgets in the first 6 months, and then people would be unable to buy any of your widgets for at least 6 more months, no matter how much they are willing to pay... you literally won't be able to make any more to sell.
Or, you could raise prices enough so you only sell 500 a month, which will make your 6 month supply last a year.
Since all the widget manufacturers are in your same situation, they all choose to do the same, and widgets go up a lot in price. Of course, your company doesn't have any extra expenses (you aren't buying any new raw materials), so the extra money you make per item is profit. Your profit increase a bunch during that time period.
Is this bad? Should the manufacturer just keep selling the product at the traditional price? If they do that, there will be no product for anyone in 6 months. Should they keep the same price, but only sell 500 a month? If they do that, then they are going to sell out very quickly every month, and half the people who want them won't get them.
Of course, half the people that would want them aren't going to get them anyway, but how should we decide who gets them and who doesn't? We could do a lottery, but that does not seem very efficient; not everyone needs a widget with the same level of need. Some people really need the widget, because it is vital to something they do, and some people just kinda like widgets but would buy something else if it was too expensive. Making it more expensive weeds out the "kinda want it, but don't need it" consumers and lets the consumers who REALLY need widgets get them (for a higher price).
Look, we can argue for a long time about whether this is the most fair way to distribute goods. While the increased priced does weed out people who don't REALLY need the item, it also weeds out people who need it but can't afford the higher price.
But you are going to end up with people not getting the item who want it no matter what, and having some mechanism to order consumers by who actually needs it the most is a much better selection mechanism than randomly choosing.
It also shows this isn't just companies raising prices for no reason.
How is this different from price gouging during a hurricane?
Why would a dynamic price be any less fair?
E.g. I'm using a per-mile car insurance policy with a device that monitors my behavior. I'm a conservative driver, so I save a lot of money. But if such systems become universal, stupid speeders will get heavily penalized because they won't be able to offload their risks onto everyone else.
So on the one hand, it's more fair to careful drivers. But on the other hand, it will logically remove all the "slack" in the system, which serves as a de-facto social safety net.
Per-mile insurance is just usage-based pricing, no different from per-gallon water or per-pound potatoes. That's not normally what people consider to be dynamic pricing.
Where it becomes a problem is when the price starts being set based on aspects of the would-be purchaser that have nothing to do with the actual product, and are solely there to evaluate your willingness to pay. Charge me twice as much because I'm buying twice as many potatoes? Of course, that's how prices work. Charge me twice as much because you've purchased a detailed psychological profile based on tracking my internet activity and that profile says I really like potatoes and I'm willing to pay extra for them? No, straight to jail.
In my example, the price actually depends on _how_ I drive (speeding, use of turn signals, etc.), so it fits.
> Charge me twice as much because I'm buying twice as many potatoes? Of course, that's how prices work. Charge me twice as much because you've purchased a detailed psychological profile based on tracking my internet activity and that profile says I really like potatoes and I'm willing to pay extra for them?
This really makes no sense. If you raise the price of potatoes on me, I'll just go to someone else. Competition still exists, after all.
More realistically, you'll raise the prices by a couple of percent for potatoes for me so I won't notice that. This is more insidious, but it also is self-limiting in scope.
I guess the key here is that there's only so much information that _people_ can track. For example, I don't really care about the price of Sensodyne toothpaste that I always buy, so a store can sneakily add a dollar or two to the price.
But hey, there are AI agents for that!
Car insurance is a terrible example to use, drivers and cars are not fungible. The risk of insuring a driver and/or vehicle has a lot of variance.
Do you want Amazon charging you twice as much for a product as someone that has half as much disposable income because they’ve determined you can afford to pay more for the exact same physical item?
Sure. I'll just switch to someone else. I don't want the government regulating the way Amazon sets the prices.
The parts that I _do_ want to be regulated are the requirements that Amazon puts on its merchants.
And they did it the way they always do it: start with poor people and minorities, so that the public get inculcated with the tacit notion that the people being price-gouged "deserve" it.
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Have the lockdowns and empty shelves that formerly held toilet paper really been that long ago? Artificially forcing sale prices to remain static when the underlying dynamic, which is to say the price, has changed creates economic dislocation and even suffering. Prices carry information and are not arbitrary.
Choose your emergency: paper products, bottled water after a hurricane, etc. Value is subjective; no item has an underlying True Intrinsic Price. When demand increases, the item becomes more valuable. The price should go up, at least in the short term. When held lower than the market price, runs occur and shelves empty. When allowed to rise, increased prices have a natural rationing effect to keep goods on the shelves for people who need them. Higher prices attract new providers, and the increased supply brings prices back down as circumstances return to normal.
Analyzed rationally, we see there’s no such thing as price gouging. The concept is an appeal to our base instincts.
I think "gouging" is an entirely fair description for targeted pricing that charges certain people more solely because your analytics suggest that they're willing to pay more.
When a potential employer demonstrates willingness to pay more with an offer that includes higher compensation, is the applicant a “price gouger” for charging a higher price than she would would have otherwise?
When someone is selling a house, is the seller a “price gouger” for accepting the higher of two competing offers for the same house?
Do you have any rhetorical examples that don't involve major negotiations? There's a big difference between two parties sitting down to hammer out a deal worth six or seven figures, and getting charged more in a retail transaction because the company has collected megabytes of data on my personal habits and they think I'll pay more for mouthwash.
People don't want every single retail transaction to turn into a negotiation on the level of buying a house or taking a new job.
It happens all around us. The term from the literature is market segmentation. Exceedingly bright people make a lot of money identifying, analyzing, and adapting to the boundaries of market segments. Airline prices tend to be more expensive during the week because business travelers occupy more seats, want to get home sooner, and are less price-sensitive due to employers footing the bill. In the U.S., your choice of Publix, Kroger, Walmart, or Aldi for grocery shopping demonstrates your most comfortable segment. After passing through the doors of your favorite grocer, further opportunities for market segmentation are in your choice between name brands or store brands, which both may have originated from the same supplier.
Grocery store margins tend to be thin. Where they really want you going is to the pharmacy, and surprisingly, what they want you to buy is generic drugs — more market segmentation. The name brand drugs tend to be really expensive. The generics are much cheaper in direct comparison, and for the store, the margin on generics is higher because name-brand prices create headroom. Yes, these broad generalizations have lots of exceptions, e.g., some generics are not perfect substitutes for name brand drugs, but the general pattern is there.
Market segmentation and dynamic pricing aren’t the same thing. Dynamic pricing is showing two different people different prices for an identical purchase based on your knowledge of the potential purchasers. It’s not, Amazon carries name brand and generic products because some people will pay more for the brand. It would be, Amazon shows me $10 for SKU X and shows you $20 for SKU X because their data says you’ll pay $20.
“Drones are racist, just like clear nail polish and white paint (ah and math)”
A yes, capitalism; a system that works perfectly as long as communication and data processing technology is innefficent enough to put a natural efficiency limit on all firms. Reminds me of the scandal around rental price "collusion", which ultimately was kinda just really effective software for doing stuff that would normally be fine.
*ETA:* And FWIW, the author here goes about as far towards that as they can -- a shoutout at the end! Anything else would be decried as biased, after all. Great article; shame it'll soon be downranked by the wonderful machines running this place :(
You mean like withholding units from the market to overcharge renters when there’s people sleeping on the streets? Totally fine.
You're describing conditions that actually result from the opposite of unfettered capitalism. Housing supply is artificially constrained because of zoning laws, tax incentives, rent freezes, environmental reviews, and general opposition to anything new, allowing landlords to behave like this (which, as an aside, they seldom actually do). The solution is to eliminate restrictions on housing construction so supply can grow with demand.
That feels like a worthy critique but I'm not sure it relates? That's just how capitalism prioritizes capital over anything else, which is the core problem of course but isn't super related to the problems of increasing information. In fact, wouldn't this technique get harder to pull off as renters have access to better and better tools themselves?
What kind of tools would help renters? This "just one penny less than they will bear" is part of the problem of modern society. There used to be SOME areas you could "win" a little. Pay a reasonable price for rent, not exactly 33.3333% of your income. Pay a reasonable price for a car, not 25.0% of your income, etc. Save a few percent here, a few percent there, and you could eventually get a downpayment on a house, or indulge in a hobby.
The endgame for these ghouls is to have you work 996+ and spend 99.9999999...% of your income on just the bare essentials so that there's not one penny left unmonetized for you to just exist, and nothing left for any type of enjoyment.
Maybe different but where I live you can certainly shop the rental market and pay less if you'll accept an older building, without modern updates. You'll have a Formica countertop not a granite one. You'll have basic appliances not stainless steel. You'll have carpet and not hardwood laminate floors. You won't have a pool or exercise room or party room. Your address won't impress anyone. But you'll pay hundreds less per month in rent.
I wouldn’t expect it to; better information, without power to act on it, doesn’t do much.
That said, this’d be one of those things where you can say “this is my prediction”, and if it doesn’t come true, go looking for the forces and factors you missed from your initial prediction.
Are you under the mistaken impression that chronic homelessness is caused by lack of housing supply? It’s much more correlated with mental illness and addiction in people who can’t be forced into care, but still desperately need it.
Your empirical claims are extremely incorrect, but regardless this whole discussion will be shut down. Shame -- it really was a good article :(
https://www.humanrightsresearch.org/post/the-intersection-of...
https://americanaddictioncenters.org/rehab-guide/addiction-s...
https://www.samhsa.gov/communities/homelessness-programs-res...
https://www.congress.gov/crs-product/R44302#_Toc437336722
It’s not exactly a cryptic relationship, and it implies the need for more than just housing, people need serious inpatient care or structures outpatient programs and those are hard to fund. It’s doubly challenging because of how the US mental health system changed in the 1980’s… very much for the worse.
At least you didn’t assume I was arguing against housing.
I love that you just Googled sources and didn't even read them
your first source says verbatim: "One of the main causes of homelessness is the lack of affordable housing". it also doesn't link addiction or mental illness as a cause - it describes that the rates are higher in unhoused populations
a brief thought experiment: if you were unhoused, living on the streets, barely enough money for food and water, your body exposed to the weather, knowing that society looks down on you at worst or ignores you at best, how would your mental health fare?
well, according to your second source:
> It can be more challenging for people who are homeless to stop using substances, because they may not have easy access to treatment, often have smaller social support networks, may have decreased motivation to quit drugs or alcohol, and may have other, higher priorities, such as finding housing or food
it's almost like being unhoused itself causes cycles of addiction because at least the drugs take the pain away for a short stint?
your third source similarly contradicts your initial claim:
>For years, ending chronic homelessness was thought to be a multi-step process, with individuals receiving treatment for addictions and illnesses, perhaps while living in transitional or temporary housing, before being found capable of living on their own. However, the strategy for ending homelessness has changed, largely due to research pioneered by housing providers. Instead of requiring chronically homeless individuals to be "housing ready" by first addressing issues thought to underlie homelessness, the new strategy allows chronically homeless individuals to move into permanent supportive housing without preconditions.
either find better sources or actually read the research you're citing, learn from them, and stop making unfounded and ludicrous claims you can't even back up
All of that is true, and I don't deny any of it. I also don't think it's unreasonable to conclude based on my initial phrasing that I was somehow against housing. I'm not. I'm for housing the homeless *but also we need to do more unless you want their lives to continue to be hell*.
I'm sorry, but the idea that having a place to sleep is enough to save a life is sorely mistaken. A third of chronically homeless people have at least a serious mental health issue and those don't go away. Likewise substance abuse is a hard thing to kick EVEN WITH A HOME. It's doubly so these days when drugs are routinely cut with fentanyl, designer drugs, and worse. A good friend of mine died three years ago very much homed, but almost totally unable to find meaningful, quality, and lasting treatment. In the end after a DECADE clean someone abused her, tricked her, and she was gone three months later.
PUTTING PEOPLE UNDER A ROOF IS NOT ENOUGH.
that's totally fair and I'm really sorry to hear that. wraparound services provided in-full is necessary and often a skipped thing that municipalities ignore and foist on ill-equipped and often-problematic religious institutions and things like AA (which is effectively also a Christian/deist indoctrination program)
I'd love to live in a utopia where our money doesn't go to murdering hundreds of children in an elementary school in another country and instead provides fully funded and socialized longterm treatment programs for people who need it, with strict regulatory and auditing guidelines to prevent abuse and non-evidence-based practices
it's a fucking shame how far we are from that ever becoming reality
...did you just link to "American Addiction Centers" as proof that the root cause of homelessness in the US is drug addiction? I... I can't believe this is the level of rigor that justifies such horrible cruelty. Just mind boggling.
I linked to multiple sources, why cherry-pick the one you deem the weakest?
With all politeness: because it shows beyond a doubt that you are arguing in bad faith, using post-hoc reasoning.
You’re making a lot of wrong assumptions about my argument based on what appears to be an expectation that anything less than a tonal echo of you is a rejection of the concept of providing housing. All of this in an environment that explicitly instructs us to charitably interpret what others are saying.
The internet is full of places to pick a dumb fight and declare your moral superiority, this doesn’t need to be one of those places.
Are you under the mistaken impression that housing is not a human right? Do you protest your taxes being too high in response to this argument? They're much more correlated with the total number of children in 3rd world countries that got blown up in a given year. I can't force you to care, but you still desperately need it. Fiscally, it's asinine to talk about the costs associated with this if you refuse to care about the actual holes in the US's pocketbook.
Is housing now a human right in liberal-land?
I guess God needs to get going building a house for every baby!
Call me when vanilla ice cream is a human right please!
If you don’t want to respond honestly to my question that’s your right, but at least don’t get on a soapbox over it. This is HN not TikTok. You aren’t impressing anyone by avoiding the question with a deflecting rant.
Potatoes, eggs, whole mess of massive spikes in collusion everywhere is the problem
It was not the efficient algorithm, but the pooling of the data that was considered to be collusion.
> Uber is another key villain in Gouged. Per Owens, Uber’s “greatest innovation wasn’t ‘disrupting’ the taxi industry—it was socializing and normalizing the very idea of dynamic pricing. They made us comfortable with the notion that prices could change at any moment.”
In my opinion, Uber has several key innovations over traditional taxi services:
* An accurate machine-provided fare quote that you can review at your leisure before agreeing to take a trip. (Instead of, like, calling a human dispatcher to ask for a quote.)
* The fact that the passenger can't screw over the driver by making fake requests and not showing up, or running off at the end of a trip - because the online platform is in charge of the payment collection.
* The fact that the driver can't screw the passenger over by driving extra distance, because the price is set ahead of time.
> roughly 75 percent of the items in identical Instacart baskets purchased at the same time varied in price from one shopper to the next
If the price differential is large enough, it sets up an opportunity for arbitrage. Maybe if 10 people cooperate and compare notes on each of their Instacart account's product prices, and then make group purchases using the account with the lowest prices...
In general, it's harder (though not impossible) to price-discriminate on goods rather than services. If seniors get a grocery discount for example, then it might be worthwhile to hire a senior to purchase things on your behalf.
If you're shopping via Instacart that alone is a huge signal that you'll pay for convenience and you're already price-insensitive.
Go to the supermarket and put your own items in your own cart. You'll pay the same price (the one marked on the shelf) as everyone else that way.