We are attending at the beginning of an era dangerous in commercial aviation. One in which if you go to a funeral the ticket will cost you more
In the United States they are already called “surveillance -based prices” (Surveillance Pricing), and they consist in a simple and scary principle: that companies that sell products and services do it in a personalized way with AI algorithms that will analyze all the information they have about you. Delta, what are you doing. In Delta Air Lines they raised to do that, but the idea He ended up knowing each other and being very criticized. So much that several American senators published an open letter demanding the CEO of the airline to explain those plans. In Delta they intended to eliminate static prices to replace them with dynamic prices that were adjusted to what each client theoretically was willing to pay. How are these personalized prices calculated? Companies such as Fetcher – who collaborates with Delta or Virgin Atlantic – have been working on these systems since 2019. They have deep learning experts (Deep Learning) and have one “Large Market Model“, an AI model that is capable of generating those custom prices based on the information of each user. Spying on to meet you better. In fact his CEO, Roy Cohen, explained That this model is trained “with all the data we can collect”, and on the company’s website they affirm that this type of systems could increase the benefits of airlines by 4.4 billion dollars annually. To collect this data, surveillance -based price systems use all types of third -party channels such as the purchasing history of a passenger, its navigation history, its geolocation, its activity in social networks, its biometric data or its financial statement. If you leave funeral, we upload the price. The former member of the FTC Lina Khan Council He already explained that this type of custom pricing systems could raise disturbing cases. A conceivable example would be that of an airline that uses artificial intelligence to collect a higher rate to a passenger “because the company knows that it has just suffered a death in the family and needs to fly to the other side of the country.” The intention was to abandon static prices. In July the president of Delta, Glen Hauenstein, declared which hoped that at the end of the year 20% of the price of its tickets will be determined individually by these AI systems. At that time that percentage was 3%, the triple that in autumn of 2024, but is that the objective was to completely abandon the current price setting systems to make the jump to these personalized and calculated prices based on what is known about each passenger. The pain threshold. The system would also put to the limit the so -called “pain threshold” of each client, establishing that maximum amount that the data suggests that these passengers want to pay. If you are in a hurry – as in the hypothetical situation of having to go to a funeral – the price would increase, while in a routine trip the price would be comparatively lower. Consumer surplus. There is a theoretical principle that explains very well the intentions of companies such as Delta Air Lines. Is called consumer surplusand it is the difference between what a client is willing to pay and what he really pays. Companies seek to capture that surplus, and AI allows you to do it almost perfectly. That, of course, entails a risk: if customers pay the maximum for what they buy, they will have less income for other expenses. Here it will be more difficult for them to do it. In Europe carrying out this type of plans seems difficult: the General Data Protection Regulation (RGPD) prohibits automated decisions based on personal data and that have meaningful effects on the user unless it gives their explicit consent. Like dynamic, but supervitaminated prices. It really is of all known that there are many companies that make use of the so -called dynamic prices that try to adjust supply and demand. Airlines have always used them —The price varies according to the day and time of the week or the number of days before the flight – but they are also well known in VTC companies such as Uber or Cabify. Said systems, of coursethey have unleashed more than one controversyand there were suspicions that Uber even raised the price if you reserved a trip When you had little battery. However, these systems do not have that massive data collection section and user profiles that raise prices based on surveillance. Image | Simon Ray In Xataka | There are people getting free flights and money at the expense of airlines. Your superpower: be very patient
