Artificial Inflation?
AI continues to see widespread use. While many benefit from AI by speeding up workflows, including General Motors, which is using the technology to shorten its vehicle development process, others have seen it backfire. That concern now appears to extend to gas stations, as suggested by a lawsuit involving several chains in California.
According to KTLA 5 News, a group of California drivers filed a lawsuit in Sacramento accusing gas station chains of using AI to increase pump prices. The named companies include BP, Circle K, 7-Eleven, Walmart, Marathon Petroleum, and Albertsons, along with Kalibrate, which allegedly supplies the AI-powered tool.
Algorithm At Work
How does AI increase pump prices? The proposed class action states that the tool collects data from competing stations and recommends or sets prices, after which pump prices allegedly rose by as much as 30 cents per gallon in areas where the software was widely used. The report noted that the named companies operate more than 1,700 gas stations across the state.
California already has the highest gas prices in the U.S., partly due to its fuel taxes. That helps explain why some drivers reportedly travel to Arizona just to fill up, especially after fuel prices rose amid the conflict in the Middle East. As such, it is understandable why some drivers are frustrated by the alleged AI-powered price-coordination scheme, which the lawsuit argues violates the state’s primary antitrust law, the Cartwright Act.
The complaint reads, “While families struggle to afford the commute to work, Defendants have conspired to put an end to competition, joining an AI-powered trust to ensure that no matter where a driver turns, the price for gasoline is artificially high.”
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Watching The Pumps
It is worth noting that AI-generated pricing recommendations are not the issue by themselves. The concern is the alleged use of AI to coordinate or fix prices among competitors. Again, this is only a lawsuit for now, but California drivers may still want to keep a closer eye on pump prices to save money where possible.
So far, high gas prices have already been changing car-buying behavior, with GM admitting it has seen a significant shift away from pickup trucks like the Chevrolet Silverado. If prices remain elevated, that trend could continue, especially in California, where drivers may have more reason to consider fuel-efficient cars, hybrids, or EVs.
