The Problem with Priceline

By Joab Jackson, Baltimore City Paper. Posted June 6, 2000.

Is it just me, or does anyone else find the idea of using Priceline (www.priceline.com) for grocery shopping a bit odd?

I have nothing against Priceline, mind you. I became a convert to this Internet bidding service a while back, after it saved me about $100 on a last-minute airline ticket from Baltimore, Md. to San Francisco. (Priceline's gig is taking bids on flights: You submit your destination, travel dates, and what you want to pay; Priceline looks for a match, and if it finds one you have to take it.) I'd e-mailed a bid of $200, half the lowest fare I'd found on my own. I got a quick e-mail rejection, the electronic equivalent of "What, are you kidding?" So I sent in a higher bid; an hour later my credit card was charged $300, and I was San Fran bound. I gave up the flexibility of departure times and the option of refundability, but Priceline got me there.

Still, when I saw the company's commercials trumpeting how we can now buy groceries by the same bidding method, it just seemed to me like crazy Internet talk (The company now offers the grocery service pretty much in all the states east of the Mississippi River, and plans to take it nationwide by year's end). Not a week later, though, I found someone who was actually using the service. Out apartment shopping, I had to wait to see one unit while the building manager finished her shopping list on an office computer.

With her prim bun of hair and floral dress, this sixtysomething seemed more like a coupon clipper than a technological pioneer. I asked her how Priceline grocery shopping worked. What she told me seemed kind of complicated: You go to the Web site and bid on the items you want. (There are thousands to choose from-but you must be somewhat flexible as to brand names.) In a minute or so, Priceline returns a list of those offers that it accepts. You then print out the list, and, with your Priceline shopper's card, take it to a participating supermarket. ("And pretty much all of them do," the apartment manager said, showing me a list.) The cost of the items is charged to your credit card.

"So you actually save money on this?" I asked.

"Oh, sure," she said. "Look at this." She points to a picture of a box of Life cereal on her computer screen. She had purchased a box for just under $3. "You can't get cereal for that price. Not that brand." Indeed, the equivalent item at the local supermarket would run a full dollar more. "And this," she went on, directing my attention to the twin tubes of toothpaste she'd picked up for $1.97. A single tube of that brand alone would cost about $2.39 if obtained by traditional methods of purchase.

Not that Priceline, like any new on-line enterprise, doesn't have its share of snafus. Leaving the apartment manager, I took a quick jaunt through Usenet, where I found some tales of Priceline frustration. One Netter, Sheryl Rosen, wrote in the rec.food.cooking newsgroup that on a recent Sunday morning she spent three hours trying to log in to Priceline to buy groceries, and had to wait five hours for the downloadable list she needed to take to the store. She essentially lost a shopping day.

Still, Rosen is pleased with the service. "Today, I spent a little over $9, and my grocery bill came to $27. Which means I saved about [two-thirds of the cost of the groceries]," she tells me by e-mail. "I save a ton of money. It's simple and I'm pleased with it." (And not long after her bad Priceline day, a site employee spotted her tale of woe on the Net and sent discount tokens.)

Groceries aren't the only consumer item Priceline hopes to bring under its umbrella. Having already added hotel rooms, new and rental cars, and long-distance phone service to its original airline-ticket business, the company plans to start offering gasoline too. Instead of just paying whatever price is quoted, we can now haggle like our forebears in a medieval marketplace, perhaps realizing savings from a seller in need of quick cash. One can almost believe William Shatner when, in that silly age-of-Aquarius Priceline ad ( www.priceline.com/media/plmedia.htm), he boldly states, "It's a whole new age of consumer power. Can you dig it?"

Maybe. But something still left me uneasy about Priceline, something I couldn't put my finger on until I read writer/composer/virtual-reality pioneer Jaron Lanier's 1995 essay "Agents of Alienation" ( www.advanced.org/jaron/agentalien.html). An essay about intelligent software agents, it nonetheless could be applied to Priceline as well. Lanier pointed out that sometimes we humans have a habit of fooling ourselves into believing computers (or, in this case, computer-run services) are making our lives easier, when in fact we are only contorting our lives in all sorts of complicated ways to make it seem so.

"The person starts to limit herself to the categories and procedures represented in the computer, without realizing what has been lost," Lanier wrote, almost as if he foresaw services like Priceline. When, under the guise of saving money, we spend hours waiting for a printout, or show up at the airport at odd hours on short notice, we are guilty of this foolishness. And our folly may actually reduce rather than expand our options.

"Priceline is a little disingenuous," Lanier responded when I e-mailed him asking what he thought of the service. "Since consumers actually have less information than they do in conventional transactions ... consumers won't get to learn how desperate sellers might have been." Vendors may cut a deal to make one sale but won't have to lower prices to meet the market as a whole.

Far from actually bringing buying power to the people, in the long run Priceline may keep us in the dark. If this service takes off and more people bid for items independently rather than buy them at prices listed for all to see and compare, everyone may lose out.

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