Uber has been charging passengers with accordance to the routes they are tracing, in Bloomberg and Business Insider reports. Such plan aims at garnering drivers in such areas to work on shrinking the passengers’ wait time.
Uber used to charge drivers with accordance to the mileage, the time of the day, and the traffic on regular basis.
Meanwhile, Uber has been experiencing a route-based pricing with UberX service over the past year in more than a dozen of cities that had UberPool.
In other words, drivers pay is not directly related to how much the passenger would pay; however, it relies more on the three mentioned factors: mileage, time of the ride, surrounding demand, which, in turn, outraged the company’s drivers.
According to Bloomberg, Uber’s head of product Daniel Graf has said that they are connecting machine that learns about how much a passenger can pay and then the company charges them based on the upfront pricing estimations. Such feature proposed by the company is dubbed “route based pricing,” which means that passengers are to be more in wealthier neighbourhoods than passengers are to pay in moderate areas.
In a phone call interview with Engadget, an Uber spokesman said that passengers choice is the element to determine upfront pricing structure, not the passenger’s estimated wealth, of course. He said also that the fare charged can exceed the driver’s payment, which is set according to duration, distance, and traffic. He also noted the service is activated in areas with Uber’s carpooling services.
“We price routes differently based on our understanding of riders’ choices so we can serve more people in more places at fares they can afford,” he said. “Riders will always know the cost of a trip before requesting a ride, and drivers will earn consistently for the work they perform with full transparency into what a rider pays and what Uber makes on every trip.”