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Uber Starts Charging What It Thinks You're Willing To Pay (bloomberg.com)
An anonymous reader quotes a report from Motherboard: Uber drivers have been complaining that the gap between the fare a rider pays and what the driver receives is getting wider. After months of unsatisfying answers, Uber is providing an explanation: It's charging some passengers more because it needs the extra cash. The company detailed for the first time in an interview with Bloomberg a new pricing system that's been in testing for months in certain cities. On Friday, Uber acknowledged to drivers the discrepancy between their compensation and what riders pay. The new fare system is called "route-based pricing," and it charges customers based on what it predicts they're willing to pay. It's a break from the past, when Uber calculated fares using a combination of mileage, time and multipliers based on geographic demand. Daniel Graf, Uber's head of product, said the company applies machine-learning techniques to estimate how much groups of customers are willing to shell out for a ride. Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. For instance, someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town, even if demand, traffic and distance are the same.
This is why taxi companies have to post rates and those rates are based on a combination of time and odometer, at least in many jurisdictions it's mandatory for them to do this.
Uber is once again demonstrating why we have passenger livery laws, and in this case it might well be the first time that flouting it has a strong effect that's really felt by the customer.
Do not look into laser with remaining eye.
the gap between the fare a rider pays and what the driver receives is getting wider.
Uber's profit margin is none of the driver's business. Don't get me wrong, I'm not defending Uber. I think they're scumbags and you shouldn't work for them. And if you don't think Uber is paying you enough, then that's another good reason to not work for them.