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.

Comments

Don't think Uber will be alone with this

[NotInHere]

Other companies will adopt this as well. They will charge you what you are willing to pay them. You won't even be safe outside of the online world, in retail shops the price tags will adopt depending on the time of day and maybe even, combined with face tracking, who is around.

Re:Don't think Uber will be alone with this

[ShanghaiBill]

Don't get me wrong, I'm not defending Uber.

You should defend them. They have every right to charge what the market will bear. They have every right to pay their employees what the market will bear. They are a business, not a charity.

If you don't like what they charge, then use Lyft, or take a taxi, or walk. If you don't like what they pay, then go work elsewhere.

Disclaimer: I use Lyft. I hate Uber. But although I don't like what they charge, I will defend their right to charge it (although, unlike Voltaire, not to the death).

Re:Don't think Uber will be alone with this

[bondsbw]

It's not like that is even remotely unique to this industry.

I always fill up at the gas station, and I pay whatever the price comes to. The yogurt shop charges by weight after I pour and add toppings. My employer pays me for all the time I use to complete a task. This happens with or without an estimate; so long as the final charge is reasonable, people usually don't complain.

Better example:

[140Mandak262Jamuna]

Someone travelling from a poor neighborhood to a fast food joint when the work shift starts will be asked to pay more than someone going from movie theater to starbucks, because the former might not have any other transportation and can be squeezed dry.

The SJW Silence is Deafing

[Anonymous Coward]

"...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..."

Quite clearly discrimination based on race.

Re:Tracks

[Anonymous Coward]

This!

When I Ubered from the Orlando, FL airport, the ride was wicked expensive because to service the airport, there were special requirements (black limo or upscale SUVs only) and the driver said they had to pay $1000 per year for the privilege of picking up fares there.

The return trip to the airport was half the cost, and that driver explained the strategy for my next trip. Get your airport ride to the nearest restaurant, and then call a normal Uber from there to wherever you are actually headed.

I thought that was a wonderful market response to Uber price gouging.