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Uber Starts Charging what it Thinks you are Willing to Pay

posted by cmn32480 on Sunday May 21 2017, @12:07PM   Printer-friendly
from the I-am-willing-to-pay-$0 dept.

Fnord666 writes:

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 Technologies Inc. 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.

Source: Bloomberg

Original Submission

 
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  • (Score: 2) by opinionated_science on Sunday May 21 2017, @12:43PM (3 children)

    by opinionated_science (4031) on Sunday May 21 2017, @12:43PM (#512993)

    I actually have some evidence of this - I travel alot. A friend pointed out that just the fact you use it out of town/country , probably gives them enough information to bump the rates.

    I installed lyft as soon as I read this article - now how do I tell the uber app it has competition....:-)

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  • (Score: 0) by Anonymous Coward on Sunday May 21 2017, @12:58PM

    by Anonymous Coward on Sunday May 21 2017, @12:58PM (#512998)

    [chilling?]
    you don't do anything, the Uber app already knows much more about you and what you have loaded on your device than you suspect

  • (Score: 0) by Anonymous Coward on Sunday May 21 2017, @02:21PM

    by Anonymous Coward on Sunday May 21 2017, @02:21PM (#513021)

    it already knows...

  • (Score: 2) by krishnoid on Sunday May 21 2017, @04:11PM

    by krishnoid (1156) on Sunday May 21 2017, @04:11PM (#513045)

    I actually have some evidence of this - I travel alot.

    Huh, I didn't know they provided travel services [blogspot.com]. Guess you learn something new every day.

    I installed lyft as soon as I read this article - now how do I tell the uber app it has competition....:-)

    Well, there's always #deleteuber [nymag.com].