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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
(Score: 1, Insightful) by Anonymous Coward on Sunday May 21 2017, @02:39PM
The underlying system (the market) is inherently decentralized; it doesn't matter that a pocket of centralization develops as a matter of efficiency—should that local centralization become dysfunctional, the whole system drops back on the underlying decentralized system (e.g., the variation and selection of competition and consumer choice), thereby allowing new, working, local pockets of centralization to replace the dysfunctional ones.
"Fairness" means nothing. It's a completely subjective notion, which is why it never works to shoehorn "fairness" into what is supposed to be an objective system. You only achieve objective reality through the negotiation of voluntary interaction, on a person-to-person basis (and, obviously, on an organization-to-organization basis, as determined by the voluntary association of individuals to organizations, etc.).