Uber to hike fare prices based on where you live

Marco Green
May 28, 2017

And it did not get there by sitting on its haunches and letting things take place as they would.The company is known for bringing disruption to the niche it operates in and along the same, we have gotten wind of something the company may be doing to double guess its customers at a very psychological level.

During the previous year, Uber had attributed price discrepancies to the uncertainty around estimating fares, even as it was experimenting with techniques created to exploit the imbalance between what customers were willing to pay and what drivers would take. This feature guarantees a rate to customers before they get in the auto.

The majority of UberX's trips are priced on mileage, time and general demand in the area, but some guinea pigs in areas with its carpooling service UberPOOL have found they are being charged more for specific routes. Drivers might understandably be upset if they see themselves as independent contractors using an app to facilitate ride-sharing - a claim Uber itself encourages - who are not seeing any benefit from higher per-ride fees. Reportedly, the gap between these two factors has only been going up with time. So if you want to go downtown on a Friday night, your price will be estimated higher versus someone trying to go to a Chili's down the street at the same time.

Under the new system, in place in 14 major markets, driver pay is no longer directly tied to how much passengers pay. Drivers won't make more money from the premium prices.

Unfortunately it seems that the new pricing system does not leave employees with more money in their pockets.

However Uber will not be paying drivers more based on what suburb they are working in.

This will require drivers to sign new contracts accepting this pay structure.

Uber has faced a torrent of scandals this year, including a trade secrets lawsuit and sexual harassment allegations. What were the overall complaints?

Graf believes the change is necessary in allowing Uber to not only maintain an edge over taxis but also increasingly relevant competitors like Lyft without running excessive losses.

So will the fare restructuring fix those problems?

Thus far, Uber's proven shaky at best in managing the trade-offs, and this development will once again test the controversial company's ability to manage its growth. The company told Bloomberg in April that it lost $2.8 billion in 2016, not including its China business.

Meanwhile, the company has also been antagonizing drivers who have caught on to the disparities between what passengers pay and what driver receive.

Other reports by Click Lancashire

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