Go deeper - join us!
Uber’s new system
Uber’s new pricing system doesn’t put any more money in drivers’ pockets but it may adjust your fares.
After testing the system within different markets, the ride company announced that they would be changing their pricing system in the hopes to turn a profit.
Route-based
Uber calls it their “route-based” system. In essence, they will charge customers what they think they are willing to pay. Instead of calculating prices based on mileage and time like in the previous model, they are applying what they call “machine-learning techniques” to estimate fares.
Confused yet?
Basically, Uber will determine the price you pay depending on where you want to go.
The determining factors are location and time of day. 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.
Again, traffic and distance does not come into play in this system.
While these fares basically secure that wealthier customers will pay more, it does not address a few factors that have been troubling to Uber for some time now. For instance, will wait times be longer in less desirable areas? More importantly, will drivers earn a fair wage?
The fine print
Unfortunately it seems that the new pricing system does not leave employees with more money in their pockets. Uber has reported that they will show how much each passenger pays per ride, but will not breakdown how much the company takes.
This will require drivers to sign new contracts accepting this pay structure.
Uber has faced many problems in the past, with price discrepancies and scandals flooding the news. What were the overall complaints? As a business Uber does not make enough money and drivers are paid too little.
So will the fare restructuring fix those problems?
According to Uber, the company itself will be able to move closer towards a profit because they are taking home more money. This will put them back into competition with other popular ride share companies in addition to gaining revenue for the business.
Uber promises that the money earned will be put towards improving the company, which in turn, means future bonuses and higher income for drivers.
