A lot of riders have written in asking how Uber fares are calculated. Last year, Uber introduced Upfront Pricing, which allows a rider to know the cost of the ride before they get in the vehicle. While Uber’s upfront pricing was meant to bring transparency to Uber’s pricing system, in many cases, it’s done the opposite.
For one thing, upfront pricing makes it difficult to know if surge pricing is in effect. Another issue that riders have brought up is how two rides that are a similar distance often have wildly divergent prices. A third problem riders have been complaining about is how they will take the same exact trip multiple times a month, but the price may vary by as much as 100%.
This has left a lot of riders confused and angry. Luckily, the good folks over at Ridester have put together a guide to Uber rates and costs, as well as a handy little fare estimator. Head on over and take a look. The fare estimator is particularly nifty.
Uber’s Upfront Pricing: The effect on Drivers
These issues are of course separate from the anger and confusion upfront pricing has caused among many drivers. For example, a lot of drivers are still under the impression that Uber only takes 20-25% of a fare, and the driver keeps the rest. With the advent of upfront pricing, that is no longer the case. Drivers are paid by time and distance only. Customers are charged based on a complicated algorithm that takes many factors into account.
Sometimes, this results in a ride where Uber receives 50% or more of what the rider paid. On other rides, Uber’s take can be as low as 5%. However, overall, upfront pricing has wound up meaning less money for drivers, at least on Uber. This may be why a growing number of Uber drivers are signing up to drive for Lyft. The higher sign up bonuses Lyft has been offering in a number of cities, such as Iowa City and Ann Arbor, may also have something to do with that.
If you’re a driver, how has upfront pricing affected you?