Love rideshare, but hate wondering what your total cost will be? That’s no longer a problem for Uber users. The company is telling customers the cost of a ride up front, instead of waiting to give them their total bill when the ride is over.
This change was implemented after the success of uberPOOL, which uses a similar up-front pricing format. UberPOOL lets users share a ride with other customers who are picked up along the way.
“Knowing how much a ride will cost in advance is clearly something riders appreciate: today uberPOOL accounts for over 20 percent of all rides globally,” an Uber blog post about the change said. “And we now want more riders globally to benefit from this feature.”
This means that riders pay the price they see on the screen when they book. They no longer have to worry about traffic, which in the past would’ve likely added to their total charge.
“Upfront fares are calculated using the expected time and distance of the trip and local traffic, as well as how many riders and nearby drivers are using Uber at that moment,” Uber shared.
The End of Uber Surge Pricing?
Marketed as a “no math and no surprises” policy, customers in theory will appreciate knowing the cost of their ride before hopping in the car. This update also means people won’t have to do math to calculate their price when surge pricing is in effect.
But don’t think this change means surge pricing is over. Unfortunately for customers—but luckily for Uber drivers—Uber simply calculates surge pricing in the final cost of the ride.
For those who haven’t had the pleasure of experiencing surge pricing, it refers to when Uber jacks up the cost of a ride based on demand. This means during holidays like New Year’s Eve you could pay up to eight times the normal fare.
Unsurprisingly, customers hated having to pay this price hike, and some may even have been willing to wait for the “surge” to drop. Previously, Uber would alert customers when the price dropped, a notification that won’t be available with this price change.
Of course, drivers love this element of rideshare. Many drivers won’t accept rides unless surge pricing is in effect.
Some say the new pricing policy is a sneaky move on Uber’s part to make customers forget about their unpopular surge-pricing policies. After all, instead of seeing the lightning bolt notification about the surge and having to manually type in the surge amount, customers only see the price of the ride.
There is only a small notification near the price that lets customers know about increased demand. And, according to The Wall Street Journal, customers can see the areas of a city with the most demand by looking at a heat map.
This new update is being tested in cities across the country including:
- New York City
- San Diego
- Parts of New Jersey
What Does This Change Mean for Uber Drivers?
Thinking of becoming an Uber driver and wondering how this would affect you? As mentioned, this pricing change won’t get rid of surge pricing, which is good for drivers.
Right now though, if someone requests a ride they will see a side-by-side pricing comparison between uberPOOL and uberX. Since uberPOOL is the cheaper option, this could lead to more people choosing uberPOOL instead. But while uberPOOL requires more work from the driver, according to The Rideshare Guy, the driver doesn’t make more money for the extra effort.
If you’re thinking of becoming a rideshare driver, another thing you should be aware of is your insurance needs. While Uber provides insurance to all drivers, you’ll still need extra coverage to be protected during all stages of driving.
For instance, even though Uber gives you insurance if you get in an accident, they often don’t give you the recommended amount. This could leave you owing thousands of dollars if you get in a crash while driving for the rideshare company.
To read more about rideshare and insurance, read our article, “Car Insurance for Rideshare Drivers.”