The giant taxi company has been quietly testing a new pricing system that charges customers what it thinks they are willing to pay, Bloomberg’s Eric Newcomer reports. “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,” he writes.
Uber tells customers up front what they’ll be paying, and the premium on the fare goes directly to the company, not to the driver. With access to a ton of data, Uber can learn a lot about consumer habits. For example, the company’s in-house researchers figured out that passengers are more likely to accept surge prices if their phone battery is dying. (The company has said it doesn’t use that insight to set individual prices.) Under traditional taxi regulation in most areas, fares are based solely on the distance and duration of the trip.