Ordering an Uber taxi in a wealthy neighbourhood? Expect to pay more
Posted: 22 May 2017 | By Darcie Thompson-Fields
Uber is transforming the way in which it calculates customer fares, by using AI technology to determine how much a customer will be willing to spend.
The US taxi company, which employs more than 6,700 people in 598 cities globally, revolutionised the industry in 2008 by allowing customers to calculate their journey cost based on mileage through their smartphone, as well as make a booking and monitor their driver’s whereabouts.
According to an article by Bloomberg, Uber is now using an AI algorithm and machine learning that calculates how much people are willing to pay based on a series of different criteria. These include time of day, destination and perhaps controversially, the location in which the taxi is booked.
For example, the AI algorithm will determine areas considered to be wealthier, and automatically hiking the cost to what it believes they would be willing to pay.
The new cost-model is currently being used in 14 currently unnamed cities.
However, Uber has seen some criticism from drivers since introducing ‘Upfront Pricing’ in August last year, guaranteeing the cost of the journey. According to reports in the article, drivers are concerned they are yet to see any of the financial benefits from the new AI fare calculator, with the model only benefit Uber.
An Uber spokesperson reacted to the story by telling website, Engadget the new model has “full transparency” to both drivers and customers.
“We price routes differently based on our understanding of riders’ choices so we can serve more people in more places at fares they can afford.
“Riders will always know the cost of a trip before requesting a ride, and drivers will earn consistently for the work they perform with full transparency into what a rider pays and what Uber makes on every trip.”