There is some pretty contagious buzz going around in the rideshare community.
The main topic seems to be in regards to the recent Uber fare changes. On the surface level, it appears that only the pricing layout changed.
However, everything that is going on behind the scenes is worth talking about.
To make matters worse, the additional fee appears to target specific frequent Uber riders.
Most reports are stating that this is nothing short of location bias. As in, the rate increases based on where a passenger is being picked up and dropped off.
To see this phenomenon for yourself, try playing around with your destination next time you use the app. Choose an area nearby your intended drop off location. Along the way, update the destination to your intended area. More than likely, you will notice a difference in price. If you do experience a significant change, you are seeing Uber’s new fare plan in action.
Originally, riders received a fare estimate based on ride specifications, such as duration, distance, and base fare. Now, riders can view the details of these estimated charges in the new price format. However, it does not disclose why one location is more expensive than another area nearby.
Read on to learn how to avoid being ripped off by Uber as a rider.
Understanding Upfront Pricing as a Rider
Uber has dubbed the new fare plan as ‘upfront’ pricing. After passengers put in their destination and pick the route a list of total fees as well as charges appear.
The updated format includes a breakdown of where each nickel and dime goes. This includes how much Uber takes out of the fare at face value as well. Uber decided to include this information to be more ‘transparent’ in regards to financial activity.
In the past, passengers used the estimation page to get an educated guess on how much the ride was going to cost. This traditional method is referred to as ‘ranged’ pricing due to the typical fluctuation in price based on traffic. Those comfortable with the ‘ranged’ pricing method have come to trust the estimate as a solid measure to figure out how much the ride is going to be.
How Does The Change Affect Riders?
Unfortunately, Uber’s estimations are no longer consistent.
Uber has started pricing passengers based on undisclosed methods. Passengers using the new ‘upfront’ fare the same way they used the ‘ranged’ fare estimate may be getting ripped off.
For example, the new pricing format displays information in a rather dishonest layout. Most notably, riders can no longer see if they are being charged for surge pricing. Not disclosing surge pricing makes it possible for Uber to charge double the normal rate, or more, without the passenger knowing.
To make matters worse, passengers are required to accept the bill before booking. Meaning that if the actual ride is less than the estimate passengers are stuck paying the initial sticker price. Needless to say, this combination is a simple recipe for ripping off passengers.
That’s not all…
The new pricing layout is not the only troublesome issue generating buzz. Reports are pouring in about extra fees seemingly unrelated to surge pricing.
Representatives from Uber have stated that the price fluctuation is based on market research. According to Uber’s marketing team, the extra amount is based on how passengers responded to price hikes in the past, namely surge pricing.
During surge times, passengers have expressed they are willing to pay more to get a ride. According to Uber, this translates to a higher tolerance for price hikes among frequent travelers. Uber denies claims that they are targeting frequent riders with price hikes.
Apparently, the increase in fare is going to help reduce prices for Uber. The plan is to use increased fare amounts to lower the fare for less expensive rideshare options. For example, passengers using more expensive Ubers, such as UberSELECT, may be charged more to reduce the fare for UberPOOL.
Locations reporting the undisclosed fare hike match this boastful claim too. Areas where frequent riders are reporting an increase of 25% or more are also where Uber offers UberPOOL.
What about Uber Drivers?
It is worth mentioning that drivers are not paid differently in areas where this occurs.
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For example, if a driver accepts a ride request for an UberPOOL and the passenger is charged less for the ride, the driver actually receives the same amount. This backs up the claim that the additional charge given to frequent riders is actually used to reduce UberPOOL fares.
According to Uber, the goal is to improve driver’s paychecks.
Assuring frugal passengers are able to use Uber regardless increases the total number of Uber users. Which increases the likelihood that drivers are able to earn a consistent paycheck each week.
How Can You Avoid Getting Ripped Off?
- Change your final destination
- Alternate between Uber and Lyft
Uber is not targeting individual riders based on which area of town they go to or where they live. Rather, they are using a frequency rate to dictate whether you are a ‘time sensitive’ or a ‘price sensitive’ passenger.
To be a ‘time sensitive’ rider, passengers must use Uber more than a certain amount on average and be willing to pay a handsome sum for the private ride.
‘Price sensitive’ passengers are determined by the type of rideshare option they use. Those who use UberPOOL indicate that they are more concerned with cost and less concerned with time.
Determining which type of passenger a rider is and charging them differently is dishonest. Especially considering how much money Uber users are already paying. Not to mention the fact that drivers receive none of the extra cash directly.
Here’s the Trick
Fortunately, the dishonest practice introduced with the new ‘upfront’ pricing can be avoided.
You might also like: The Ridester Guide To Uber Pricing
Typically, this gets around Uber’s ‘frequent rider’ price estimator. Giving passengers a rate closer to their normal fares.
For optimal results, let your Uber driver know ahead of time what your plans are. More than likely, they will know why. If not, you have nothing to lose by telling them ahead of time, considering the fact that removing the price hike does not have an effect on the driver’s pay.
Other Ways to Save On Uber Fares
Of course, there are other ways to get around the price hike. Namely, remove the title of ‘frequent rider’ from your account.
A very easy way to achieve this is to alter your methods of transportation. There are many methods to go about doing this. For example, passengers should consider switching between Uber and Lyft.
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Balancing between the two can make it appear that you use the Uber app sporadically. Maintain this habit long enough and the end result will work in your favor.
If you are no longer highlighted as a frequent rider, Uber should, in theory, put you back at the fare rates experienced pre-upfront pricing. For those that rely on the rideshare service to get back and forth from work, switching up rideshare apps may be the preferred route to take.
In some situations and areas where both services are not readily available, this is not ideal. If that is the case, consider taking a different form of transportation if at all possible. There are plenty of alternative options for transportation in most of the cities across the United States. Check in with your local city’s website for more information.
Regardless of which method you choose, keep up the routine. If you do so, your Uber fares may go down without you having to jump through any technical hoops mid-ride. Remember, there are many benefits to using public transportation.
What Does Uber Have To Say?
With loads of people taking note of the price increase and sharing the information online, it comes as no surprise that Uber issued a statement.
Representatives from Uber state that the changes are in response to market research. According to the announcement, the pricing update is set in place to reduce the price for less expensive rideshare options.
Apparently, this is an attempt to increase the number of people that use Uber. They claim this move will help drivers maintain a consistent paycheck every week.
Our Take on Upfront Pricing
At first, Uber’s recent changes to their pricing plan came as a welcomed update. The new ‘upfront’ pricing plan appeared to disclose the information needed to make an informed decision.
Unfortunately, omitted information leaves passengers vulnerable to unwarranted price hikes. Most notably is the disappearance of surge pricing multiplier. With surge prices no longer visible, inexperienced Uber riders may end up paying more without knowing it.
Many reputable sources have reported that Uber is charging some riders more than others. Usually, this is confirmed by comparing past fares to those issued pre-upfront pricing. Passengers that frequently use Uber are backing up this claim too.
Fortunately, there are ways to combat this sneaky tactic.
Alter Your Destination
The easiest way to achieve this and continue to only use Uber is to lie about your destination initially. To do so, set the drop off location to an area near where you want to go.
Then, change that spot to where you are actually trying to get to along the way. Bear in mind, that if you do not change the location at an optimal point during the ride you may end up overpaying due to miles traveled and time spent.
Switch Between Uber & Lyft
Having to figure out when to change your destination can be really annoying. If you do not feel like dealing with this every time you make a ride request, take the time to alter which rideshare app you are using.
Fluctuating which service you use will change whether your account is tagged as a frequent rider or not. Bear in mind, there is always the option of changing which method of transportation you take to travel, such as public transportation or a cab.
Whatever method you choose to avoid getting ripped off, do not spend excess money unnecessarily. Implementing any of the tactics we have suggested is going to save you money in the long run.
Remember, there is an honest way to charge for each rideshare fare and sneaking in extra charges is not one of them. Be sure to let your fellow rideshare enthusiasts know the new ‘upfront’ pricing is not as honest as it appears to be.