The factors that influence the Uber ride cost are the time of the day, weekends, events, driver availability. These type of costs shows up in the “surge pricing” charge because these factors are influenced by the demand and supply at the time of Uber ride request.
The main factor in a ride is the mileage; this is what costs you more than time. Drivers prefer long rides that are traffic-free to maximize income and dread slow drives with short distances due to traffic.
1, Rider cost and drivers income calculation:
Below is the detailed information regards the cost of the trip:
Base Fare: this is the flat fee that Uber charges for each ride, it varies according to the car category. UberX, Uber Confront, UberXL.
Cost per Minute: This is what Uber charges for every minute from the moment the ride begins. It takes into account traffic and other circumstances that can cause a ride to take longer than expected.
Cost per Mile: This is what Uber charges for every mile drive. Drivers usually take the fastest route, but when traffic or other instructions are foreseen, they will choose a different route. Uber charges for the shortest distance in a pre-quote fare. Your fare may increase if you travel to a different destination or make extra stops along the route, or the trip takes much longer than expected.
Booking Fee: This is an extra fee that Uber charges to cover its operational costs. In your city, a flat fee might be added to each trip. It helps support operational, regulatory, and safety costs
Surge Price: This is an additional multiplier that is added when there is a lot of strain in the system, basically a supply and demand function. So if you are in a surge area, your overall fee can multiply by up to x3. When there are more riders than available drivers, prices may temporarily increase until the marketplace is rebalanced.
Tipping: This is purely optional, while there is an Uber tipping platform, the passenger can give the driver cash at their discretion.
Waiting Fare: when the driver approaches the pinpoint within a 20-meter range, the time starts to account, which includes 2 minutes of free waiting time for the raider, after 2 minutes start to charge the rider $0.5/minutes
Minimum Fare
There is a minimum fare rate that is set to assure a certain level of income for the Uber driver. This varies per city and is based on the above calculation being no lower than the minimum fee. If the total is lower, then you will be charged the minimum price.
The Fare is calculated like this:
Passengers Ride Fare =[Base Fare + ((Cost per minute x time of the ride) + (cost per mile x ride distance) )x surge boost multiplier + booking fee +waiting fee
Driver income= Passengers Ride Fare + tips- service fee – Taxes Tax On Service Fee-Expenses –Tax On Intermediary Passthrough Fees+Taxes Gst
Service fee=25% * Passengers Ride Fare+ Taxes Gst
2 Uber provide The Uber Fare Construct
2.1 Up Front Fare and Quote
Uber has developed an upfront fare estimator that calculates how much a ride will cost based on all the above parameters stored in its memory. This historical data takes into account all the variables and the time the passenger makes the call adds into the equation surge and traffic factors. So a basic calculation will always be used as the baseline, most probably the baseline will increase due to traffic and surge fluctuations.
To get an estimation, all you need to do is open the app and supply a destination, and the app will calculate the ride. Uber has been known to add a random sum for extra income, and this is not an exact science, more of a random number generator based on the overall price and with hopes that the passenger agrees. Uber does not provide detailed information on how the prices are reached, so you are in the dark on the overall cost, but if you know the time and mileage, and you know the base fare and fees, you can work it out and see the difference.
UPFRONT FARES
With upfront pricing, you know the exact cost of your trip before requesting. This fare includes (but is not limited to):
-A base rate
-Rates for estimated time and distance of the route
-The current demand for rides in the area
A booking fee and any applicable surcharges, fees, and tolls are also calculated and included.
When you request a ride, you agree to be charged the upfront fare when the trip ends. Your fare may increase if you travel to a different destination or make extra stops along the route, or the trip takes much longer than expected.
If an upfront fare is not honored, you will either be charged the minimum fare or a fare based on the measured time and distance for your trip, including any base fare, booking fee, surcharges, tolls, and other relevant factors such as a dynamic pricing charge.
You’ll always get a receipt for any trip fare. If your fare is different than the upfront fare you agreed to, your receipt will explain why.
2.2 POST-TRIP FARES
Some cities do not provide upfront fares. Instead, you’re charged either a minimum fare or a fare based on the time and distance for your trip’s route, including a base fare, booking fee, surcharges, tolls, and other relevant factors such as dynamic pricing when demand for rides is high in the area of the city where you’re requesting a ride. Fares may vary by location, the vehicle option you select, and other factors.
The rider can simply open the Uber app, type the pickup location and the destination and your estimated price will appear at the bottom of the screen. This price is based on the traffic and the hour at which you check, meaning it is subject to change depending on the availability of drivers. You can also check online to get a price estimate for a trip to any city in the world where Uber operates.
3 The dynamic pricing model and surging price
3.1 dynamic pricing model
The dynamic pricing model is used by Uber when traffic is heavy and the demand for rides exceeds the number of drivers available. You’ll be notified in big bold letters when there is a price increase, and you can always choose to wait a while before leaving. You can also request to be alerted as soon as fares go back down to normal, as soon as more drivers become available.
Uber fare estimation features mean you always know where you stand on travel costs. If you’re planning a weekend away with friends for example, you can compare splitting the fare of your Uber ride to the price of petrol, renting a car, and public transport. You can budget your trip in advance with the fare estimator and your buddies will be happy to know exactly how much they’ll have left to spend on good food and drinks.
3.2 Surge pricing
Surge pricing is specific in different areas of a city. Some neighborhoods might have surge pricing while other neighborhoods have normal pricing. Uber uses a lot of data such as information about events, weather, historical data, holiday time, and traffic to have a forecast of future market conditions.
Riders benefit from surge pricing because they have multiple options, they can choose to pick a car very fast or they can wait 10-15 minutes for a better price. The driver benefits too because they get a percentage of that surge price too. So they earn more money.
4 The Uber fare price does not change when the gas price increase
On July 28th,2021, after I qualified to be an Uber driver, I booked my first trip from south chappal to north industry park, after I drive to his house and a name is Peter which come to my can and I told him this is my last trip, he politely congratulation my qualification, this trip is 17.7km and no surge price and waiting time, so each $0.875/kilometers, the gas price is $1.21/liters, the detail picture as detail for the trip
On November 2nd of 2021, I went to the same house to pack up Peter again, to send his workplace the income for the driver is even 0.2 less than first trip, but the gas price increase to $1.43/liters, compared to the last trip, the gas price increase almost 20%, but the driver income decrease, this is very bad news for the driver, but it is good news for the raider, if the gas price contiously increase, the driver will less income so the less driver will on the road the the more chance to surge the price.
Uber should consider adding the local gas price as a factor to the basic fare calculation to all drivers survive.
5. The real-time results form Uber driver account
Before table is I take from Uber account to let the reader understand the lists of the income for the driver, in this table you can’t see the book fee, I looked at the Uber APP the charge rider $3.00 book fee, then compensate $3.0 back, results is $0 charged .
| Type | UberX | UberX | UberX | UberX | UberX |
| Fare Fare | CA$19.48 | CA$7.94 | CA$22.81 | CA$12.41 | |
| Fare Cancellation | CA$5.00 | ||||
| Fare Surge | CA$9.12 | CA$7.45 | |||
| Fare Wait Time At Pickup | CA$1.80 | ||||
| Service Fee | -CA$4.87 | -CA$2.44 | -CA$1.25 | -CA$7.98 | -CA$4.97 |
| Taxes Tax On Service Fee | -CA$0.24 | -CA$0.12 | -CA$0.06 | -CA$0.40 | -CA$0.25 |
| Tip | |||||
| Expenses Tax On Intermediary Passthrough Fees | -CA$0.17 | -CA$0.17 | -CA$0.17 | -CA$0.17 | |
| Taxes Gst | CA$1.15 | CA$0.66 | CA$0.25 | CA$1.77 | CA$1.17 |
| Total | CA$15.35 | CA$7.67 | CA$3.94 | CA$25.15 | CA$15.64 |
From the above table, there is a cancellation fee to the rider if the rider does not follow the cancelation rules,( see antoher ariticles regauds the rules).
Do you have any comments for above information?