FARE SURCHARGE MUCH? NEW TECH SHOWS UBER CHARGING WHAT IT THINKS YOU ARE WILLING TO PAY

Using the passenger details and the area from where he/she travels from uber, Uber's new fare system called route-based pricing charges customers based on what it predicts they're willing to pay.

Have you ever wondered why you have a surcharge rate when you took a cab on Uber? Is it even more infuriating if your friend standing next to you, books the same distance, but not charged a surcharge rate? It's a question that has puzzled and even annoyed a lot of us as a number of Indian Uber users vented on social media.

Now Uber has announced that it is charging some passengers more because it needs 'extra cash' to survive as an organization.

As per an article by Bloomberg Technologies. Uber technologies has introduced a new pricing syste that is been in testing for months. Uber acknowledged to drivers the discrepancy between compensation and what riders pay.

Using the passenger's details, the new fare system, called route-based pricing charges customers based on what it predicts they are willing to pay. "It's a break fro the past, when Uber calculated fares using a combination of mileagge, time and multipliers based on geographic demand," the report stated.

As per the report, Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. "For instance, 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 re the same." tee report added.

In an attempt to ease drivers' concerns, Uber will start reporting the price a passenger pays on each ride, though it will stop breaking out the percentage Uber takes of the fare. The company will also send drivers an updated terms of service agreement reflecting the new fee system. Route based pricing is currently limited to 14 U.S. cities where Uber offers its carpooling service.

The difference between the calculations of riders fares and driver pay could be the future of Uber's business. The company said it pockets what's leftover and could parlay this mathematical framework into moving closer to profitability.

Uber has faced a torrent of scandals this year, including a trade secrets lawsuit and sexually harassment allegations.