A recent post on the Chicago sub-Reddit sparked a lot of discussion about Uber and their shady pricing tactics. The user mattywilliams posted two photos comparing their ride from West Town to River North in a cab which was the same price as a pool and cheaper than UberX.
As some other users pointed out, Uber has made it extremely difficult for users to see how much surging affects the price of a ride.
But another possible reason that this user’s ride was expensive is that Uber has started using a new pricing model. As Bloomberg reports, this new “route-based pricing” charges customers “based on what it predicts they are willing to pay.”
Essentially, if you use Uber a lot and are traveling primarily between affluent areas, you are more likely to be charged more. As Business Insider wrote: “While Uber knows the routes on which it will charge premium pricing, it doesn’t alert drivers or passengers of the pricing change.”
So that could be one explanation why a ride from West Town to River North has increased in cost for a passenger.
Business Insider also interviewed Uber’s head of product Daniel Graf who denied claims that this new pricing model targets wealthy customers, but rather that the algorithms pick up on the routes that are in high demand.
“We don’t know what wealthier parts of towns are,” said Graf in the Business Insider interview. “We don’t take anything related to wealth or any other characteristics into account. All we look is what are the demands for our different products. That is all it is.”
Uber is not the only company to implement a pricing model like this. The Whole Foods which opened in Englewood last year charges much less for their products than the Whole Foods in Lincoln Park.
Another extra charge you may not have known about? Uber just started charging customers $15 to return lost items left behind in a car. One website has kept track of a historical time-line of increased prices and standard rates for different types of Ubers, but only dates back to July 2015.
This year, the question of ethics has come up multiple times with regards to Uber and not just on the road. Their corporate culture has repeatedly exhibited sexism and sexual harassment in the workplace.
There was also a tax calculation error that led to drivers losing out on hundreds of millions of dollars. This news was discovered after Uber was caught raising their fares without passing off the extra money to their drivers.
Back in June, Uber founder Travis Kalanick resigned from the CEO position after video surfaced of him berating a driver and pressure from investors to step down.
Competition and negative press have no doubt created issues for the company, who reported losing $2.8 billion in 2016.
Due to all the recent controversy, Uber has begun a 180 Days campaign, taking on initiatives such as “making meaningful changes to the driver experience” and providing phone support for passengers.
While ride-share services do offer the ability to be picked up on-demand in a convenient way that cabs and public transportation cannot offer, there needs to be better checks and balances on these companies so as to be fair to employees and customers. For a long time, Chicago has weakened regulations on Uber and other ride share services, and without tightening up a regulated system, consumers may soon start to feel drastic effects.