Here is why your Uber taxi will be more expensive this Christmas
Uber, the taxi application, has moved to explain its ‘dynamic pricing’ plan which kicks in busy periods like Christmas and New Year’s Eve.
During times of peak demand – when there are not enough drivers on the platform to accommodate the influx of those looking for rides – fares increase so as to incentivize more drivers to come onto the platform.
Uber said that ‘dynamic pricing’ solves the perennial challenge of never being able to get a ride on New Year’s Eve, or after a major sporting event, or during bad weather.
The Uber platform is a marketplace of riders and drivers – driver partners are all independent transportation providers who are not bound by exclusivity.
Many drivers have their own businesses and because Uber doesn’t employ drivers, every driver has a choice of how he or she spends his/her time, the company explained.
How dynamic pricing works
“Dynamic pricing helps bring demand and supply in line when necessary, by increasing prices it incentivizes more drivers to come onto the platform, remembering that driver partners keep a majority of the fare.
“The dynamic pricing algorithm automatically increases prices to encourage more drivers to come onto the platform and to cater for the demand. When demand and supply are in line, prices quickly return to normal – and riders can continue to rely on a safe, hassle-free transportation option. During times of crisis or disaster, Uber works quickly to ensure dynamic pricing is deactivated.”
Uber stressed that when dynamic pricing is in place it is communicated repeatedly to a user and requires confirmation from the user before one can request a trip, also riders can obtain a fare estimate before starting their trip.
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