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How Uber Fares Calculated
Uber has now become an integral part of our fast moving lifestyles. It is a hassle-free mode of transportation. It is one of the most convenient apps to book a cab. The services are satisfactory and fast. What else can we expect in the digital era when everything is computerized?
This includes the fare calculation. The fares the riders pay are calculated by a software. Have you ever wondered as to how actually they are calculated? What factors are considered in its computation? If no, then read further to get a clarity on what you are paying for. This article is from the rider’s point of view.
The trip fare includes the following parameters: –
- Base Fare
- Time Fare
- Distance Fare
- Long Distance Fare
- Surge Multiplier
- Tolls
- Uber Fees
Let us understand each parameter in detail
Base Fare
It is the flat fee charged at the beginning of the ride. This is the price for pickup. The base fare may be different for different cities or even for different locations within the same city. These rates are different for UberX, XL, UberSelect, Black Car and SUV.
Time Fare
It is the amount charged for each minute you are on the ride. It is the time duration from start to end of the trip. Its cost is calculated as – (Cost per minute * time in ride)
A trip fare is determined by the route’s total time and distance. When a stop is made during a trip, this waiting time is included in the fare. Any distance traveled to additional stops prior to the rider’s final destination will also be included.
Long Distance Fare
These are usually out-station trips where the distance traveled is more. The fare within a certain range is considered at normal rates. When you enter in the long distance threshold, from there on LD fares are charged. This threshold is decided by Uber itself.
The calculation is similar –
(Total trip distance above the long distance threshold * long distance fare.)
Surge Multiplier
During times of high demand for rides, fares may increase to make sure those who need a ride can get one. Surge pricing for any trip is based on the rider’s pickup location. It is in the form of a multiplier i.e. 1.15x or 1.20x. This surge multiplier applies to the base, time, and distance of the trip fare.
Tolls
Your vehicle may be charged tolls and other road surcharges on bridge and tunnel crossings, highways, and around airports. Tolls and other road surcharges are only paid when a rider is in the car. Toll is charged from the riders and reimbursed to the drivers.
Uber Fees
Drivers using the driver app are charged the Uber Fee as a percentage of each trip fare. If surge pricing applies to a trip, the Uber Fee percentage is also deducted from the surge amount. The Uber Fee helps cover costs including technology, development of app features, marketing, and payment processing for driver-partners.
Example Of Fare Calculation
| CATEGORIES | FARE |
| i. Base Fare | 20 |
| ii. Time Fare | 48.45 |
| iii. Distance Fare | 168.52 |
| iv. TOTAL (i+ii+iii) | 236.97 |
| Now, if Surge multiplier is 1.20X, then | |
| v. Surge Multiplier | 1.2 |
| vi. Surge Price
=(20*.2)+(48.45*.20)+(168.52*.2) |
47.39 |
| vii. TOTAL FARE (iv + vi) | 284.36 |
When you select a ride this is how it shows estimated fares.
One can select the ride as per their choice, from the 3 options available.