Uber Marketplace is the platform that connects customers who are looking for a ride with available driver-partners.
About Uber Marketplace
Marketplace by Uber enables individuals interested in hailing a ride to connect with available, independent drivers at the tap of a button. Uber is committed to offering the best possible prices for the riders and drivers. So, being upfront about its technology concerning pricing and matching is part of its policy and drives the Marketplace.
Uber Marketplace is responsible for determining prices for riders and earnings for drivers while taking into consideration real-world factors such as traffic. Also, it acts as a one-stop shop for knowing what’s new on Uber, pilot projects, keeping a check on marketplace health, and seeing how Uber rides work.
How does the Marketplace determine ride fares?
Uber employs its technology to provide riders with upfront pricing and matching. In line with this principle, Uber offers the riders an upfront cost range for the ride that they request. This calculated price is the base fare — an estimation based on the duration and length of the requested trip.
In general, your final trip fare is composed of a base fare and add-ons which may include one or some of the following:
- Tolls and surcharges
- Surge pricing
- Route-based adjustments
- Rider promotions and subscriptions
- Booking fees or operating fees in some locations
- Pool discounts
- Driver tips
Do Uber drivers earn the exact amount a rider pays for the trip?
No, the amount paid by riders for trips is different from what the drivers earn. This difference between what you pay and what drivers earn is made up of service fees.
The service fee is a component that driver-partners pay Uber. It helps fund Uber’s operations and driver promotions. This fee does not take tips, tolls, cancellation fees, and long pickup fees into consideration. Moreover, driver earnings with Uber comprise surcharges, reimbursement for tolls, driver promotions, tips, and other miscellaneous fees.
Nonetheless, the driver may be exempt from paying the service fee under special circumstances. For instance, when a trip takes longer than the predicted trip duration, Uber does not receive a service fee.
What is surge pricing on Uber Marketplace?
Surge pricing gets activated when the supply of drivers to the demand for rides in a locality gets imbalanced. When the surge is active, ride fares get hiked in order to restore the balance and provide rides to customers who need it more than others.
Moreover, Uber Surge is controlled by algorithms that detect shifts in ride-driver supply and demand and is updated in real-time all over a city.
How do product pilots work for Uber?
Uber pilots new products and offerings before their full-fledged release in the market. To do the same, the platform has two distinct approaches as mentioned on Uber Marketplace:
- A/B tests: Measuring how new features perform for groups of randomly selected users and comparing the test group against a control group
- Marketplace-wide pilots: Observing the impact of a change on the marketplace as a whole
Some of Uber’s current pilot projects are concerned with the following:
- New driver earnings structure
- Upfront pricing for drivers
- Multimodal transportation
- New driver and rider promotions