Products

What is Dynamic Pricing?

January 6, 2018 / Dhaka

Uber’s fares are always dynamically priced. This means that the fare a rider sees is based on variables subject to change over time. These variables include (but are not limited to) the estimated time and distance of the predicted route, estimated traffic, and the number of riders and drivers using Uber at a given moment.

Dynamic fares help ensure that riders can always receive a quick pickup by matching the supply of drivers with the demand of riders. Dynamic pricing may cause fares to temporarily increase. This encourages more drivers to get on the road and head to areas of the city where demand for rides is higher than drivers’ ability to accommodate all the ride requests happening at any moment.

From today, when fares are higher due to dynamic pricing, riders in Dhaka will be notified by their app that fares are currently higher.

Dynamic pricing ensures reliability over time. As more driver-partners come on the road to share a ride due to dynamic pricing, more riders can avail a ride to get to where they need to go, thus ensuring a model of ride-share that is beneficial for all.

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Frequently Asked Questions

  1. Has there been a price increase for UberX and PREMIER?
  • No. There has been no increase in price. From this week, when the demand for rides supersedes the number of cars available on the road, riders will see dynamic pricing kicking in and drivers on their app see the areas in the city that have high demand. In such situations, dynamic pricing helps us incentivise drivers to get their cars out on the roads to address the increased demand. In the process, we are able to not just predict demand and supply but also bring down the wait times for riders, increase earnings for our driver partners over that period and then eventually bring down the prices once again soon as supply meets demand. If prices are higher than usual do to higher demand, you will be notified in app before requesting your Uber.
  1. What does high demand within my area mean?
  • High demand means that a lot of riders just like yourself are requesting Ubers to get to where they need to go. Dynamic pricing notifies driver-partners that there are more riders waiting for rides in that area and dynamic pricing ensures that they are compensated for making the longer journey to get there and fill the supply gap in the market. Once that happens, the market stabilizes and the prices go back to normal.
  1. Can I avoid dynamic pricing by leaving for my destination early or requesting during off- peak times?
  • Dynamic pricing kicks in when demand exceeds supply; it is algorithm based and hard to pre-empt or predict.  If prices are higher than usual do to higher demand, you will be notified in app before requesting your Uber. You can wait for prices to come down or make an informed choice.
  1. Will I be offered any promos to balance out my fare increase?
  • System generated weekly promos will continue for the foreseeable future.
  1. How has my regular UBER fare increased? I’m a regular UBER user.
  • Dynamic pricing kicks in when demand exceeds supply. In such situation, prices will be higher than usual. You will always be notified in app, if prices are higher due to dynamic pricing.
  1. My UberX fare is now more expensive than regular PREMIER fares. Why?
  • Increased fares as a result of dynamic pricing is a function of demand for the selected product and can vary for each product. When UberX demand is high, UberX prices may increase as a result of dynamic pricing, while PREMIER fares might remain stable as a result of supply being sufficient to meet demand.
  1. Is dynamic pricing active if I skip destination?
  • Yes