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Uber Caught Using AI to Calculate Socioeconomically-based Pricing Structure

Uber Caught Using AI to Calculate Socioeconomically-based Pricing Structure

What can you afford to pay for an Uber ride? Uber has installed AI to help it figure that out. Uber pricing is not as cut and dry as a taxi service, which, at least in Philadelphia, is based on an initial ride charge, passenger number, distance and time rate. Uber’s software considers what neighborhood you are coming from and going to, time of day and then takes a stab at what it thinks you will be willing to pay. The previous pricing algorithm calculated the price based on mileage, time, and supply and demand whereas the new route-based version uses machine learning to charge you as much as Uber thinks it can get.

A customized price per ride which is higher or lower depending on the new factors doesn’t necessarily translate to a rate change for the driver, which means that those travelling within and between more affluent areas are essentially subsidizing those who are not. Uber’s spokesperson said their new fare system is "based on our understanding of riders' choices so we can serve more people in more places at fares they can afford. "Riders will always know the cost of a trip before requesting a ride, and drivers will earn consistently for the work they perform with full transparency into what a rider pays and what Uber makes on every trip." 

May 22nd 2017

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