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Uber to introduce ‘upfront fare’ for its regular rides extending from uberPOOL

Uber planning major expansion in India to bring in vehicles

Startup & Entrepreneurship

Uber to introduce ‘upfront fare’ for its regular rides extending from uberPOOL

Aiming to enhance the customer experience and answer the critics concerning its strategy of ‘surge pricing’, cab-hailing app Uber has announced that its cabs will now present its riders in the US and in some parts of India with ‘upfront fare’. This makes it easier for customers to see how much they will have to pay for a ride.

The fare will be calculated on the basis of expected travel time, distance, traffic, surge and tolls where applicable.

Arundhati Singh and Dennis Zhao, the product managers of Uber, said in a blog post, “We moved to upfront, per trip fares–just like airlines and hotels–two years ago when we launched UberPOOL… So in April, we began slowly introducing upfront fares for regular uberX trips in cities across the US and more recently in India, with more to follow.”

“Uber has been testing upfront fares for a small segment of riders across five cities in India since the beginning of this month,” an Uber India spokesperson told media.

The current cities that are included for the ‘upfront fare’ facility for its riders are New Delhi, Kolkata, Mumbai, Hyderabad and Chennai. The company plans to roll out the changes to pricing in the app globally over the next few months, including other cities in India.

This feature is current present in six cities in the US that includes, New York City, Miami, San Diego, Philadelphia, Seattle and New Jersey.

Customers had to mandatorily enter their destinations while booking Uber that allows Uber to calculate the fare in advance and show it to riders before they book their ride.

The blog post also touched this feature. It read, “Knowing how much a ride will cost in advance is clearly something riders appreciate: today uberPOOL accounts for over 20 per cent of all rides globally. And we now want more riders globally to benefit from this feature.”

Delhi and Bangalore clocks 25 percent of the share rides through its uberPOOL feature. Uber had launched uberPOOL in San Francisco almost two years ago, where the upfront fare feature was introduced for the first time.

The ‘upfront fare’ product feature to riders now will be introduced across uberGO, uberX and other Uber services. With the new version of the app, the lightning-bolt icon previously used to indicate surge pricing on Uber will go away.

The blogpost also tried to justify its ‘surge pricing’ strategy linking it with its new feature. Previously, Uber has defended surge pricing saying it balances demand and supply and that it has always been transparent about exactly how much more it is charging customers than the normal fare.

Karnataka has already barred app-based cab companies from charging surge pricing.

“(Now) when fares go up due to increased demand, instead of surge lightning bolts and pop-up screens, riders are given the actual fare before they request their ride. There’s no complicated math and no surprises: passengers can just sit back and enjoy the ride,” the blogpost said.

With upfront price feature surge still remains a component of how a rider is charged for his trip but will not see the surge multipliers and the icon in-app, the spokesperson said.

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