LATEST ! Uber changes its pricing model to fixed fare to rival Grab

In a move clearly to rival Grab’s flat fare model, Uber has announced that riders will also be shown an upfront fee before they book a ride. Previously, UberX riders were given an estimated fare.

WHY FIXED PRICING

The flat fare model is a key reason why people choose Grab over Uber in Singapore. Many riders have heard of horror stories of fellow riders paying huge amount of fare because of the surge pricing. While fare details such as price estimates, surge multipliers and tolls were presented in the app, riders were often given shocked to see a final fare that was much higher than the original estimate. This is one reason why riders choose to use Grabcar as it offers an upfront fare, and a peace of mind. While both Uber and Grab have their own dynamic pricing model Uber has always been blasted by riders because of their surge pricing whereas Grab’s dynamic pricing system has not seen much attention. Riders who do not want the uncertainty present in Uber’s pricing model will definitely choose a service with upfront fares.

What it means to drivers

More riders – There will definitely be more Uber riders once they learn about the change in the fare model. It has taken Uber a long time to realise that they have been losing out to Grab in terms of rider experience.

MORE RIDERS = GREATER EARNINGS

One advantage that Uber drivers enjoy over Grab previously is getting paid while being stuck in gridlock traffic. As Uber charges riders by the time and distance, Uber drivers get compensated when they are stuck in jam while Grab drivers do not. With a level playing field now, lets just pray for smooth traffic everyday!

Flat fare? What happens if a customer has multiple stops or a change in destination ?

While Grab drivers manually key in $5 fares for each additional stop within a 5km radius, Uber automatically charges the rider based on time and distance travelled over the drop off point. For example, if the destination is Ion Orchard and customer wants to go to Suntec subsequently, the fare will include flat fare to Ion Orchard + time and distance from Ion Orchard to Suntec.

What we think

The pricing model that Uber is adopting for multiple stops will face some challenges and limitations.

How will Uber know if there are additional stops and how to charge riders accordingly? Depending on the route, Uber’s automatic method of calculating additional stops may be circumvented by riders. For example – If you travel from Tanjong Rhu to Marina Bay Financial Centre via Republic Boulevard and make an additional stop at MBS prior to MBFC, the route will appear normal even though there was an additional stop.

To all drivers, do keep a lookout and monitor trips with additional stops. If you feel the fare is wrong, use the Uber app to highlight any issues to the wonderful support team at Uber.

Happy driving !