San Francisco had one of our standard Uber-hating hissy fits back in April of this year when Uber was served a lawsuit claiming that claimed Uber engaged in a scammy fare manipulation scheme that showed riders higher fares than drivers, with Uber underpaying their drivers and pocketing the difference. Now, an Uber executive has completely admitted to this on the record in an interview with Bloomberg , explaining that it’s all part of Uber’s new “route-based pricing” model that in some ways sounds even shadier than the alleged fare manipulation scheme.
In words that ought to win the Pulitzer Prize For Truth In An Individual Sentence, Bloomberg Technology ’s Eric Newcomer writes that “After months of unsatisfying answers, Uber Technologies Inc. is providing an explanation: It’s charging some passengers more because it needs the extra cash.”
In speaking with Uber’s head of product Daniel Graf explained that not all riders were being charged a different fare than the driver was being shown — only riders on higher demand routes were getting the increased fare. Route-based pricing is sort of like another algorithmic version of Uber’s surge pricing , except the price spikes are applied to areas with higher demand and where […]