Uber Will Soon Be Using AI to Calculate Prices

Uber are moving towards an AI algorithm which will charge customers based on what they believe they're willing to pay

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How often do you take a ride on Uber and think that you paid too much for a trip just across to the next suburb?

Not for much longer says the ridesharing company, as Uber executives have admitted that they are looking to utilise Artificial Intelligence (AI) to calculate the costs based on how much customers are willing to pay.

The change comes off of the back of complaints from Uber drivers saying that the gap between the amount Uber was taking off each ride was getting wider.

Uber last year announced “up-front pricing”, which meant that they’d provide an estimation of how much the cost of the ride will be, giving a level of transparency unavailable in the new format.

However, the new structure was viewed by drivers as another way to take away their hard-earned money, which has now led to the AI driven calculation system.

Daniel Graf, Head of Product at Uber, has said that the AI calculation is already being tested in 14 US cities, and will be based on what the system predicts the customer is willing to pay.

The new algorithm, called “route-based pricing” will look at data such as location and where they’re travelling to in order to detect how much a customer might be willing to pay. This means that a customer moving from an affluent suburb to another will have costs higher than one moving to a poorer suburb, even if the time and distance of travel is the same.

Graf explained that reaching a suitable pricing technique has been a difficult task, although from the outset it seems quite a simple solution, comparing it to another digital leader, Google.

“Google search is very simple to do; it’s very complex what’s happening behind the scenes. The same thing here. Taking a trip is easy. To make this all work in a whole market, and sustainable, is really, really hard,” he said.

With the driver’s best interests in mind, Uber have stated that they will become more transparent with the drivers, telling them how much the customer paid for the ride, but will not be changing the portion they take.

Moving forward, Uber’s new adaptation to an AI calculated service may grow to different industries, as companies look for better ways to charge customers.