Uber is a people logistics service that uses a matchmaking model to connect customers directly with drivers to reduce prices for customers by optimising load capacity for drivers. It is now available in 53 countries and more than 200 cities and is revolutionising logistics and service using data. .
The app automatically detects the user’s position using GPS – so ‘riders’ can book a taxi with a single press of a button. Users can get an estimate of their fare by entering their destination. This is calculated by algorithms which consider the distance, prices of similar journeys, and the current Uber price rate.
Uber uses an algorithmic approach to account for differences in supply and demand in different areas. when supply out-strips demand prices are low, when demand increases the algorithm drives up pricing to encourage more drivers out and optimise revenue. This is called ‘surge pricing’. When demand outstrips supply in a certain area, surge pricing is applied and the usual fare rate will be multiplied appropriately. Users will be notified of surge pricing on booking, and can cancel the trip if they do not want to pay the increased fare.
When a the taxi is booked, a temporary bridge is created between customer and driver data allowing them to make contact and see each other’s location. Once the journey is over and the transaction complete, the exchange of data ends.
Uber scaled rapidly through partnership, using the best experts in any one area ( eg Google Maps, or best checkout system, or best driver id check ) and focused their development on the unique pricing model that optimises pricing to reduce prices for customers, increase occupancy rate for drivers, and drive customer growth and frequency for UBER.
UBER is changing the model for transport in cities around the world, with loyal customers, drivers clamouring to become an UBER driver, and a system determined to continually drive down pricing and increase service levels.
UBER has already changed the way transport works in London, picking up an UBER for shorter and well as longer journeys. replacing the need for a car at all. The future looks good.