Pricing and Payments
Uber's pricing is similar to metered taxis although all hiring and payment is handled exclusively through Uber and not with the driver personally. If the Uber car is travelling at a speed greater than 11 mph, the price is calculated on a distance basis. Otherwise, the price is calculated on a time basis. Prices are about 50% to 75% higher than prices charged by conventional taxicabs. At the end of a ride, the complete fare (which includes a tip) is automatically billed to the customer's credit card. Uber has said that its high prices are the premium that the customers pay for a cab service that is not only reliable but also punctual and comfortable.
During holiday times, such as Halloween or New Year's Eve, Uber increases its prices to "surge price" levels. Customers receive notice when making a reservation that prices have multiplied by a factor of 2x or more. This is done to attract more drivers and to create equilibrium between supply and demand. During New Year's Eve 2011, surge pricing reached levels as high as seven times the normal rates, causing outrage in response to charges such as $135 for a one-mile trip. Uber co-founder Travis Kalanick responded by explaining, "Because this is so new, it’s going to take some time for folks to accept it. There’s 70 years of conditioning around the fixed price of taxis."
Read more about this topic: Uber (company)