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by kdot 2589 days ago
What's the rational for percentage based fees? The technology cost for a 4 mile ride is the same for a 50 mile ride.
4 comments

An imbalance of power between a a $70 billion dollar company like Uber and folks who need an extra $200/week to make rent.

Also keep in mind that even at these fee levels, Uber and Lyft are somehow not profitable.

"Because they can."

That's really all they (and, to be honest, most "marketplace" tech companies) need to say. They have the customers; here are our terms. It kinda really sucks, because the quality incentive goes out the window.

> The technology cost for a 4 mile ride is the same for a 50 mile ride.

Technically no, the real-time tracking requires constant data streaming to and from their servers, proportional to the duration of the ride.

But a more likely answer is that a fixed amount per ride makes short rides prohibitive or at least less appealing.

And if you think about it, much of the costs are probably fixed (across all rides), so you could say they should charge $millions to the first ride, then just charge marginal costs for the others. Dilution of costs across purchases is an indispensable part of doing business.

It's not just percentage based. There is a fixed booking fee sometimes as well.
Some cities seem to get far better rates too. In Boston most of my trips were around $4-5, maybe closer to $15 to get to logan. When I was in Columbus it was like the trips were arbitrarily twice as much, hovering $7-10 for similar distances. Miami probably had the highest rates I've experienced (Like $25+ to get to the other side of the biscayne bay), traffic was terrible as well so I wasn't as shocked, but it seemed much higher than going a similar distance in LA. I was still able to get rides in 10 minutes in most cases everywhere, so it wasn't for lack of free drivers, it seemed.