Uber has decided to get rid of the old ways of calculating fares. They will now use artificial intelligence and machine learning concept to calculate the fares.

Uber believes that this new way of calculating fares would benefit the users and would increase their user base.

Earlier Uber used to calculate fare on the basis of distance travelled and the type of car that the user travelled in. But, in this new method, there would be several more factors like your previous trip, your address, your credit card store and much more.

This new fare calculation system would help Uber to understand their customer better and fare would be based on that only.

The new fare calculation system is based on ‘Route base pricing’ strategy. This involves the very complex set of algorithms to calculate the fare on the basis of customer’s spending habits.

For example, if a customer lives in some posh area he will be charged more than the other customer who lives in the low cost residential area for the same distance.

Uber’s product head Daniel Graf said,” This new system is more or less similar to Google search. There will be lots of calculation done behind the scene to make the user’s travel easy.”

The main reason for this new system is the profit maximization.

This new system has been implemented in 14 cities in the US but they are mainly for the UberPool service.

Uber wants to implement to this system in common transport mode across the world.

Image source: PCMag