“This trip with taxi cab costed me more than I thought!”, exclaimed Seema. “And what is the Surge Pricing? She had taken the taxi cab Uber Go. “I also don’t like the way Ola charges” said Ravi. “Life was so simple when we booked taxi by 4 hours 40 km. The devil is in the details. Lets understand how OLA/Uber charges during the coffee break”, I said. So we sat down and went through the Uber/Ola receipt we had. This article explains how taxi cabs Uber, Ola are charging. What is surge pricing? Also mentions Taxy App to find the ­private taxi as well as the good old black-and-yellow ­ in your vicinity at the best rate possible.

What are Uber,Ola etc?

Uber, Ola Cabs are on-demand taxi aggregators. Taxi aggregators typically don’t own any cabs or employ drivers; they connect customers with drivers through a technology platform, the front-end for the customer mostly is an app. Advantage of using them is  no haggling with drivers especially auto drivers on where you want to go and payments.

Ola started in December 2010. TaxiForSure was founded , in June 2011, it was acquired by Ola in March 2015 for $200 million. Uber entered India in October 2013. Meru, started much before, in 2007, but it mostly had owned cars , it bought cars and employed drivers. It began a shift to the aggregation model in 2011. Ola introduced autos on its platform in October 2014

Bills depends on Cab chosen

The cost of travelling depends on the kind of car one chooses during the trip. In India, Uber offers uberGO (hatchback vehicles or small cars that are the cheapest), uberX (mid-sized sedans that are costlier) and uberBLACK (larger vehicles at premium pricing). While Ola offers Ola Mini, Ola Sedan and Ola Prime. Lets look at these car in detail.

Type of Uber Cab

• uberGo offer consumers rides in hatchbacks like the Toyota Etios Liva and Maruti Ritz.
• uberX is Uber’s budget option. Seats up to 4 people. It offers mainstream sedans like the Maruti Swift Dzire to people looking for a cab.
• UberBLACK is the luxury version of uberX. Uber Black service  offers vehicles like Toyota Camry and Audi A6 at affordable rates. Picks you up in a high-end sedan Seats up to 4.
• UberSUV is the luxury version of UberXL. Seats up to 6. It includes a Toyota Innova or a Tata Aria if they select the SUV option.
• UberXL is Uber’s budget SUV option. Picks you up in your everyday SUV ,Seats up to 6. It includes cars such as Maruti Suzuki Ertiga, Toyota Innova etc and will be able to seat a maximum of 6 people.
• UberPOOL, is Uber’s ride-sharing service in India . It lets users share the ride and the cost with another person who is requesting a ride along a similar route. You will get vehicles that are available on uberX, but this will cost you 50% less than uberX, making it the cheapest Uber. This service was first launched in San Francisco in August 2014 and later got expanded to Paris, New York, Los Angeles and Austin.
• The image below shows the type of Uber cabs and fares as applicable in Bangalore in Nov 15. Click on image to expand.
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Type of Ola Cabs 

• Ola Mini is the most affordable personal transportation option in the city and its fleet include hatchbacks like Tata Indica and Nissan Micra amongst others.
• Ola Sedan is aimed at a regular city traveler looking for a spacious car and comfortable drive and includes cars like Suzuki DZire, Mahindra Verito and Toyota Etios.
• Ola Prime business class experience fleet includes cars like Toyota Innova, Altis, Skoda Rapid and Honda Civic.

Ola rates in Nov 2015 for Bangalore from www.olacabs.com/fares

Fare differs from City to City, Also within the city

Rates of Cab may differ from city to city. For example uberX Base fare is Rs 40 in Bangalore and fare per km is Rs 7 while in Delhi base fare is Rs 55 and fare per km is Rs 55. Comparison of fareUber X in Bangalore and Delhi is given below

	BASE FARE	Fare per unit of time	fare per unit of distance	MIN FARE	CANCELLATION FEE
New Delhi	₹ 55	₹ 1PER MINUTE	₹ 9PER KILOMETER	₹ 80	₹ 100
Bangalore	₹ 40	₹ 1PER MINUTE	₹8 PER KILOMETER	₹ 75	₹ 75

Within the city also rates might differ if distance is exceeded. After 15 KMs, Uber charges an additional fare for every kilometre. This rate will vary depending on the city. You can check out the new long distance rates for Bangalore.

	Base	Per Minute	Regular Fare (Up to 15 KM)	Long Distance Fares  (After 15 KM)	MINIMUM FARE
uberGO	₹35	₹1	₹7	₹14	₹50
uberX	₹40	₹1	₹8	₹16	₹75

At times Waiting charge comes into play. Waiting charge is time taken to board the cab after pickup time as well as waiting during the trip. However, all the radio taxi and app-based taxi services calculate it as the entire time spent on the journey, and not just stuck in traffic. While Ride time includes total time from the pickup time to drop time.

Understanding the Uber/Ola Reciept

For a given city and car type, Uber/Ola specifies three numbers which determine the price of your ride. There’s also the minimum fare and cancellation charge and there could also be surge pricing,

• The base fare, F
• The fare per unit of time,   CPT
• The fare per unit of distance, CPD

For a given ride, these numbers are combined to obtain the final price. Both the time and distance fares are applied directly to the entire trip.

Total Fare = Base Fare + Cost Per Unit of Time * Total Time taken + Cost per Unit of Distance * Total Distance travelled.

If your ride lasted for time T and you rode a distance of D, the total cost is = B+CPT∗T+CPD∗D.

An excerpt from Uber receipt is shown below:

What is Surge Pricing or Peak Price?

Surge pricing happens when there’s a high demand for vehicles in a particular are such as on weekend nights, on holidays, or during bad weather.  When an excessive number of ride requests are made within a short duration in a given area compared to the number of drivers currently on the road, the price of all rides in that area is increased or surged by a multiple (displayed as 1.5x or 2.1x, for example).

The degree of the multiple is determined by the ratio between the number of demands for rides and the supply of drivers at the moment when the surge goes into effect. The different sections in a metro area are broken up into neighborhoods. On the Uber driver app (see below), when demand increases in an area that neighborhood will change color. Yellow means increased demand, Orange means heavily increased demand, and Red means that demand has reached a level that triggers a surge. The amount of the surge is given by the multiplier 1.2x, 1.4x, etc. Any rides given in that area will experience a fare increase equal to the multiplier.On the passenger app, the map does not display the locations of the surge pricing. It only shows with the Surge Icon. Surge pricing is not a live, continuously updated price, the surge will expire after so many minutes and be recalculated based on the demand/supply ratio at that time. Ref:What is Uber Surge Pricing

Surge rates are supposed to be incentive for drivers, to put more cabs on the road when they’re most needed. There is lot of debate online as to Does surge pricing actually encourage more drivers to get on the road?  Surge pricing is an automated algorithm. Demand surges have also been monitored by Uber’s human staffers, who have on rare occasions used their discretion to lower prices.

Uber/OLA are by no means unique in its dynamic pricing strategy, either. Airlines have similar tactics to sell tickets and hotels use dynamic pricing to book rooms, especially during busy holiday seasons. What makes Uber/Ola different is that the company is atup front and transparent about how much you’re going to pay when the price spikes. You will never pay the surged fare price unless you accept the fare price, the taxi cab app will always ask you first before requesting a car for you.

Surge pricing, charges a multiplier on every fare during busy times. So calculation during Surge pricing works as follows. It calculates the normal fare as explained above. Then it multiples the normal fare by surged multiplier. For the excerpt of image given below

• Normal fare = 35+ 12.24 * 7 + 44.37 * 1= 154.47
• Surged fare = Normal fare * Surged multiplier = 154.47 * 1.3 = 200.81
• Excess fare due to surge = Surged fare- normal fare = 200.81 – 154.47 = 46.34

Example of OLA receipt is shown below.

App to find Cab:  TAXY on ANDROID

Taxy will help you find a taxi ­private as well as the good old black-and-yellow ­ in your vicinity at the best rate possible. This app tracks information from services like Uber, Ola Cabs, and TaxiForSure to find all the cars around you, sorting them into two columns ­ cheapest and nearest. Additionally , it will mention the taxi service, type, and estimated the travel time. You can even configure the app to alert you at a preset time and show you the best cabs available at that moment. At present, Taxy can be used in 52 cities including Delhi, Mumbai, Bengaluru, Kolkata, Pune, Goa, Kochi, Bhopal, Chandigarh and Surat.

Do you use the cabs from Uber or OLA etc? How has been your experience? Do you think people will continue using Uber/Ola etc? Will these cabs replace or reduce buying car?