Algorithm of Uber vs Grab

Grab vs Uber

Hi Rowell,

I can definitely help you out in regards to Uber. Uber originally started out using the below algorithm to charge riders.

Your Uber fare is first calculated on 4 main criteria:

• Base (or initial) fare – A flat fee charged at the beginning of every ride
• Cost per minute – How much you are charged for each minute you are inside the ride
• Cost per mile – How much you are charged for each mile of the ride
• Booking Fee (Formerly ‘Safe Rides Fee’) – A flat fee to cover Uber’s ‘operating costs’ (Not included for Uber’s more luxury services like UberBlack or UberSUV)

Here’s how Uber uses the 4 main criteria above to calculate your fare:

Base Fare + (Cost per minute * time in ride) + (Cost per mile * ride distance) + Booking Fee = Your Fare

Then Uber would add in any tolls/fees that you would have incurred along the route and potentially would have multiplied your fare by a certain amount if surge pricing was in play. For more information on this check out this article.

However, in the past year or two (depending on your location) Uber has switched over to an Upfront Fare System. Basically they take your trip and give you a set price before you even ride. That set price is still determined using the above algorithm - your estimated mileage, travel time, and whether or not you are traveling during a period of high demand (surge pricing). It seems like when Uber moved over to this upfront fare system that prices were always a little bit higher for trips than they were previously, in other words, Uber may be applying a slight surge to most rides without riders even knowing!

I am not as familiar with Grabs pricing algorithm, but from what I do know, it is very similar to Ubers. Grab is a bit confusing as their pricing model changes slightly between countries and services, some areas use an upfront pricing model (fixed fares) and other charge per mile/per minute in real time. Like Uber, Grab will usually charge you a base fare, per km fee, and per minute fee. Also, similar to Uber, they have dynamic pricing during peak periods.

This is an interesting article comparing Uber/Grab Fixed fares.

Hope this helps! I am happy to look into Grab/Uber prices for a certain city if you would like.

lilly 1026

RideGuru market data & operations expert