Uber Is Letting Users And Drivers Decide Their Own Fares Through Uber Flex

The more things change, the more they remain the same.

Uber is testing out a new service in India named Uber Flex, through which users can choose the fare they offer to drivers. Uber suggests a price, but users have the option to pick a price higher or lower than the suggested amount. If a driver accepts the price quoted by the user, the ride is confirmed. Users have reported the service being tried out in Surat and Indore.


Drivers similarly have the option to quote their rates to the user. Users see a list of drivers willing to take them at a price of their choosing, and their ratings along their car models. Users can pick whichever driver’s offer catches their fancy, and the ride is then confirmed.


This is a marked departure from how Uber usually operates — Uber usually shows users a price, and then connects them to a driver, who has to accept the price shown by the company. But both users and drivers can be unhappy with the price decided by Uber. Uber is now experimenting with a model in which it pushes itself out of the equation with a suggested price, and lets users and drivers agree on a price that they both deem suitable.

The system could lead to more efficient price discovery. Uber’s pricing was often opaque, and both drivers and users often complained that it was stacked against them. The new model will allow the laws of demand and supply to play themselves out, and hopefully come up with more efficient prices.

But conversely, the new system can also lead to some unpleasant surprises on both sides. Drivers could discover there are some drivers who’re willing to undercut them on prices, and bring down prices for everyone. Users, on the other hand, could discover that rides to unpopular areas might end up being quite expensive, as could rides during rains and traffic snarls.

But perhaps most tellingly, the new system is essentially a digital redux of what booking a cab used to be in the pre-Uber era — users would hail several cabs, haggle for fares, and then finally take a cab in which they could agree at a price with the driver. Uber had removed this friction by becoming a trusted intermediary, and provided prices that users and drivers could both agree on. But Uber now, perhaps after seeing startups like Indrive, is looking to create a platform in which users and drivers can themselves figure out prices. It remains to be seen how successful Uber Flex ends up being, but it would appear that more than a decade after the cab hailing revolution, the industry might be heading back to right where it started.