If you need to go somewhere urgently and are not in a mood to drive or if your car is giving you problems, don’t worry! All you need to do is open the Uber app on your smartphone and book a car. Your Uber car will be at your doorstep to take you to your destination in comfort. Uber has become a part of our lives and it is a brand whose name has become a part of our lexicon. If you have ever wondered how much does Uber cost and how does Uber decide its pricing, we have the answers for you. We have a guide that tells all you want to know about Uber and how the company prices its services.
The Uber success story
Uber is an American company that is in the business of providing ride services and ride sharing services. The San-Francisco based company operates in 63 countries across the world and offers its services in 785 metros in different cities. Travis Kalanick and Garett Camp founded the company in 2009. There is an interesting story on how the idea for starting Uber was conceived. Camp once had to hire a private driver paying $800 on New Year’s Eve. This experience motivated him to create a service that could provide cost-effective rides for customers. Uber started its services from 2011.
They launched their mobile app services in 2012, allowing customers to book an Uber ride using their smartphones. Initially, they offered luxury cars, but later on, launched UberX that allowed passengers to book low-cost rides. UberPool is a carpooling service that the company operates. They also offer a food delivery service called Uber Eats. Uber has more than 110 million users across the world using its services. They have captured the ride service market in the USA with a 60% market share. In 2018, they earned a revenue of $11.27 billion and have assets worth $23.88 billion.
Uber collaborates with car owners across the world, who can add their cars to the Uber worldwide fleet. Anyone who meets requirements, including a valid driving license can partner with Uber after clearing a background check. They can use their own car or rent a car to use for Uber. All Uber drivers are considered as contractors offering services. They would be added onto the Uber platform and can start offering their services to the public. Uber has mechanisms to ensure safety for passengers.
Uber has a rating system where both the driver and the customer would rate each other. The idea is to identify drivers who don’t provide good services and have complaints from customers. Such drivers are removed from the Uber platform. In the same way, Uber expects its customers also to be well behaved and would remove customers would have low ratings. Uber’s success story has led the entry to many a competitor. Despite competition and stiff opposition from local taxis, Uber has been growing from strength to strength.
How it works?
Availing Uber’s services is simple. Both customers and drivers would have the Uber app installed on their phones. When you need an Uber, all you need to do is select the location you wish to travel, the app would take your home location automatically using GPS location search. You would then get an estimate of the price displayed. You can check out different options like Uber X or Uber Pool depending on your preferences. Uber uses a dynamic pricing model. The prices vary depending on the demand. This is known as surge pricing. Surge is when there is a great demand for cars during peak hours like work hoursand weekends.
The price applicable at that time of the day would be displayed. If it is acceptable, then you can confirm. The Uber app would scout for drivers nearby and allot one of them for you. Both you and the driver would get notifications about this. The driver would then come down to your location. You can get on board and complete the ride. Once the ride is complete, the price would be displayed. You can pay using various options, including cash and card. Once the transaction is complete, you would rate the driver based on the service provided. At the same time, the driver would also rate you on your behavior with the driver and other factors.
The Uber pricing model determines the answer to how much Uber costs. While there may be slight variations from country to country, the basic pricing model is the same. It involves the following formula (as explained in their website):
Uber price = ((Base price + Time rate + Distance rate) * Surge factor) + Toll + Tips+ any other fee + any local tax
Let us examine each of the factors that determine the Uber pricing for your ride.
- Base price: This is the basic fee that is a fixed or flat fee. This covers the cost of picking up the customer.
- Time rate: This is calculated based on the total time taken for the trip.
- Distance rate: This is the total distance traveled from the time the trip commenced until the time the trip concluded.
- Surge factor: This is the factor that determines surge pricing. For instance, during peak hours a surge factor of 1.5 may be applicable, which means you need to pay one and a half times the regular price.
- Toll: This includes any local road tolls that have to be paid to the toll operator.
- Tips: These are tips payable to the drivers. This is usually optional and left to the customer’s discretion.
- Any other fee: In some places, a booking fee may be charged to cover the administrative expenses, including the cost of carrying out background check of the driver.
- Local tax: Depending on the place of operation, there may be local taxes applicable.
All these factors put together determine the pricing and this is used by the app to calculate the price. This is the pricing model, with each of the factors varying depending upon the country and city where the service is provided. Each of the pricing factors is determined based on local conditions. For instance, in some countries, there may be local laws that govern the minimum fare. This would need to be factored by Uber. Similarly, taxes would vary. Surge pricing factor depends on the demand. If the demand is more, then surge pricing would be applicable. The fee also depends on the type of vehicle. Luxury vehicles would obviously have a higher fee. When you opt for ride sharing, you would be sharing the car with other passengers who would all be dropped to their destinations based on the shortest route as decided by the app. The charges would also be divided among all the passengers and hence the final price you pay would be less.
As a customer, you can pay using different methods:
- Card – this includes credit card and debit card
- Online banking
- Digital payment and wallets like Google Pay, Apple Pay, etc.
- Gift cards offered by Uber
- Any other payment mode prevalent in the country/city of operation
Who benefits from Uber services?
The answer to this question is all the parties concerned benefit from services provided by Uber. Generally, 75% of the total price charged is given to the driver (excluding tolls and taxes that would be on actuals). Uber retains the remaining fee. The driver would retain any tips paid. Being a part of the Uber network is profitable for drivers. The amount they earn will usually not only cover their expenses but also help them make a profit. The more the number of rides, the higher they can earn. Surge pricing is beneficial for the driver as they can earn more during the time when there is a higher demand.
Uber services are advantageous for customers. In almost all places where Uber operates, their prices would be lesser than local taxi services. This makes it advantageous for customers. For regular users of Uber, the low pricing during most of the time would make up for surge pricing during peak times. Discounts are available for new customers for the first ride. Various promotional offers would be available for the benefit of customers. The biggest advantage for customers from Uber is convenience. Customers can travel wherever they want in a convenient way. This is the reason Uber is patronized by customers worldwide.
Uber would benefit as they get around 25% of the overall fee for every ride. Considering that there are thousands of rides happening worldwide at any time, it is a profitable venture for Uber. In most cases, their administrative fee would also be covered. The surge pricing would help the company make more money. Overall, it is a profitable business for Uber.
The Uber service is a win-win situation for all the parties involved. Drivers, customers, and the company would all benefit from the services provided.
Uber’s charges in different countries
The definitive answer to how much does Uber cost can be found out by a comparison of Uber services in different countries. This would help you get a general idea of how Uber prices its services. Uber has a price estimation tool that helps you understand how much Uber costs in different cities and different countries.
The following are prices for an Uber ride in cities across the world. The calculation is done for a ride of a distance of 5 km and is calculated using the US dollar for comparison.
- Philippines – $1.33
- India – $1.34
- Russia – $1.66
- Jordan – $1.76
- Argentina – $1.84
- Saudi Arabia – $2.30
- Brazil – $2.39
- South Africa – $3.29
- Bahrain – $4.14
- Greece – $4.67
- Hong Kong – $6.65
- Australia – $6.70
- Canada – $7.31
- New Zealand – $7.41
- United Kingdom – $7.46
- United States of America – $7.52
- Germany – $8.92
- France – $9.07
- Netherlands – $10.07
- Switzerland – $13.90
As can be seen from the above list, Uber prices vary from $1.33 to $13.90 from country to country. Even within a country, prices can vary from city to city. In a country like the US, prices vary a lot. For example, in New York, the base price of Uber is $2.55 with $0.35 charged per minute and $1.75 charged per mile. On the other hand, in Philadelphia, the base price would be $1.25 and the charges per minute and per mile would be $0.18 and $1.15 respectively. In Los Angeles, there is no base price and charges are based on a per mile price of $0.96 and per minute price of $0.15.
Uber costs thus differ from place to place, but in general, is cheaper than a taxi.
The Psychology Behind a Strong Security Culture in the Financial Sector
By Javvad Malik, Security Awareness Advocate at KnowBe4
Banks and financial industries are quite literally where the money is, positioning them as prominent targets for cybercriminals worldwide. Unfortunately, regardless of investments made in the latest technologies, the Achilles heel of these institutions is their employees. Often times, a human blunder is found to be a contributing factor of a security breach, if not the direct source. Indeed, in the 2020 Verizon Data Breach Investigations Report, miscellaneous errors were found vying closely with web application attacks for the top cause of breaches affecting the financial and insurance sector. A secretary may forward an email to the wrong recipient or a system administrator may misconfigure firewall settings. Perhaps, a user clicks on a malicious link. Whatever the case, the outcome is equally dire.
Having grown acutely aware of the role that people play in cybersecurity, business leaders are scrambling to establish a strong security culture within their own organisations. In fact, for many leaders across the globe, realising a strong security culture is of increasing importance, not solely for fear of a breach, but as fundamental to the overall success of their organisations – be it to create customer trust or enhance brand value. Yet, the term lacks a universal definition, and its interpretation varies depending on the individual. In one survey of 1,161 IT decision makers, 758 unique definitions were offered, falling into five distinct categories. While all important, these categories taken apart only feature one aspect of the wider notion of security culture.
With an incomplete understanding of the term, many organisations find themselves inadvertently overconfident in their actual capabilities to fend off cyberthreats. This speaks to the importance of building a single, clear and common definition from which organisations can learn from one another, benchmark their standing and construct a comprehensive security programme.
Defining Security Culture: The Seven Dimensions
In an effort to measure security culture through an objective, scientific method, the term can be broken down into seven key dimensions:
- Attitudes: Formed over time and through experiences, attitudes are learned opinions reflecting the preferences an individual has in favour or against security protocols and issues.
- Behaviours: The physical actions and decisions that employees make which impact the security of an organisation.
- Cognition: The understanding, knowledge and awareness of security threats and issues.
- Communication: Channels adopted to share relevant security-related information in a timely manner, while encouraging and supporting employees as they tackle security issues.
- Compliance: Written security policies and the extent that employees adhere to them.
- Norms: Unwritten rules of conduct in an organisation.
- Responsibilities: The extent to which employees recognise their role in sustaining or endangering their company’s security.
All of these dimensions are inextricably interlinked; should one falter so too would the others.
The Bearing of Banks and Financial Institutions
Collecting data from over 120,000 employees in 1,107 organisations across 24 countries, KnowBe4’s ‘Security Culture Report 2020’ found that the banking and financial sectors were among the best performers on the security culture front, with a score of 76 out of a 100. This comes as no surprise seeing as they manage highly confidential data and have thus adopted a long tradition of risk management as well as extensive regulatory oversight.
Indeed, the security culture posture is reflected in the sector’s well-oiled communication channels. As cyberthreats constantly and rapidly evolve, it is crucial that effective communication processes are implemented. This allows employees to receive accurate and relevant information with ease; having an impact on the organisation’s ability to prevent as well as respond to a security breach. In IBM’s 2020 Cost of a Data Breach study, the average reported response time to detect a data breach is 207 days with an additional 73 days to resolve the situation. This is in comparison to the financial industry’s 177 and 56 days.
Moreover, with better communication follows better attitude – both banking and financial services scored 80 and 79 in this department, respectively. Good communication is integral to facilitating collaboration between departments and offering a reminder that security is not achieved solely within the IT department; rather, it is a team effort. It is also a means of boosting morale and inspiring greater employee engagement. As earlier mentioned, attitudes are evaluations, or learned opinions. Therefore, by keeping employees informed as well as motivated, they are more likely to view security best practices favourably, adopting them voluntarily.
Predictably, the industry ticks the box on compliance as well. The hefty fines issued by the Information Commissioner’s Office (ICO) in the past year alone, including Capital One’s $80 million penalty, probably play a part in keeping financial institutions on their toes.
Nevertheless, there continues to be room for improvement. As it stands, the overall score of 76 is within the ‘moderate’ classification, falling a long way short of the desired 90-100 range. So, what needs fixing?
Towards Achieving Excellence
There is often the misconception that banks and financial institutions are well-versed in security-related information due to their extensive exposure to the cyber domain. However, as the cognition score demonstrates, this is not the case – dawdling in the low 70s. This illustrates an urgent need for improved security awareness programmes within the sector. More importantly, employees should be trained to understand how this knowledge is applied. This can be achieved through practical exercises such as simulated phishing, for example. In addition, training should be tailored to the learning styles as well as the needs of each individual. In other words, a bank clerk would need a completely different curriculum to IT staff working on the backend of servers.
By building on cognition, financial institutions can instigate a sense of responsibility among employees as they begin to recognise the impact that their behaviour might have on the company. In cybersecurity, success is achieved when breaches are avoided. In a way, this negative result removes the incentive that typically keeps employees engaged with an outcome. Training methods need to take this into consideration.
Then there are norms and behaviours, found to have strong correlations with one another. Norms are the compass from which individuals refer to when making decisions and negotiating everyday activities. The key is recognising that norms have two facets, one social and the other personal. The former is informed by social interactions, while the latter is grounded in the individual’s values. For instance, an accountant may connect to the VPN when working outside of the office to avoid disciplinary measures, as opposed to believing it is the right thing to do. Organisations should aim to internalise norms to generate consistent adherence to best practices irrespective of any immediate external pressures. When these norms improve, behavioural changes will reform in tandem.
Building a robust security culture is no easy task. However, the unrelenting efforts of cybercriminals to infiltrate our systems obliges us to press on. While financial institutions are leading the way for other industries, much still needs to be done. Fortunately, every step counts -every improvement made in one dimension has a domino effect in others.
Has lockdown marked the end of cash as we know it?
By James Booth, VP of Payment Partnerships EMEA, PPRO
Since the start of the pandemic, businesses around the world have drastically changed their operations to protect employees and customers. One significant shift has been the discouragement of the use of cash in favour of digital and contactless payment methods. On the surface, moving away from cash seems like the safe, obvious thing to do to curb the spread of the virus. But, the idea of being propelled towards an innovative, digital-first, cashless society is also compelling.
Has cashless gone viral?
Recent months have forced the world online, leading to a surge in e-commerce with UK online sales seeing a rise of 168% in May and steady growth ever since. In fact, PPRO’s transaction engine, has seen online purchases across the globe increase dramatically in 2020: purchases of women’s clothing are up 311%, food and beverage by 285%, and healthcare and cosmetics by 160%.
Alongside a shift to online shopping, a recent report revealed 7.4 million in the UK are now living an almost cashless life – claiming changing payment habits has left Britons better prepared for life in lockdown. In fact, according to recent research from PPRO, 45% of UK consumers think cash will be a thing of the past in just five years. And this UK figure reflects a global trend. For example, 46% of Americans have turned to cashless payments in the wake of COVID-19. And in Italy, the volume of cashless transactions has skyrocketed by more than 80%.
More choice than ever before
Whilst the pandemic and restrictions surrounding cash have certainly accelerated the UK towards a cashless society, the proliferation of local payment methods (LPMs) in the UK, such as PayPal, Klarna and digital wallets, have also been a key driver. Today, 31% of UK consumers report they are confident using mobile wallets, such as Apple Pay. Those in Generation Z are particularly keen, with 68% expressing confidence using them.
As LPM usage continues to accelerate, the use of credit and debit cards are likely to decline in the coming years. Whilst older generations show an affinity with plastic, younger consumers feel less secure around its usage. 96% of Baby Boomers and Generation X confirmed they feel confident using credit/debit cards, compared to just 75% of Generation Z.
Does social distancing mean financial exclusion?
As we hurtle into a digital age, leaving cash in the rearview, there are ramifications of going completely cashless to consider. We must take into consideration how removing cash could disenfranchise over a quarter of our society; 26% of the global population doesn’t have a traditional bank account. Across Latin America, 38% of shoppers are unbanked, and nearly 1 in 5 online transactions are completed with cash. While in Africa and the Middle East, only 50% of consumers are banked in the traditional sense, and 12% have access to a credit card. Even here in the UK, approximately 1.3 million UK adults are classed as unbanked, exposing the large number of consumers affected by any ban on cash.
Even when shopping online – many consumers rely on cash-based payments. At the checkout page, consumers are provided with a barcode for their order. They take this barcode (either printed or on their mobile device) to a local convenience store or bank and pay in cash. At that point, the goods are shipped.
There are also older generations to consider. Following the closure of one in eight banks and cashpoints during Coronavirus, the government faced calls to act swiftly to protect access to cash, as pensioners struggled to access their savings. Despite the direction society is headed, there are a significant number of older people that still rely on cash – they have grown up using it. With an estimated two million people in the UK relying on cash for day to day spending, it is important that it does not disappear in its entirety.
Supporting the transition away from cash
Cashless protocols not only restrict access to goods and services for consumers but also limit revenue opportunity for merchants. While 2020 has provided the global economy with one great reason to reduce the acceptance of cash, the payments industry has billions of reasons to offer multiple options that cater to the needs of every kind of shopper around the world.
Whilst it seems younger generations are driving LPM adoption, it is important that older generations aren’t forgotten. If online shops fail to offer a variety of preferred payment methods, consumers will not hesitate to shop elsewhere. With 44% of consumers reporting they would stop a purchase online if their favourite payment method wasn’t available – this is something merchants need to address to attract and retain loyal customers.
UnionPay increases online acceptance across Europe and worldwide with Online Travel Agencies
- UnionPay International today announces that two of Europe’s leading travel companies, Logitravel and Destinia, have started accepting UnionPay.
- This acceptance will enable users of the groups’ travel websites to make purchases using UnionPay payment methods.
The acceptance partnerships between the OTAs and UnionPay began in July 2020 for customers across 13 European countries and another 90 countries and regions worldwide. The European countries covered by the agreements include the UK, Germany, France, Italy, Spain, Portugal, Norway, Denmark, Sweden, Austria, Switzerland, Hungary and Ireland. The brands covered by these acceptances include Logitravel.com and Destinia.com which together deliver more than 8.5 million worldwide travel bookings each year covering flights, hotels, holidays, car hire and other experiences.
With over 8.4 billion cards issued in 61 countries and regions worldwide, UnionPay has the world’s largest cardholder base and is the preferred payment brand for many Chinese and Asian expatriates and students based in Europe, as well as an increasing number of global customers. These cardholders are also particularly attractive to the two OTAs. Despite the impact of Covid-19, Logitravel and Destinia expect to see the demand for travel across the European continent as well as that between Europe and Asia return to growth in the coming years. They are now placing significant focus on offering more payment options and smoother payment services to meet this demand.
The partnerships incorporate UnionPay’s ExpressPay and SecurePlus technology, which will ensure seamless transactions for the customers, contained within a single process through the relevant websites. UnionPay’s technology also provides for the requirement to authenticate transactions under the EU regulation Payment Services Directive 2 (PSD2) ensuring that sites will be compliant as soon as the relevant countries apply the requirements.
Wei Zhihong, UnionPay International’s Market Director, said: “This is a major partnership with two of Europe’s leading online travel companies. Logitravel and Destinia are brands which have been at the forefront of e-commerce for many years and we are very excited to be working with them to extend their reach to new audiences. This highlights the work that we have carried out in ensuring that our technology provides effective solutions for the biggest e-commerce sites both in Europe and around the world. We look forward to announcing many more similar agreements in the near future.”
Jesús Pons, Chief Financial Officer at Logitravel Group said: “UnionPay has always been on our radar, and since travel has become a crucial part of its development, Logitravel felt it important to develop this important partnership. It really was an obvious decision for Logitravel since both companies share a passion for e-commerce and emphasising the payment experience for their customers.”
Ricardo Fernández, Managing Director at Destinia Group said: “We believe that this is the beginning of a really strong relationship. Our discussions with UnionPay in reaching this partnership have demonstrated their understanding of the needs of major online merchants and their ability to deliver the highest quality systems. We look forward to working together on further partnership as we move forward.”
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