Why Uber Is More Expensive ... For Some People

Narrator: These 11 people are calling an UberX from our office in Lower Manhattan to the Plaza Hotel. Same ride at the exact same time. $66.27. $64.96.

Mine says $54.95. What? For UberX? For UberX. Wow.

Narrator: The highest fare was nearly 21% more expensive than the lowest fare. We're all just sitting in the same room and you're going to give different prices? Like, is there a reason they're getting a more expensive

one? Narrator: This report on Uber and Lyft found routes that are over 50% more expensive. So what's going on? The same product or service, different prices for different consumers.

Alex: They have access to tons of data about you, about people like you. It's safe to say they can use those indicators to adjust prices in ways that they think will be more profitable for the company.

Narrator: Uber says it doesn't use personal data to personalize prices. But what we found is that Uber's patents and a certain in-app disclosure raise questions. It is a bait and switch, right?

Like, "Hey, take this Uber ride, and it's only going to cost you 10 bucks." And then three years later, Uber says, "Hey, now that actually costs you $60." And you're stuck. Narrator: You'd think with higher prices, drivers would be making

more. When it first started, I think it was 75/25 split, 75 for the driver. But lately I've seen below 50%, which I never saw before.

Narrator: So is Uber setting a different price just for you? And is that the reason why some Uber rides are so expensive? In the early days, while Uber didn't show you the

price of a ride right away, it did promise a bargain. UberX, cheaper than a taxi. The low prices helped bring riders onto the app. More riders attracted more drivers.

They needed a decent percentage of consumers and drivers on their platform. And if they captured enough of that, the idea would be that for consumers or the drivers to leave Uber would be very costly.

Narrator: For many Uber drivers, the deal was simple. Keep 80% of the fare while Uber took 20%. And that strategy paid off. By 2013, Uber expanded to more than 60 cities worldwide and was valued at around $3.5 billion.

But making that bargain possible and scaling it fast meant Uber was willing to lose money. They were taking their venture capital financing and whatever other financing they were raising, and they were letting the core of their business operate at a loss.

Narrator: At the time, Uber priced rides using a rate card that followed a pretty simple formula, a base charge plus a fixed rate per minute and per mile. Think of it like a digital taxi meter. And who could forget when Uber introduced surge pricing?

When demand outpaced the number of available drivers, Uber multiplied the fare. Surge pricing didn't always sit well with riders. In fact, it sparked backlash, like in 2012, when Uber charged over $100 for rides less than three miles on

New Year's Eve. But drivers actually love surge pricing. Well, if there were no surges, I wouldn't even drive. I would quit driving Uber. The surges is when I make a lot of money.