Darrival is a ride-hailing platform built on blockchain technology that seeks to empower the people who create and extract value within its ecosystem – drivers and riders. Ride-hailing platforms charge drivers a high commission from the total fare for every ride. Commission rates vary from agent to agent, and have increased over the years from a range of 5%-8% to 25%-30%.
The commission varies from ride to ride without being communicated to the driver. According to a recent MIT study, the profits earned by ride-hail drivers can be very low. The study raises concerns over labour standards, noting that some drivers end up making losses after paying for gas, insurance, maintenance, and other costs. The median hourly profit was $3.37, with 74% of drivers earning less than the minimum wage in their state.
Calculations for fares in ride-hailing companies are often unclear and can include hidden multipliers. They also infuse surge pricing into the app at any time without there being any way to verify it. Ride-hailing platforms collect a lot of data about their users, including their location, gender, spending patterns and history, contacts and even their battery level.
While it’s scary to think that companies could collect so much information about us, the ability to analyze this data through the lens of purchasing capacity, price sensitivity and behavioral science gives them a dangerous potential to exploit users for profit.
Personalized pricing or discriminatory pricing is a growing trend, according to a recent Deloitte and Salesforce report. Forty percent of brands that currently use artificial intelligence to personalize the customer experience have used it for tailored pricing and promotions in real-time.