New Research Shows In-App Fare Negotiation Can Broaden Mobility Access, Cut Inefficiencies
New research released by Oxford Economics reveals that allowing riders and drivers to negotiate fares directly within mobility apps can enhance price discovery, improve operational efficiency, and expand transportation access. Conducted in partnership with inDrive—the world’s second-most-downloaded ride-hailing app—the study combines survey data from riders and drivers across seven emerging markets: Colombia, Egypt, Mexico, Morocco, Nepal, Pakistan, and Peru.
The findings indicate that while ride-hailing platforms have significantly improved mobility over the past two decades through algorithmic matching and dynamic pricing, existing pricing models struggle to fully account for the diverse preferences of riders and drivers. Algorithmic pricing is generally optimized for average market conditions but often fails to reflect the wide variations in incomes, trip distances, and travel circumstances across emerging markets. Consequently, a single price set by algorithms may not accurately capture the true value of a trip for either party, leaving mutually beneficial rides unrealized and some areas underserved.
In-app fare negotiation emerges as a solution that bridges this gap, representing a new phase in ride-hailing evolution. Rather than replacing algorithmic pricing, negotiation complements it. The process typically begins with an algorithmic estimate, but riders and drivers can adjust fares to better reflect individual circumstances, introducing decentralized decision-making where central pricing is less precise and inclusive.
The research shows widespread adoption of fare negotiation where available. Across the surveyed markets, approximately 75% of trips on inDrive involved negotiated fares, rising to around 80% in parts of Latin America and the Middle East. This high adoption rate correlates with increased trip volumes—nearly two-thirds (64%) of riders and drivers in Latin America reported completing more trips due to fare negotiation. Similar trends appeared in Egypt, Morocco, and Pakistan, where most respondents said negotiation increased their trip completion.
Market data also indicates that this pricing approach supported rapid user growth. inDrive has reached key user milestones in several markets—such as Peru, Egypt, Colombia, and Pakistan—within relatively short periods, underscoring the strong acceptance of fare negotiation in mature ride-hailing environments.
Beyond scale, flexible pricing was shown to improve mobility accessibility for riders and utilization for drivers. In Latin America, 55% of riders said rides negotiated on inDrive were more affordable than those on other platforms, while 66% of drivers agreed that negotiation helps them earn a fair income and avoid underpaid trips. About half of all respondents across surveyed markets also reported that fare negotiation helped them access trips in harder-to-reach locations.
Anubhav Mohanty, Director at Oxford Economics, commented:
“These findings highlight the limits of algorithmic pricing in highly variable markets. Where incomes, geography, and trip conditions differ widely, allowing riders and drivers to negotiate prices can improve how markets clear, unlocking additional rides and improving overall efficiency.”
Andries Smit, Chief Growth Businesses Officer at inDrive, added:
“Fare negotiation brings human agency and individual choice back into the pricing process. By allowing riders and drivers to agree on prices that reflect real-world conditions, we see more trips completed, fairer outcomes for drivers, and better access to mobility for riders, especially in markets where standard pricing models don’t always work. These underlying dynamics also matter because direct agreement on fares reduces reliance on blanket subsidies or short-term discounts to reach price-sensitive users, creating a more sustainable marketplace. Over time, this can support lower platform fees and more affordable rides, while ensuring prices remain grounded in the realities of local supply and demand.”
Overall, the Oxford Economics study indicates a broader shift in ride-hailing—from pure automation toward human–algorithm collaboration. While algorithms remain essential for scale and efficiency, introducing price flexibility can improve both outcomes and accessibility, expanding total ridership in diverse markets.
inDrive, a global mobility and urban services platform, operates in 1,065 cities across 48 countries worldwide, and is currently transitioning into a super app with additional locally-relevant urban services beyond ride-hailing. inDrive has completed over 7 billion transactions and surpassed 390 million app downloads globally, making it the second-most-downloaded ride-hailing app worldwide.