How to Use Distance Tier Pricing in the eCab Taxi Booking WordPress Plugin

You have used the eCab Taxi Booking WordPress plugin for your taxi business. Now you want to add distance-based tier pricing.

Your taxi company requires a flexible and accurate pricing mechanism to deal with customer requests and maximize revenue.

The WordPress eCab Taxi Booking Manager plugin by MagePeople contains an advanced Distance-Based Tier Pricing Addon that allows you to set your own fare rules based on trip distance, duration, and other factors. This blog article walks you through how to configure and use the Distance Tier Pricing Addon, with examples for calculating fares in different situations. Whether you’re new to the plugin or simply looking to simplify your pricing strategy, this guide is for you.

But before applying the tier price, let’s understand this.

Understanding Distance Tier Pricing in the Taxi Sector

Distance tier pricing in the taxi sector is a system of tiered fares where prices vary with respect to the traveling distance, offering distinct price “tiers” for short, intermediate, and long trips. It is used most frequently in combination with time-based and dynamic pricing systems in determining taxi fares. Below is an in-depth description of how it functions, advantages, determinants, and substitutes.

According to Researchgate “Fixed taxi fares, set by the government, just don’t work well when the market changes or competition heats up – it hurts the taxi drivers. Dynamic pricing, though, lets fares change in real-time based on how many taxis are around, how many people need them, and what other services are charging. It’s a much more flexible and fair way to go.”

How It Works

Distance tier pricing segments a journey into sections or tiers and pays by the mile or kilometer for every tier. This is how it operates:

• Distance Measurement: Taxi meters or electronic systems with GPS effectively capture the distance covered from the origin of a journey.
• Tiered Rates: The rate system is established with multiple rates for multiple distance ranges. For example, the first 3 miles would be $X per mile, the second 5 miles $Y per mile, then $Z per mile.
• Calculation: The total fare is calculated by multiplying the applicable tier rate per section of the trip, often tacked on to a base fare or other charges (e.g., toll or booking fee).

Example of Fare Calculation

For a 10-mile trip:

Base fare: $3.00

0–3 miles: $2.50/mile = $7.50

3–8 miles: $2.00/mile = $10.00

8–10 miles: $1.50/mile = $3.00

Total: $3.00 + $7.50 + $10.00 + $3.00 = $23.50

Examples of Tiers

Short Trip (0–3 miles): Blends a base fare (e.g., $3.00) with an increased per-mile rate (e.g., $2.50/mile) to cover early cost of doing business.

Medium Trip (3–8 miles): A slightly lower per-mile rate (e.g., $2.00/mile) to balance profitability with competitiveness for medium trips.

Long Trip (8+ miles): The lowest per-mile rate (e.g., $1.50/mile), benefiting from economies of scale and encouraging longer trips.

Advantages

• Transparency: Passengers have a clear understanding of how fares are calculated depending on the distance covered.
• Fairness: Prices are directly proportional to the actual distance, thus being fair relative to flat-rate systems.
• Profitability: The cabs can generate maximum revenues by pricing differently for different trip lengths.

Factors that Influence Distance-Based Pricing

• Operating Costs: Fuel, vehicle upkeep, and the pay of employees play a massive part in tiered rate policies.
• Location: Tiers vary by location—urban, traffic-congested areas may have higher tiers with higher prices, while rural areas may offer lower rates.
• Competition: Firms can raise or lower tiers to match ride-sharing entities like Uber or Lyft.
• Demand: Peak times or highly popular events can initiate surcharges or dynamic adjustments to tiers.
• Time-Based Pricing: Prices based on trip duration, most suitable in highly congested areas where travel time is the main factor.
• Dynamic Pricing: Real-time fare changes based on demand, weather, or events, as in transportation services like ridesharing.
• Flat Fares: Fixed rates for specific routes, e.g., airport transfers, for convenience to passengers.

Why Choose Distance Tier Pricing?

Tier pricing for distance attains a balance between transparency and adaptability, hence its popularity with traditional taxi services. Knowledge of this form of pricing makes it possible for both drivers and passengers to make well-informed fare as well as service decisions.

We already know that eCab Taxi Booking Manager is a powerful WordPress plugin built on top of WooCommerce, specifically tailored for chauffeur and taxi companies. It utilizes the Google Maps API to enhance precise distance and time estimates, offers multi-level pricing schemes, and seamlessly integrates with WooCommerce for smooth payments.

Enhance your pricing to the next level with the Distance-Based Tier Pricing Addon, which enables you to specify dynamic tiered prices dependent on distance ranges and supports both Single Tier and Progressive/Mixed Tier Pricing logic.

Setting Up the Distance Tier Pricing Addon

Visit MagePeople official website and purchase the Distance Based Tier Pricing Addon For Taxi Booking – Ecab.

Step 1: Install and Activate the Plugin

1. Download and Install:

1. Log in to your WordPress admin dashboard.
2. Make sure you have installed the latest version of eCab Taxi Booking Manager.
3. Navigate to Plugins > Add New.
4. Upload the Distance Based Tier Pricing Addon ZIP file if you have the premium version.
5. Click Install Now and then Activate.

If you want to learn more about eCab taxi settings, check out how to make a taxi booking website.

Step 2: Configure Pricing Settings

1. Access Pricing Settings:

Navigate to Transportation > select a car, for example: Fiat Panda

2. Click Edit and explore the settings.

3. Go to Pricing Tab and scroll down to Distance Tier Pricing section.

4. Now enable Distance Tier Pricing from the toggle button.

5. Distance Tier Pricing only works with the Distance as Google Maps, Distance + Duration as Google Maps, or Inclusive Pricing mode.

Pricing Modes

• Distance as Google Maps: Calculates fares based solely on distance, ignoring duration.
• Distance + Duration as Google Maps: Combines distance-based fares with duration costs (using the default price per hour).
• Inclusive Pricing: Likely mirrors Distance + Duration as Google Maps, adding duration costs, but may vary based on specific plugin settings (check MagePeople documentation for clarity).

6. Select the pricing mode: Distance as Google Maps, Distance + Duration as Google Maps, or Inclusive Pricing.

7. Set Default Pricing:

• Price per Kilometer: Set a default rate (e.g., $2.5/km) for distances outside tiered ranges.
• Price per Hour: Set a default rate (e.g., $10/hour) for duration-based calculations.

8. Define Additional Parameters:

• Initial Price: Added to the fare for all trips. For example: A fixed starting fare (e.g., $5).
• Minimum Price:  Ensures one-way trip fares meet a minimum threshold. For example: The minimum fare for one-way trips (e.g., $30).
• Return Discount: Reduces the fare for return trips (fixed or percentage). For example: A fixed or percentage discount for return trips (e.g., 10% or $5).
• Waiting Time Price/Hour: Adds a cost for waiting time during the trip. For example: A charge for waiting time (e.g., $15/hour).
• Return Minimum Price: Ensures return trip fares meet a minimum threshold after discounts. For example: The minimum fare for return trips (e.g., $40).

For this walkthrough, we won’t use any additional parameters for now.

Let’s understand tier price using this addon.

Understanding Pricing Logics

The Distance Based Tier Pricing Addon supports two primary pricing logics:

• Single Tier Pricing: Applies the pricing type of the tier corresponding to the trip’s total distance (or the last tier if the distance exceeds the maximum) to the entire trip distance.
• Progressive/Mixed Tier Pricing: Calculates fares by applying each tier’s pricing to its respective distance range, with the default price per kilometer for any remaining distance beyond the last tier.

Set Up Distance Tiers:

• In the Distance Based Tier Pricing settings, define tiers with start and end distances and their pricing types (Price per Kilometer or Fixed Rate).
• Example:
  • First Tier: 0–10 km, Price per Kilometer ($2/km).
  • Second Tier: 10–20 km, Fixed Rate ($20).

Example Scenarios: Fare Calculations

To illustrate how the Distance Tier Pricing Addon works, let’s calculate fares for a 24.4 km, 43-minute (0.709 hours, based on plugin rounding) return trip using two tier configurations, with the following parameters:

• Default Pricing: $2.5/km, $10/hour
• Additional Parameters:
  • Initial Price: $5
  • Minimum Price: $30 (for one-way trips)
  • Return Discount: 10%
  • Waiting Time Price/Hour: $15/hour (0 hours assumed)
  • Return Minimum Price: $40

Scenario Set 1: Original Setup (Second Tier: Price per Kilometer)

• Tiers:
  • First Tier (0–10 km): Fixed Rate ($20)
  • Second Tier (10–20 km): Price per Kilometer ($2/km)

Single Tier Pricing

• Distance as Google Maps:
  • Distance Cost: 24.4 km × $2/km = $48.8 ( in single tier, only last tier type is selected, which is $2/km)
  • Initial Price: +$5 = $53.8
  • Waiting time: +$15 = 68.8

If Return is selected

Fare: $123.84

Return fare: 68.8 x 2 = $137.6

Return Discount: $137.6 × 10% = $13.76

Total: $137.6 – $13.76 = $123.84

Return Minimum Price: $123.84 > $40, no adjustment

• Distance + Duration as Google Maps:

• Distance Cost: $48.8
• Duration Cost: 0.709 hours × $10/hour = $7.09
• Initial Price: +$5 = $60.89
• Waiting time: +$15 = $75.88

If Return is selected

• Return fare: 75.88x 2 = $151.76
• Return Discount: $151.76 × 10% = $15.176
• Total: $151.76 – $15.176 = $136.584
• Return Minimum Price: $136.584 > $40, no adjustment

Fare: $136.584

Progressive/Mixed Tier Pricing

• Distance as Google Maps:
  • First Tier (0–10 km): $20
  • Second Tier (10–20 km): 10 km × $2/km = $20
  • Remaining (20–24.4 km): 4.4 km × $2/km = $8.8
  • Distance Cost: $20 + $20 + $8.8 = $48.8
  • Initial Price: +$5 = $53.8
  • Waiting time: +$15 = $68.8

If return is selected

• Return fare: 68.8 x 2 = $137.6
• Return Discount: $137.6 × 10% = $13.76
• Total: $137.6 – $13.76 = $123.84
• Return Minimum Price: $123.84 > $40, no adjustment

Fare: $123.84

• Distance + Duration as Google Maps:

• Distance Cost: $20 + ($2 x 14.4km) = $48.8
• Duration Cost: 43/60 x $10 = $7.16
• Initial Price: +$5 = $60.96
• Waiting time: +$15 = $75.96

If return is selected

• Return fare: 75.96 x 2 = $151.93
• Return Discount: $151.93 × 10% = $15.193
• Total: $151.93– $15.193 = $136.73
• Return Minimum Price: $136.73 > $40, no adjustment

Fare: $136.73 ( decimal places are different due to round up )

Scenario Set 2: New Setup (Second Tier: Fixed Rate)

• Tiers:
  • First Tier (0–10 km): Price per Kilometer ($2/km)
  • Second Tier (10–20 km): Fixed Rate ($20)

Single Tier Pricing

• Distance as Google Maps:

• Distance Cost: $20 ( In single tier only last tier will be counted if its fixed rate)
• Initial Price: +$5 = $25
• Waiting time: +$15 = $40

If return is selected

• Return fare: $40 x 2 = $80
• Return Discount: $80 × 10% = $8
• Total: $80– $8 = $72
• Return Minimum Price: $72 > $40, no adjustment

• Fare: $72

• Distance + Duration as Google Maps:

• Distance Cost: $20 (fixed rate for entire trip, as 24.4 km > 20 km)
• Duration Cost: 43/60 x $10 = $7.16
• Initial Price: +$5 = $32.16
• Waiting time: +$15 = $47.16

If return is selected

• Return fare: $47.16 x 2 = $94.32
• Return Discount: $94.32 × 10% = $9.432
• Total: $94.32– $9.432 = $84.888
• Return Minimum Price: $84.888 > $40, no adjustment

• Fare: $84.888
• Inclusive Pricing: Assumed to mirror Distance + Duration: $84.888

Progressive/Mixed Tier Pricing

• Distance as Google Maps:

• First Tier (0–10 km): 10 km × $2/km = $20
• Second Tier (10–20 km): $20
• Remaining (20–24.4 km): 4.4 km × $2.5/km = $11
• Distance Cost: $20 + $20 + $11 = $51
• Initial Price: +$5 = $56
• Waiting time: +$15 = 71

If return is selected

• Return fare: $71 x 2 = $142
• Return Discount: $142 × 10% = $14.2
• Total: $142– $14.2 = $127.8
• Return Minimum Price: $127.8 > $40, no adjustment

• Fare: $127.8

• Distance + Duration as Google Maps:

• Distance Cost: $51
• Duration Cost: 43/60 x $10 = $7.16
• Initial Price: +$5 = $63.16
• Waiting time: +$15 = $78.16

If return is selected

• Return fare: $78.16 x 2 = $156.32
• Return Discount: $156.32 × 10% = $15.632
• Total: $142– $14.2 = $140.688
• Return Minimum Price: $140.688 > $40, no adjustment

• Fare: $140.688
• Inclusive Pricing: $140.688

Tips for Optimizing Your Pricing Strategy

1. Test Different Configurations: Experiment with tier ranges and pricing types to balance competitiveness and profitability.
2. Leverage Return Discounts: Offer attractive discounts (e.g., 10%) to encourage return trips, but set a Return Minimum Price to protect revenue.
3. Monitor Waiting Time: Enable waiting time charges for trips with stops to cover driver downtime.
4. Use Google Maps API: Ensure your API key is active and properly configured for accurate distance and duration data.
5. Check Documentation: Refer to MagePeople’s eCab documentation for specific settings, especially for Inclusive Pricing.

Conclusion

The Distance Based Tier Pricing Addon for the eCab Taxi Booking Manager plugin offers unparalleled flexibility for taxi businesses. By configuring Single Tier or Progressive/Mixed Tier Pricing with modes like Distance as Google Maps or Distance + Duration as Google Maps, and incorporating parameters like Initial Price, Return Discount, and Return Minimum Price, you can create a pricing model tailored to your business needs. The examples above demonstrate how fares vary based on setup, ensuring you can optimize for both customer satisfaction and profitability.

Ready to set up your taxi booking system?

Install the eCab plugin, configure your tiers, and start offering seamless bookings today! For further assistance, check out MagePeople’s support resources or contact their team.