Uber employs private car drivers to carry fares from place to place, connecting these drivers with riders using a smartphone app. When a rider requests a pickup, the system determines his location, locates an available driver, and dispatches the car. After delivery, Uber charges the rider's account for the trip.
Uber drivers are independent contractors who use their own vehicles to pick up and transport riders. This has caused some conflicts in cities with established taxicab industries, who see the newcomers as an unlicensed threat to their business. Uber drivers may also run afoul of their car insurance companies, which often will not cover accidents that occur while a vehicle is being driven for profit.
Another controversial aspect of Uber's system is surge pricing. When demand is high, the system compensates by charging a multiplier above and beyond the basic fare instead of simply queuing pickups and instituting delays. Users can get a ride more quickly than using a standard taxi service, but the price paid for the trip can be many times higher than the equivalent cab fare. Passengers are shown how much a surge fee will be before the ride begins, and can opt to find alternate transport if the cost is too high.