Like the Ethical Egoist and Hedonist, Utilitarians are consequentialists and believe that moral assessment ultimately rests on the context of actions, particularly the ends of an action.
But Utilitarians also tend to believe that there are no innate ideas with which we are given at birth. We must learn the difference between what is good and bad, what is desirable and what is not. This knowledge must come to us through experience (a posteriori) since there are no innate ideas. This means that Utilitarians tend to be empiricists:
If it is true that all our knowledge comes to us through sensory experience, then abstract concepts like 'good' and 'bad' must be directly rooted in some kind of sensory experience. And, it seems obvious enough what this experience must be ...
At this point we might be tempted to think that there is no difference between Hedonism (or Epicurianism) and Utilitarianism. After all, don't hedonists assert that 'good' just is equal to pleasure? This is why some critics of the theory are tempted to call it "pig philosophy;" if morality is reducible to pleasure and pain, what's the difference between humans and animals? Doesn't the utilitarian reduce us all to the level of animals? Well, there are two important distinctions between classical Utilitarianism (as expressed by Mill) and Hedonism. The first is that Mill recognizes that humans are capable of a kind of pleasure not available to most animals.
Given that concepts like 'good' and 'bad' are defined in terms of pleasure and pain, it's clear enough how we would define an abstract concept like 'happiness' ...
So if the distinction between the two types of pleasure is what marks the difference between Hedonism and Utilitarianism, what's the difference between Utilitarianism and Egoism? Here the difference lies in the number of people who are included in the moral prescription. The moral principle of utilitarians far exceeds the scope of the principle of Egoism ...
So, Utilitarianism differs from classical Hedonism in that draws a distinction between two types of pleasures available to humans, and it differs from Egoism in that it significantly widens the sphere of our moral interest. The utilitarian is also a communitarian who believes individuals are subordinate to their communities. To put it in a pithy form, "the needs of the many outweigh the needs of the few." The UP demands that my needs as an individual must always be tempered by the greater needs of my moral community. But how do I calculate the needs of the community? If for each action with moral worth I must calculate what will produce the greatest overall happiness for the greatest number, wont I be so busy calculating, that I never have time left for action? This realization caused some utilitarians after Mill to propose a new type of Utilitarianism. The distinction is made by altering the focus of our moral assessment from each individual moral action, to general rules of moral acts. Mill himself never clearly distinguished between these two foci and sometimes seems to be expressing one, and sometimes the other. However, later utilitarians draw a sharper distinction between the two expressions of the theory.
By establishing basic rules of action governed by the UP, we save a great deal of time that would have been spent calculating the implications of our actions. But, as some utilitarians countered, Rule Utilitarianism seems to share more in common with some Deontological theories than Consequentialism.