Ride-hailing Subscriptions

FILE - In this Jan. 12, 2016 file photo, a ride share car displays Lyft and Uber stickers on its front windshield in downtown Los Angeles, Calif. Ride-hailing giants Uber and Lyft have launched subscription plans promising savings for trips to the gym, to work or around town. The ride-hailing companies stand to gain by increasing customer loyalty in a competitive market and securing more predictable revenue at a time when both companies are heading to an initial public offering.

NEW YORK — The start of a new year often coincides with a surge in monthly memberships to gyms.

Ride-hailing services are hoping customers will think along the same lines about their transportation needs. Uber and Lyft recently launched subscription plans prom­is­ing savings for those trips to the gym, to work or around town.

The ride-hailing companies stand to gain by increasing customer loy­al­ty in a competitive market and sec­uring more predictable revenue at a time when both are heading into an initial public offering.

But you should figure out if the num­bers add up before committing to one ride provider.

“I think both these things should come with the caveat, ‘buyer be­ware,’ ” said Keith Millhouse, a trans­portation consultant and principal at Mill­house Strategies.

Millhouse called Uber’s sub­scrip­tion a “complete mystery,” and he said getting value out of Lyft’s plan was possible, but complicated. Others were more optimistic.

“If (riders) know they’re going to be traveling enough or more than enough to take advantage of it, then by all means it’s an opportunity for them to save money,” said Steven Pol­zin, program director for mobility pol­icy research at the Center for Urban Transportation Research, Uni­ver­sity of South Florida. “If you’re on the margins, or you’re an in­fre­quent user, then you might not want to.”

What do you get with Lyft’s plan?

Lyft’s All-Access Plan, available na­tionwide, costs $299 and allows you to take 30 trips valued at up to $15 over 30 days. If a ride goes over $15, you pay the difference. After the first 30 trips, you get 5% off any ad­di­tional rides.

Who can benefit from Lyft’s plan?

Riders who take very frequent trips in the $10-$15 range hit the sweet spot.  Without the plan, 30 trips at $15 each would cost $450, so the plan could theoretically save you about $150. At $10 each, you would break even. But if your trips often cost less than $10, you may end up pay­ing more for those trips than you would have without the pass.

Another consideration is how many days you need transportation to work. Most full-time jobs include more than 20 work days per month, which means more than 40 trips.

A 30-ride plan may appeal to those who occasionally work from home because the alternative — a monthly public transportation pass — often assumes five days of commuting per week so riders may be paying for trips they don’t take.

“As more and more people have started telecommuting, all of a sudden those price points (for public transit passes) aren’t necessarily as attractive,” Polzin said.

What do you get with Uber’s pass?

Uber rolled out a subscription pro­gram called “Ride Pass” in five U.S. cities: Los Angeles, Miami, Denver, Aus­tin and Orlando. It costs $14.99 in all of those cities except Los An­gel­es, where it costs $24.99.  Uber says the monthly fee gives riders dis­counts up to 15% on all rides and pro­tection from surge pricing, which is higher pricing triggered by peaks in demand during rush hour, special events or bad weather.

Who can benefit from Uber’s pass?

Uber has been hearing from riders that they want more consistent pri­ces. For example, some customers find that their ride to work is cheap­er than their ride home, so hav­ing the pass can protect riders from an un­fore­seen spike, an Uber spokes­man said.

The surge protection pricing could prove valuable if you frequently take Uber rides during peak times or at popular locations, say if you’re a bartender who works at a trendy night club that has a crush of demand for rides as partiers head home.

“With surge protection, that could be a good deal,” Polzin said. “If you knew you were traveling in places and times where there’s surge pri­cing, you could save real money real fast.”

What are downsides

to subscriptions?

With Uber’s pass, you don’t get to see the price of your desired routes until you pay the fee, and some reviewers on Reddit and Twitter said they got the pass and then paid what they considered to be higher rates for rides.

Uber says that should not be hap­pen­ing, and if it is, riders should write to customer support. The com­pany is using the pilot to collect feed­back from riders before rolling it out in more cities.

Other Uber riders complained that the discounts amounted to pen­nies on short rides and $1 on a ride worth $60.

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