‘Buyer beware’ on ride packages
The start of a new year often coincides with a rise in the number of gym memberships.
Ride-hailing services are hoping that customers will think along the same lines about their transportation needs. Uber and Lyft recently introduced subscription plans promising savings for those trips to the gym, to work or around town.
The ride-hailing companies stand to gain by gaining 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 whether 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 is complicated. Oth-
ers are 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 at the University of South Florida. “If you’re on the margins, or you’re an infrequent user, then you might not want to.” Lyft’s All-Access Plan: Available nationwide, the plan 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 percent off any additional rides.
Riders who take very frequent trips in the $10 to $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. 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. Uber’s Ride Pass: The subscription program is available in Los Angeles, Miami, Denver, Austin and Orlando. It costs $15, except in Los Angeles, where it costs $25. Uber says the monthly fee gives riders discounts up to 15 percent on all rides and protection from surge pricing, which is higher rates during times of peak demand — rush hour, special events or bad weather.
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 charges, an Uber spokesman said.
The surge-pricing protection 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 patrons head home. Downsides: With Uber, you don’t 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 limited service to collect feedback from riders before offering 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.
“Savings are, on average, 15 percent to 20 percent, but can vary depending on how busy it is,” said Michael Amodeo, spokesman for Uber, in an email. “For example, savings will typically be higher during commuting hours or nights and weekends when more people are opening up (and using) our app.”
For Lyft’s plan, there’s a specific set of riders who would benefit, but if riders don’t use all of their 30 trips in 30 days, they lose them.
The plans, said Mike Ramsey, senior automotive and smart mobility research director at Gartner, are a bigger benefit to the companies when people don’t fully take advantage of them. “It’s like a gym membership,” he said. “The gym would be unbearable if everyone used it. Nonetheless, some people take great advantage of very low cost subscriptions.”