‘Buyer be­ware’ on ride pack­ages

San Francisco Chronicle - - BUSINESS REPORT - By Cathy Busse­witz

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.”

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